FUNG TIN YAU, SUING ON BEHALF OF HIMSELF AND MAXFORTUNE TRADING LTD AS A SHAREHOLDER OF SAMDOR CO LTD v. LAI NG NUI AND OTHERS

FUNG TIN YAU, SUING ON BEHALF OF HIMSELF AND MAXFORTUNE TRADING LTD AS A SHAREHOLDER OF SAMDOR CO LTD v. LAI NG NUI AND OTHERS

The Judge dismissed all three sets of appeals: the 2078 counterclaim was not plainly and obviously unsustainable and disclosed a reasonable cause of action based on assumed fiduciary duties; the O.14 summary judgment appeals failed because factual disputes (Consensus v Withdrawal/Wyse Agreements) are highly fact‑sensitive and require trial; the derivative strike‑out applications failed because a prima facie case of fraud on the minority was established such that derivative claims should proceed.

Citation
[2020] HKCFI 252
Parties
Petitioner; Plaintiff; Defendant; Respondent (consolidated): Fung Tin Yau (馮天佑); Respondent; Defendant: Fung Tin Shing (馮天承); Respondent; Defendant: Fung Wing See (馮穎思); 3rd Respondent; Company in Winding Up Petitions: Great Anchor International Limited; 3rd Respondent; Plaintiff/defendant in Related Actions: Maxfortune Trading Limited; 3rd Respondent; Plaintiff/defendant in Related Actions: Premium Management Limited; Plaintiff; 1st Plaintiff in Original Actions: Lai Ng Nui (賴五女); Plaintiff; 2nd Plaintiff: Fung Wing Yan (馮穎欣); Plaintiff; 3rd Plaintiff: Fung Wing Yin (馮穎賢); Plaintiff; Company Action Claimant: Wyse Investment Limited; Defendant; Company the Subject of Derivative Claim: Samdor Company Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
23 January 2020
Case Number
HCA136/2018
Procedural Posture
Consolidated Company, Winding Up and Related Civil Proceedings (derivative, Trust and Recovery Claims) / Interlocutory Appeals From Masters' Decisions on Strike Out and Summary Judgment Applications; Heard in Chambers Before a Judge of the Court of First Instance
Outcome
All three sets of interlocutory appeals dismissed; leave to defend maintained; counterclaim not struck out
Legal Topics
Derivative Actions, Fiduciary Duties, Strike Out Applications, Summary Judgment (o.14), Duomatic Principle, Fraud on the Minority Exception, Constructive Trust, Estoppel, Costs
Source Language
EN
Company Law Equity Insolvency Civil Procedure Derivative Actions Fiduciary Duties Strike Out Applications Summary Judgment (o.14) +5 more

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Parties

Fung Tin Yau (馮天佑)

Petitioner; Plaintiff; Defendant; Respondent (consolidated)

Fung Tin Shing (馮天承)

Respondent; Defendant

Fung Wing See (馮穎思)

Respondent; Defendant

Great Anchor International Limited

3rd Respondent; Company in Winding Up Petitions

Maxfortune Trading Limited

3rd Respondent; Plaintiff/defendant in Related Actions

Premium Management Limited

3rd Respondent; Plaintiff/defendant in Related Actions

Lai Ng Nui (賴五女)

Plaintiff; 1st Plaintiff in Original Actions

Fung Wing Yan (馮穎欣)

Plaintiff; 2nd Plaintiff

Fung Wing Yin (馮穎賢)

Plaintiff; 3rd Plaintiff

Wyse Investment Limited

Plaintiff; Company Action Claimant

Samdor Company Limited

Defendant; Company the Subject of Derivative Claim

Procedural Posture

Consolidated Company, Winding Up and Related Civil Proceedings (derivative, Trust and Recovery Claims) / Interlocutory Appeals From Masters' Decisions on Strike Out and Summary Judgment Applications; Heard in Chambers Before a Judge of the Court of First Instance

Legal Issues

  1. 1 Whether counterclaim based on assumed fiduciary duties disclosed a reasonable cause of action and should be struck out
  2. 2 Whether summary judgment applications (O.14) should be granted against the respondent given pleaded oral agreements (Withdrawal/Wyse)
  3. 3 Whether derivative claims should be struck out for absence of fraud on the minority, alternative remedy or lack of clean hands

Ratio Decidendi

The Judge dismissed all three sets of appeals: the 2078 counterclaim was not plainly and obviously unsustainable and disclosed a reasonable cause of action based on assumed fiduciary duties; the O.14 summary judgment appeals failed because factual disputes (Consensus v Withdrawal/Wyse Agreements) are highly fact‑sensitive and require trial; the derivative strike‑out applications failed because a prima facie case of fraud on the minority was established such that derivative claims should proceed.

Court Disposition

All three sets of interlocutory appeals dismissed; leave to defend maintained; counterclaim not struck out

Orders

  • Appeals dismissed in respect of the 2078 strike out summons, the 2998-3000 O.14 summonses and the 133/136 strike out summonses
  • Costs nisi: respondent to have costs of all three sets of appeals, taxed if not agreed