A-ONE INVESTMENTS LTD (PROVISIONAL LIQUIDATORS APPOINTED) v. A-1 BUSINESS LTD AND OTHERS

A-ONE INVESTMENTS LTD (PROVISIONAL LIQUIDATORS APPOINTED) v. A-1 BUSINESS LTD AND OTHERS

The court held that the reconstituted plaintiff (A-1 Business) had an arguable proprietorial claim of misappropriation sufficient to justify continuing the Mareva injunction against Mr Chau; the derivative route and procedural amendments were permissible, fortification of the undertaking was not required for proprietorial claims, and the strike out application failed.

Citation
A-ONE INVESTMENTS LTD (PROVISIONAL LIQUIDATORS APPOINTED) v. A-1 BUSINESS LTD AND OTHERS
Parties
Plaintiff (provisional Liquidators Appointed): A-ONE INVESTMENTS LIMITED; 1st Defendant: A-1 BUSINESS LIMITED; 2nd Defendant: CHAU CHAM WONG PATRICK; 3rd Defendant: LEUNG YUNG
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
13 November 2008
Case Number
HCA1868/2008
Procedural Posture
Derivative Action Arising From Alleged Misappropriation; Mareva (freezing) Injunction / Inter Partes Summons to Continue Ex Parte Injunction; Hearing and Amendment/reconstitution of Parties
Outcome
Application to continue the Mareva injunction granted; application to strike out dismissed; amendments to reconstitute the plaintiff allowed.
Legal Topics
Derivative Action, Mareva Injunction/freezing Order, Fiduciary Duties, Misappropriation of Company Funds, Striking Out, Costs, Disclosure/non Disclosure
Source Language
EN
Company Law Insolvency Equity and Trusts Civil Procedure Remedies (injunctions) Derivative Action Mareva Injunction/freezing Order Fiduciary Duties +4 more

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Parties

A-ONE INVESTMENTS LIMITED

Plaintiff (provisional Liquidators Appointed)

A-1 BUSINESS LIMITED

1st Defendant

CHAU CHAM WONG PATRICK

2nd Defendant

LEUNG YUNG

3rd Defendant

Procedural Posture

Derivative Action Arising From Alleged Misappropriation; Mareva (freezing) Injunction / Inter Partes Summons to Continue Ex Parte Injunction; Hearing and Amendment/reconstitution of Parties

Legal Issues

  1. 1 Whether the ex parte Mareva injunction should be continued against the 2nd defendant
  2. 2 Whether the Provisional Liquidators' claim by way of derivative action was properly constituted
  3. 3 Whether the statement of claim should be struck out as misconceived

Ratio Decidendi

The court held that the reconstituted plaintiff (A-1 Business) had an arguable proprietorial claim of misappropriation sufficient to justify continuing the Mareva injunction against Mr Chau; the derivative route and procedural amendments were permissible, fortification of the undertaking was not required for proprietorial claims, and the strike out application failed.

Court Disposition

Application to continue the Mareva injunction granted; application to strike out dismissed; amendments to reconstitute the plaintiff allowed.

Orders

  • Continue the injunction (as originally granted by Kwan J) until further order against the 2nd defendant (Chau)
  • Amendments allowed to reconstitute the action so that A-1 Business is the plaintiff and the 2nd defendant becomes the 1st defendant (procedural modifications ordered)