XU LIAN GUO AND ANOTHER v. KWOK MING FAI AND OTHERS

XU LIAN GUO AND ANOTHER v. KWOK MING FAI AND OTHERS

P2 failed to discharge the burden to show a real prospect of success on the merits of the defences; there was effective service and no procedural irregularity; evidence established that Ps had effective control over the relevant PRC subsidiaries and that the Fund had been transferred and could not be accounted for; accordingly the Setting Aside Summons was dismissed and D4's 2nd O.14 Summons was allowed, with final judgment against P1 and P2 jointly and severally for RMB150,000,000 plus interest and costs ordered against the plaintiffs.

Citation
XU LIAN GUO AND ANOTHER v. KWOK MING FAI AND OTHERS
Parties
Plaintiff: 1st plaintiff; Plaintiff: 2nd plaintiff; Defendant: 1st defendant; Defendant: 2nd defendant; Defendant: 3rd defendant; Defendant: 4th defendant (D4)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
24 December 2014
Case Number
HCA1710/2011
Procedural Posture
Civil/company Law – Breach of Fiduciary Duties and Breach of Service Contract; Application Under Order 14 RHC / Interlocutory Applications: Setting Aside Judgment (setting Aside Summons) and Summary/final Judgment Application Under O.14 (2nd O14 Summons); Sequestration Summons Adjourned
Outcome
Setting Aside Summons (by 2nd plaintiff) dismissed. D4's 2nd O.14 Summons allowed: final judgment entered for D4 against P1 and P2 jointly and severally for RMB150,000,000 with interest; costs awarded to D4 against plaintiffs.
Legal Topics
Setting Aside Default Judgment, Summary Judgment Under Order 14 RHC, Breach of Fiduciary Duties, Breach of Service Contract, Accounting for Misapplied Funds, Service and Personal Service, Deconsolidation and Market Prejudice
Source Language
EN
Company Law Civil Procedure Contract Law Equity/fiduciary Duties Insolvency Procedure (sequestration) Setting Aside Default Judgment Summary Judgment Under Order 14 RHC Breach of Fiduciary Duties +4 more

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Parties

1st plaintiff

Plaintiff

2nd plaintiff

Plaintiff

1st defendant

Defendant

2nd defendant

Defendant

3rd defendant

Defendant

4th defendant (D4)

Defendant

Procedural Posture

Civil/company Law – Breach of Fiduciary Duties and Breach of Service Contract; Application Under Order 14 RHC / Interlocutory Applications: Setting Aside Judgment (setting Aside Summons) and Summary/final Judgment Application Under O.14 (2nd O14 Summons); Sequestration Summons Adjourned

Legal Issues

  1. 1 Whether Poon J's Order & Judgment obtained on 2 May 2013 should be set aside
  2. 2 Whether P2 (and P1) demonstrated a real prospect of success on D4's counterclaim such that default judgment should be set aside
  3. 3 Whether Ps owed and breached fiduciary and contractual duties in relation to RMB150,000,000 (the Fund) and whether D4 was entitled to final judgment under O.14

Ratio Decidendi

P2 failed to discharge the burden to show a real prospect of success on the merits of the defences; there was effective service and no procedural irregularity; evidence established that Ps had effective control over the relevant PRC subsidiaries and that the Fund had been transferred and could not be accounted for; accordingly the Setting Aside Summons was dismissed and D4's 2nd O.14 Summons was allowed, with final judgment against P1 and P2 jointly and severally for RMB150,000,000 plus interest and costs ordered against the plaintiffs.

Court Disposition

Setting Aside Summons (by 2nd plaintiff) dismissed. D4's 2nd O.14 Summons allowed: final judgment entered for D4 against P1 and P2 jointly and severally for RMB150,000,000 with interest; costs awarded to D4 against plaintiffs.

Orders

  • Setting Aside Summons (2nd plaintiff) dismissed
  • Final judgment for the 4th defendant (D4) against the 1st and 2nd plaintiffs jointly and severally for RMB 150,000,000, assessed forthwith