FUNG YUEN KWAN, VERONICA v. NEW BRIGHT INTERNATIONAL DEVELOPMENT LTD

HCMP 1668/2020 & HCMP 2219/2020
(Heard together)

[2022] HKCFI 3788

HCMP 1668/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1668 OF 2020

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HCMP 2219/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2219 OF 2020

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(Heard Together)

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D E C I S I O N

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1.  These are my short reasons for acceding to the application of Mr Dawes SC (appearing with Ms So for Ms Veronica Fung) to have the interim injunction application, which is to be heard tomorrow, adjourned. With the benefit of hearing counsel, the proposition that there should be a trial of primary issue, with the rest of the proceedings be stayed, is agreeable to the parties. I think that the stay should also apply to the interim injunction summons. That summons was filed on 1^st December 2022. On 4^th December 2020, directions were given by the court for substantive argument and filing of evidence.

2.  There was considerable delay in the filing of evidence, but it has to be said that the delay, which I will elaborate a little further, cannot be blamed solely upon Ms Fung because the fact that Ms Fung might have delayed in filing her evidence would not have inhibited Madam Lo to have a hearing fixed for the argument of the summons.

3.  As the events unfolded, Madam Lo only sought to fix a date for the argument on 26 July 2022, which was more than one and a half years after taking out the summons. In the meantime, there were two directors appointed by Ms Fung. They are her brothers by the name of Baton and Harry, and they were appointed respectively in December 2021 and January 2022. Prima facie, there is no reason why Ms Fung should not have done so when she is the majority owner of the company in question, and there was no prosecution of the injunction application.

4.  However, Baton’s appointment had resulted in the issue of another set of proceedings by Madam Lo to challenge the same. With respect, I take the view that this was indiscriminate use of the court’s scarce resources. It should not be countenanced by the court, and it reflects rather poorly on the need for the interim injunction.

5.  It is an important backdrop to this dispute between Ms Fung and Madam Lo that they had generated no less than 8 sets of proceedings in this court. Madam Lo’s case is fundamentally premised upon an oral cooperation agreement based on which she is said to be entitled to equal participation in the management of the company despite being only a minority shareholder. This has become the central dispute which applies to almost all of the 8 sets of proceedings between the parties. Given the agreement of the parties, and I shall order in a moment, that there should be a preliminary trial as to whether or not such a cooperation agreement existed, I do not see in the circumstances before the court that the injunction summons calls to be resolved in parallel. Such resolution would engage a good deal of the court’s resources.

6.  There are two points that I should add to what I have already said. Firstly, I agree with Mr Dawes that it is evident from the terms of injunction sought that they have been overtaken by events, namely, the appointment of Baton and Harry. Hence, in order to be effective it is imperative for Madam Lo to seek additional relief in her summons. Secondly, I think it is quite clear from the chronology of events that Ms Fung’s evidence did not cover the appointment of her brothers as additional directors, and therefore the evidence in that regard is lacking. I think this deficiency in the evidence would likely impact upon the feasibility of deciding the summons tomorrow.