CHAN CHI CHUNG v. JACKY FUNG CHI CHUNG AND OTHERS

HCMP 1043/2022

[2022] HKCFI 3053

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1043 OF 2022

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BETWEEN

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D E C I S I O N

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1.  I have before me an originating summons issued by the Plaintiff seeking leave to issue a Writ endorsed with a statement of claim annexed to the originating summons commencing a derivative action pursuant to sections 732 and 733 of the Companies Ordinance (Cap 622).

2.  A notice of appointment to hear the originating summons before me today was issued on 31 August 2022. I am satisfied that the originating summons and the notice of appointment were served on the three defendants—the 3^rd Defendant being the subject Company. I have an affirmation of service in respect of service of the originating summons. Ms Leung who appeared for the Plaintiff has undertaken on behalf of the Plaintiff that an affirmation of service in respect of the notice of appointment be filed by 4:30pm on 7 October 2022.

3.  The claim which is asserted in the draft statement of claim is quite straight forward, namely, that the 1^st Defendant who was the sole director of the Company during 2021 and 2022 has misappropriated substantial assets from the Company in breach of his fiduciary duties. The 2^nd Defendant was the Recipient of a significant proportion of the alleged misappropriated amount which exceeded HK$13 million.

4.  The court in determinate an application of this sort is not concerned to assess, at least not more than superficially if the application is uncontested, the merits of the claim. Suffice to say that the statutory provisions require the court to be satisfied that it is in the interests of the Company that leave be granted to a member, which the Plaintiff is, to commence proceedings on behalf of the Company and there is a series question be tried.

5.  I am satisfied that on the face of the statement of claim, both the criteria are satisfied. I will, therefore, grant leave. I will reserve the question of the costs of both the application and the payment of the costs of the substantive proceedings that will be commenced in order that they can be reconsidered when the Plaintiff is able to assess the extent to which the 3^rd Defendant is able to pay the costs of the proceedings that the Plaintiff proposes to issue.