PANG IENG LUN AND ANOTHER v. ZHANG ZHIJIAN

PANG IENG LUN AND ANOTHER v. ZHANG ZHIJIAN

Court found on evidence Zhang was indebted and the RMB1,000,000 was a partial repayment; there was cessation of repayment within Clause15.5(1), Clause15.5 may be validly invoked by the other contractual shareholders only, and the Notice of Termination was validly served; accordingly Zhang is ordered to sell his shares under Clause10 by specific performance. On the counterclaim the court found the earlier declaration of trust had been extinguished by a transfer of beneficial interest to Lou in mid‑2019, so the 24 and 28 September 2021 transfers were not protected by the trust exception and are void; Ms Ma must transfer 20,000 shares back to Mr Lou.

Citation
[2026] HKCFI 2561
Parties
1st Plaintiff: Pang Ieng Lun (彭映鸞); 2nd Plaintiff: Lou Kim Neng (勞劍寧); Defendant (original Action) and Plaintiff (counterclaim): Zhang Zhijian (張志建); 3rd Defendant (by Counterclaim): Ma Kin Kwan (馬建軍); 4th Defendant (by Counterclaim): Ma Ka Ching (馬嘉靜)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
5 May 2026
Case Number
HCA1224/2022
Procedural Posture
Civil Commercial Trial Contractual Dispute (shareholders Agreement) With Counterclaim / Trial Judgment (determination)
Outcome
Claims partly successful for plaintiffs and claimant on counterclaim; specific performance and declarations ordered with costs nisi orders
Legal Topics
Specific Performance, Breach of Shareholders' Agreement, Share Transfer Restrictions, Declaration of Trust and Beneficial Ownership, Termination Clause (default), Effect of Foreign Judgment and Freezing Orders, Costs
Source Language
EN
Contract Law Company Law Equity and Trusts Civil Procedure Specific Performance Breach of Shareholders' Agreement Share Transfer Restrictions Declaration of Trust and Beneficial Ownership +3 more

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Parties

Pang Ieng Lun (彭映鸞)

1st Plaintiff

Lou Kim Neng (勞劍寧)

2nd Plaintiff

Zhang Zhijian (張志建)

Defendant (original Action) and Plaintiff (counterclaim)

Ma Kin Kwan (馬建軍)

3rd Defendant (by Counterclaim)

Ma Ka Ching (馬嘉靜)

4th Defendant (by Counterclaim)

Procedural Posture

Civil Commercial Trial Contractual Dispute (shareholders Agreement) With Counterclaim / Trial Judgment (determination)

Legal Issues

  1. 1 Whether defendant was indebted to PRC Company and whether RMB1,000,000 was partial repayment
  2. 2 Whether cessation of repayment triggered Clause 15.5 of the SHA
  3. 3 Whether Notice of Termination required service by non‑contractual shareholders or only contractual shareholders

Ratio Decidendi

Court found on evidence Zhang was indebted and the RMB1,000,000 was a partial repayment; there was cessation of repayment within Clause15.5(1), Clause15.5 may be validly invoked by the other contractual shareholders only, and the Notice of Termination was validly served; accordingly Zhang is ordered to sell his shares under Clause10 by specific performance. On the counterclaim the court found the earlier declaration of trust had been extinguished by a transfer of beneficial interest to Lou in mid‑2019, so the 24 and 28 September 2021 transfers were not protected by the trust exception and are void; Ms Ma must transfer 20,000 shares back to Mr Lou.

Court Disposition

Claims partly successful for plaintiffs and claimant on counterclaim; specific performance and declarations ordered with costs nisi orders

Orders

  • Defendant Zhang Zhijian do sell his shares in the Company to Pang Ieng Lun and Lou Kim Neng in accordance with Clause 10 of the SHA
  • Costs order nisi: Zhang Zhijian to pay costs of the claim to Pang Ieng Lun and Lou Kim Neng, to be taxed if not agreed