TSANG SIU CHONG v. KIM LUNG TRANSPORTATION SERVICES LTD AND OTHERS

TSANG SIU CHONG v. KIM LUNG TRANSPORTATION SERVICES LTD AND OTHERS

The court struck out all claims of P1 and P6 because the pleaded and evidenced wrongs post-dated the injection of the partnership business into the companies so any loss belonged to P2-P5 (or P4) and Tsang's alleged loss was at best reflective; there was no valid ratification of MPC's authority and defendants did not rely on MPC's implied warranty of authority so the court declined to exercise its summary jurisdiction to order MPC personally to pay wasted costs, but ordered costs against P6 for P1 and P6's claims and apportioned hearing costs as stated.

Citation
TSANG SIU CHONG v. KIM LUNG TRANSPORTATION SERVICES LTD AND OTHERS
Parties
1st Plaintiff: KIM LUNG TRANSPORTATION CO. (a firm); 2nd Plaintiff: KIM LUNG TRANSPORT SERVICES LTD.; 3rd Plaintiff: KIM LUNG (HOLDINGS) LTD.; 4th Plaintiff: KIM LUNG LOGISTICS LTD.; 5th Plaintiff: KIM LUNG MANAGEMENT LTD.; 6th Plaintiff / Applicant: TSANG SIU CHONG; 1st Defendant: IP MAN FAI; 2nd Defendant: AIR GLOBAL LTD.
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
6 June 2012
Case Number
HCMP1003/2012
Procedural Posture
Company Law / Civil Injunctive Proceedings (derivative/representative and Fiduciary Claims) / Strike Out Applications and HCMP Leave to Intervene and Related Costs Applications (heard on Interlocutory Applications)
Outcome
Claims of 1st Plaintiff (KIM LUNG TRANSPORTATION CO.) and 6th Plaintiff/Applicant (TSANG SIU CHONG) dismissed and struck out; application for personal costs against Michael Pang & Co. dismissed; costs orders made against P6 in favour of defendants as stated.
Legal Topics
Derivative Action, Anton Piller Order, Striking Out for Lack of Cause of Action, Reflective Loss, Ratification of Authority, Wasted Costs Order, Breach of Fiduciary Duty, Warranty of Authority
Source Language
EN
Company Law Civil Procedure Solicitors' Liability Equity and Fiduciary Duties Costs Law Injunctions Agency/warranty of Authority Derivative Action +7 more

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Parties

KIM LUNG TRANSPORTATION CO. (a firm)

1st Plaintiff

KIM LUNG TRANSPORT SERVICES LTD.

2nd Plaintiff

KIM LUNG (HOLDINGS) LTD.

3rd Plaintiff

KIM LUNG LOGISTICS LTD.

4th Plaintiff

KIM LUNG MANAGEMENT LTD.

5th Plaintiff

TSANG SIU CHONG

6th Plaintiff / Applicant

IP MAN FAI

1st Defendant

AIR GLOBAL LTD.

2nd Defendant

Procedural Posture

Company Law / Civil Injunctive Proceedings (derivative/representative and Fiduciary Claims) / Strike Out Applications and HCMP Leave to Intervene and Related Costs Applications (heard on Interlocutory Applications)

Legal Issues

  1. 1 Whether the 1st plaintiff (partnership) continued to carry on business after injection into companies such that it has cause of action
  2. 2 Whether Tsang (P6) has standing to sue for losses alleged to be suffered by P2-P5 or only reflective loss
  3. 3 Whether the appointment/authority of solicitors Michael Pang & Co. (MPC) to institute proceedings for P2-P5 was valid or ratified

Ratio Decidendi

The court struck out all claims of P1 and P6 because the pleaded and evidenced wrongs post-dated the injection of the partnership business into the companies so any loss belonged to P2-P5 (or P4) and Tsang's alleged loss was at best reflective; there was no valid ratification of MPC's authority and defendants did not rely on MPC's implied warranty of authority so the court declined to exercise its summary jurisdiction to order MPC personally to pay wasted costs, but ordered costs against P6 for P1 and P6's claims and apportioned hearing costs as stated.

Court Disposition

Claims of 1st Plaintiff (KIM LUNG TRANSPORTATION CO.) and 6th Plaintiff/Applicant (TSANG SIU CHONG) dismissed and struck out; application for personal costs against Michael Pang & Co. dismissed; costs orders made against P6 in favour of defendants as stated.

Orders

  • All claims made by 1st Plaintiff (KIM LUNG TRANSPORTATION CO.) are struck out.
  • All claims made by 6th Plaintiff (TSANG SIU CHONG) are struck out.