RE SHUN ON CO. LTD.

RE SHUN ON CO. LTD.

The court accepted the 3rd respondent's undertaking to permit on-site inspection of the SOUS accounting source documents and database in lieu of immediate formal discovery for the broad accounting-records classes (items 1,3-10) but ordered formal discovery (further and better list plus an affirmation) limited to the periodical financial statements of MCI, Cana Realty and Cana Corp (item 2) to be served within 28 days, because those statements are within the 3rd respondent's power under Washington law.

Citation
RE SHUN ON CO. LTD.
Parties
Petitioner: Six petitioners; 3rd Respondent: Yuen Cho Nang; 7th Respondent: Shun On Company Limited; 8th Respondent: Company to which 1st respondent transferred shares; Respondents: Six individual respondents (remaining shareholders)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
30 September 2002
Case Number
HCCW828/2000
Procedural Posture
Companies (winding Up) Petition Under Companies Ordinance (s.177(1)(f); S.168 A) / Interlocutory Application for Specific Discovery (chambers Application)
Outcome
Interlocutory relief granted in part: undertaking accepted for accounting records; formal discovery ordered for periodical financial statements only; costs reserved as costs in the cause (no separate costs awarded to parties)
Legal Topics
Unfair Prejudice, Specific Discovery, Inspection of Corporate Accounting Records, Shareholder Inspection Rights (us), Undertakings in Lieu of Discovery
Source Language
EN
Company Law Civil Procedure Discovery Shareholder Rights Private International Aspects Unfair Prejudice Specific Discovery Inspection of Corporate Accounting Records +2 more

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Parties

Six petitioners

Petitioner

Yuen Cho Nang

3rd Respondent

Shun On Company Limited

7th Respondent

Company to which 1st respondent transferred shares

8th Respondent

Six individual respondents (remaining shareholders)

Respondents

Procedural Posture

Companies (winding Up) Petition Under Companies Ordinance (s.177(1)(f); S.168 A) / Interlocutory Application for Specific Discovery (chambers Application)

Legal Issues

  1. 1 Whether the 3rd respondent must give formal discovery of SOUS accounting records and related documents
  2. 2 Whether on-site inspection offered by the 3rd respondent is an acceptable alternative to formal discovery
  3. 3 Scope of periodical financial statements to which a shareholder is entitled under Washington law

Ratio Decidendi

The court accepted the 3rd respondent's undertaking to permit on-site inspection of the SOUS accounting source documents and database in lieu of immediate formal discovery for the broad accounting-records classes (items 1,3-10) but ordered formal discovery (further and better list plus an affirmation) limited to the periodical financial statements of MCI, Cana Realty and Cana Corp (item 2) to be served within 28 days, because those statements are within the 3rd respondent's power under Washington law.

Court Disposition

Interlocutory relief granted in part: undertaking accepted for accounting records; formal discovery ordered for periodical financial statements only; costs reserved as costs in the cause (no separate costs awarded to parties)

Orders

  • No order for discovery in respect of items 1 and 3 to 10 in the schedule upon the undertaking by counsel on behalf of the 3rd respondent to permit inspection of the accounting records and database
  • The 3rd respondent do, within 28 days of the handing down of this decision, (a) make and serve on the petitioners a further and better list of documents within the classes specified in item 2 in the schedule; and (b) make and file an affirmation stating whether he has, or has at any time had, in his possession,...