PENG HUI ZHOU v. HONG KONG TACHIBANA ELECTRONICS CO LTD AND OTHERS

PENG HUI ZHOU v. HONG KONG TACHIBANA ELECTRONICS CO LTD AND OTHERS

The court rejected the petitioner's factual case that there was an agreement to remunerate him by dividends and that a quasi‑partnership existed; the shares were given as a customary recognition at par pursuant to Japanese practice and no enforceable expectation to dividends or management rights was proven; therefore the conduct complained of was not unfairly prejudicial under s168A and the petition was dismissed.

Citation
PENG HUI ZHOU v. HONG KONG TACHIBANA ELECTRONICS CO LTD AND OTHERS
Parties
Petitioner: Peng Hui Zhou; Company: Hong Kong Tachibana Electronics Company Limited; 2nd Respondent: Koji Matsumoto; 3rd Respondent: Kenji Hasuo
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
22 September 2010
Case Number
HCMP1080/2008
Procedural Posture
Section 168 a Petition Under the Companies Ordinance (unfairly Prejudicial Conduct) / Trial Judgment (court of First Instance)
Outcome
Petition dismissed
Legal Topics
Unfairly Prejudicial Conduct, Buy‑out Relief, Share Allotment and Dilution, Dividends, Quasi‑partnership, Interpretation of Shareholders' Understandings
Source Language
EN
Company Law Corporate Governance Shareholder Disputes Employment Law Equity Unfairly Prejudicial Conduct Buy‑out Relief Share Allotment and Dilution +3 more

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Parties

Peng Hui Zhou

Petitioner

Hong Kong Tachibana Electronics Company Limited

Company

Koji Matsumoto

2nd Respondent

Kenji Hasuo

3rd Respondent

Procedural Posture

Section 168 a Petition Under the Companies Ordinance (unfairly Prejudicial Conduct) / Trial Judgment (court of First Instance)

Legal Issues

  1. 1 Whether a relationship of trust and confidence/quasi‑partnership existed between the shareholders
  2. 2 Whether an agreement existed that shares issued to petitioner carried an entitlement to dividends as remuneration for securing customers
  3. 3 Whether refusal to declare dividends was unfairly prejudicial

Ratio Decidendi

The court rejected the petitioner's factual case that there was an agreement to remunerate him by dividends and that a quasi‑partnership existed; the shares were given as a customary recognition at par pursuant to Japanese practice and no enforceable expectation to dividends or management rights was proven; therefore the conduct complained of was not unfairly prejudicial under s168A and the petition was dismissed.

Court Disposition

Petition dismissed

Orders

  • Petition dismissed
  • Costs nisi: Petitioner to pay the 2nd and 3rd Respondents their costs of the proceedings, to be taxed on party and party basis if not agreed