TONG KIN HING v. AUTRON MAURITIUS CORPORATION AND OTHERS

TONG KIN HING v. AUTRON MAURITIUS CORPORATION AND OTHERS

The action was struck out because the pleaded central allegation (that the Autron Loans were granted by the other directors in breach of duty) was shown on undisputed admissions and contemporaneous documents to be false or materially suppressed: the plaintiff had agreed to and approved almost all loans and signed remittance vouchers, making continuation of the derivative claim an abuse of process; the defective, verified pleading could not properly be cured by amendment and strike out with indemnity costs was warranted.

Citation
TONG KIN HING v. AUTRON MAURITIUS CORPORATION AND OTHERS
Parties
Plaintiff (derivative Claimant on Behalf of 6th Defendant): Tong Kin Hing; 1st Defendant: Autron Mauritius Corporation; 2nd Defendant: Autron Corporation Limited; 3rd Defendant (director of 6th Defendant): Lim Kheng Joo, Eric; 4th Defendant (director of 6th Defendant): Tan Cheng Leong; 5th Defendant (director of 6th Defendant): Lee Sun Wing; 6th Defendant: DBG Holdings Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
16 October 2009
Case Number
HCA1961/2009
Procedural Posture
Derivative Action / Company Law Dispute / Applications Heard for Injunction and Strike Out; Judgment Striking Out Action (reasons Delivered)
Outcome
Action struck out as an abuse of the process of the court
Legal Topics
Derivative Action, Breach of Fiduciary Duty, Abuse of Process, Statement of Truth (order 41 A), Costs Indemnity, Injunctive Relief
Source Language
EN
Company Law Civil Procedure Corporate Governance Equity & Fiduciary Duties Derivative Action Breach of Fiduciary Duty Abuse of Process Statement of Truth (order 41 A) +2 more

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Parties

Tong Kin Hing

Plaintiff (derivative Claimant on Behalf of 6th Defendant)

Autron Mauritius Corporation

1st Defendant

Autron Corporation Limited

2nd Defendant

Lim Kheng Joo, Eric

3rd Defendant (director of 6th Defendant)

Tan Cheng Leong

4th Defendant (director of 6th Defendant)

Lee Sun Wing

5th Defendant (director of 6th Defendant)

DBG Holdings Limited

6th Defendant

Procedural Posture

Derivative Action / Company Law Dispute / Applications Heard for Injunction and Strike Out; Judgment Striking Out Action (reasons Delivered)

Legal Issues

  1. 1 Whether the plaintiff had standing to continue the derivative action
  2. 2 Whether the action was frivolous, vexatious or an abuse of process
  3. 3 Whether the directors breached fiduciary duties in granting loans to related companies

Ratio Decidendi

The action was struck out because the pleaded central allegation (that the Autron Loans were granted by the other directors in breach of duty) was shown on undisputed admissions and contemporaneous documents to be false or materially suppressed: the plaintiff had agreed to and approved almost all loans and signed remittance vouchers, making continuation of the derivative claim an abuse of process; the defective, verified pleading could not properly be cured by amendment and strike out with indemnity costs was warranted.

Court Disposition

Action struck out as an abuse of the process of the court

Orders

  • Action struck out
  • Order nisi for costs in favour of 1st to 5th Defendants on an indemnity basis