XCHRX NG YAT CHI v. MAX SHARE LTD. AND ANOTHER

HCCW 321/96

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP NO.CW 321 OF 1996

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D E C I S I O N

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1. This is an application by the Respondents for security for costs. A similar application came before Cheung J on 4 November 1996 in the same matter. On that occasion, Cheung J ordered security.

2. The facts are clearly set out in that judgment and the only difference since the date of Cheung J's judgment, is that the Court of Final Appeal in Max Share Ltd. and Anr. v. Ng Yat Chi [1998] 2 HKC 251 determined that the Petitioner has locus standi to present a petition to wind up the company. That holding has no bearing on the essential features of the case which go to establishing that the plaintiff is but a nominal plaintiff. The shares which are registered in his name have been charged to Mr Choy by virtue of a Charging Order made on 9 April 1992. Upon the Petitioner's bankruptcy, the shares were sold by the trustee in bankruptcy and bought by Mr Choy. The effect of both the Charging Order and the sale of shares means, as Cheung J rightly held, that the Petitioner no longer has any beneficial interest in the shares and he is only holding the shares as a trustee for the benefit of Mr Choy. I can see no rationale for coming to any different conclusion but that the Petitioner is a bare trustee.

3. In my judgment, the principles set out in the judgment of Cheung J (with which I am in full agreement and respectfully adopt) continue to be applicable. The Petitioner is a nominal plaintiff and there is no evidence before the court that he would be able to pay costs which would become payable if he were to be unsuccessful in this petition. There is no evidence of his financial position before the court other than that he is an undischarged bankrupt. There was some reference in his 6th affirmation to the fact that there is an order for costs in his favour made in the proceedings before the Court of Final Appeal. However, I note that the Petitioner was a litigant in person before that court and as such he has taken no steps to tax the costs to which he is entitled. And in the case of a litigant in person, such costs as are recoverable other than disbursements, and as I note that there is no evidence that there were disbursements incurred in that matter, the costs recoverable are purely nominal. In any event, unless there is evidence that he has the financial ability to meet the costs, I cannot come to the conclusion that he has made good his assertion.

4. There are other grounds relied on by the Respondents, being the insolvency of the 1st Respondent. That is not a matter that I need go into, or indeed place any weight on, because the critical factor here is that the Petitioner is, in my judgment, a nominal plaintiff.

5. Because the matter has not yet reached a position where I am able to grant leave for a date to be fixed for the hearing of the petition, I am not prepared to make any order for security for costs that would extend to and include the costs of the prospective hearing at this point in time. This will not preclude the Respondents from making further applications in the future.

6. Looking at the draft bills submitted, I will simply order that two-thirds of the amount set out in Part 1A and B of the Skeleton Bill be paid into court. In round terms, this comes to $790,000. A sum of $350,000 had previously been paid by way of security and credit will be given for this amount. Therefore, the balance of $440,000 is to be paid into court within seven days of today.