JUNESTAR INVESTMENT CORPORATION v. BOLDWIN CONSTRUCTION CO LTD AND ANOTHER

JUNESTAR INVESTMENT CORPORATION v. BOLDWIN CONSTRUCTION CO LTD AND ANOTHER

Section 186 does not prevent interlocutory applications against persons other than the company; allegations challenging a company's authority to sue cannot be pleaded as a defence (paragraph 12 struck out) and must be addressed by striking out the plaintiff's name or separate application; allegations about the employee Ann were irrelevant and speculative and were struck out; pleas premised on hypothetical ratification were not plainly unsustainable and therefore were not struck out; the counterclaim was duplicative of an existing action and the names of Junestar and LWD as defendants by counterclaim and the entire counterclaim were struck out; consequential amendments and timelines for...

Citation
JUNESTAR INVESTMENT CORPORATION v. BOLDWIN CONSTRUCTION CO LTD AND ANOTHER
Parties
Plaintiff (original Action): Junestar Investment Corporation; 1st Defendant (original Action): Boldwin Construction Company Limited; 2nd Defendant (original Action): Chan Shiu Chick; Plaintiff (by Counterclaim): Chan Shiu Chick; 1st Defendant (by Counterclaim): Junestar Investment Corporation; 2nd Defendant (by Counterclaim): Law Wai Duen Nina
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
20 August 2003
Case Number
HCA1036/2002
Procedural Posture
Shareholder Derivative Action / Company Law Dispute / Application to Strike Out Parts of Defence and Counterclaim (heard in Chambers)
Outcome
Application allowed in part: specified paragraphs of Defence struck out; Counterclaim and Junestar and LWD as defendants by counterclaim struck out; leave granted to amend Defence; timelines fixed; costs awarded to Junestar and LWD
Legal Topics
Derivative Action, Strike Out / Abuse of Process, Provisional Liquidation and Section 186, Beneficial Ownership of Shares, Ratification, Joinder and Counterclaims, Relevance and Scandalous Pleadings
Source Language
EN
Company Law Civil Procedure Trusts and Equitable Remedies Insolvency Law Derivative Action Strike Out / Abuse of Process Provisional Liquidation and Section 186 Beneficial Ownership of Shares +3 more

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Parties

Junestar Investment Corporation

Plaintiff (original Action)

Boldwin Construction Company Limited

1st Defendant (original Action)

Chan Shiu Chick

2nd Defendant (original Action)

Chan Shiu Chick

Plaintiff (by Counterclaim)

Junestar Investment Corporation

1st Defendant (by Counterclaim)

Law Wai Duen Nina

2nd Defendant (by Counterclaim)

Procedural Posture

Shareholder Derivative Action / Company Law Dispute / Application to Strike Out Parts of Defence and Counterclaim (heard in Chambers)

Legal Issues

  1. 1 Whether appointment of provisional liquidators under s.186 Companies Ordinance requires leave to continue non-company proceedings or to bring strike out application
  2. 2 Whether allegations of beneficial ownership and breach of trust can be raised as a defence to a derivative action or go to locus standi
  3. 3 Whether lack of authority to bring proceedings can be pleaded as a defence or must be raised by striking out plaintiff's name or separate application

Ratio Decidendi

Section 186 does not prevent interlocutory applications against persons other than the company; allegations challenging a company's authority to sue cannot be pleaded as a defence (paragraph 12 struck out) and must be addressed by striking out the plaintiff's name or separate application; allegations about the employee Ann were irrelevant and speculative and were struck out; pleas premised on hypothetical ratification were not plainly unsustainable and therefore were not struck out; the counterclaim was duplicative of an existing action and the names of Junestar and LWD as defendants by counterclaim and the entire counterclaim were struck out; consequential amendments and timelines for...

Court Disposition

Application allowed in part: specified paragraphs of Defence struck out; Counterclaim and Junestar and LWD as defendants by counterclaim struck out; leave granted to amend Defence; timelines fixed; costs awarded to Junestar and LWD

Orders

  • Paragraph 12 of the Defence struck out
  • Paragraphs 27(3)(c) and (d), 29(3) (limited to specified words), 29(5) (limited to specified words), 29(8)(a) insofar as relating to 27(3)(c) and (d), 31(3) and (4), 32(3)(ii) to (v), 32(4)(i) to (iv) of the Defence struck out