DEACON TO KEN CHIU v. EDWARD G. HARSHFIELD AND OTHERS

DEACON TO KEN CHIU v. EDWARD G. HARSHFIELD AND OTHERS

The court found the defendants proposed a clear breach of a binding covenant in Clause 11 and the material before the court did not show such grave misconduct by the plaintiff as to disentitle him from enforcing the covenant; accordingly an interlocutory injunction was granted to preserve the plaintiff's contractual...

Source-derived case information.

Citation
DEACON TO KEN CHIU v. EDWARD G. HARSHFIELD AND OTHERS
Parties
Plaintiff: Deacon To Ken Chiu; 1st Defendant: Edward G. Harshfield; 2nd Defendant: Edmund Yam To Chow; 3rd Defendant: Daniel Nai Chong Li; 4th Defendant: Ira Stephen Rimerman; 5th Defendant: Kenneth Alan Starger; 6th Defendant: Citibank N.A.; 7th Defendant: Far East Bank Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
21 May 1979
Case Number
HCA931/1979
Procedural Posture
Interlocutory Injunction Concerning Enforcement of Covenant and Removal of Company Chairman / Inter Partes Hearing for Interim Relief Following Ex Parte Injunction; Interlocutory Stage
Outcome
Interlocutory injunction granted restraining defendants from removing the plaintiff as permanent Chairman or Director of the Bank; order in terms of amended inter partes summons granted; costs allocated as indicated
Legal Topics
Enforceability of Contractual Covenant, Removal of Chairman Under Articles, Interlocutory Relief, Balance of Convenience, Alleged Misconduct Disentitling Performance
Source Language
en
Contract Company Law Equity Injunctions Corporate Governance Enforceability of Contractual Covenant Removal of Chairman Under Articles Interlocutory Relief +2 more

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Parties

Deacon To Ken Chiu

Plaintiff

Edward G. Harshfield

1st Defendant

Edmund Yam To Chow

2nd Defendant

Daniel Nai Chong Li

3rd Defendant

Ira Stephen Rimerman

4th Defendant

Kenneth Alan Starger

5th Defendant

Citibank N.A.

6th Defendant

Far East Bank Limited

7th Defendant

Procedural Posture

Interlocutory Injunction Concerning Enforcement of Covenant and Removal of Company Chairman / Inter Partes Hearing for Interim Relief Following Ex Parte Injunction; Interlocutory Stage

Legal Issues

  1. 1 Whether the court should grant an interlocutory injunction restraining defendants from removing the plaintiff as Chairman in breach of Clause 11 of the 1969 Deed
  2. 2 Whether the plaintiff is disentitled to enforce the covenant by reason of alleged misconduct or interference with management
  3. 3 Whether the balance of convenience governs or is displaced where there is a clear covenant breach

Ratio Decidendi

The court found the defendants proposed a clear breach of a binding covenant in Clause 11 and the material before the court did not show such grave misconduct by the plaintiff as to disentitle him from enforcing the covenant; accordingly an interlocutory injunction was granted to preserve the plaintiff's contractual rights without resort to balance of convenience.

Court Disposition

Interlocutory injunction granted restraining defendants from removing the plaintiff as permanent Chairman or Director of the Bank; order in terms of amended inter partes summons granted; costs allocated as indicated

Orders

  • Order in terms of paragraphs 1 and 2 of the inter partes summons as amended by inserting the words "originally" and "as now adjourned" after the words "7th defendant" and the words "March 1979" respectively
  • Interim injunction restraining the 6th defendant whether by itself or by its agents or servants from removing or purporting to remove the plaintiff as permanent Chairman or Director of the 7th defendant in breach of Clause 11 of the Deed dated 4 June 1969