LI MING AND OTHERS v. ZHANG CAIKUI AND ANOTHER

LI MING AND OTHERS v. ZHANG CAIKUI AND ANOTHER

The Lien Summonses were dismissed because the Former Receivers failed to prove on the balance of probabilities the existence of any actual or potential indebtedness in relation to their unpaid fees: the asserted funding/loans (HK$28m) lacked contemporaneous documentary records and material terms, the evidence was insufficient and speculative, and therefore a binding declaration of an equitable lien over the Receiver Shares could not be granted.

Citation
[2021] HKCFI 1805
Parties
Plaintiffs: 1st Group of Relevant employees whose shares in CHINA SHANSHUI INVESTMENT COMPANY LIMITED were held by ZHANG CAIKUI on trust; Plaintiffs: 2nd Group of Relevant employees whose shares in CHINA SHANSHUI INVESTMENT COMPANY LIMITED were held by LI YANMIN on trust; Interested Party: CHINA SHANSHUI INVESTMENT COMPANY LIMITED; 1st Plaintiff (hca 1282/2017): LI MING; 2nd Plaintiff (hca 1282/2017): WU RANTAO; 3rd Plaintiff (hca 1282/2017): ZHAO DONGWEI; 1st Defendant: ZHANG CAIKUI; 2nd Defendant: LI YANMIN; Respondents to Lien Summonses: SH Plaintiffs (SHPs)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
23 June 2021
Case Number
HCA1282/2017
Procedural Posture
Trust Actions and Lien Summonses (receivership) / Decision (judgment)
Outcome
Lien Summonses dismissed
Legal Topics
Receivers' Lien, Equitable Lien, Waiver, Abuse of Process, Threshold of Proof, Declaration of Entitlement, Evidence on Funding
Source Language
EN
Equity Trusts Receivership Civil Procedure Costs Receivers' Lien Equitable Lien Waiver +4 more

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Parties

1st Group of Relevant employees whose shares in CHINA SHANSHUI INVESTMENT COMPANY LIMITED were held by ZHANG CAIKUI on trust

Plaintiffs

2nd Group of Relevant employees whose shares in CHINA SHANSHUI INVESTMENT COMPANY LIMITED were held by LI YANMIN on trust

Plaintiffs

CHINA SHANSHUI INVESTMENT COMPANY LIMITED

Interested Party

LI MING

1st Plaintiff (hca 1282/2017)

WU RANTAO

2nd Plaintiff (hca 1282/2017)

ZHAO DONGWEI

3rd Plaintiff (hca 1282/2017)

ZHANG CAIKUI

1st Defendant

LI YANMIN

2nd Defendant

SH Plaintiffs (SHPs)

Respondents to Lien Summonses

Procedural Posture

Trust Actions and Lien Summonses (receivership) / Decision (judgment)

Legal Issues

  1. 1 Whether the Former Receivers are entitled to an equitable lien over the 456,325 CSI shares
  2. 2 Whether the Former Receivers have proved on the balance of probabilities an actual or potential indebtedness to justify a declaration of lien
  3. 3 Whether the Former Receivers have waived any lien by prior conduct or transfers

Ratio Decidendi

The Lien Summonses were dismissed because the Former Receivers failed to prove on the balance of probabilities the existence of any actual or potential indebtedness in relation to their unpaid fees: the asserted funding/loans (HK$28m) lacked contemporaneous documentary records and material terms, the evidence was insufficient and speculative, and therefore a binding declaration of an equitable lien over the Receiver Shares could not be granted.

Court Disposition

Lien Summonses dismissed

Orders

  • Dismiss the substantive Lien Summonses brought by the Former Receivers
  • Refuse the ancillary order that the shares deposited with Court shall remain so deposited (§3 refused)