Relevant employees whose shares in China Shanshui Investment Company Limited held by ZHANG CAIKUI on trust (Please refer to Schedule 1 attached to the Writ of Summons for names of the relevant employees) AND ANOTHER v. ZHANG CAIKUI AND ANOTHER

Relevant employees whose shares in China Shanshui Investment Company Limited held by ZHANG CAIKUI on trust (Please refer to Schedule 1 attached to the Writ of Summons for names of the relevant employees) AND ANOTHER v. ZHANG CAIKUI AND ANOTHER

The court held that because K&L Gates had not established standing to act for all plaintiffs and the allegations of coercion and conflict lacked particulars, the matter should not proceed as a broad multi-day evidentiary trial; instead the strike-out summons is to be listed for half-day argument, no further evidence without leave, the claims of the 1,072 plaintiffs are stayed pending the outcome, and costs of the hearing were reserved in the cause.

Citation
Relevant employees whose shares in China Shanshui Investment Company Limited held by ZHANG CAIKUI on trust (Please refer to Schedule 1 attached to the Writ of Summons for names of the relevant employees) AND ANOTHER v. ZHANG CAIKUI AND ANOTHER
Parties
Applicant (solicitors on Record for Plaintiffs): K & L Gates; Respondent (competing Solicitors): Stephenson Harwood; Affected Plaintiffs (represented by Stephenson Harwood): 1,072 Plaintiffs
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
14 July 2017
Case Number
HCA1766/2014
Procedural Posture
Interlocutory Dispute in Consolidated Civil/commercial Actions Concerning Change of Solicitors and Validity of Retainers / Directions Hearing / Interlocutory (hearing 30 June 2017; Decision 14 July 2017)
Outcome
Interlocutory directions given: strike-out summons to be set down for argument; stay of specified plaintiffs' claims pending outcome; restrictive evidence regime and costs reserved.
Legal Topics
Change of Solicitors, Strike Out Application, Validity of Retainer, Stay of Proceedings, Supervisory Jurisdiction Over Solicitors
Source Language
EN
Civil Procedure Legal Professional Regulation Commercial Litigation Change of Solicitors Strike Out Application Validity of Retainer Stay of Proceedings Supervisory Jurisdiction Over Solicitors

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Parties

K & L Gates

Applicant (solicitors on Record for Plaintiffs)

Stephenson Harwood

Respondent (competing Solicitors)

1,072 Plaintiffs

Affected Plaintiffs (represented by Stephenson Harwood)

Procedural Posture

Interlocutory Dispute in Consolidated Civil/commercial Actions Concerning Change of Solicitors and Validity of Retainers / Directions Hearing / Interlocutory (hearing 30 June 2017; Decision 14 July 2017)

Legal Issues

  1. 1 Whether K&L Gates had standing to bring a strike-out summons purporting to act for all plaintiffs
  2. 2 Whether the retainer given to Stephenson Harwood by the 1,072 plaintiffs is valid in light of prior instructions to K&L Gates and alleged special mandate to Mr Gao Yong
  3. 3 Whether allegations of coercion/duress and conflicts of interest warranted a full multi-day trial with cross-examination

Ratio Decidendi

The court held that because K&L Gates had not established standing to act for all plaintiffs and the allegations of coercion and conflict lacked particulars, the matter should not proceed as a broad multi-day evidentiary trial; instead the strike-out summons is to be listed for half-day argument, no further evidence without leave, the claims of the 1,072 plaintiffs are stayed pending the outcome, and costs of the hearing were reserved in the cause.

Court Disposition

Interlocutory directions given: strike-out summons to be set down for argument; stay of specified plaintiffs' claims pending outcome; restrictive evidence regime and costs reserved.

Orders

  • Strike-out summons set down for argument on a date to be fixed in consultation with counsel; estimate half a day
  • No further evidence may be filed without leave of the court