JONATHAN LIM v. SHE WAI HUNG AND OTHERS

JONATHAN LIM v. SHE WAI HUNG AND OTHERS

The court found a triable dispute that the plaintiff lacked clear entitlement to bring a derivative action because the trustees controlling the majority shares were not shown to be acting improperly; the matters complained of could be resolved by an ordinary majority and damages would be an adequate remedy for the plaintiff personally. Accordingly summary judgment and interim relief were refused and the plaintiff's summary application dismissed, with a costs order nisi against him. The court accepted undertakings by the 1st and 2nd defendants restraining them from representing themselves as officers of the company until trial.

Citation
JONATHAN LIM v. SHE WAI HUNG AND OTHERS
Parties
Plaintiff (suing on Behalf of Himself and Other Shareholders of 3rd Defendant Except She Wai Hung): Jonathan Lim; 1st Defendant: She Wai Hung; 2nd Defendant: She Siu Pang; 3rd Defendant: Golden Bright Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
6 December 2010
Case Number
HCA391/2010
Procedural Posture
Company/shareholder Dispute (derivative and Personal) / Summary Judgment Application (interlocutory)
Outcome
Plaintiff's application for summary judgment dismissed; no summary declarations or injunctions granted; costs order nisi against plaintiff; court accepted undertakings by 1st and 2nd defendants restraining them from holding out or acting as directors/representatives/secretary until trial or further order.
Legal Topics
Derivative Action, Locus Standi, Articles of Association Enforcement, Interim Injunctions, Summary Judgment, Company Meetings Quorum
Source Language
EN
Company Law Civil Procedure Bankruptcy Law Derivative Action Locus Standi Articles of Association Enforcement Interim Injunctions Summary Judgment +1 more

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Parties

Jonathan Lim

Plaintiff (suing on Behalf of Himself and Other Shareholders of 3rd Defendant Except She Wai Hung)

She Wai Hung

1st Defendant

She Siu Pang

2nd Defendant

Golden Bright Limited

3rd Defendant

Procedural Posture

Company/shareholder Dispute (derivative and Personal) / Summary Judgment Application (interlocutory)

Legal Issues

  1. 1 Whether the plaintiff (holder of 1 out of 10,000 shares) has locus standi to bring a derivative action on behalf of the 3rd defendant
  2. 2 Whether the purported appointments of the 1st and 2nd defendants as directors and company secretary were valid
  3. 3 Whether the plaintiff can bring a personal action to enforce rights under the company constitution (Companies Ordinance s23)

Ratio Decidendi

The court found a triable dispute that the plaintiff lacked clear entitlement to bring a derivative action because the trustees controlling the majority shares were not shown to be acting improperly; the matters complained of could be resolved by an ordinary majority and damages would be an adequate remedy for the plaintiff personally. Accordingly summary judgment and interim relief were refused and the plaintiff's summary application dismissed, with a costs order nisi against him. The court accepted undertakings by the 1st and 2nd defendants restraining them from representing themselves as officers of the company until trial.

Court Disposition

Plaintiff's application for summary judgment dismissed; no summary declarations or injunctions granted; costs order nisi against plaintiff; court accepted undertakings by 1st and 2nd defendants restraining them from holding out or acting as directors/representatives/secretary until trial or further order.

Orders

  • Summary judgment application dismissed
  • Costs order nisi: plaintiff to pay 1st and 2nd defendants' costs of the application forthwith