MAYER CORPORATION DEVELOPMENT INTERNATIONAL LTD v. ALLIANCE FINANCIAL INTELLIGENCE LTD AND OTHERS

MAYER CORPORATION DEVELOPMENT INTERNATIONAL LTD v. ALLIANCE FINANCIAL INTELLIGENCE LTD AND OTHERS

On the balance of probabilities the Court found that an oral agreement existed between Mayer BVI (Lai) and Lam/Capital Wealth in May/June 2009 to sell Mayer BVI's shares; the 19 June 2009 custodial arrangement was orally varied on 24 June 2009 so that AFIL released certificates 70 and 71 and Lam/Capital Wealth obtained an irrevocable right to sell the 200 million shares; there was no proven breach of trust or dishonest assistance rendering the purchasers liable; Aspial and Bumper are entitled to be registered as owners of the shares.

Citation
MAYER CORPORATION DEVELOPMENT INTERNATIONAL LTD v. ALLIANCE FINANCIAL INTELLIGENCE LTD AND OTHERS
Parties
1st Plaintiff (hca 238): Aspial Investment Limited; 2nd Plaintiff (hca 238): Bumper East Limited; Defendant (hca 238) / Plaintiff (hccl 3): Mayer Corporation Development International Limited; 3rd Defendant (hccl 3): Alliance Financial Intelligence Ltd (AFIL); 4th Defendant (hccl 3): Charles Chan; 5th Defendant (hccl 3): Lam Chin Chun (Capital Wealth)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
16 July 2012
Case Number
HCCL3/2012
Procedural Posture
Commercial Action (share Ownership Dispute, Consolidated HCA 238 / HCCL 3) / Judgment (court of First Instance)
Outcome
Mayer BVI's claims dismissed; declaration granted that Aspial and Bumper are entitled to be registered as owners of the shares under certificates 70 and 71; costs awarded against Mayer BVI (order nisi)
Legal Topics
Custodian Agreement, Breach of Trust, Sale of Shares, Dishonest Assistance, Constructive/actual Notice, Declarations, Costs
Source Language
EN
Equity Trusts Company Law Commercial Law Property Law Evidence Custodian Agreement Breach of Trust +5 more

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Parties

Aspial Investment Limited

1st Plaintiff (hca 238)

Bumper East Limited

2nd Plaintiff (hca 238)

Mayer Corporation Development International Limited

Defendant (hca 238) / Plaintiff (hccl 3)

Alliance Financial Intelligence Ltd (AFIL)

3rd Defendant (hccl 3)

Charles Chan

4th Defendant (hccl 3)

Lam Chin Chun (Capital Wealth)

5th Defendant (hccl 3)

Procedural Posture

Commercial Action (share Ownership Dispute, Consolidated HCA 238 / HCCL 3) / Judgment (court of First Instance)

Legal Issues

  1. 1 Whether Mayer BVI entered into an agreement with Capital Wealth in May/June 2009 to sell 300 million Mayer HK shares and on what terms
  2. 2 Terms and effect of the 19 June 2009 Custodian Agreement between AFIL and Mayer BVI
  3. 3 Whether Wang entered into a custodian agreement with AFIL on 19 June 2009 for 99 million shares and an agreement with Charles Chan to sell them

Ratio Decidendi

On the balance of probabilities the Court found that an oral agreement existed between Mayer BVI (Lai) and Lam/Capital Wealth in May/June 2009 to sell Mayer BVI's shares; the 19 June 2009 custodial arrangement was orally varied on 24 June 2009 so that AFIL released certificates 70 and 71 and Lam/Capital Wealth obtained an irrevocable right to sell the 200 million shares; there was no proven breach of trust or dishonest assistance rendering the purchasers liable; Aspial and Bumper are entitled to be registered as owners of the shares.

Court Disposition

Mayer BVI's claims dismissed; declaration granted that Aspial and Bumper are entitled to be registered as owners of the shares under certificates 70 and 71; costs awarded against Mayer BVI (order nisi)

Orders

  • Mayer Corporation Development International Limited's claims against AFIL, Charles Chan, Lam Chin Chun, Bumper East Limited and Aspial Investment Limited dismissed
  • Declaration that Aspial Investment Limited is entitled to be registered as owner of the 100 million Mayer HK shares represented by certificate 70 and that Bumper East Limited is entitled to be registered as owner of the 100 million Mayer HK shares represented by certificate 71