WYSE INVESTMENT LTD v. FUNG TIN YAU

WYSE INVESTMENT LTD v. FUNG TIN YAU

The Court dismissed all three sets of appeals: the 2078 strike out appeal failed because the counterclaim based on assumed fiduciary duties disclosed a reasonable cause of action and was not plainly frivolous or an abuse; the O.14 appeals (2998‑3000) failed because factual disputes about oral family agreements and estoppel/Duomatic principles required trial and the defences raised arguable points; the 133/136 derivative strike outs failed because the applicant did not show absence of a prima facie 'fraud on the minority' and other strike out grounds were insufficient — leave to defend retained and matters to be resolved at trial.

Citation
[2020] HKCFI 252
Parties
Petitioner/claimant/defendant (various Consolidated Actions): Fung Tin Yau; Plaintiff/respondent (various Consolidated Actions): Lai Ng Nui; 1st Respondent/defendant: Fung Tin Shing; 2nd Respondent/defendant: Fung Wing See; 3rd Respondent/defendant (hccw 170): Great Anchor International Limited; Plaintiff/3rd Respondent/company Party: Maxfortune Trading Limited; Plaintiff/3rd Respondent/company Party: Premium Management Limited; Plaintiff/company Party: Wyse Investment Limited; Defendant/company Party: SAMDOR Company Limited; 2nd Plaintiff/family Member: Fung Wing Yan; 3rd Plaintiff/family Member: Fung Wing Yin; Deceased Patriarch (relevant Factual Actor): Fung Hing Sheung (deceased)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
23 January 2020
Case Number
HCA2999/2017
Procedural Posture
Consolidated Company and Related Civil Proceedings (winding Up, Derivative, Debt and Possession Claims) / Appeal From Masters' Decisions on Strike Out and Summary Judgment (consolidated Hearing Before Companies Judge)
Outcome
All three sets of appeals dismissed; underlying Masters' decisions reinstated
Legal Topics
Derivative Action, Strike Out Applications, Summary Judgment (o.14), Assumption of Fiduciary Duties, Constructive Trust, Duomatic Principle, Fraud on the Minority, Leave to Defend, Limitation
Source Language
EN
Company Law Equity and Trusts Civil Procedure Insolvency Derivative Action Strike Out Applications Summary Judgment (o.14) Assumption of Fiduciary Duties +5 more

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Parties

Fung Tin Yau

Petitioner/claimant/defendant (various Consolidated Actions)

Lai Ng Nui

Plaintiff/respondent (various Consolidated Actions)

Fung Tin Shing

1st Respondent/defendant

Fung Wing See

2nd Respondent/defendant

Great Anchor International Limited

3rd Respondent/defendant (hccw 170)

Maxfortune Trading Limited

Plaintiff/3rd Respondent/company Party

Premium Management Limited

Plaintiff/3rd Respondent/company Party

Wyse Investment Limited

Plaintiff/company Party

SAMDOR Company Limited

Defendant/company Party

Fung Wing Yan

2nd Plaintiff/family Member

Fung Wing Yin

3rd Plaintiff/family Member

Fung Hing Sheung (deceased)

Deceased Patriarch (relevant Factual Actor)

Procedural Posture

Consolidated Company and Related Civil Proceedings (winding Up, Derivative, Debt and Possession Claims) / Appeal From Masters' Decisions on Strike Out and Summary Judgment (consolidated Hearing Before Companies Judge)

Legal Issues

  1. 1 Whether respondent’s counterclaim based on assumed fiduciary duties disclosed a reasonable cause of action for trust/constructive trust remedies
  2. 2 Whether summary judgments should have been granted to companies (O.14) or leave to defend given
  3. 3 Whether common law derivative actions should be struck out for alternative remedy, absence of fraud on the minority or claimant’s lack of clean hands

Ratio Decidendi

The Court dismissed all three sets of appeals: the 2078 strike out appeal failed because the counterclaim based on assumed fiduciary duties disclosed a reasonable cause of action and was not plainly frivolous or an abuse; the O.14 appeals (2998‑3000) failed because factual disputes about oral family agreements and estoppel/Duomatic principles required trial and the defences raised arguable points; the 133/136 derivative strike outs failed because the applicant did not show absence of a prima facie 'fraud on the minority' and other strike out grounds were insufficient — leave to defend retained and matters to be resolved at trial.

Court Disposition

All three sets of appeals dismissed; underlying Masters' decisions reinstated

Orders

  • Respondent awarded costs of all three sets of appeals (to be taxed if not agreed) apportioned as stated in judgment
  • Costs of 2078 appeal to be borne by Madam Lai and Jenny; costs of 2998‑3000 appeals to be borne by Maxfortune, Wyse and Premium respectively; costs of 133/136 appeals to be borne by Madam Lai, Jenny and Andy