SUN JIYOU AND OTHERS v. L & A INTERNATIONAL HOLDINGS LTD AND ANTOHER

SUN JIYOU AND OTHERS v. L & A INTERNATIONAL HOLDINGS LTD AND ANTOHER

FM holds an equitable proprietary interest in the charged shares (equitable mortgagee) and may be joined; circumstances materially changed since injunction and serious factual disputes mean plaintiffs have not met the high degree of assurance required for a mandatory interlocutory injunction; consequently the injunction is varied to prevent the registered holder exercising voting rights until further order, plaintiffs' applications to compel registration are premature and dismissed, and the Company gives an undertaking not to register the disputed transfers pending further order.

Citation
SUN JIYOU AND OTHERS v. L & A INTERNATIONAL HOLDINGS LTD AND ANTOHER
Parties
1st Plaintiff: Sun Jiyou; 2nd Plaintiff: Chen Haiyan; 3rd Plaintiff: Liu Jing; 4th Plaintiff: Ling Chuanshun; 5th Plaintiff: Zhang Bing; 6th Plaintiff: Xiao Laiwen; 1st Defendant: L & A International Holdings Limited; 2nd Defendant: Yang's Holdings Capital Limited; 3rd Defendant (joined): Flying Mortgage Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
26 October 2016
Case Number
HCMP1929/2016
Procedural Posture
Originating Summons Under Companies Ordinance (cap 622) S152; Application to Vary Interim Injunction / Adjourned Hearing of Interim Relief and Application to Intervene; Decision on Variation and Registration Claims (interlocutory Stage)
Outcome
Application by FM to be joined granted; injunction varied to prevent 2nd defendant from exercising voting rights in respect of disputed shares until further order; plaintiffs' claims to compel registration dismissed as premature; Company to give undertaking not to register transfers pending further order; costs to...
Legal Topics
Share Registration Under S151–152, Equitable Mortgage/charge, Interlocutory Mandatory Injunction, Beneficial Ownership Disputes, Vendor Purchaser Trust, Documents and Stamp Duty
Source Language
EN
Company Law Equity and Trusts Injunctions Securities/share Transfers Stamp Duty Share Registration Under S151–152 Equitable Mortgage/charge Interlocutory Mandatory Injunction +3 more

Case Brief

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Parties

Sun Jiyou

1st Plaintiff

Chen Haiyan

2nd Plaintiff

Liu Jing

3rd Plaintiff

Ling Chuanshun

4th Plaintiff

Zhang Bing

5th Plaintiff

Xiao Laiwen

6th Plaintiff

L & A International Holdings Limited

1st Defendant

Yang's Holdings Capital Limited

2nd Defendant

Flying Mortgage Limited

3rd Defendant (joined)

Procedural Posture

Originating Summons Under Companies Ordinance (cap 622) S152; Application to Vary Interim Injunction / Adjourned Hearing of Interim Relief and Application to Intervene; Decision on Variation and Registration Claims (interlocutory Stage)

Legal Issues

  1. 1 Whether Flying Mortgage (FM) has an equitable proprietary interest in the disputed shares and may intervene
  2. 2 Whether FM's equitable interest terminated on 11 May 2016
  3. 3 Whether the interim injunction requiring voting by registered holder in accordance with plaintiffs' directions should be varied

Ratio Decidendi

FM holds an equitable proprietary interest in the charged shares (equitable mortgagee) and may be joined; circumstances materially changed since injunction and serious factual disputes mean plaintiffs have not met the high degree of assurance required for a mandatory interlocutory injunction; consequently the injunction is varied to prevent the registered holder exercising voting rights until further order, plaintiffs' applications to compel registration are premature and dismissed, and the Company gives an undertaking not to register the disputed transfers pending further order.

Court Disposition

Application by FM to be joined granted; injunction varied to prevent 2nd defendant from exercising voting rights in respect of disputed shares until further order; plaintiffs' claims to compel registration dismissed as premature; Company to give undertaking not to register transfers pending further order; costs to...

Orders

  • Flying Mortgage Limited to be joined as 3rd defendant
  • Injunction varied: Yang's Holdings Capital Limited (registered holder) shall not exercise voting rights in respect of the disputed shares at any general meeting of the Company until further order of the Court