CANTAB INTERNATIONAL LTD AND OTHERS v. LUK NGAI LING IRENE AND OTHERS

CANTAB INTERNATIONAL LTD AND OTHERS v. LUK NGAI LING IRENE AND OTHERS

Clause 2(2) required provision of an updated audit report up to the date of the agreement or as near as reasonably practicable; defendants failed to supply such a report, withdrew resignation/nomination letters to the Education Bureau contrary to clause 5 and withheld essential information, these breaches amounted to repudiation; plaintiffs were entitled to terminate and recover the deposit and losses; counterclaim dismissed.

Citation
CANTAB INTERNATIONAL LTD AND OTHERS v. LUK NGAI LING IRENE AND OTHERS
Parties
1st Plaintiff: Cantab International Limited; 2nd Plaintiff: Ng Tsz Man; 3rd Plaintiff: Leung Kin Yan; 1st Defendant: Luk Ngai Ling Irene; 2nd Defendant: Cantab Education Centre (Fo Tan) Limited; 3rd Defendant: Cantab Education Centre (Kowloon Bay) Limited; 4th Defendant: Cantab Education Centre (Prince Edward) Limited; 5th Defendant: Cantab Education Centre Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
1 November 2016
Case Number
HCA926/2012
Procedural Posture
Contractual Dispute (sale of Tutorial Business) / Judgment (court of First Instance)
Outcome
Judgment for the plaintiffs; defendants' counterclaim dismissed
Legal Topics
Breach of Contract, Sale of Business as a Going Concern, Repudiation and Rescission, Damages Assessment, Veil of Incorporation, Regulatory Approval (education Bureau)
Source Language
EN
Contract Law Commercial Law Corporate Law Property Law Administrative Law Breach of Contract Sale of Business as a Going Concern Repudiation and Rescission +3 more

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Parties

Cantab International Limited

1st Plaintiff

Ng Tsz Man

2nd Plaintiff

Leung Kin Yan

3rd Plaintiff

Luk Ngai Ling Irene

1st Defendant

Cantab Education Centre (Fo Tan) Limited

2nd Defendant

Cantab Education Centre (Kowloon Bay) Limited

3rd Defendant

Cantab Education Centre (Prince Edward) Limited

4th Defendant

Cantab Education Centre Limited

5th Defendant

Procedural Posture

Contractual Dispute (sale of Tutorial Business) / Judgment (court of First Instance)

Legal Issues

  1. 1 Meaning and effect of clause 2(2) requiring an "updated Audit Report" before payment of balance
  2. 2 Whether the defendants' conduct (failure to provide updated report and withdrawal of resignation letters to Education Bureau) amounted to repudiatory breach
  3. 3 Whether plaintiffs were buying only the 5th defendant company or the business as a going concern

Ratio Decidendi

Clause 2(2) required provision of an updated audit report up to the date of the agreement or as near as reasonably practicable; defendants failed to supply such a report, withdrew resignation/nomination letters to the Education Bureau contrary to clause 5 and withheld essential information, these breaches amounted to repudiation; plaintiffs were entitled to terminate and recover the deposit and losses; counterclaim dismissed.

Court Disposition

Judgment for the plaintiffs; defendants' counterclaim dismissed

Orders

  • Return of HKD 1,000,000 (first instalment) to the plaintiffs
  • Payment of HKD 911,712.24 for rental in respect of April and May 2012