TRILAND CO LTD v. PRAT DEVELOPMENT LTD AND OTHERS

TRILAND CO LTD v. PRAT DEVELOPMENT LTD AND OTHERS

The court discharged the interim injunction in HCA 6310/82 because Triland failed to raise a serious question to be tried on either an implied freezing term in Article 108 or on pleaded fraud on the minority (insufficient particularity), and on the balance of convenience continued management powers for the board were essential to protect the company and its creditors; the interim injunction in HCA 6886/82 (accounting) was ordered to continue as prayed.

Citation
TRILAND CO LTD v. PRAT DEVELOPMENT LTD AND OTHERS
Parties
Plaintiff (hca 6310/82); 1st Defendant (hca 6886/82): Triland Company Limited; 1st Defendant (hca 6310/82); 3rd Defendant (hca 6886/82): Prat Development Limited; 2nd Defendant (hca 6310/82); 1st Plaintiff (hca 6886/82): International Maritime Carriers Ltd.; 3rd Defendant (hca 6310/82); 2nd Plaintiff (hca 6886/82): Red Lake Investment Co. Limited; 4th Defendant (hca 6310/82): Chou Wen Hsien; 5th Defendant (hca 6310/82): Tsao Wen King; 6th Defendant (hca 6310/82): Chow Chung Kai; 2nd Defendant (hca 6886/82): Samuel Tak Lee
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
24 September 1982
Case Number
HCA6310/1982
Procedural Posture
Company Law Derivative Action and Interim Injunction / Interlocutory (application for Continuation/discharge of Interim Injunctions)
Outcome
Interim injunction in HCA 6310/82 discharged; interim injunction in HCA 6886/82 continued in terms of the inter partes summons
Legal Topics
Implied Terms in Articles of Association, Shareholders Buy Out/internal Auction (article 108), Fraud on the Minority, Balance of Convenience in Interlocutory Relief, Directors' Management Powers
Source Language
EN
Company Law Fiduciary Duties Injunctions Shareholders' Rights Derivative Actions Implied Terms in Articles of Association Shareholders Buy Out/internal Auction (article 108) Fraud on the Minority +2 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 12 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Triland Company Limited

Plaintiff (hca 6310/82); 1st Defendant (hca 6886/82)

Prat Development Limited

1st Defendant (hca 6310/82); 3rd Defendant (hca 6886/82)

International Maritime Carriers Ltd.

2nd Defendant (hca 6310/82); 1st Plaintiff (hca 6886/82)

Red Lake Investment Co. Limited

3rd Defendant (hca 6310/82); 2nd Plaintiff (hca 6886/82)

Chou Wen Hsien

4th Defendant (hca 6310/82)

Tsao Wen King

5th Defendant (hca 6310/82)

Chow Chung Kai

6th Defendant (hca 6310/82)

Samuel Tak Lee

2nd Defendant (hca 6886/82)

Procedural Posture

Company Law Derivative Action and Interim Injunction / Interlocutory (application for Continuation/discharge of Interim Injunctions)

Legal Issues

  1. 1 Whether a term can be implied into the articles to restrain directors from dealing with company assets pending an Article 108 internal auction
  2. 2 Whether the derivative claim pleads fraud on the minority with sufficient particularity to raise a serious question to be tried
  3. 3 Whether the balance of convenience favours continuation or discharge of the interim injunction

Ratio Decidendi

The court discharged the interim injunction in HCA 6310/82 because Triland failed to raise a serious question to be tried on either an implied freezing term in Article 108 or on pleaded fraud on the minority (insufficient particularity), and on the balance of convenience continued management powers for the board were essential to protect the company and its creditors; the interim injunction in HCA 6886/82 (accounting) was ordered to continue as prayed.

Court Disposition

Interim injunction in HCA 6310/82 discharged; interim injunction in HCA 6886/82 continued in terms of the inter partes summons

Orders

  • Interim injunction obtained on 20 July 1982 in HCA 6310/82 discharged
  • Interim injunction in HCA 6886/82 continued in terms as prayed by the inter partes summons