Read the full judgment text of CACV 000245/1998 on BabelCite. This Court of Appeal judgment was delivered on 7 October 1998 before Godfrey JA, Leong JA.
Civil procedure – security for costs – Companies Ordinance (Cap. 32) s.357 – plaintiff company impecunious – whether order for security for costs should be made – balancing exercise between injustice to plaintiff of being prevented from pursuing a proper claim and injustice to defendant of being unable to recover costs – whether plaintiff's claim had good prospects – whether inaccurate reference by judge to 'a strong case for misrepresentation' vitiated discretion – whether order for security would stifle plaintiff's claim – whether probability of stifling can be inferred without direct evidence – relevant principles summarised in Keary Developments Ltd v Tarmac Construction Ltd [1995] 3 All ER 534 and Trident International Freight Services Ltd v Manchester Ship Canal Co [1990] BCLC 263 followed – M.V. Yorke Motors v Edwards [1982] 1 All ER 102 considered – application of principles – contracts for carriage of beer containers by sea – dispute over agreed freight rate and additional terminal handling charges alleged to be compelled by US Federal Law – plaintiff refused to pay and defendant refused to deliver – plaintiff ceased trading in 1996, had no money, owed former solicitors Herbert Smith about US$400,000 – leave granted ex parte on 4 July 1998 for plaintiff to be represented by director Mr. Yip Chun Nam – application for security made very late on eve of five-day trial listed for 12 October 1998 – first issue held no; description as misrepresentation was inaccurate but did not vitiate discretion because judge had not gone into merits and underlying conclusion that plaintiff showed a reasonable case was sound – second issue held no; on common sense inference and economic circumstances, the probability of stifling could be inferred without direct evidence – appeal dismissed.
Legal issues: Whether judge's reference to 'misrepresentation' vitiated his assessment of prospects of success · Whether judge erred in finding security for costs would stifle the plaintiff's claim
Outcome: Appeal dismissed; the Deputy Judge's refusal of security for costs was upheld.
Cited by 1 case