Case Update on 1 November 2021

Nov 1, 2021

One of our members, Ronald recently represented a main contractor defendant in an application against a plaintiff sub-contractor for security for costs pursuant to s.905 of the Companies Ordinance on the basis that there was credible evidence to believe that the plaintiff sub-contractor would not be able to meet an adverse cost order.

Construction Law is one of Ronald's areas of specialty. For more information regarding his profile, please visit the individual page on our website.

From his experience, having being involved in a number of such applications, it seems that there has been a palatable uptick of such security for costs applications both in the Hong Kong courts and in arbitration proceedings.

What is interesting about this case is that it was made very shortly before trial; about 4 months. But as the main contractor defendant acted immediately upon being made aware of the plaintiff sub-contractor’s situation, the Court did not accept the assertion that the application was made oppressively late.

It seems that parties are becoming increasingly cognizant of the importance of protecting their position in respect to costs. This case also serves as an important reminder to parties to periodically assess the opponents ability to pay costs throughout the proceedings and act accordingly once being made aware of the possibility that the opponent will not meet any adverse costs order.

Please click below to read the full judgment:
https://legalref.judiciary.hk/lrs/common/search/search_result_detail_frame.jsp?DIS=139476&QS=%2B&TP=JU