A R EVANS CAPITAL PARTNERS LTD v. GEN2 PARTNERS INC

A R EVANS CAPITAL PARTNERS LTD v. GEN2 PARTNERS INC

The court held the BVI company had established a place of business in Hong Kong and therefore was a 'specified corporation' under the Ordinance; accordingly AR Evans, as a member, was entitled to seek leave under s168BC. Leave was granted to intervene and defend the High Court Action and to bring derivative claims on behalf of the Company in respect of breaches of the shareholders' agreement and breaches of fiduciary/directors' duties (but not for money had and received). The court dispensed with the s168BD notice requirement and declined to make provision of security a precondition to grant of leave, while leaving open an application for security in the ordinary way. The s168A petition...

Citation
A R EVANS CAPITAL PARTNERS LTD v. GEN2 PARTNERS INC
Parties
Plaintiff/petitioner: A R Evans Capital Partners Limited; Defendant/6th Respondent: Gen2 Partners Inc; 1st Respondent/shareholder: Novel Alternative Investment Limited; 2nd Respondent/director/shareholder: Paul Lincoln Heffner; 3rd Respondent/director/shareholder: Wang‑Chi Barry Lau; 4th Respondent/related Company: Gen2 Partners Limited; 5th Respondent/related Company: Gen2 Partners Investment Management Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
15 June 2012
Case Number
HCMP1255/2011
Procedural Posture
Section 168 BC Derivative Intervention and Section 168 a Unfair Prejudice Petition; Strike‑out Application / Applications Heard and Interlocutory Judgment on Leave to Intervene, Derivative Claims and Strike‑out; Directions Given
Outcome
Interlocutory: leave granted to AR Evans to intervene and defend High Court Action on behalf of Gen2 Partners Inc and to bring specified derivative claims; s168A petition struck out with liberty to apply to amend; procedural directions and time limits imposed; issue of security for costs left to separate application.
Legal Topics
Derivative Proceedings, Unfair Prejudice (s168 A), Intervention (s168 Bc), Specified Corporation and Place of Business, Service and Registration of Non‑hong Kong Companies, Security for Costs, Fiduciary Duties, Shareholders' Agreement
Source Language
EN
Company Law Civil Procedure Equity and Trusts Derivative Proceedings Unfair Prejudice (s168 A) Intervention (s168 Bc) Specified Corporation and Place of Business Service and Registration of Non‑hong Kong Companies +3 more

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Parties

A R Evans Capital Partners Limited

Plaintiff/petitioner

Gen2 Partners Inc

Defendant/6th Respondent

Novel Alternative Investment Limited

1st Respondent/shareholder

Paul Lincoln Heffner

2nd Respondent/director/shareholder

Wang‑Chi Barry Lau

3rd Respondent/director/shareholder

Gen2 Partners Limited

4th Respondent/related Company

Gen2 Partners Investment Management Limited

5th Respondent/related Company

Procedural Posture

Section 168 BC Derivative Intervention and Section 168 a Unfair Prejudice Petition; Strike‑out Application / Applications Heard and Interlocutory Judgment on Leave to Intervene, Derivative Claims and Strike‑out; Directions Given

Legal Issues

  1. 1 Whether the BVI incorporated Gen2 Partners Inc was a "specified corporation" under the Companies Ordinance for s168BC/s168A purposes
  2. 2 Whether AR Evans should be granted leave under s168BC to intervene and defend the High Court Action on behalf of the Company
  3. 3 Whether AR Evans should be granted leave to bring derivative claims on behalf of the Company and whether those claims disclose a serious question to be tried

Ratio Decidendi

The court held the BVI company had established a place of business in Hong Kong and therefore was a 'specified corporation' under the Ordinance; accordingly AR Evans, as a member, was entitled to seek leave under s168BC. Leave was granted to intervene and defend the High Court Action and to bring derivative claims on behalf of the Company in respect of breaches of the shareholders' agreement and breaches of fiduciary/directors' duties (but not for money had and received). The court dispensed with the s168BD notice requirement and declined to make provision of security a precondition to grant of leave, while leaving open an application for security in the ordinary way. The s168A petition...

Court Disposition

Interlocutory: leave granted to AR Evans to intervene and defend High Court Action on behalf of Gen2 Partners Inc and to bring specified derivative claims; s168A petition struck out with liberty to apply to amend; procedural directions and time limits imposed; issue of security for costs left to separate application.

Orders

  • AR Evans given leave to intervene in HCA 357/2011 and to defend the proceedings on behalf of Gen2 Partners Inc
  • AR Evans given leave to bring derivative claims on behalf of Gen2 Partners Inc limited to claims based on the Shareholders Agreement and breaches of fiduciary/directors' duties (claim for money had and received refused)