CHINACAST EDUCATION CORPORATION AND OTHERS v. CHAN TZE NGON AND OTHERS

CHINACAST EDUCATION CORPORATION AND OTHERS v. CHAN TZE NGON AND OTHERS

No Quistclose trust arose: the HK$3,000,000 was advanced as loans to the company, the funds were mixed in the company's bank account, the Acknowledgement was signed by the company not the funders and contained no express trust term, and there was insufficient evidence that property did not pass to the company; accordingly the fund is treated as money standing to the credit of the plaintiffs/action and the court ordered payment out to the 3rd Defendant to the extent of the Indebtedness with any balance to the Plaintiffs.

Citation
[2020] HKCFI 3121
Parties
1st Plaintiff: CHINACAST EDUCATION CORPORATION; 2nd Plaintiff: CHINACAST TECHNOLOGY (BVI) LIMITED; 3rd Plaintiff: CHINACAST TECHNOLOGY (SHANGHAI) LIMITED; 3rd Defendant: Jim Ma (3rd Defendant); 10th Defendant: ST DESTINY LIMITED; 11th Defendant: ISTHOCH ASSETS LIMITED; 12th Defendant: CAST GREAT LIMITED; 13th Defendant: NEW SHANGHAI INVESTMENTS LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
28 December 2020
Case Number
HCA1062/2012
Procedural Posture
Civil Mareva Injunction / Payment Out of Court Dispute / Appeal From Master's Order and Concurrent Summons for Payment Out of Court
Outcome
Appeal allowed in part: payment out to 3rd Defendant to extinguish the Indebtedness; any remaining balance to be paid to the Plaintiffs; costs orders nisi made with specified allocation.
Legal Topics
Quistclose Trust, Funds Paid Into Court, Mareva Injunction, Undertaking as to Damages, Payment Out of Court, Costs
Source Language
EN
Equity Trusts Civil Procedure Litigation Funding Bankruptcy Law Quistclose Trust Funds Paid Into Court Mareva Injunction +3 more

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Parties

CHINACAST EDUCATION CORPORATION

1st Plaintiff

CHINACAST TECHNOLOGY (BVI) LIMITED

2nd Plaintiff

CHINACAST TECHNOLOGY (SHANGHAI) LIMITED

3rd Plaintiff

Jim Ma (3rd Defendant)

3rd Defendant

ST DESTINY LIMITED

10th Defendant

ISTHOCH ASSETS LIMITED

11th Defendant

CAST GREAT LIMITED

12th Defendant

NEW SHANGHAI INVESTMENTS LIMITED

13th Defendant

Procedural Posture

Civil Mareva Injunction / Payment Out of Court Dispute / Appeal From Master's Order and Concurrent Summons for Payment Out of Court

Legal Issues

  1. 1 Whether the HK$3,000,000 fund is subject to a Quistclose trust
  2. 2 Whether the funds formed part of the Plaintiffs' assets or remained the property of third party funders
  3. 3 Whether the 3rd Defendant is entitled to payment out of the fund to satisfy the Indebtedness

Ratio Decidendi

No Quistclose trust arose: the HK$3,000,000 was advanced as loans to the company, the funds were mixed in the company's bank account, the Acknowledgement was signed by the company not the funders and contained no express trust term, and there was insufficient evidence that property did not pass to the company; accordingly the fund is treated as money standing to the credit of the plaintiffs/action and the court ordered payment out to the 3rd Defendant to the extent of the Indebtedness with any balance to the Plaintiffs.

Court Disposition

Appeal allowed in part: payment out to 3rd Defendant to extinguish the Indebtedness; any remaining balance to be paid to the Plaintiffs; costs orders nisi made with specified allocation.

Orders

  • Pay out of court to 3rd Defendant so much of the HK$3,000,000 fund as will extinguish the Indebtedness (approximately HK$2.2 million)
  • Pay any balance remaining in court after payment to 3rd Defendant to the Plaintiffs