SILVER STONE DEVELOPMENT LTD AND ANOTHER v. LAU KWONG CHING, JAMES AND OTHER

SILVER STONE DEVELOPMENT LTD AND ANOTHER v. LAU KWONG CHING, JAMES AND OTHER

Where a stockbroker and third parties transacted and transferred shares without the plaintiff's authority the acts constituted conversion; the initial Powers of Attorney were not operative to authorize the sales once the plaintiff opened an account governed by account opening forms naming the plaintiff's authorised signatory, so defendants 2, 3, 4 and 6 were liable for conversion and defendant 5 was liable under his guarantee; damages measured at market value on date of conversion less payments already made resulted in judgment of $15,438,000 against 2nd,3rd,4th and 6th defendants and $5,208,000 under the guarantee against the 5th defendant, with prescribed interest and costs nisi.

Citation
SILVER STONE DEVELOPMENT LTD AND ANOTHER v. LAU KWONG CHING, JAMES AND OTHER
Parties
1st Plaintiff: Silver Stone Development Limited; 2nd Plaintiff: Lui Yue Yun, Gary; 1st Defendant: Lau Kwong Ching, James; 2nd Defendant: Kwok Wai Tak, Edward; 3rd Defendant: Carrier Stock Investment Company Limited; 4th Defendant: Ho Pun Tsun, Peter; 5th Defendant: Szeto Joseph; 6th Defendant: Asia Glory Holdings Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
1 June 2006
Case Number
HCA2206/2000
Procedural Posture
Civil: Conversion, Fraud, Contract, Guarantee, Securities Regulation / Judgment at Trial (court of First Instance)
Outcome
Judgment for plaintiffs in part; action dismissed as against 1st Defendant; 2nd, 3rd, 4th and 6th Defendants liable for conversion; 5th Defendant liable on guarantee
Legal Topics
Conversion, Fraudulent Misrepresentation, Breach of Contract, Money Had and Received, Guarantee Enforcement, Stockbroker Duties, Authority and Powers of Attorney
Source Language
EN
Civil Commercial Tort Contract Securities Law Conversion Fraudulent Misrepresentation Breach of Contract +4 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 12 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

Silver Stone Development Limited

1st Plaintiff

Lui Yue Yun, Gary

2nd Plaintiff

Lau Kwong Ching, James

1st Defendant

Kwok Wai Tak, Edward

2nd Defendant

Carrier Stock Investment Company Limited

3rd Defendant

Ho Pun Tsun, Peter

4th Defendant

Szeto Joseph

5th Defendant

Asia Glory Holdings Limited

6th Defendant

Procedural Posture

Civil: Conversion, Fraud, Contract, Guarantee, Securities Regulation / Judgment at Trial (court of First Instance)

Legal Issues

  1. 1 Whether the shares were converted by defendants and by whom
  2. 2 Whether the stockbroker (3rd Defendant) acted with authority or in breach of contract and regulatory duties
  3. 3 Validity and effect of two Powers of Attorney and whether they conferred authority

Ratio Decidendi

Where a stockbroker and third parties transacted and transferred shares without the plaintiff's authority the acts constituted conversion; the initial Powers of Attorney were not operative to authorize the sales once the plaintiff opened an account governed by account opening forms naming the plaintiff's authorised signatory, so defendants 2, 3, 4 and 6 were liable for conversion and defendant 5 was liable under his guarantee; damages measured at market value on date of conversion less payments already made resulted in judgment of $15,438,000 against 2nd,3rd,4th and 6th defendants and $5,208,000 under the guarantee against the 5th defendant, with prescribed interest and costs nisi.

Court Disposition

Judgment for plaintiffs in part; action dismissed as against 1st Defendant; 2nd, 3rd, 4th and 6th Defendants liable for conversion; 5th Defendant liable on guarantee

Orders

  • Action dismissed against 1st Defendant; no order as to costs between 1st Defendant and Plaintiffs (order nisi)
  • Judgment for 1st Plaintiff against 2nd Defendant in sum of HK$15,438,000 (plus interest)