CHEUNG HING v. WONG CHOR CHEUNG AND OTHERS

CHEUNG HING v. WONG CHOR CHEUNG AND OTHERS

The consent order was properly construed as requiring that a sale not be secretly conducted to exclude the plaintiff; the Best Century agreement was a sham orchestrated to preserve control by the 1st defendant, the corporate veil was pierced to reveal Best Century as the 1st defendant's alter ego, Best Century was not a bona fide purchaser for value without notice, and the plaintiff had standing to bring personal and derivative claims; accordingly the agreement was void, registration vacated and injunctive and costs relief granted.

Citation
CHEUNG HING v. WONG CHOR CHEUNG AND OTHERS
Parties
Plaintiff: Cheung Hing; 1st Defendant: Wong Chor Cheung; 2nd Defendant: Best Century Holdings Limited; 3rd Defendant: Wah Fung Forest Resources Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
7 April 2014
Case Number
HCA925/2010
Procedural Posture
Civil Action: Shareholder Dispute and Property Sale / Judgment After Trial
Outcome
Best Century agreement declared void and of no effect; registration vacated; permanent and interim injunctions granted against sale without plaintiff's prior written consent; damages to be assessed; costs awarded to plaintiff on an indemnity basis against the 1st and 2nd defendants with certificate for two counsel.
Legal Topics
Derivative Action, Piercing Corporate Veil, Sham Transaction, Consent Order Construction, Injunctions, Voidable Disposition, Standing / Locus Standi
Source Language
EN
Property Law Company Law Equity Conveyancing Civil Procedure Contract Law Fiduciary Duties Fraud +7 more

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Parties

Cheung Hing

Plaintiff

Wong Chor Cheung

1st Defendant

Best Century Holdings Limited

2nd Defendant

Wah Fung Forest Resources Limited

3rd Defendant

Procedural Posture

Civil Action: Shareholder Dispute and Property Sale / Judgment After Trial

Legal Issues

  1. 1 Whether the sale agreement to Best Century breached the consent order
  2. 2 Whether the Best Century agreement was a sham and the corporate veil should be pierced
  3. 3 Whether Best Century was a bona fide purchaser for value without notice

Ratio Decidendi

The consent order was properly construed as requiring that a sale not be secretly conducted to exclude the plaintiff; the Best Century agreement was a sham orchestrated to preserve control by the 1st defendant, the corporate veil was pierced to reveal Best Century as the 1st defendant's alter ego, Best Century was not a bona fide purchaser for value without notice, and the plaintiff had standing to bring personal and derivative claims; accordingly the agreement was void, registration vacated and injunctive and costs relief granted.

Court Disposition

Best Century agreement declared void and of no effect; registration vacated; permanent and interim injunctions granted against sale without plaintiff's prior written consent; damages to be assessed; costs awarded to plaintiff on an indemnity basis against the 1st and 2nd defendants with certificate for two counsel.

Orders

  • The Best Century agreement is declared void and of no effect.
  • The registration of the Best Century agreement at the Land Registry be vacated.