LEE SAI NAM v. LI SHU CHUNG AND ANOTHER

LEE SAI NAM v. LI SHU CHUNG AND ANOTHER

The strike out applications were refused because the pleadings were not obviously unsustainable: the restitution and constructive trust/knowing receipt claims were arguable on the pleaded facts, the identifiable funds in the corporate account could be pleaded as belonging to the claimant for restitutionary purposes, and the pleaded factual matrix that the director was the directing mind of the corporate vehicle sufficed to raise triable issues; therefore the high threshold for summary striking out was not met.

Citation
LEE SAI NAM v. LI SHU CHUNG AND ANOTHER
Parties
Plaintiff (original); 1st Defendant (counterclaim): Lee Sai Nam; 1st Defendant (original); Plaintiff (by Counterclaim): Li Shu Chung; 2nd Defendant (original): Li Joseph See Sun; 2nd Defendant (counterclaim) (withdrawn): Allied Ever Holdings Ltd; 3rd Defendant (counterclaim): Li Sin Man Seline; 4th Defendant (counterclaim): Yuen Hing Enterprise Macao; Defendant (counterclaim): Commercial Offshore Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
8 March 2012
Case Number
HCA1711/2009
Procedural Posture
Civil Action With Counterclaim (family Business Dispute) / Interlocutory Strike Out Application (chambers Hearing/decision)
Outcome
Strike out applications by the 3rd and 4th defendants refused; costs awarded to the plaintiff (by counterclaim) Li Shu Chung.
Legal Topics
Money Had and Received, Constructive Trust, Knowing Receipt, Piercing the Corporate Veil, Strike Out Application
Source Language
EN
Equity Trusts Restitution Company Law Civil Procedure Money Had and Received Constructive Trust Knowing Receipt +2 more

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Parties

Lee Sai Nam

Plaintiff (original); 1st Defendant (counterclaim)

Li Shu Chung

1st Defendant (original); Plaintiff (by Counterclaim)

Li Joseph See Sun

2nd Defendant (original)

Allied Ever Holdings Ltd

2nd Defendant (counterclaim) (withdrawn)

Li Sin Man Seline

3rd Defendant (counterclaim)

Yuen Hing Enterprise Macao

4th Defendant (counterclaim)

Commercial Offshore Limited

Defendant (counterclaim)

Procedural Posture

Civil Action With Counterclaim (family Business Dispute) / Interlocutory Strike Out Application (chambers Hearing/decision)

Legal Issues

  1. 1 Whether the counterclaim alleging money had and received is maintainable where funds are company profits
  2. 2 Whether a constructive trust/knowing receipt claim is sufficiently pleaded and sustainable against the director and the corporate vehicle
  3. 3 Whether the director can be held accountable without an express lifting of the corporate veil

Ratio Decidendi

The strike out applications were refused because the pleadings were not obviously unsustainable: the restitution and constructive trust/knowing receipt claims were arguable on the pleaded facts, the identifiable funds in the corporate account could be pleaded as belonging to the claimant for restitutionary purposes, and the pleaded factual matrix that the director was the directing mind of the corporate vehicle sufficed to raise triable issues; therefore the high threshold for summary striking out was not met.

Court Disposition

Strike out applications by the 3rd and 4th defendants refused; costs awarded to the plaintiff (by counterclaim) Li Shu Chung.

Orders

  • Strike out summonses dated 8 November 2011 by the 3rd and 4th defendants refused
  • Costs to be paid to the plaintiff (by counterclaim) Li Shu Chung