Read the full judgment text of HCCT000014/1997 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 10 December 1997 before The Hon Mr Justice Findlay, in Chambers.
Companies law — Security for costs — Counterclaims — Section 357 Companies Ordinance — Liquidation — Whether to order security where counterclaim mirrors plaintiff's claim — Whether justice requires security — Construction contract dispute involving termination, liquidated damages, and counterclaims for breach and extensions of time. The plaintiff Samover claimed liquidated damages of $24.3 million against contractor Grand Choice, who counterclaimed for about $100 million. Samover sought security for costs under s.357 as Grand Choice was in liquidation and likely unable to pay costs if unsuccessful. The court examined authorities confirming security is appropriate only if counterclaim is an independent cause of action causing extra cost burden distinct from plaintiff's claim. Held: The counterclaim issues were substantially the same as the plaintiff’s claim and defence; thus, additional costs were not significant. No evidence of oppression or misuse of the application to stifle a genuine claim was found. The large security sought was unreasonable. Justice required dismissal of the application for security. Costs ordered in favor of Grand Choice.
Legal issues: Security for costs on a counterclaim
Outcome: Samover's summons for security for costs dismissed