KLH INVESTMENT LTD. v. YEUNG WEI SUNG and Another

KLH INVESTMENT LTD. v. YEUNG WEI SUNG and Another

The petition was not plain and obvious to fail: the pleaded facts, assumed true for strike-out purposes, sufficiently alleged exclusion from management, diversion of revenue to related businesses and use of third party entities to operate the business so as to found arguable unfairly prejudicial conduct under...

Source-derived case information.

Citation
KLH INVESTMENT LTD. v. YEUNG WEI SUNG and Another
Parties
Petitioner: KLH Investment Limited; 1st Respondent: Yeung Wei Sung; 2nd Respondent: Wing Cheong Hung Fat Development Company Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
17 December 1996
Case Number
HCMP1537/1996
Procedural Posture
Company Petition Under Section 168 a Companies Ordinance (unfair Prejudice) / Inter Partes Hearing on Summonses and Strike Out Application; Judgment and Interlocutory Orders Made
Outcome
Strike out application dismissed. Interim and interlocutory relief granted to preserve company assets; order compelling signing and filing of accounts (rendered unnecessary by respondents' compliance but costs awarded); appointment of Coopers & Lybrand as court expert valuer; directions and timetable for further...
Legal Topics
Unfairly Prejudicial Conduct, Strike Out/abuse of Process, Interim Relief to Preserve Assets, Appointment of Court Expert Valuer, Directors' Duties and Accounts, Mismanagement and Diversion of Corporate Opportunities
Source Language
en
Company Law Civil Procedure Equity Unfairly Prejudicial Conduct Strike Out/abuse of Process Interim Relief to Preserve Assets Appointment of Court Expert Valuer Directors' Duties and Accounts +1 more

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Parties

KLH Investment Limited

Petitioner

Yeung Wei Sung

1st Respondent

Wing Cheong Hung Fat Development Company Limited

2nd Respondent

Procedural Posture

Company Petition Under Section 168 a Companies Ordinance (unfair Prejudice) / Inter Partes Hearing on Summonses and Strike Out Application; Judgment and Interlocutory Orders Made

Legal Issues

  1. 1 Whether the petition discloses a cause of action under s.168A (unfairly prejudicial conduct)
  2. 2 Whether the petition is an abuse of process or should be struck out as bound to fail
  3. 3 Whether interim mandatory/directions to preserve company assets should be granted pending the petition

Ratio Decidendi

The petition was not plain and obvious to fail: the pleaded facts, assumed true for strike-out purposes, sufficiently alleged exclusion from management, diversion of revenue to related businesses and use of third party entities to operate the business so as to found arguable unfairly prejudicial conduct under s.168A. Consequently the strike-out application failed. The court had jurisdiction to grant interim preservation orders, to compel signature of accounts where necessary to meet statutory filing obligations, and to appoint a court expert valuer with costs ordered in the cause and initially disbursed from company funds.

Court Disposition

Strike out application dismissed. Interim and interlocutory relief granted to preserve company assets; order compelling signing and filing of accounts (rendered unnecessary by respondents' compliance but costs awarded); appointment of Coopers & Lybrand as court expert valuer; directions and timetable for further...

Orders

  • Strike out application dismissed with costs to Petitioner and certificate for two counsel
  • Inter partes summons of 29 November 1996 (accounts) - Petitioner awarded costs; 1st Respondent ordered to sign directors' report and balance sheet and cause profits tax return to be filed (respondents had since signed but costs awarded)