WILLWIN DEVELOPMENT (ASIA) CO LTD AND ANOTHER v. WEI XING AND OTHERS

WILLWIN DEVELOPMENT (ASIA) CO LTD AND ANOTHER v. WEI XING AND OTHERS

On the facts and contemporaneous documentary evidence the court found Xing and Hu Ying remained directors for the relevant periods and therefore owed fiduciary duties; Xing used his position to divert clients and procure orders for ESL and misused confidential client/technical information while still a director; Hu Ying knowingly assisted and, by deliberate blindness, dishonestly assisted those breaches and ESL is attributable with her state of mind; passing off was established by misrepresentations to clients; plaintiffs are entitled to account for sums withdrawn and certain reliefs were granted though ongoing injunctions against ex-directors' use of confidential information were limited.

Citation
WILLWIN DEVELOPMENT (ASIA) CO LTD AND ANOTHER v. WEI XING AND OTHERS
Parties
1st Plaintiff: Willwin Development (Asia) Company Limited; 2nd Plaintiff: Shenzhen Willwin Technology Company Limited; 1st Defendant: Wei Xing; 2nd Defendant: Evolution Solution Limited; 3rd Defendant: Hu Ying
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
8 March 2016
Case Number
HCA797/2012
Procedural Posture
Company and Commercial Litigation (directors Duties, Breach of Confidence, Passing Off) / Judgment After Trial
Outcome
Judgment for plaintiffs in part. Defendants found liable for breach of fiduciary duties, misuse of confidential information, dishonest assistance (Hu Ying and ESL), and passing off (Xing and ESL). Account ordered; specified injunctive relief limited; costs ordered nisi in favour of plaintiffs.
Legal Topics
Directors' Duties and Conflicts of Interest, Misuse of Confidential Information, Dishonest Assistance, Passing Off, Accounting and Tracing of Funds, Misappropriation, Mareva Injunction, Attribution of State of Mind to Company
Source Language
EN
Company Law Fiduciary Duties Confidential Information Intellectual Property (passing Off) Equity and Trusts Civil Procedure (injunctions, Mareva) Accounting and Recovery of Funds Directors' Duties and Conflicts of Interest +7 more

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Parties

Willwin Development (Asia) Company Limited

1st Plaintiff

Shenzhen Willwin Technology Company Limited

2nd Plaintiff

Wei Xing

1st Defendant

Evolution Solution Limited

2nd Defendant

Hu Ying

3rd Defendant

Procedural Posture

Company and Commercial Litigation (directors Duties, Breach of Confidence, Passing Off) / Judgment After Trial

Legal Issues

  1. 1 Whether Xing and Hu Ying remained directors and owed fiduciary duties to WW
  2. 2 Whether WW carried on a business and had goodwill and clients
  3. 3 Whether Xing diverted WW's business and opportunities to ESL while still a director

Ratio Decidendi

On the facts and contemporaneous documentary evidence the court found Xing and Hu Ying remained directors for the relevant periods and therefore owed fiduciary duties; Xing used his position to divert clients and procure orders for ESL and misused confidential client/technical information while still a director; Hu Ying knowingly assisted and, by deliberate blindness, dishonestly assisted those breaches and ESL is attributable with her state of mind; passing off was established by misrepresentations to clients; plaintiffs are entitled to account for sums withdrawn and certain reliefs were granted though ongoing injunctions against ex-directors' use of confidential information were limited.

Court Disposition

Judgment for plaintiffs in part. Defendants found liable for breach of fiduciary duties, misuse of confidential information, dishonest assistance (Hu Ying and ESL), and passing off (Xing and ESL). Account ordered; specified injunctive relief limited; costs ordered nisi in favour of plaintiffs.

Orders

  • Grant relief in terms of paragraphs (2), (7), (7A), (10A), (10B), (13), (15), (17), (18) and (20) of the Re-amended Statement of Claim
  • Order an account to be taken of sums received by Xing and Hu Ying as particularised in Annexure B and pursuant to paragraphs 52A and 57A of the Re-amended Statement of Claim