Li v Wu

In the case of Li v Wu, Yu Xin Li, a shareholder in a company, sought compensation from Tao Wu, another shareholder, for breaches of fiduciary duties, misleading and deceptive conduct, and breaches of contract. The dispute arose from the management and control of a real estate development project, with allegations that Wu had acted against the interests of the company and its shareholders. The court was tasked with determining the validity of Li's claims for compensation under the GEI shareholder agreement, including equitable compensation for breach of fiduciary duty, and assessing any losses resulting from Wu's conduct.

The court examined the evidence provided by Li and Wu regarding the alleged breaches and the consequential damages. It was established that Wu had engaged in misleading and deceptive conduct by procuring the 2008 agreement, but Li failed to demonstrate any loss or damage resulting from this conduct. Additionally, the court found no breach of contract by Wu. The key issue was Li's claim for equitable compensation for breach of fiduciary duty, which the court found problematic. Li's claim for compensation was based on the proportion of liquidator’s fees spent on liquidating companies set up by Wu without Li's knowledge. However, Li did not provide a substantiated calculation of this claim, leading the court to conclude that it was arbitrary and unsupportable. The court granted leave for Li to rely on the Second Further Amended Statement of Claim, excluding the claim for equitable compensation.

The court ruled in favour of Li for the indemnity claim under the GEI shareholder agreement, awarding Li $976,866.80, along with interest. It dismissed Li's other claims, including those for equitable compensation for breach of fiduciary duty and any breach of contract by Wu. The court directed the parties to confer and file proposed orders for costs and any other necessary orders within 14 days, with the matter to be listed for final orders or further hearing as needed.