LAI NG NUI v. FUNG TIN YAU

LAI NG NUI v. FUNG TIN YAU

The court dismissed all three sets of appeals because the counterclaim alleging assumption of fiduciary duties disclosed a reasonable cause of action, the defences to the O.14 summonses raised disputed factual questions (including alleged oral agreements and estoppel/Duomatic arguments) for trial so summary judgment was inappropriate, and the derivative claims disclosed a prima facie case of fraud on the minority; therefore none of the interlocutory orders under appeal were plainly and obviously wrong.

Citation
[2020] HKCFI 252
Parties
Petitioner/defendant/plaintiff/counterclaimant: Fung Tin Yau; 1st Respondent/defendant: Fung Tin Shing; 2nd Respondent/defendant: Fung Wing See; 1st Plaintiff/defendant: Lai Ng Nui; 2nd Plaintiff/defendant: Fung Wing Yan; 3rd Plaintiff/defendant: Fung Wing Yin; 3rd Respondent/company: Great Anchor International Limited; Plaintiff/company: Maxfortune Trading Limited; Plaintiff/company: Premium Management Limited; Plaintiff/company: Wyse Investment Limited; Company/defendant: Samdor Company Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
23 January 2020
Case Number
HCA2078/2017
Procedural Posture
Consolidated Companies (winding Up) and Related Civil Claims; Multiple Interlocutory Applications and Appeals / Hearing on Consolidated Appeals From Masters (strike Out and Summary Judgment Appeals); Decision at Appeal Stage in Chambers
Outcome
All three sets of appeals dismissed.
Legal Topics
Strike Out, Summary Judgment (order 14), Assumption of Fiduciary Duties, Derivative Action, Duomatic Principle, Fraud on the Minority, Estoppel, Costs
Source Language
EN
Company Law Equity and Trusts Civil Procedure Insolvency/winding Up Strike Out Summary Judgment (order 14) Assumption of Fiduciary Duties Derivative Action +4 more

Case Brief

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Parties

Fung Tin Yau

Petitioner/defendant/plaintiff/counterclaimant

Fung Tin Shing

1st Respondent/defendant

Fung Wing See

2nd Respondent/defendant

Lai Ng Nui

1st Plaintiff/defendant

Fung Wing Yan

2nd Plaintiff/defendant

Fung Wing Yin

3rd Plaintiff/defendant

Great Anchor International Limited

3rd Respondent/company

Maxfortune Trading Limited

Plaintiff/company

Premium Management Limited

Plaintiff/company

Wyse Investment Limited

Plaintiff/company

Samdor Company Limited

Company/defendant

Procedural Posture

Consolidated Companies (winding Up) and Related Civil Claims; Multiple Interlocutory Applications and Appeals / Hearing on Consolidated Appeals From Masters (strike Out and Summary Judgment Appeals); Decision at Appeal Stage in Chambers

Legal Issues

  1. 1 Whether counterclaim alleging assumption of fiduciary duties disclosed reasonable cause of action
  2. 2 Whether summary judgment under O.14 should have been granted to companies
  3. 3 Whether common law derivative actions should be struck out for alternative remedy, lack of fraud on the minority or clean hands

Ratio Decidendi

The court dismissed all three sets of appeals because the counterclaim alleging assumption of fiduciary duties disclosed a reasonable cause of action, the defences to the O.14 summonses raised disputed factual questions (including alleged oral agreements and estoppel/Duomatic arguments) for trial so summary judgment was inappropriate, and the derivative claims disclosed a prima facie case of fraud on the minority; therefore none of the interlocutory orders under appeal were plainly and obviously wrong.

Court Disposition

All three sets of appeals dismissed.

Orders

  • Appeals dismissed
  • Costs order nisi: Respondent entitled to costs of all three sets of appeals to be taxed if not agreed