STACK ELECTRONICS ASIA LTD v. LU DA LIN AND OTHERS

STACK ELECTRONICS ASIA LTD v. LU DA LIN AND OTHERS

The court refused to set aside the ex parte injunctions because the alleged non-disclosures were not shown to be material in the context of the strong prima facie case of fiduciary breach and diversion; on authority it was appropriate to continue the restraint on competition despite imminent termination of the Agency Agreement to prevent New Elite obtaining an unfair head start; the freezing order cap of $21,000,000 was to be maintained pending trial on the basis of the audit report evidence available at interlocutory stage; limited variations to permitted withdrawals were granted and fortification and costs were reserved for further hearing.

Citation
STACK ELECTRONICS ASIA LTD v. LU DA LIN AND OTHERS
Parties
Plaintiff: Stack Electronics Asia Limited; 1st Defendant: Lu Da Lin (alias Lu Dalin; Sylvester Lu Da Lin; Sylvester Luk Da Lin; Sylvester Lui Da Lin); 2nd Defendant: United Vantage Asia Limited; 3rd Defendant: New Elite; 4th Defendant: New Elite SZ; 5th Defendant: NEC T Co. Ltd.
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
16 November 2007
Case Number
HCA1850/2007
Procedural Posture
Civil Interim Injunctive Relief (anton Piller; Mareva/freezing Order) and Related Proprietary/agency/fiduciary Claims / Interlocutory Hearing on Application to Set Aside/discharge Ex Parte Injunctions and Application to Extend and Vary Injunctions (decision Delivered 16 November 2007)
Outcome
Application to set aside and discharge the ex parte injunctions dismissed; interim injunctions (including restraint on competition) extended until trial or further order; freezing order upheld at $21,000,000 with agreed variations to permitted withdrawals; further hearing ordered on fortification and costs.
Legal Topics
Anton Piller Order, Mareva/freezing Injunction, Ex Parte Non Disclosure, Fiduciary Duty and Diversion of Corporate Opportunity, Misuse of Confidential Information, Variation of Freezing Order and Permitted Withdrawals, Fortification
Source Language
EN
Equity Civil Procedure Company Law Contract Injunctions Agency Law Anton Piller Order Mareva/freezing Injunction +5 more

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Parties

Stack Electronics Asia Limited

Plaintiff

Lu Da Lin (alias Lu Dalin; Sylvester Lu Da Lin; Sylvester Luk Da Lin; Sylvester Lui Da Lin)

1st Defendant

United Vantage Asia Limited

2nd Defendant

New Elite

3rd Defendant

New Elite SZ

4th Defendant

NEC T Co. Ltd.

5th Defendant

Procedural Posture

Civil Interim Injunctive Relief (anton Piller; Mareva/freezing Order) and Related Proprietary/agency/fiduciary Claims / Interlocutory Hearing on Application to Set Aside/discharge Ex Parte Injunctions and Application to Extend and Vary Injunctions (decision Delivered 16 November 2007)

Legal Issues

  1. 1 Whether material non-disclosure occurred in the ex parte applications sufficient to set aside the injunctions
  2. 2 Whether materials seized under the Anton Piller order were misused and whether that justifies discharging injunctions
  3. 3 Whether the interim injunction restraining competition should be continued after termination of the Agency Agreement

Ratio Decidendi

The court refused to set aside the ex parte injunctions because the alleged non-disclosures were not shown to be material in the context of the strong prima facie case of fiduciary breach and diversion; on authority it was appropriate to continue the restraint on competition despite imminent termination of the Agency Agreement to prevent New Elite obtaining an unfair head start; the freezing order cap of $21,000,000 was to be maintained pending trial on the basis of the audit report evidence available at interlocutory stage; limited variations to permitted withdrawals were granted and fortification and costs were reserved for further hearing.

Court Disposition

Application to set aside and discharge the ex parte injunctions dismissed; interim injunctions (including restraint on competition) extended until trial or further order; freezing order upheld at $21,000,000 with agreed variations to permitted withdrawals; further hearing ordered on fortification and costs.

Orders

  • Application to set aside ex parte injunctions dismissed
  • Interim injunction restraining competition by Lu, United Vantage, New Elite and related companies extended until trial or further order