Read the full judgment text of HCCT 56/2004 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 19 December 2007 before Deputy High Court Judge L. Chan.
Construction and Arbitration Proceedings — Security for costs — Application under section 357 Companies Ordinance — Plaintiff’s operation ceased and address changed — Defendant seeks security for costs of approximately HK$1.89 million — Plaintiff applies late to adduce second affirmation arguing merits — Court refuses to admit further merits evidence in security for costs application due to absence of high probability of success and potential delay — Court conducts balancing exercise on quantum — Discounts made for leading counsel fees not involved — Court fixes security at HK$600,000 as fair and reasonable — Plaintiff’s impecuniosity argument rejected as circular and unsubstantiated — Plaintiff ordered to provide security by payment into court or bank guarantee within 42 days — Further proceedings stayed pending compliance — Failure to provide security results in dismissal of action without further order — Costs of application awarded to defendant in cause but no further costs order. The judgment highlights principles limiting merits inquiry in security for costs applications and considerations in fixing quantum, balancing interests and preventing abuse of process.
Legal issues: Admissibility of second affirmation on application for security for costs · Quantum and reasonableness of security for costs · Effect of failure to provide security for costs
Outcome: Plaintiff’s application to adduce second affirmation dismissed; defendant’s application for security for costs granted in the sum of HK$600,000; proceedings stayed pending security; failure to provide security within 42 days leads to dismissal of action.