AMERITAX PLUS LTD v. DENICE Y FOSTER HARRIS

AMERITAX PLUS LTD v. DENICE Y FOSTER HARRIS

The District Court has jurisdiction under section 52AB(3) of the District Court Ordinance to order the sale of shares subject to a charging order; despite contractual transfer restrictions in the articles of association and the risk that directors may refuse to register transfers, the court may exercise its equitable jurisdiction to order a sale with appropriate directions. Accordingly the master’s dismissal was set aside and an order for sale of the 9,999 shares was granted with specified procedural safeguards including opportunity for existing shareholders to purchase, plaintiff conduct of sale, independent valuation for reserve price, and liberty to apply for further directions.

Citation
AMERITAX PLUS LTD v. DENICE Y FOSTER HARRIS
Parties
Plaintiff: Ameritax Plus Limited; Defendant (personal and Personal Representative of Estate of John Charles Harris, Deceased): Denice Y F Foster Harris
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
1 November 2012
Case Number
DCMP1298/2012
Procedural Posture
Charging Order Application for Sale of Charged Shares / Appeal (re Hearing Before District Judge)
Outcome
Master's order dated 18 September 2012 set aside; order for sale of 9,999 shares granted
Legal Topics
Charging Orders, Order for Sale of Shares, Private Company Share Transfer Restrictions, District Court Jurisdiction, Enforcement of Judgment
Source Language
EN
Civil Procedure Enforcement Company Law Equity Charging Orders Order for Sale of Shares Private Company Share Transfer Restrictions District Court Jurisdiction +1 more

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Parties

Ameritax Plus Limited

Plaintiff

Denice Y F Foster Harris

Defendant (personal and Personal Representative of Estate of John Charles Harris, Deceased)

Procedural Posture

Charging Order Application for Sale of Charged Shares / Appeal (re Hearing Before District Judge)

Legal Issues

  1. 1 Whether the District Court has jurisdiction to order sale of shares subject to a charging order
  2. 2 Whether contractual transfer restrictions in the articles of association prevent a court-ordered sale
  3. 3 What terms and directions are appropriate for a court-ordered sale of privately held shares

Ratio Decidendi

The District Court has jurisdiction under section 52AB(3) of the District Court Ordinance to order the sale of shares subject to a charging order; despite contractual transfer restrictions in the articles of association and the risk that directors may refuse to register transfers, the court may exercise its equitable jurisdiction to order a sale with appropriate directions. Accordingly the master’s dismissal was set aside and an order for sale of the 9,999 shares was granted with specified procedural safeguards including opportunity for existing shareholders to purchase, plaintiff conduct of sale, independent valuation for reserve price, and liberty to apply for further directions.

Court Disposition

Master's order dated 18 September 2012 set aside; order for sale of 9,999 shares granted

Orders

  • The order of the master dated 18 September 2012 be set aside
  • An order for sale of 9,999 ordinary shares of Joymark International Limited standing in the name of the estate of John Charles Harris and subject of a charging order absolute dated 10 April 2012