JUST CONDUCT LTD v. CHINA RISE FINANCE COMPANY LTD AND OTHERS

JUST CONDUCT LTD v. CHINA RISE FINANCE COMPANY LTD AND OTHERS

The First Mortgage and 2014 Loan Agreement were void: the First Mortgage was not properly executed under Companies Ordinance (only one director signed) and there was no authority to bind Just Conduct; China Rise had constructive knowledge of the irregularities and therefore could not rely on ostensible...

Source-derived case information.

Citation
[2025] HKCFI 3875
Parties
Plaintiff (by Original Action): Just Conduct Limited; 1st Defendant (by Original Action) & Counterclaim Plaintiff: China Rise Finance Company Limited; 2nd Defendant (by Original Action): Tang & Associates (a firm); 3rd Defendant (by Original Action): Wong Yuen Wah; 4th Defendant (by Original Action): Li Wing Ka Chermaine; 5th Defendant (by Original Action): Tang Hin Ming Henry
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
29 August 2025
Case Number
HCA2283/2018
Procedural Posture
Civil Commercial Litigation — Mortgage, Company and Contract Dispute / Trial Judgment (court of First Instance)
Outcome
Claims of Just Conduct upheld in respect of invalidity of documents; China Rise counterclaim dismissed
Legal Topics
Mortgage Validity, Execution of Deeds and Company Execution Formalities, Non Est Factum, Ostensible/actual Authority, Indoor Management/turquand Rule, Constructive Knowledge and Notice, Ratification and Acknowledgement, Unjust Enrichment, Conspiracy to Defraud, Costs
Source Language
en
Company Law Contract Law Property Law Equity and Trusts Agency Law Civil Fraud/conspiracy Civil Procedure Mortgage Validity +9 more

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Parties

Just Conduct Limited

Plaintiff (by Original Action)

China Rise Finance Company Limited

1st Defendant (by Original Action) & Counterclaim Plaintiff

Tang & Associates (a firm)

2nd Defendant (by Original Action)

Wong Yuen Wah

3rd Defendant (by Original Action)

Li Wing Ka Chermaine

4th Defendant (by Original Action)

Tang Hin Ming Henry

5th Defendant (by Original Action)

Procedural Posture

Civil Commercial Litigation — Mortgage, Company and Contract Dispute / Trial Judgment (court of First Instance)

Legal Issues

  1. 1 Whether the 2014 Loan Agreement and First Mortgage were valid and binding on Just Conduct
  2. 2 Whether China Rise had actual or constructive knowledge of irregularities
  3. 3 Whether Chermaine Li or the Parents had actual or ostensible authority to bind Just Conduct

Ratio Decidendi

The First Mortgage and 2014 Loan Agreement were void: the First Mortgage was not properly executed under Companies Ordinance (only one director signed) and there was no authority to bind Just Conduct; China Rise had constructive knowledge of the irregularities and therefore could not rely on ostensible authority/indoor management; the Parents established non est factum in relation to the 2016 Board Minutes and the Further Mortgage, rendering them void ab initio. Consequently both registered mortgages should be vacated from the Land Registry.

Court Disposition

Claims of Just Conduct upheld in respect of invalidity of documents; China Rise counterclaim dismissed

Orders

  • Declaration that the 2014 Board Minutes, the 2014 Loan Agreement, the First Mortgage, the 2016 Board Minutes and the Further Mortgage were void ab initio
  • Order that the First Mortgage and the Further Mortgage be vacated from the Land Registry