LAI NG NUI AND OTHERS v. FUNG TIN YAU

LAI NG NUI AND OTHERS v. FUNG TIN YAU

The Court dismissed all three sets of appeals: (1) the 2078 strike out appeal was dismissed because the counterclaim alleging assumption of fiduciary duties disclosed a reasonable cause of action and was not plainly and obviously unsustainable; (2) the appeals against dismissal of the 2998-3000 O.14 summonses were dismissed because the respondent's defences (Withdrawal/Wyse Agreements and related estoppel/Duomatic arguments) raised triable issues and summary judgment/conditional leave to defend was inappropriate; and (3) the 133/136 derivative strike out appeals were dismissed because the respondent established a prima facie case of 'fraud on the minority' and locus to bring derivative...

Citation
[2020] HKCFI 252
Parties
Petitioner / Plaintiff / Defendant (various Consolidated Proceedings): Fung Tin Yau; Plaintiff / 1st Plaintiff (hca 2225, HCA 2078 Original): Lai Ng Nui; 1st Respondent / Defendant: Fung Tin Shing; 2nd Respondent / Defendant: Fung Wing See; 3rd Respondent / Company Party: Great Anchor International Limited; Plaintiff / Company Party: Maxfortune Trading Limited; Plaintiff / Company Party: Premium Management Limited; Plaintiff / Company Party: Wyse Investment Limited; Defendant / Company Party (subject of Derivative Claim): Samdor Company Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
23 January 2020
Case Number
HCA2225/2016
Procedural Posture
Consolidated Companies (winding Up) and Related Civil Actions; Appeals From Masters' Interlocutory Decisions / Hearing of Master Appeals Against Strike Out and Summary Judgment Orders Before Court of First Instance (companies Judge)
Outcome
All three sets of appeals dismissed (appeals against Masters' decisions on 2078 strike out, 2998-3000 O.14 and 133/136 strike out dismissed).
Legal Topics
Derivative Action, Fiduciary Duties (ad Hoc), Constructive Trust, Strike Out Under Order 18, Summary Judgment (order 14), Duomatic Principle, Estoppel, Fraud on the Minority, Costs
Source Language
EN
Company Law Equity Civil Procedure Trusts and Fiduciary Law Derivative Action Fiduciary Duties (ad Hoc) Constructive Trust Strike Out Under Order 18 +5 more

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Parties

Fung Tin Yau

Petitioner / Plaintiff / Defendant (various Consolidated Proceedings)

Lai Ng Nui

Plaintiff / 1st Plaintiff (hca 2225, HCA 2078 Original)

Fung Tin Shing

1st Respondent / Defendant

Fung Wing See

2nd Respondent / Defendant

Great Anchor International Limited

3rd Respondent / Company Party

Maxfortune Trading Limited

Plaintiff / Company Party

Premium Management Limited

Plaintiff / Company Party

Wyse Investment Limited

Plaintiff / Company Party

Samdor Company Limited

Defendant / Company Party (subject of Derivative Claim)

Procedural Posture

Consolidated Companies (winding Up) and Related Civil Actions; Appeals From Masters' Interlocutory Decisions / Hearing of Master Appeals Against Strike Out and Summary Judgment Orders Before Court of First Instance (companies Judge)

Legal Issues

  1. 1 Whether the respondent's counterclaim alleging assumption of fiduciary duties discloses a reasonable cause of action
  2. 2 Whether the 2078 counterclaim is frivolous, vexatious or an abuse of process and should be struck out
  3. 3 Whether summary judgment should have been granted against the respondent in HCA 2998-3000 (Order 14) or whether his defences raise triable issues

Ratio Decidendi

The Court dismissed all three sets of appeals: (1) the 2078 strike out appeal was dismissed because the counterclaim alleging assumption of fiduciary duties disclosed a reasonable cause of action and was not plainly and obviously unsustainable; (2) the appeals against dismissal of the 2998-3000 O.14 summonses were dismissed because the respondent's defences (Withdrawal/Wyse Agreements and related estoppel/Duomatic arguments) raised triable issues and summary judgment/conditional leave to defend was inappropriate; and (3) the 133/136 derivative strike out appeals were dismissed because the respondent established a prima facie case of 'fraud on the minority' and locus to bring derivative...

Court Disposition

All three sets of appeals dismissed (appeals against Masters' decisions on 2078 strike out, 2998-3000 O.14 and 133/136 strike out dismissed).

Orders

  • Costs nisi: respondent awarded costs of all three sets of appeals, to be taxed if not agreed
  • Costs of 2078 strike out appeals to be borne by Madam Lai and Fung Wing See