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Law Ka Leung, Victor And Others v Xin Yingmei And Others

Judgment Cited authorities 64 Cited in Precedent Map Related
Vincent
Judgment Date11 July 2016
Subject MatterCivil Action
Judgement NumberHCA2423/2013
CourtHigh Court (Hong Kong)
HCA2345/2013 TREMENDOUS SUCCESS HOLDINGS LTD AND ANOTHER v. SINOSOFT TECHNOLOGY GROUP LTD AND OTHERS

HCA 2345/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2345 of 2013

________________________

BETWEEN
TREMENDOUS SUCCESS HOLDINGS LIMITED
substituted as the 1st plaintiff for
SOUTH CHINA HOLDINGS LIMITED		 1st Plaintiff
JANFUL LIMITED 2nd Plaintiff
and
SINOSOFT TECHNOLOGY GROUP LIMITED 1st Defendant
NANJING SKYTECH CO., LIMITED
(南京擎天科技有限公司) 		2nd Defendant
XIN YING MEI (辛颖梅) 3rd Defendant
WANG XIAOGANG (汪晓刚) 4th Defendant
ZHANG HONG (张虹) 5th Defendant
LIU BIAO (刘飙) 6th Defendant
MA MING (马明) 7th Defendant
DING SU LIN (丁蘇霖) 8th Defendant

________________________

AND HCA 1613/2013
ACTION NO 1613 of 2013

________________________

BETWEEN
JANFUL LIMITED 1st Plaintiff
TREMENDOUS SUCCESS HOLDINGS LIMITED
substituted as the 2nd plaintiff for
SOUTH CHINA HOLDINGS LIMITED 		2nd Plaintiff
and
SINOSOFT TECHNOLOGY GROUP LIMITED 1st Defendant
XIN YING MEI (辛颖梅) 2nd Defendant

________________________

AND HCA 2423/2013
ACTION NO 2423 of 2013

________________________

BETWEEN
LAW KA LEUNG, VICTOR 1st Plaintiff
TEOH, TEAN CHAI, ANTHONY 2nd Plaintiff
SOUTH CHINA FINANCE AND MANAGEMENT LIMITED
The plaintiffs are suing on behalf of themselves and all other
shareholders in SINOSOFT TECHNOLOGY GROUP LIMITED
(except the 1st, 2nd, 3rd and 4th defendants) 		3rd Plaintiff
and
XIN YINGMEI (辛穎梅) 1st Defendant
WANG XIAOGANG (汪曉剛) 2nd Defendant
ZHANG HONG (張虹) 3rd Defendant
MA MING (馬明) 4th Defendant
DING SU LIN (丁蘇霖) 5th Defendant
SINOSOFT TECHNOLOGY GROUP LIMITED 6th Defendant

________________________

(Heard together by order of Hon Au Yeung J dated 2 September 2015)

Before: Deputy High Court Judge Anita Yip SC in Chambers
Date of Hearing: 15, 16, 17, 21 September, 26, 27, 29 October and 4 November 2015
Date of Judgment: 11 July 2016

________________________

JUDGMENT

________________________


Sections Paragraph
A. BACKGROUND
A.1 The seven summonses 1
A.2 The parties 5
A.3 The three actions 7
B. HCA 2345
B.1 2nd to 7th defendants’ summons to set aside the ex parte leave to serve the concurrent Writ out of jurisdiction
B.1.1 2nd to 7th defendants’ summons 13
B.1.2 Legal principles on Order 11, rule 1 of the RHC 14
B.1.3 2nd to 7th defendants’ grounds to set aside the leave 18
B.2 Absence of pleading of foreign law
B.2.1 Submissions 19
B.2.2 Discussion 28
B.3 Reflective loss
B.3.1 Submissions 48
B.3.2 Discussion 54
B.3.3 Conclusion 92
B.4 Forum non conveniens
B.4.1 The law 95
B.4.2 Submissions 106
B.4.3 Discussion 116
B.4.4 Conclusion 157
B.5 Order 11 gatew
B.5.1 The law 158
B.5.2 Submissions 159
B.5.3 Discussion 161
B.6 Material non disclosure
B.6.1 Legal principles 175
B.6.2 Defendants’ alleged material non disclosures 176
B.6.3 Discussion 177
B.6.4 Re grant of fresh leave 225
C. HCA 1613
C.1 2nd Defendant’s summons to set aside the ex parte leave to serve the concurrent Writ out of jurisdiction 232
C.2 No serious issue to be tried 238
C.3 Material non disclosure 287
C.4 Conclusion 291
D. HCA 2423
D.1 Parties’ summonses 292
D.2 Strike Out Summons
D.2.1 Background 295
D.2.2 Plaintiffs’ arguments 297
D.2.3 Defendants’ arguments 299
D.2.4 Discussion 308
D.3 Stay Summons
D.3.1 The summons 347
D.3.2 No serious issue to be tried: improperly instituted claim 349
D.3.3 No serious issue to be tried: ulterior motive 387
D.3.4 No serious issue to be tried: no loss to Sinosoft 423
D.3.5 Order 11 gateways 461
D.3.6 Forum non conveniens 477
D.3.7 Material non disclosure 499
D.3.8 Conclusion 520
D.4 Judgment Summons and Time Summons
D.4.1 The summonses 521
D.4.2 Legal principles 524
D.4.3 Parties’ submissions 529
D.4.4 Breach of the Unless Order 535
D.4.5 Other ground 561
D.4.6 Conclusion 578
E. ORDERS
F. NOTE OF THANKS

A. BACKGROUND

A.1 The seven summonses

1. There are in total seven summonses arising out of three actions before this court.

2. The three actions are: HCA 2345/2013 (“HCA 2345”), HCA 1613/2013 (“HCA 1613”) and HCA 2423/2013 (“HCA 2423”). They are related.

3. Out of the seven summonses, there are three summonses to set aside the leave granted on an ex parte basis to the plaintiffs to serve the concurrent Writ out of the jurisdiction in each of the three actions. The other four summonses are all concerned with HCA 2423 only.

4. By the order of Her Ladyship Madam Justice Au-yeung dated 2 September 2015, all seven summonses in the three actions came before this court. The two summonses to set aside the (ex parte) leave to serve out in HCA 2345 and HCA 1613 were heard on 15 to 17 and 21 September 2015. All the five summonses in HCA 2423 were heard on 26, 27, 29 October 2015 and 4 November 2015. They will be dealt with altogether in this judgment.

A.2 The parties

5. It is necessary to first set out all the parties in the three actions:

HCA 2345 HCA 1613 HCA 2423 [1]
1st plaintiff Tremendous Success Holdings Limited (“TS”) substituted as 1st plaintiff for South China Holdings Limited (“South China”) Janful Limited
(“Janful”)		 Law Ka Leung, Victor
2nd plaintiff Janful Tremendous Success Holdings Limited (“TS”) substituted as 2nd plaintiff for South China Teoh, Tean Chai, Anthony
3rd plaintiff South China Finance and Management Limited
1st defendant Sinosoft Technology Group Limited (“Sinosoft”) Sinosoft Xin Ying Mei (“Xin”)
2nd defendant Nanjing Skytech Co., Limited (“Nanjing Skytech”) Xin Wang Xiaogang (“Wang”)
3rd defendant Xin Zhang Hong (“Zhang”)
4th defendant Wang Ma Ming (“Ma”)
5th defendant Zhang Ding Su Lin (“Ding”)
6th defendant Liu Biao (“Liu”) Sinosoft
7th defendant Ma
8th defendant Ding

6. The key entities in these actions are:

(1) Janful: It is a limited company incorporated in Hong Kong and indirectly wholly owned by South China. It was used as an investment corporate vehicle by South China.

(2) South China: It is a company incorporated in the Cayman Islands, with its shares listed on the HKSE. South China’s claims in HCA 2345 and HCA 1613 were assigned to TS, pursuant to the orders of Master Chow dated 18 September 2014.

(3) Sinosoft: It is also a company incorporated in the Cayman Islands, with its shares listed on the HKSE. It was named as the 1st defendant in both HCA 2345 and HCA 1613. HCA 2423 is a derivative action commenced by minority shareholders of Sinosoft on its behalf and thus Sinosoft was named as a technical defendant (the 6th defendant) therein.

(4) Nanjing Skytech: It is a company incorporated in Mainland China. On 31 January 2000, Janful and Nanjing Skytech entered into a joint venture agreement (“JV Agreement”) for the incorporation of Nanjing South China Skytech Technology(“JV Company” or “JVC”) to run a business of software design and development. Two different versions of JV Agreement are revealed in these proceedings. There is a serious dispute on whether the JV Agreement registered with the PRC authorities represented the genuine agreement between Janful and the JVC. It is common ground that Janful held 66.7% equity in the JVC and Nanjing Skytech held 33.3% equity therein.

(5) Xin: She has been a director of Nanjing Skytech since about November 1998. From about March 2000 to March 2003, she was the vice-president and director of the JVC. She is a common defendant in all three actions. She is the wife of Wang, who was also named as a defendant in HCA 2345 and HCA 2423.

(6) Ding: The only unrepresented defendant in HCA 2345 and HCA 2423, and absent from the hearings. According to the plaintiffs in both actions, Ding was an employee of a subsidiary of South China in Mainland China since 1993. He was then appointed by Janful to the board of the JVC.

(7) Other defendants: The other defendants in these three actions, namely, Wang, Ma, Zhang, Liu, together with Xin, were referred to as the “NS Principals” in the Statement of Claim in all three actions. They were directors or senior officials of the JVC. Wang was a director and the General Manager. Ma was the Deputy General Manager. Zhang was a director, the Chief Engineer and the Deputy General Manager. Liu was the Manager of Finance Department.

A.3 The three actions

7. HCA 2345 was commenced by South...

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