KIM LUNG TRANSPORTATION CO (a firm) AND OTHERS v. IP MAN FAI AND ANOTHER

KIM LUNG TRANSPORTATION CO (a firm) AND OTHERS v. IP MAN FAI AND ANOTHER

The Court struck out all claims by P1 and by P6 because the pleaded and evidenced wrongs post‑2010 related to the business and confidential information of P2 (and at most P4), not P1, and Tsang's alleged losses are reflective of company loss so he lacks standing; MPC's authority to act for P2–P5 was not proved and purported ratification at the EGM was invalid, but because defendants did not demonstrate reliance/inducement on any implied warranty of authority the Court declined to order MPC personally to pay wasted costs under the summary jurisdiction (while inviting consideration of an Order 62 wasted costs application)

Citation
KIM LUNG TRANSPORTATION CO (a firm) AND OTHERS v. IP MAN FAI AND ANOTHER
Parties
1st Plaintiff: KIM LUNG TRANSPORTATION CO. (a firm); 2nd Plaintiff: KIM LUNG TRANSPORT SERVICES LTD.; 3rd Plaintiff: KIM LUNG (HOLDINGS) LTD.; 4th Plaintiff: KIM LUNG LOGISTICS LTD.; 5th Plaintiff: KIM LUNG MANAGEMENT LTD.; 6th Plaintiff / HCMP Applicant: TSANG SIU CHONG; 1st Defendant: IP MAN FAI; 2nd Defendant: AIR GLOBAL LTD.
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
6 June 2012
Case Number
HCA271/2012
Procedural Posture
Civil Company Law / Injunctions / Derivative Type Proceedings / Judgment (court of First Instance Decision)
Outcome
Claims by P1 and P6 dismissed and struck out; application for personal costs against MPC dismissed; costs orders made against P6 in favor of defendants; procedural invitations regarding wasted costs under Order 62
Legal Topics
Authority of Solicitors, Ratification, Derivative Action / S168 BC Companies Ordinance, Fiduciary Duties of Directors, Reflective Loss, Striking Out for No Reasonable Cause of Action, Wasted Costs / Solicitor's Liability, Anton Piller Relief
Source Language
EN
Company Law Civil Procedure Equity Professional Negligence/costs Authority of Solicitors Ratification Derivative Action / S168 BC Companies Ordinance Fiduciary Duties of Directors +4 more

Case Brief

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Parties

KIM LUNG TRANSPORTATION CO. (a firm)

1st Plaintiff

KIM LUNG TRANSPORT SERVICES LTD.

2nd Plaintiff

KIM LUNG (HOLDINGS) LTD.

3rd Plaintiff

KIM LUNG LOGISTICS LTD.

4th Plaintiff

KIM LUNG MANAGEMENT LTD.

5th Plaintiff

TSANG SIU CHONG

6th Plaintiff / HCMP Applicant

IP MAN FAI

1st Defendant

AIR GLOBAL LTD.

2nd Defendant

Procedural Posture

Civil Company Law / Injunctions / Derivative Type Proceedings / Judgment (court of First Instance Decision)

Legal Issues

  1. 1 Whether P1 (partnership) retained standing to sue for alleged wrongs committed after its business was injected into companies P4/P2
  2. 2 Whether Tsang (P6) can sue personally for loss allegedly caused to P2–P5 or whether any loss is reflective and non-recoverable
  3. 3 Whether Messrs Michael Pang & Co. (MPC) had authority to act for P2–P5 and whether they are liable personally for wasted costs

Ratio Decidendi

The Court struck out all claims by P1 and by P6 because the pleaded and evidenced wrongs post‑2010 related to the business and confidential information of P2 (and at most P4), not P1, and Tsang's alleged losses are reflective of company loss so he lacks standing; MPC's authority to act for P2–P5 was not proved and purported ratification at the EGM was invalid, but because defendants did not demonstrate reliance/inducement on any implied warranty of authority the Court declined to order MPC personally to pay wasted costs under the summary jurisdiction (while inviting consideration of an Order 62 wasted costs application)

Court Disposition

Claims by P1 and P6 dismissed and struck out; application for personal costs against MPC dismissed; costs orders made against P6 in favor of defendants; procedural invitations regarding wasted costs under Order 62

Orders

  • All claims made by KIM LUNG TRANSPORTATION CO. (P1) struck out
  • All claims made by TSANG SIU CHONG (P6) struck out