CHEN HONGQING v. The persons whose names are set out in the second column of the Schedule to the Re-amended Writ of Summons filed on 26 March 2018 AND OTHERS

CHEN HONGQING v. The persons whose names are set out in the second column of the Schedule to the Re-amended Writ of Summons filed on 26 March 2018 AND OTHERS

The Receivership Summons was dismissed because (1) the Court set aside the Service Out Order removing the jurisdictional basis for the application, (2) Chen HQ failed to establish a serious issue to be tried — his competing pleaded cases were contradictory — and (3) the alleged necessities for appointing interim receivers were speculative and disproportionate; balance of convenience and concerns about non‑disclosure of funding reinforced refusal. The alternative interim injunction was also refused and no order was made on the Direction Summons, parties given liberty to apply for consequential orders.

Citation
[2019] HKCFI 2122
Parties
Plaintiff (hca 2648/2017): Chen Hongqing; Defendants (named Shds): SH Defendants (SHDs); Defendant / Intended Intervener (2266th Defendant): Jinan Industrial Development Investment Group Co, Ltd; Putative Interested Parties / Former Receivers: EY Receivers / Former Receivers; Plaintiffs (hca 1282/2017): Li Ming et al (employees / plaintiffs); 1st Defendant (hca 1282/2017): Zhang Caikui; 2nd Defendant (hca 1282/2017): Li Yanmin
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
30 August 2019
Case Number
HCA2648/2017
Procedural Posture
Interlocutory Applications Concerning Receivership, Interim Injunctions and Directions / Decision on Interlocutory Summonses (receivership Summons and Direction Summons)
Outcome
Receivership Summons dismissed in its entirety; alternative interim injunction refused; no order made on Direction Summons; parties granted liberty to apply for consequential orders; costs nisi order against Chen HQ for the Receivership Summons (certificate for two counsel); no order as to costs for Direction Summons.
Legal Topics
Appointment of Interim Receivers, Interlocutory Injunction, Jurisdiction to Serve Out, Balance of Convenience, Nominee Voting Rights, Disclosure of Source of Funds, Takeover Code Implications
Source Language
EN
Company Law Equity Trusts Civil Procedure Securities Regulation Injunctions Receivership Appointment of Interim Receivers +6 more

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Parties

Chen Hongqing

Plaintiff (hca 2648/2017)

SH Defendants (SHDs)

Defendants (named Shds)

Jinan Industrial Development Investment Group Co, Ltd

Defendant / Intended Intervener (2266th Defendant)

EY Receivers / Former Receivers

Putative Interested Parties / Former Receivers

Li Ming et al (employees / plaintiffs)

Plaintiffs (hca 1282/2017)

Zhang Caikui

1st Defendant (hca 1282/2017)

Li Yanmin

2nd Defendant (hca 1282/2017)

Procedural Posture

Interlocutory Applications Concerning Receivership, Interim Injunctions and Directions / Decision on Interlocutory Summonses (receivership Summons and Direction Summons)

Legal Issues

  1. 1 Whether there was a serious issue to be tried as to Chen HQ’s beneficial/equitable interest in the CSI shares
  2. 2 Whether a proper basis existed to appoint interim receivers to preserve the shares (jeopardy/danger of dissipation)
  3. 3 Whether appointment of interim receivers was necessary and proportionate (no less intrusive means available)

Ratio Decidendi

The Receivership Summons was dismissed because (1) the Court set aside the Service Out Order removing the jurisdictional basis for the application, (2) Chen HQ failed to establish a serious issue to be tried — his competing pleaded cases were contradictory — and (3) the alleged necessities for appointing interim receivers were speculative and disproportionate; balance of convenience and concerns about non‑disclosure of funding reinforced refusal. The alternative interim injunction was also refused and no order was made on the Direction Summons, parties given liberty to apply for consequential orders.

Court Disposition

Receivership Summons dismissed in its entirety; alternative interim injunction refused; no order made on Direction Summons; parties granted liberty to apply for consequential orders; costs nisi order against Chen HQ for the Receivership Summons (certificate for two counsel); no order as to costs for Direction Summons.

Orders

  • Dismissal of the Receivership Summons dated 8 February 2018 in its entirety
  • Refusal of the alternative interim injunction sought by Chen Hongqing