EDA HOLDINGS LIMITED AND OTHERS v. ETEK HOLDINGS LIMITED AND ANOTHER

EDA HOLDINGS LIMITED AND OTHERS v. ETEK HOLDINGS LIMITED AND ANOTHER

The court found that the 2nd defendant wrongfully converted the shares in Certificate No. 364004 on 14 October 1981; the plaintiffs were the beneficial owners of those shares; defences based on estoppel, replacement by fungible shares or reliance on pledge representations failed; damages for conversion were assessed as HK$28,632,425 with interest (9% p.a. on HK$62,599,413 from 15 Oct 1981 to 4 May 1982; 8% p.a. on HK$28,632,425 from 5 May 1982 until judgment) and costs to plaintiffs against the 2nd defendant.

Citation
EDA HOLDINGS LIMITED AND OTHERS v. ETEK HOLDINGS LIMITED AND ANOTHER
Parties
1st Plaintiff (in Liquidation): EDA HOLDINGS LIMITED; 2nd Plaintiff (in Liquidation): INLAND REALTY LIMITED; 3rd Plaintiff (in Liquidation): FORD FINANCE LIMITED; 1st Defendant: ETEK HOLDINGS LIMITED; 2nd Defendant: BBMB FINANCE (HONG KONG) LIMITED (formerly BUMIPUTRA MALAYSIA FINANCE LIMITED)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
15 December 1987
Case Number
HCA4046/1985
Procedural Posture
Tort (conversion) and Equitable Claims for Declaration and Accounts; Ancillary Contractual/pledge Dispute / Trial Judgment (decision on Liability and Damages)
Outcome
Judgment for plaintiffs against both defendants; plaintiffs entitled to damages, interest and costs; relief also granted against 1st defendant as sought.
Legal Topics
Conversion, Beneficial Ownership of Shares, Trusts and Declarations of Trust, Pledge and Continuing Security, Estoppel, Measure of Damages for Conversion, Fraud and Misconduct by Agent/employee
Source Language
EN
Tort Equity Property Banking and Finance Company Law Conversion Beneficial Ownership of Shares Trusts and Declarations of Trust +4 more

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Parties

EDA HOLDINGS LIMITED

1st Plaintiff (in Liquidation)

INLAND REALTY LIMITED

2nd Plaintiff (in Liquidation)

FORD FINANCE LIMITED

3rd Plaintiff (in Liquidation)

ETEK HOLDINGS LIMITED

1st Defendant

BBMB FINANCE (HONG KONG) LIMITED (formerly BUMIPUTRA MALAYSIA FINANCE LIMITED)

2nd Defendant

Procedural Posture

Tort (conversion) and Equitable Claims for Declaration and Accounts; Ancillary Contractual/pledge Dispute / Trial Judgment (decision on Liability and Damages)

Legal Issues

  1. 1 Whether the Etek share certificate and the underlying shares were wrongfully converted by the 2nd defendant on 14 October 1981
  2. 2 Whether the plaintiffs were the beneficial owners of the shares in the Etek certificate
  3. 3 Whether the handing over of share certificates to the lender created a continuing security covering prior advances

Ratio Decidendi

The court found that the 2nd defendant wrongfully converted the shares in Certificate No. 364004 on 14 October 1981; the plaintiffs were the beneficial owners of those shares; defences based on estoppel, replacement by fungible shares or reliance on pledge representations failed; damages for conversion were assessed as HK$28,632,425 with interest (9% p.a. on HK$62,599,413 from 15 Oct 1981 to 4 May 1982; 8% p.a. on HK$28,632,425 from 5 May 1982 until judgment) and costs to plaintiffs against the 2nd defendant.

Court Disposition

Judgment for plaintiffs against both defendants; plaintiffs entitled to damages, interest and costs; relief also granted against 1st defendant as sought.

Orders

  • Judgment entered for the plaintiffs against the 1st and 2nd defendants with costs.
  • Damages for conversion awarded to the plaintiffs in the aggregate amount of HK$28,632,425.00.