ANTHONY JAMES HATTON v. DOROTHY JANE FURNESS AND OTHERS

ANTHONY JAMES HATTON v. DOROTHY JANE FURNESS AND OTHERS

The petitions relating to dormant shelf companies were struck out because, on the pleaded facts, it was plain and obvious they contained no complaint that could properly be characterised as conduct in the affairs of those dormant companies; by contrast petitions concerning property‑holding companies, the IP holding company (Sparkling Wine), Step Further and Insomnia Singapore were not struck out because the pleaded financial interdependence, operational links and plausible effects on listing, banking facilities, audits, staff and business opportunities meant it was not plain and obvious they could not found relief under s168A.

Citation
ANTHONY JAMES HATTON v. DOROTHY JANE FURNESS AND OTHERS
Parties
Petitioner / Beneficial Owner: Anthony James Hatton; Petitioner (beneficially Owned by Anthony Hatton): Yearich Limited; 2nd Petitioner (hcmp 1208/2007): Rustem Limited; 1st Respondent / 1st Defendant: Dorothy Jane Furness; 2nd Respondent / 2nd Defendant: Raphael Homer Echaluce; 3rd Respondent / Nominal Respondent: Stephen Smout; 4th Respondent / Plaintiff (hca 2712/2006) / Central Management Company: Step By Step Limited; Plaintiff / 4th Respondent in Some Petitions (operator of Dusk Till Dawn): New Success Enterprises Limited; Plaintiff / Respondent (operator of Insomnia (hong Kong)): Step Up Limited; Respondent (ip Holding Company): Sparkling Wine International Limited; 3rd Defendant (hca 2712/2006) / Operator of Competing Business: Entertainment Company Limited; 4th Defendant (hca 2712/2006) / Operator of Competing Business: Mad Dogs Wanchai Public House Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
26 October 2007
Case Number
HCMP845/2007
Procedural Posture
Consolidated Company Petitions Under Section 168 a Companies Ordinance Cap.32 and Related High Court Action (hca 2712/2006) / Applications to Strike Out, to Amend Petitions and to Consolidate; Judgment on Strike Out, Amendment and Consolidation Applications (decision Handed Down)
Outcome
Mixed: petitions for four shelf companies struck out; strike out applications otherwise dismissed; leave to amend granted for petitions not struck out; consolidation orders made to consolidate HCMP 1208/2007 and HCA 2712/2006 with specified consolidated petitions; costs orders made (order nisi)
Legal Topics
Unfairly Prejudicial Conduct (s168 A), Directors' Fiduciary Duties, Constructive Trust and Knowing Receipt, Strike‑out Procedure, Consolidation of Proceedings
Source Language
EN
Company Law Civil Procedure Equity Unfairly Prejudicial Conduct (s168 A) Directors' Fiduciary Duties Constructive Trust and Knowing Receipt Strike‑out Procedure Consolidation of Proceedings

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Parties

Anthony James Hatton

Petitioner / Beneficial Owner

Yearich Limited

Petitioner (beneficially Owned by Anthony Hatton)

Rustem Limited

2nd Petitioner (hcmp 1208/2007)

Dorothy Jane Furness

1st Respondent / 1st Defendant

Raphael Homer Echaluce

2nd Respondent / 2nd Defendant

Stephen Smout

3rd Respondent / Nominal Respondent

Step By Step Limited

4th Respondent / Plaintiff (hca 2712/2006) / Central Management Company

New Success Enterprises Limited

Plaintiff / 4th Respondent in Some Petitions (operator of Dusk Till Dawn)

Step Up Limited

Plaintiff / Respondent (operator of Insomnia (hong Kong))

Sparkling Wine International Limited

Respondent (ip Holding Company)

Entertainment Company Limited

3rd Defendant (hca 2712/2006) / Operator of Competing Business

Mad Dogs Wanchai Public House Limited

4th Defendant (hca 2712/2006) / Operator of Competing Business

Procedural Posture

Consolidated Company Petitions Under Section 168 a Companies Ordinance Cap.32 and Related High Court Action (hca 2712/2006) / Applications to Strike Out, to Amend Petitions and to Consolidate; Judgment on Strike Out, Amendment and Consolidation Applications (decision Handed Down)

Legal Issues

  1. 1 Whether acts/omissions by other companies or by individuals in their personal capacity can amount to conduct of the affairs of the subject company under s168A
  2. 2 Whether the consolidated petitions disclose a reasonable cause of action or are plain and obvious failures and thus should be struck out under Order 18 r19 and the court's inherent jurisdiction
  3. 3 Whether the degree of interdependence/interaction between companies suffices to treat conduct of one as conduct of another for unfair prejudice purposes

Ratio Decidendi

The petitions relating to dormant shelf companies were struck out because, on the pleaded facts, it was plain and obvious they contained no complaint that could properly be characterised as conduct in the affairs of those dormant companies; by contrast petitions concerning property‑holding companies, the IP holding company (Sparkling Wine), Step Further and Insomnia Singapore were not struck out because the pleaded financial interdependence, operational links and plausible effects on listing, banking facilities, audits, staff and business opportunities meant it was not plain and obvious they could not found relief under s168A.

Court Disposition

Mixed: petitions for four shelf companies struck out; strike out applications otherwise dismissed; leave to amend granted for petitions not struck out; consolidation orders made to consolidate HCMP 1208/2007 and HCA 2712/2006 with specified consolidated petitions; costs orders made (order nisi)

Orders

  • Petitions in HCMP Nos. 846, 848, 849 and 851 of 2007 struck out and dismissed
  • Applications to strike out petitions in HCMP Nos. 840, 842, 843, 845, 847 and 850 of 2007 dismissed