TSANG WING KWAI AND ANOTHER v. WONG WING SZE TIFFANY AND ANOTHER

TSANG WING KWAI AND ANOTHER v. WONG WING SZE TIFFANY AND ANOTHER

On the balance of probabilities the Mother executed the 1988 Declaration of Trust with understanding and thereby held the one original share on bare trust for Kwai; the 2012 Return of Allotment and Board Minutes were not shown to have been validly executed or understood by the Mother given her cognitive impairment...

Source-derived case information.

Citation
[2019] HKCFI 3148
Parties
1st Applicant: Tsang Wing Kwai; 2nd Applicant: Open Treasure Industries Limited; 1st Respondent: Wong Wing Sze Tiffany (Administratrix to the Estate of Chan Chung Han); 2nd Respondent: Tsang Wing Fai
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
31 December 2019
Case Number
HCMP1912/2013
Procedural Posture
HCMP 1912/2013 Miscellaneous Proceedings (companies and Trusts) / Re Trial Judgment
Outcome
Judgment for 1st Applicant Tsang Wing Kwai
Legal Topics
Share Allotment, Declaration of Trust, Non Est Factum, Mistake, Undue Influence/inducement, Duomatic Principle, Rectification of Company Register, Costs
Source Language
en
Companies Law Trusts and Trustees Estate Administration Mental Capacity/incapacity Civil Procedure Share Allotment Declaration of Trust Non Est Factum +5 more

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Parties

Tsang Wing Kwai

1st Applicant

Open Treasure Industries Limited

2nd Applicant

Wong Wing Sze Tiffany (Administratrix to the Estate of Chan Chung Han)

1st Respondent

Tsang Wing Fai

2nd Respondent

Procedural Posture

HCMP 1912/2013 Miscellaneous Proceedings (companies and Trusts) / Re Trial Judgment

Legal Issues

  1. 1 Whether the Declaration of Trust dated 29 July 1988 validly vested beneficial ownership of one share in Tsang Wing Kwai
  2. 2 Whether the Return of Allotment dated 16 January 2012 and associated Board Minutes are valid
  3. 3 Whether the Annual Return of 8 August 2012 operated as ratification of the Purported Allotment or was signed under mistake

Ratio Decidendi

On the balance of probabilities the Mother executed the 1988 Declaration of Trust with understanding and thereby held the one original share on bare trust for Kwai; the 2012 Return of Allotment and Board Minutes were not shown to have been validly executed or understood by the Mother given her cognitive impairment and in any event contravened s57B CO and were for the dominant improper purpose of diluting Kwai’s beneficial interest; the Annual Return was signed by Kwai under mistake and did not ratify the Purported Allotment; accordingly the Declaration of Trust is effective, the share vests in Kwai, the Purported Allotment is set aside and the company register is rectified.

Court Disposition

Judgment for 1st Applicant Tsang Wing Kwai

Orders

  • Declaration that the share settled by the Declaration of Trust has been held on bare trust by the Mother for Kwai's benefit
  • The share be vested in Tsang Wing Kwai