Safe Castle Ltd v China Silver Asset Management (Hong Kong) Ltd

Judgment Cited authorities (2) Cited in Precedent Map Related
CourtCourt of Appeal (Hong Kong)
Judgment Date19 March 2021
Neutral Citation[2021] HKCA 376
Judgment NumberCACV69/2020
Year2021
Copyright noteJudgment sourced from the Hong Kong Judiciary/Hong Kong Special Administrative Region Government.
Subject MatterCivil Appeal
CACV69/2020 SAFE CASTLE LTD v. CHINA SILVER ASSET MANAGEMENT (HONG KONG) LTD

CACV 69/2020

[2021] HKCA 376

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 69 OF 2020

(ON APPEAL FROM HCCW NO 69 OF 2019)

________________________

IN THE MATTER of China Silver Asset Management (Hong Kong) Limited

and
IN THE MATTER of section 177(1)(d) of the Companies (Winding up and Miscellaneous Provisions) Ordinance (Cap 32)

________________________

BETWEEN
SAFE CASTLE LIMITED Petitioner
and
CHINA SILVER ASSET MANAGEMENT (HONG KONG) LIMITED Respondent

________________________

Before: Hon Kwan VP and Chu JA in Court

Dates of Written Submissions: 7, 21 and 28 August 2020

Date of Judgment: 19 March 2021

________________________

J U D G M E N T

________________________

Hon Kwan VP (giving the Judgment of the Court):

1. On 11 March 2020, Harris J made a winding-up order against China Silver Asset Management (Hong Kong) Limited (“the Company”) on insolvency grounds. Acting by its former directors in their residual capacity, the Company filed a notice of appeal against the winding-up order on 19 March 2020. The notice of appeal was amended on 11 June 2020.

2. By a summons issued on 3 July 2020, the petitioner, Safe Castle Limited, seeks security for costs of and occasioned by the appeal in the total sum of $1,093,810. The petitioner seeks an order that the Company do procure its former directors and/or its parent company incorporated in the Cayman Islands, China Silver Asset Management Limited, to provide security by making a payment into court.

3. Having considered the evidence filed by the parties and the submissions they have lodged, we will deal with this application on paper.

4. We do not propose to mention the background facts leading to the presentation of the petition, the Company’s grounds of opposition to the petition, the reasons for the making of the winding-up order and the grounds of appeal advanced in the amended notice of appeal.

5. Although the Company filed an affidavit by one of its former directors on 17 July 2020 opposing the application for security for costs on the grounds that the parent company has sufficient financial resources to assist the Company to pay any adverse costs order and that the appeal has strong merits, when the Company came to serve the submission of its counsel Mr M C Law on 21 August 2020, it would appear that the liability to provide security for costs is no longer in contention. Mr Law’s submission only addressed the proper amount of security that should be ordered by the court.

6. For the avoidance of doubt, we should say that this is a clear case for security to be ordered. The Company has been adjudged insolvent. The appeal is pursued on its behalf by former directors and/or the parent company, who are not parties in the appeal. There is a real risk that should the appeal fail and an adverse costs order is made, the Company will be laden with an additional debt which prejudices not only the petitioner but its creditors as a whole. It is established that a limited company which appeals alone from a winding-up order, without joining any one personally responsible for costs, will be ordered to give security. (Hong Kong Civil Procedure 2021, vol 1, §59/10/30; cited with approval in Re Wah Nam Group Limited, CACV 310/2000, 1 November 2000, at §§5 to 13)

7. The letter of support from the parent company is of no assistance. Nor is it necessary to...

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