Soka Gakkai International of Hong Kong Ltd v. Lam Kin Chung

HCMP 1011/2024

[2025] HKCFI 3061

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1011 OF 2024

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D E C I S I O N

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1.I will allow the company to participate in the main proceeding as in relation to paragraph 2(d) of the petition. The company may use the company’s funds for this purpose, subject to providing quarterly reports of its expenditure in connection with the petition. The condition is imposed to ensure transparency.

2.I do not believe that the present circumstances are the ordinary situation of an unfair prejudice petition where essentially a majority and a minority group of shareholders are at loggerheads with each other. In such case, the company’s assets should not be used to advance the interests of one or other faction of shareholders. Here there are no shareholders. The directors named as 2^nd to 18^th Respondents in the petition are under attack to account for the propriety of their management of the company. They will inevitably be looking after their own personal interests in the conduct of their defences. I am not confident that they will necessarily be speaking for the best interests of the company as a result. It would (I think) be necessary, proper and expedient to have a more neutral voice, namely the company as represented by the Litigation Committee, to advance the company’s points in relation to paragraph 2(d).

3.I do not accept that the issues raised by paragraph 2(d) of the petition are moot, merely because the injunction sought thereunder is currently not being pursued. The petitioner has reserved the possibility of later pursuing paragraph 2(d) depending on events. The petitioner does not agree to a strike-out for that reason. In those circumstances, where paragraph 2(d) hangs like a sword of Damocles over the company, it is right to authorise the company now to take part in the unfair prejudice proceedings for the limited purpose of dealing with paragraph 2(d).

4.I shall now hear the parties on costs and consequential orders.

Mr. Bernard Man SC, leading Mr. Ernest Ng, instructed by DLA Piper Hong Kong, for the Plaintiff

Mr. Anson Wong SC, leading Mr. Jason Yu, instructed by Deheng Law Offices (Hong Kong) LLP, for the Defendant