CHINA CITY CONSTRUCTION & DEVELOPMENT CO., (HK) LTD v. 宁波佳合港湾股权投资合伙企业（有限合伙）AND ANOTHER

CHINA CITY CONSTRUCTION & DEVELOPMENT CO., (HK) LTD v. 宁波佳合港湾股权投资合伙企业（有限合伙）AND ANOTHER

The court found there was a serious issue to be tried as to the Shareholding Trust because a contemporaneous Entrusted Shareholding Agreement existed raising triable issues as to authenticity and effect; however there was no serious issue to be tried as to the ListCo Shares Trust because the Plaintiff failed to adduce credible evidence of payment/value or chain of funds to support a constructive or express trust in its favour. Accordingly the proprietary injunction preserving the Shareholding against the 1st Defendant was continued; injunctive and preservation relief against the 2nd Defendant and Mareva relief were refused; the ex parte Service Out Order was set aside as to the 2nd...

Citation
[2020] HKCFI 1925
Parties
Plaintiff: China City Construction & Development Co., (HK) Limited; 1st Defendant: 宁波佳合港湾股权投资合伙企业（有限合伙）; 2nd Defendant: Huinong Fund International Investments Ltd.
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
7 August 2020
Case Number
HCA2303/2018
Procedural Posture
Civil Action (trust and Proprietary Claims) / Interlocutory — Application for Interlocutory Injunctions and Preservation Orders; Application to Set Aside Service Out Order (order 11)
Outcome
Injunction against 1st Defendant in respect of Shareholding continued; remainder of injunction summons dismissed; Service Out Order set aside as to 2nd Defendant; no retrospective leave to serve out on 2nd Defendant; costs — no order (costs nisi)
Legal Topics
Constructive Trust, Proprietary Injunction, Mareva Injunction, Preservation Order (order 29), Service Out of Jurisdiction (order 11), Full and Frank Disclosure
Source Language
EN
Trusts and Equity Company Law Civil Procedure Remedies International Service of Process Constructive Trust Proprietary Injunction Mareva Injunction +3 more

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Parties

China City Construction & Development Co., (HK) Limited

Plaintiff

宁波佳合港湾股权投资合伙企业（有限合伙）

1st Defendant

Huinong Fund International Investments Ltd.

2nd Defendant

Procedural Posture

Civil Action (trust and Proprietary Claims) / Interlocutory — Application for Interlocutory Injunctions and Preservation Orders; Application to Set Aside Service Out Order (order 11)

Legal Issues

  1. 1 Whether a shareholding trust (Entrusted Shareholding Agreement) exists in favour of the Plaintiff
  2. 2 Whether the 2nd Defendant held the 69,000,000 H-shares and dividends on trust for the Plaintiff (ListCo Shares trust)
  3. 3 Whether interlocutory proprietary/Mareva injunctions and preservation orders should be granted

Ratio Decidendi

The court found there was a serious issue to be tried as to the Shareholding Trust because a contemporaneous Entrusted Shareholding Agreement existed raising triable issues as to authenticity and effect; however there was no serious issue to be tried as to the ListCo Shares Trust because the Plaintiff failed to adduce credible evidence of payment/value or chain of funds to support a constructive or express trust in its favour. Accordingly the proprietary injunction preserving the Shareholding against the 1st Defendant was continued; injunctive and preservation relief against the 2nd Defendant and Mareva relief were refused; the ex parte Service Out Order was set aside as to the 2nd...

Court Disposition

Injunction against 1st Defendant in respect of Shareholding continued; remainder of injunction summons dismissed; Service Out Order set aside as to 2nd Defendant; no retrospective leave to serve out on 2nd Defendant; costs — no order (costs nisi)

Orders

  • Continue injunction granted by ST Poon J against the 1st Defendant in paragraphs 1 and 2 of the Injunction Order until judgment or further order
  • Dismiss the remainder of the Injunction Summons