Hong Kong Case Law: Decisions & Judgments

Topic

No reflective loss principle

Legal area

Court

30 Dec 2022

TAM YUK CHING AND OTHERS v. HOOSENALLY & NEO (a firm) AND ANOTHER

Citation

[2022] HKCFI 3825
Court

Court of First Instance
Case number

HCA1511/2020

P1's claim for HK$5,712,000 was struck out because the Statement of Claim failed to plead facts establishing a duty owed by D1 to P1 in the KV Property transaction and therefore disclosed no reasonable cause of action. P1's claim for HK$5,508,000 was not struck out because, on the pleaded facts, it was not plain and obvious that the claim was barred by the no reflective loss principle and a trial could find P1 suffered the loss personally.
14 Jan 2020

SEYMOUR ENTERPRISES LTD v. LEAD CREATION INTERNATIONAL LTD

Citation

[2019] HKDC 1684
Court

District Court
Case number

DCCJ602/2017

The court found on the facts that the defendant was unjustly enriched at the expense of the plaintiff, the plaintiff suffered the loss directly (not merely reflective of Airchal) so the no reflective loss principle did not apply, and the defendant failed to establish bona fide change of position because its agents acted unreasonably and failed to make enquiries; therefore the plaintiff is entitled to restitution of €96,500 with interest and costs.
7 Jan 2020

WAH NAM GROUP LTD v. RODERICK JOHN SUTTON AND ANOTHER

Citation

[2020] HKCA 30
Court

Court of Appeal
Case number

CACV217/2017

Leave to appeal was dismissed because WN's claim was struck out for contravening the no reflective loss principle: the companies (GSP and CS) have valid causes of action and WN's pleaded loss is purely reflective as a shareholder; the existence or disputed strength of the companies' causes of action and differences in defendants' capacities do not affect the principle; the security for costs application fell away and no order was made.
10 Oct 2018

WAH NAM GROUP LTD v. RODERICK JOHN SUTTON AND ANOTHER

Citation

[2018] HKCA 687
Court

Court of Appeal
Case number

CACV217/2017

The Court of Appeal dismissed the appeals and upheld the strike‑out because Wah Nam's pleaded loss derived solely from the fall in value of its interest in Summit Mass and was identical to the loss pleaded by its subsidiaries; therefore Wah Nam's direct claim against the Former Liquidators was barred by the no reflective loss principle and should be struck out.
10 Oct 2018

WAH NAM GROUP LTD v. RODERICK JOHN SUTTON AND ANOTHER

Citation

[2018] HKCA 687
Court

Court of Appeal
Case number

CACV215/2017

The appeal was dismissed because Wah Nam's pleaded loss was the same as that claimed by its subsidiaries and was therefore reflective; a shareholder cannot pursue a direct claim for loss that derives solely from diminution in value of its interest in a company and must look to the company (including derivative proceedings) so the claim was rightly struck out.
9 Mar 2017

BASAB INC. v. FOK HEI YU AND ANOTHER

Citation

BASAB INC. v. FOK HEI YU AND ANOTHER
Court

Court of First Instance
Case number

HCA2562/2013

The claims by Basab Inc. and Mr Hui against the receivers were struck out and dismissed because the loss pleaded by the plaintiffs was merely reflective of the loss of Accufit resulting from the sale of KHL shares; accordingly the no reflective loss principle bars the plaintiffs' claims against the receivers and the injunction sought was unnecessary in light of the refusal of leave for a BVI derivative action; costs were ordered for the receivers.
10 Feb 2017

BASAB INC AND ANOTHER v. SUPERB GLORY HOLDINGS LTD AND OTHERS

Citation

BASAB INC AND ANOTHER v. SUPERB GLORY HOLDINGS LTD AND OTHERS
Court

Court of Appeal
Case number

CACV256/2014

Leave to appeal was refused because questions (a) and (b) either did not arise on the facts or were not reasonably arguable, and question (c) rested on the incorrect premise that the plaintiff had an independent cause of action; accordingly the Court declined to exercise its discretion to grant leave and awarded costs to the respondents.
2 Dec 2016

BASAB INC. AND ANOTHER v. SUPERB GLORY HOLDINGS LTD AND OTHERS

Citation

BASAB INC. AND ANOTHER v. SUPERB GLORY HOLDINGS LTD AND OTHERS
Court

Court of Appeal
Case number

CACV256/2014

The Court of Appeal held that the plaintiffs' alleged loss was merely reflective of the loss suffered by Accufit (the company holding the KHL shares) and therefore barred by the no reflective loss principle; the plaintiffs are not bringing claims as secured creditors and the secured-creditor exception does not assist them; the equity of redemption and subrogation arguments do not prevent the rule's application; consequently the judge below was correct to strike out the plaintiffs' claims against the 1st and 2nd defendants and dismiss the action as against them.
3 Mar 2016

BASAB INC. AND ANOTHER v. SUPERB GLORY HOLDINGS LTD AND OTHERS

Citation

BASAB INC. AND ANOTHER v. SUPERB GLORY HOLDINGS LTD AND OTHERS
Court

Court of Appeal
Case number

CACV256/2014

The plaintiffs' unexplained failure to lodge required appeal materials and to take timely steps despite being warned justified dismissal for want of prosecution; because security for costs had been paid, the court made an unless order giving a final opportunity but assessed and ordered payment of the defendants' thrown-away costs to be paid from the security.
7 Feb 2014

LEE SAI NAM v. LI SHU CHUNG AND ANOTHER

Citation

LEE SAI NAM v. LI SHU CHUNG AND ANOTHER
Court

Court of First Instance
Case number

HCA1711/2009

The court held the Misappropriation Claim was barred by the no reflective loss principle on the pleadings and therefore was properly withdrawn/liable to be struck out; accordingly the Father must pay Ken's costs for the Misappropriation Claim and associated striking-out parts. By contrast, the New Shares Claim, read in context of the whole pleading, was not a plain and obvious case for strike out because it was arguable that the new shares were part of a subsisting trust or acquired qua trusteeship; accordingly Ken must pay the Father's costs in respect of the strike out summons as to the New…