L Y GROUP DEVELOPMENT LTD v. EAST CANTON LTD AND ANOTHER

L Y GROUP DEVELOPMENT LTD v. EAST CANTON LTD AND ANOTHER

On the pleaded facts taken in the plaintiff's favour the deposits created an arguable equitable purchaser's lien over the Shares of Century Peace constituting an equitable charge; the holder of such a charge is entitled to preservation of its security and it is at least arguable that this jurisdiction can be exercised against third parties over whom the debtor has control where disposal would destroy the essence of the security; accordingly the interlocutory striking out applications against the 2nd Defendant failed and the plaintiff's amendment to join Century Peace was allowed, while the lis pendens registration against the Property was vacated as wrongful in law.

Citation
L Y GROUP DEVELOPMENT LTD v. EAST CANTON LTD AND ANOTHER
Parties
Plaintiff: L Y Group Development Limited; 1st Defendant: East Canton Limited; 2nd Defendant: Full Luck Hotel Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
15 July 2015
Case Number
HCA1428/2014
Procedural Posture
Civil Action (share and Property Sale) / Interlocutory Applications: Striking Out, Lis Pendens Vacation and Amendment of Statement of Claim
Outcome
2nd Defendant's applications to cease being a party and to strike out dismissed; lis pendens registered by plaintiff vacated; plaintiff's amendment to add Century Peace allowed; costs orders made as nisi orders with details below.
Legal Topics
Purchaser's Lien, Lis Pendens, Strike Out, Piercing Corporate Veil, Injunctive Relief, Preservation of Security
Source Language
EN
Equity Company Law Property Law Civil Procedure Purchaser's Lien Lis Pendens Strike Out Piercing Corporate Veil +2 more

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Parties

L Y Group Development Limited

Plaintiff

East Canton Limited

1st Defendant

Full Luck Hotel Limited

2nd Defendant

Procedural Posture

Civil Action (share and Property Sale) / Interlocutory Applications: Striking Out, Lis Pendens Vacation and Amendment of Statement of Claim

Legal Issues

  1. 1 Whether the plaintiff has a purchaser's lien over the shares of Century Peace
  2. 2 Whether plaintiff may obtain injunctive relief affecting the 2nd defendant and Century Peace notwithstanding separate corporate personality in order to preserve its security
  3. 3 Whether the writ and statement of claim were registrable as a lis pendens against the Property

Ratio Decidendi

On the pleaded facts taken in the plaintiff's favour the deposits created an arguable equitable purchaser's lien over the Shares of Century Peace constituting an equitable charge; the holder of such a charge is entitled to preservation of its security and it is at least arguable that this jurisdiction can be exercised against third parties over whom the debtor has control where disposal would destroy the essence of the security; accordingly the interlocutory striking out applications against the 2nd Defendant failed and the plaintiff's amendment to join Century Peace was allowed, while the lis pendens registration against the Property was vacated as wrongful in law.

Court Disposition

2nd Defendant's applications to cease being a party and to strike out dismissed; lis pendens registered by plaintiff vacated; plaintiff's amendment to add Century Peace allowed; costs orders made as nisi orders with details below.

Orders

  • 2nd Defendant's application under Order 15 r 6(2)(a) to cease to be a party dismissed
  • 2nd Defendant's application under Order 18 r 19(1) to strike out the action as against the 2nd Defendant dismissed