GUARDIAN PROPRIETARY LTD v. LU JUN AND OTHERS

GUARDIAN PROPRIETARY LTD v. LU JUN AND OTHERS

Application dismissed because the applicant (through Madam Yu) was the de facto majority controller and could procure the company to initiate the proposed proceedings; leave under ss.168BB-168BC was therefore unnecessary and the application was misconceived, warranting costs orders (indemnity up to and including 21...

Source-derived case information.

Citation
GUARDIAN PROPRIETARY LTD v. LU JUN AND OTHERS
Parties
Applicant: Guardian Proprietary Limited; 1st Respondent: Lu Jun; 2nd Respondent: 2nd respondent (company controlled by 1st respondent); 3rd Respondent: Astrotec Company Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
3 May 2012
Case Number
HCMP923/2011
Procedural Posture
Derivative Action Application Under Companies Ordinance (ss.168 Bb,168 Bc) / Leave Application (originating Summons)
Outcome
Application dismissed
Legal Topics
Derivative Action, Leave to Commence Derivative Proceedings, Shareholder Control, Indemnity Costs
Source Language
en
Company Law Civil Procedure Costs Derivative Action Leave to Commence Derivative Proceedings Shareholder Control Indemnity Costs

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Parties

Guardian Proprietary Limited

Applicant

Lu Jun

1st Respondent

2nd respondent (company controlled by 1st respondent)

2nd Respondent

Astrotec Company Limited

3rd Respondent

Procedural Posture

Derivative Action Application Under Companies Ordinance (ss.168 Bb,168 Bc) / Leave Application (originating Summons)

Legal Issues

  1. 1 Whether leave should be granted under ss.168BB-168BC for a derivative action where the applicant effectively controls a majority of the company
  2. 2 Whether the applicant is a proper person to bring a derivative action when the applicant can procure the company to commence proceedings
  3. 3 Appropriate costs order where the application is misconceived

Ratio Decidendi

Application dismissed because the applicant (through Madam Yu) was the de facto majority controller and could procure the company to initiate the proposed proceedings; leave under ss.168BB-168BC was therefore unnecessary and the application was misconceived, warranting costs orders (indemnity up to and including 21 December 2011; thereafter party-and-party taxed).

Court Disposition

Application dismissed

Orders

  • Application dismissed.
  • Costs: 1st and 2nd respondents to be paid costs on an indemnity basis incurred up to and including the hearing on 21 December 2011; costs incurred after that date to be taxed and paid on a party-and-party basis.