Hong Kong Case Law: Decisions & Judgments

Topic

Multiple derivative action

Legal area

Court

27 Dec 2018

CHU KONG v. LAU WING YAN AND OTHERS

Citation

[2018] HKCA 1010
Court

Court of Appeal
Case number

CACV105/2018

The Court of Appeal held that the arbitration clause incorporated into the Supplemental Agreement is valid and covers the disputes; factual questions about the 3rd defendant's actual or apparent authority and the 4th defendant's knowledge make the disputes between the plaintiff/the Company and the 4th defendant substantive rather than nominal; and the plaintiff's potential locus difficulties in commencing arbitration derivatively do not render the arbitration agreement incapable of being performed; accordingly the mandatory stay under s20(1) must be granted and the action against the 4th defe…
30 Oct 2017

CHU KONG v. LAU WING YAN AND OTHERS

Citation

CHU KONG v. LAU WING YAN AND OTHERS
Court

Court of First Instance
Case number

HCA226/2017

The matter is a multiple derivative action which is not "the subject of an arbitration agreement" under s20(1) because the core complaints are against defendants who are not parties to the arbitration agreement; consequently the court must dismiss the applicant's summons to refer the dispute to arbitration.
22 Feb 2017

CHAN CHUN HOO THOMAS v. WADDINGTON LTD

Citation

CHAN CHUN HOO THOMAS v. WADDINGTON LTD
Court

Court of Final Appeal
Case number

FAMV49/2016

Leave to appeal was dismissed because the questions posed did not raise issues of general or public importance on the facts found; the lower courts correctly applied fiduciary principles (duty to avoid conflicts and to disclose), and there was no evidential basis to conclude Yugang would not have dealt with Profit Point — the evidential burden to show the third party would not deal lay on the fiduciary. The finding of breach and the award of equitable compensation were upheld in principle.
20 May 2016

WADDINGTON LTD v. CHAN CHUN HOO THOMAS AND OTHERS

Citation

WADDINGTON LTD v. CHAN CHUN HOO THOMAS AND OTHERS
Court

Court of Appeal
Case number

CACV10/2014

The Court upheld the trial judge's findings that D1 had negotiated the Yugang transaction prior to the market sale and, as fiduciary in control of both entities, breached the no‑conflict duty by causing Profit Point to dispose of its shares to facilitate the Yugang sale for the benefit of D1/Chansam; causation was established on equitable principles and MDA was available; the BVI law point was barred by prior interlocutory determinations and abuse/issue estoppel; pre‑judgment interest was adjusted on appeal to the conventional prime+1% starting point and compound interest was refused.
18 Dec 2013

WADDINGTON LTD v. CHAN CHUN HOO THOMAS AND OTHERS

Citation

WADDINGTON LTD v. CHAN CHUN HOO THOMAS AND OTHERS
Court

Court of First Instance
Case number

HCA3291/2003

On the facts the Recorder found on the balance of probabilities that Thomas, who controlled the group, caused Profit Point to sell its Prestige shares to facilitate a concerted transaction (the Yugang Agreement) and thereby breached fiduciary duties owed to Profit Point and its holding companies; the court held that BVI BC Act s184C does not, on proper construction and persuasive English authority, abrogate the common law multiple derivative action; Waddington failed to prove allegations against Chansam; damages for Profit Point were quantified and awarded.
19 Jul 2013

WADDINGTON LTD v. CHAN CHUN HOO THOMAS AND OTHERS

Citation

WADDINGTON LTD v. CHAN CHUN HOO THOMAS AND OTHERS
Court

Court of Appeal
Case number

CACV136/2013

The Court of Appeal dismissed the appeal: even assuming relevance of the documents, the applications were hopelessly late without adequate explanation, would likely disrupt an imminent nine‑day trial and risked prejudice to defendants; the WKLL and Deacons subpoenas sought substantially the same material as the Yugang application and were an abuse of process; the 1st defendant was properly heard and entitled to costs, and the plaintiff must pay those costs on an indemnity basis if not agreed.
7 May 2013

WADDINGTON LTD v. CHAN CHUN HOO THOMAS AND OTHERS

Citation

WADDINGTON LTD v. CHAN CHUN HOO THOMAS AND OTHERS
Court

Court of First Instance
Case number

HCA3291/2003

The court ordered third party discovery against HSBC as the requested charge and mortgage documents were likely in HSBC's custody, relevant to corporate control and motive and necessary for fair trial preparation; ordered limited discovery against PWC but refused voluminous financial accounts due to burden and limited probative value; refused discovery against EY because requested materials belonged to Yugang and Yugang should be heard and late production risked jeopardising trial; dismissed security for costs application for undue delay and prejudice to plaintiff; allowed withdrawal of late…
14 Jun 2011

EAST ASIA SATELLITE TELEVISION (HOLDINGS) LTD v. NEW COTAI, LLC AND OTHERS

Citation

EAST ASIA SATELLITE TELEVISION (HOLDINGS) LTD v. NEW COTAI, LLC AND OTHERS
Court

Court of Appeal
Case number

CACV161/2010

The Court held that the availability of multiple derivative actions is governed by the law of the place of incorporation; BVI law does not permit multiple derivative actions and Macao law on its face permits only single derivative actions (veil-piercing does not convert that into a general multiple derivative right), the reflective loss doctrine bars the asserted reflective claims in the circumstances pleaded, material non-disclosure justified setting aside service out, but East was granted leave to raise new points (including on the Said v Butt exception) and Claim B5 (inducing breach) was n…
14 Jun 2011

EAST ASIA SATELLITE TELEVISION (HOLDINGS) LTD v. NEW COTAI, LLC AND OTHERS

Citation

EAST ASIA SATELLITE TELEVISION (HOLDINGS) LTD v. NEW COTAI, LLC AND OTHERS
Court

Court of Appeal
Case number

CACV160/2010

The court held that the availability of derivative and multiple derivative actions is governed by the law of the company's place of incorporation; BVI and Macao law do not recognise multiple derivative actions such that the asserted multiple derivative claims were not arguable and were properly struck out; reflective loss doctrine barred recovery of the asserted diminution of enterprise value by shareholders through the claimed chain; service out may be set aside for material non-disclosure and that Reyes J's exercise of discretion in that respect was within bounds; however the court permitte…
16 Jul 2010

EAST ASIA SATELLITE TELEVISION (HOLDINGS) LTD v. NEW COTAI, LLC AND OTHERS

Citation

EAST ASIA SATELLITE TELEVISION (HOLDINGS) LTD v. NEW COTAI, LLC AND OTHERS
Court

Court of First Instance
Case number

HCMP2218/2009

Leave to serve the Re‑Amended Writ outside Hong Kong was properly given as to Silver Point and Oaktree but set aside as to the three external New Cotai directors (Moross, Baker, Vora) because there was no good arguable case: personal claims against directors inducing their own company to breach were untenable absent pleaded bad faith; multiple derivative claims were not sustainable because neither Macao nor BVI law provided a clear basis for multiple derivative actions and EAST had not established exceptions; many derivative claims asserted amounted to impermissible reflective loss and were s…