PLEASURE INTERNATIONAL LTD AND OTHERS v. KAO WAI HO FRANCIS AND ANOTHER

PLEASURE INTERNATIONAL LTD AND OTHERS v. KAO WAI HO FRANCIS AND ANOTHER

On the evidence the 1st defendant failed to show any triable issue: under BVI law the common law no‑conflict and no‑profits rules apply and are not displaced by s124 or by the Articles; disclosure under s124 does not resolve the conflict or absolve accountability; the gifts therefore gave rise to a breach of fiduciary duty in principle and the plaintiffs were entitled to the injunction and costs ordered.

Citation
PLEASURE INTERNATIONAL LTD AND OTHERS v. KAO WAI HO FRANCIS AND ANOTHER
Parties
1st Plaintiff: Pleasure International Limited; 2nd Plaintiff: Silverbay Group Limited; 3rd Plaintiff: Golden Jungle Limited; 4th Plaintiff: Lam Pak Kin; 1st Defendant: Kao Wai Ho Francis; 2nd Defendant: Sunni International Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
25 June 2009
Case Number
HCA1753/2008
Procedural Posture
Shareholder Derivative Action (breach of Fiduciary Duty) / Summary Judgment Application (order 14)
Outcome
Judgment for the plaintiffs: injunction granted; costs ordered against the 1st defendant and indemnity by Sunni for shortfall.
Legal Topics
Directors' Duties, No Conflict Rule, No Profits Rule, Derivative Action, Foreign Law (bvi), Statutory Construction (bca)
Source Language
EN
Company Law Equity Fiduciary Duties Conflict of Laws Injunctive Relief Directors' Duties No Conflict Rule No Profits Rule +3 more

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Parties

Pleasure International Limited

1st Plaintiff

Silverbay Group Limited

2nd Plaintiff

Golden Jungle Limited

3rd Plaintiff

Lam Pak Kin

4th Plaintiff

Kao Wai Ho Francis

1st Defendant

Sunni International Limited

2nd Defendant

Procedural Posture

Shareholder Derivative Action (breach of Fiduciary Duty) / Summary Judgment Application (order 14)

Legal Issues

  1. 1 Whether the 1st defendant showed a triable issue to resist summary judgment on breach of fiduciary duty
  2. 2 Whether disclosure under s124 BCA discharges the common law no‑conflict duty
  3. 3 Whether section 120(1) or other BCA provisions modify common law fiduciary duties

Ratio Decidendi

On the evidence the 1st defendant failed to show any triable issue: under BVI law the common law no‑conflict and no‑profits rules apply and are not displaced by s124 or by the Articles; disclosure under s124 does not resolve the conflict or absolve accountability; the gifts therefore gave rise to a breach of fiduciary duty in principle and the plaintiffs were entitled to the injunction and costs ordered.

Court Disposition

Judgment for the plaintiffs: injunction granted; costs ordered against the 1st defendant and indemnity by Sunni for shortfall.

Orders

  • Injunction restraining the 1st defendant from causing or procuring the 2nd defendant to transfer or otherwise dispose of any Imagi shares at no consideration or otherwise in breach of fiduciary duty without the unanimous consent of Sunni's shareholders
  • Order nisi that the 1st defendant do pay the plaintiffs' costs of the action including the costs of this application such costs to be taxed