HUI YIN SANG AND OTHERS v. TSOI PING KWAN AND OTHERS

HUI YIN SANG AND OTHERS v. TSOI PING KWAN AND OTHERS

Applicants failed to discharge the burden under Order 23: on the evidence the factors for residence were equally balanced so plaintiffs could not be shown to be ordinarily resident outside Hong Kong; plaintiffs were legally beneficially interested and not mere nominal plaintiffs; there was insufficient evidence to conclude they will be unable to pay defendants' costs; and the contested declarations raised real disputed facts (forgery, misrepresentation) making strike out plainly inappropriate, therefore applications for security, stay and striking out must be dismissed and costs ordered to plaintiffs.

Citation
HUI YIN SANG AND OTHERS v. TSOI PING KWAN AND OTHERS
Parties
1st Plaintiff: Hui; 2nd Plaintiff: Wong; 3rd Plaintiff: Shanghai Consultants; 4th Plaintiff: Direct Properties; 1st Defendant: Tsoi; 2nd Defendant: Lam; 3rd Defendant: Catford Development Ltd.; 4th Defendant: New Land Holdings Ltd.
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
21 July 2011
Case Number
HCA392/2008
Procedural Posture
Derivative and Multiple Derivative Action With Interlocutory Applications / Interlocutory Application for Security for Costs and Striking Out (order 23 and Order 18)
Outcome
Applications by 1st and 2nd Defendants for security for costs, for a stay and for striking out dismissed; costs awarded to plaintiffs.
Legal Topics
Security for Costs, Derivative Action, Nominal Plaintiff, Striking Out, Residence of Company, Fiduciary Duties, Forgery, Declaratory Relief
Source Language
EN
Company Law Civil Procedure Equity Corporate Litigation Security for Costs Derivative Action Nominal Plaintiff Striking Out +4 more

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Parties

Hui

1st Plaintiff

Wong

2nd Plaintiff

Shanghai Consultants

3rd Plaintiff

Direct Properties

4th Plaintiff

Tsoi

1st Defendant

Lam

2nd Defendant

Catford Development Ltd.

3rd Defendant

New Land Holdings Ltd.

4th Defendant

Procedural Posture

Derivative and Multiple Derivative Action With Interlocutory Applications / Interlocutory Application for Security for Costs and Striking Out (order 23 and Order 18)

Legal Issues

  1. 1 Whether Shanghai Consultants and Direct Properties are ordinarily resident out of Hong Kong under Order 23 rule 1(1)(a)
  2. 2 Whether Shanghai Consultants and Direct Properties are nominal plaintiffs and there is reason to believe they will be unable to pay defendants' costs under Order 23 rule 1(1)(b)
  3. 3 Whether the contested claims (declarations) should be struck out under Order 18 rule 19 as plainly unsustainable

Ratio Decidendi

Applicants failed to discharge the burden under Order 23: on the evidence the factors for residence were equally balanced so plaintiffs could not be shown to be ordinarily resident outside Hong Kong; plaintiffs were legally beneficially interested and not mere nominal plaintiffs; there was insufficient evidence to conclude they will be unable to pay defendants' costs; and the contested declarations raised real disputed facts (forgery, misrepresentation) making strike out plainly inappropriate, therefore applications for security, stay and striking out must be dismissed and costs ordered to plaintiffs.

Court Disposition

Applications by 1st and 2nd Defendants for security for costs, for a stay and for striking out dismissed; costs awarded to plaintiffs.

Orders

  • Applications in Summons dated 12 November 2010 (paras 1,2,3) dismissed
  • 1st and 2nd Defendants to pay costs of the Summons to 1st–4th Plaintiffs with Certificate for Counsel