DAVID CHIEN v. FRANCIS CHEUNG AND OTHERS

DAVID CHIEN v. FRANCIS CHEUNG AND OTHERS

There was a serious question to be tried that the directors approved a disposal of the company's principal asset at an undervalue and in breach of their fiduciary duties, the plaintiff (having become a registered member) was entitled to interlocutory relief, and an interim quia timet injunction should be granted restraining completion of the sale pending determination of the leave application under s168BC or further order.

Citation
DAVID CHIEN v. FRANCIS CHEUNG AND OTHERS
Parties
Plaintiff: David Chien; 1st Defendant: Francis Cheung; 2nd Defendant: Jennifer Kwok; 3rd Defendant: Chiu Chin Hung; 4th Defendant: Wong Kay; 5th Defendant: Lau Kin Fai; 6th Defendant: Harvey Jackel Cheung; 7th Defendant: Fan Chor Ho Paul; 8th Defendant: Tse Man Bun; 9th Defendant: Lung Chee Ming George; Respondent (hcmp 841/2013): Tysan Holdings Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
7 June 2013
Case Number
HCMP2892/2012
Procedural Posture
Application for Interim Injunction Under Section 350 B of the Companies Ordinance and Application for Leave to Bring Statutory Derivative Proceedings Under Section 168 BC / Interlocutory Hearing (injunction Granted Pending Determination of Leave Application)
Outcome
Interim injunction granted; defendants' strike‑out summons dismissed; costs ordered against defendants
Legal Topics
Interim Injunction, Derivative Proceedings, Connected Party Transaction, Undervalue Disposal, Breach of Directors' Duties, Conflict of Interest, Shareholders' Approval
Source Language
EN
Company Law Corporate Governance Equity/fiduciary Duties Securities/listing Regulation Interim Injunction Derivative Proceedings Connected Party Transaction Undervalue Disposal +3 more

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Parties

David Chien

Plaintiff

Francis Cheung

1st Defendant

Jennifer Kwok

2nd Defendant

Chiu Chin Hung

3rd Defendant

Wong Kay

4th Defendant

Lau Kin Fai

5th Defendant

Harvey Jackel Cheung

6th Defendant

Fan Chor Ho Paul

7th Defendant

Tse Man Bun

8th Defendant

Lung Chee Ming George

9th Defendant

Tysan Holdings Limited

Respondent (hcmp 841/2013)

Procedural Posture

Application for Interim Injunction Under Section 350 B of the Companies Ordinance and Application for Leave to Bring Statutory Derivative Proceedings Under Section 168 BC / Interlocutory Hearing (injunction Granted Pending Determination of Leave Application)

Legal Issues

  1. 1 Whether there is a serious question to be tried that directors approved disposal at undervalue and breached fiduciary duties
  2. 2 Whether the court may grant interim relief under section 350B and inherent jurisdiction pending leave for derivative proceedings under section 168BC
  3. 3 Whether plaintiff had standing/member status to seek relief

Ratio Decidendi

There was a serious question to be tried that the directors approved a disposal of the company's principal asset at an undervalue and in breach of their fiduciary duties, the plaintiff (having become a registered member) was entitled to interlocutory relief, and an interim quia timet injunction should be granted restraining completion of the sale pending determination of the leave application under s168BC or further order.

Court Disposition

Interim injunction granted; defendants' strike‑out summons dismissed; costs ordered against defendants

Orders

  • Injunction restraining the defendants from directly or indirectly engaging in any act or conduct to secure completion of the sale under the Agreement for Sale and Purchase of Shares in Tysan Foundation (Hong Kong) Limited dated 12 November 2012 and the Supplemental Agreement dated 21 December 2012 until...
  • The defendants' summons (24 January 2013) to strike out the 1st Originating Summons is dismissed with costs