XCHRX Simon Finlayson Kidd v. China Sail Factory Ltd. and Others

HCMP3353/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANCEOUS PROCEEDINGS NO.3353 OF 1999

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D E C I S I O N

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1. This is an application for security for costs by the Respondents against the Petitioner.

2. The Petitioner is not a Hong Kong resident. He is a New Zealander and works in the Mainland under a work permit. Although a Hong Kong address is provided in the Petition, this address is not a full one and according to the land search conducted by the Respondents, the Petitioner is not the owner of any of the flats in that address.

3. Mr Lane who acted for the Petitioner informed the Court today that he has no instruction to act for the Petitioner.

4. The principle regarding security for costs is too well established to be repeated. It is a matter of discretion for the Court. Where a plaintiff is a foreigner, the discretion is ordinarily in favour of granting the security for the simple reason that the defendants may be prejudiced in terms of recovery of costs if their defence is successful. There is evidence from the Respondents that the shares of the Petitioner have a negative net value and he had not paid up his share capital. In this case, the Petitioner has not filed any affidavit in response to the application and, in my view, an order for security is appropriate.

5. As to the amount of the security, the sum asked for is about $500,000. Security should be ordered by stages and the appropriate amount I would order at this stage is $300,000.

Order

6. The orders will be that :

(1) the Petitioner is to furnish within 21 days the security of $300,000 either by payment into Court, or by way of a bank guarantee to be approved by the Master;

(2) the proceedings are stayed in the meantime;

(3) the hearing of 29th September 1999 is vacated; and

(4) the Petitioner is to furnish further security of $200,000 in like manner as stated in paragraph (1) in the event that he wishes to restore the hearing of the Petition (estimated to last 3-4 days).