AU YUK LIN AND ANOTHER v. MENFOND ELECTRONIC ART & COMPUTER DESIGN CO LTD

AU YUK LIN AND ANOTHER v. MENFOND ELECTRONIC ART & COMPUTER DESIGN CO LTD

On the basis of the affirmations and the draft statement of claim the court was satisfied there was a prima facie case of breach of fiduciary duty giving rise to a serious question to be tried, the company had been given the required statutory notice, and it was in the companys interests to grant leave; accordingly leave under s732(1) and (2) was granted to commence the proposed derivative action.

Citation
AU YUK LIN AND ANOTHER v. MENFOND ELECTRONIC ART & COMPUTER DESIGN CO LTD
Parties
1st Applicant: Au Yuk Lin; 2nd Applicant: Wong Man; Respondent (company): Menfond Electronic Art & Computer Design Co Ltd; Proposed Defendant (director and Minority Shareholder): Wong Wang Hin Eddy; Proposed Defendant (company Controlled by Eddy Wong): Pacific Rich (Asia) Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
24 September 2014
Case Number
HCMP1460/2014
Procedural Posture
Application for Leave to Commence Statutory Derivative Action Under the Companies Ordinance / Decision on Originating Summons (leave Granted)
Outcome
Leave granted to the applicants to commence, on behalf of Menfond Electronic Art & Computer Design Co Ltd, a High Court action against Wong Wang Hin Eddy and Pacific Rich (Asia) Limited under Companies Ordinance Cap 622; costs of the application to be paid out of the companys assets; costs of the proposed derivative...
Legal Topics
Statutory Derivative Action, Breach of Fiduciary Duty, Leave to Commence Proceedings, Costs and Indemnity
Source Language
EN
Company Law Fiduciary Duties Civil Procedure Statutory Derivative Action Breach of Fiduciary Duty Leave to Commence Proceedings Costs and Indemnity

Case Brief

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Parties

Au Yuk Lin

1st Applicant

Wong Man

2nd Applicant

Menfond Electronic Art & Computer Design Co Ltd

Respondent (company)

Wong Wang Hin Eddy

Proposed Defendant (director and Minority Shareholder)

Pacific Rich (Asia) Limited

Proposed Defendant (company Controlled by Eddy Wong)

Procedural Posture

Application for Leave to Commence Statutory Derivative Action Under the Companies Ordinance / Decision on Originating Summons (leave Granted)

Legal Issues

  1. 1 Whether there is a serious question to be tried that the director breached fiduciary duties causing loss to the company
  2. 2 Whether it is in the companys interests to grant leave to members to commence the proposed statutory derivative action
  3. 3 Whether the company has been given the notice required by s733(3)

Ratio Decidendi

On the basis of the affirmations and the draft statement of claim the court was satisfied there was a prima facie case of breach of fiduciary duty giving rise to a serious question to be tried, the company had been given the required statutory notice, and it was in the companys interests to grant leave; accordingly leave under s732(1) and (2) was granted to commence the proposed derivative action.

Court Disposition

Leave granted to the applicants to commence, on behalf of Menfond Electronic Art & Computer Design Co Ltd, a High Court action against Wong Wang Hin Eddy and Pacific Rich (Asia) Limited under Companies Ordinance Cap 622; costs of the application to be paid out of the companys assets; costs of the proposed derivative...

Orders

  • Leave granted pursuant to section 732(1) and (2) of the Companies Ordinance, Cap 622, to commence on behalf of the company a High Court action against Wong Wang Hin Eddy and Pacific Rich (Asia) Limited in respect of the matters in the draft statement of claim (Exhibit AYL-25).
  • The costs of this application are to be paid to the applicants out of the assets of the company.