FUKU GROUP LIMITED formerly known as LIONSTAR GROUP LTD v. RAKICH INVESTMENTS LTD formerly known as COMPUTER DYNAMICS LTD AND OTHERS

FUKU GROUP LIMITED formerly known as LIONSTAR GROUP LTD v. RAKICH INVESTMENTS LTD formerly known as COMPUTER DYNAMICS LTD AND OTHERS

Where a party knowingly or recklessly makes false representations as to title to the subject matter inducing another to enter a contract, the contract is voidable for fraudulent misrepresentation; the representee may rescind the contract ab initio and recover restitution and damages, and the individual representors are personally liable; applying these principles, the Agreement was rescinded and damages awarded to Rakich Investments.

Citation
[2025] HKCFI 3881
Parties
Plaintiff (original Action); 3rd Defendant (by Counterclaim): Fuku Group Limited (formerly Lionstar Group Limited); 1st Defendant (original Action); 1st Plaintiff (by Counterclaim): Rakich Investments Limited (formerly Computer Dynamics Limited); 2nd Defendant (original Action); 2nd Plaintiff (by Counterclaim): Lionstar Manufacturing Limited; 3rd Defendant (original Action): Peter Anthony Rakich; 1st Defendant (by Counterclaim): Stephen John Cummins; 2nd Defendant (by Counterclaim): Victor Edmond McCluskey; 4th Defendant (by Counterclaim): Transworld Capital Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
29 August 2025
Case Number
HCA2400/2018
Procedural Posture
Consolidated Civil Action (hca 2400/2018 & HCA 1888/2019) / Trial and Judgment (trial Heard 13 March 2025; Judgment Delivered 29 August 2025)
Outcome
Judgment for Rakich Camp on counterclaim; Fuku's original claim dismissed for want of prosecution; Agreement rescinded and declared void ab initio.
Legal Topics
Fraudulent Misrepresentation, Rescission of Contract, Damages, Specific Performance (sought), Agency Liability, Failure to Prosecute, Interest and Costs
Source Language
EN
Contract Law Tort (fraud) Equity (rescission) Agency Law Civil Procedure Commercial Law Fraudulent Misrepresentation Rescission of Contract +5 more

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Parties

Fuku Group Limited (formerly Lionstar Group Limited)

Plaintiff (original Action); 3rd Defendant (by Counterclaim)

Rakich Investments Limited (formerly Computer Dynamics Limited)

1st Defendant (original Action); 1st Plaintiff (by Counterclaim)

Lionstar Manufacturing Limited

2nd Defendant (original Action); 2nd Plaintiff (by Counterclaim)

Peter Anthony Rakich

3rd Defendant (original Action)

Stephen John Cummins

1st Defendant (by Counterclaim)

Victor Edmond McCluskey

2nd Defendant (by Counterclaim)

Transworld Capital Limited

4th Defendant (by Counterclaim)

Procedural Posture

Consolidated Civil Action (hca 2400/2018 & HCA 1888/2019) / Trial and Judgment (trial Heard 13 March 2025; Judgment Delivered 29 August 2025)

Legal Issues

  1. 1 Whether the Agreement concerned transfer of HSR shareholding (Heshan Factory) or sale of the Lionstar business and IP
  2. 2 Whether Steve, Vic and Fuku made fraudulent misrepresentations as to title to HSR
  3. 3 Whether the Agreement should be rescinded for fraud and the consequences of rescission

Ratio Decidendi

Where a party knowingly or recklessly makes false representations as to title to the subject matter inducing another to enter a contract, the contract is voidable for fraudulent misrepresentation; the representee may rescind the contract ab initio and recover restitution and damages, and the individual representors are personally liable; applying these principles, the Agreement was rescinded and damages awarded to Rakich Investments.

Court Disposition

Judgment for Rakich Camp on counterclaim; Fuku's original claim dismissed for want of prosecution; Agreement rescinded and declared void ab initio.

Orders

  • Declaration that the Agreement dated 16 March 2018 has been rescinded and is void ab initio
  • Fuku Group Limited's claims in HCA 2400/2018 dismissed