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

On the contemporaneous documents and emails and the parties' conduct the Agreement was for transfer of HSR shares; the representations that Fuku owned HSR were false; Steve and Vic knew (or were reckless) as to the falsity; Rakich relied on those representations and suffered losses and therefore validly elected rescission and is entitled to damages and repayment due under the loan note; consequently Fuku's claim is dismissed and Rakich's counterclaim succeeds with specified monetary and interest orders and costs.

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; 2nd Defendant (original Action); 2nd Plaintiff (by Counterclaim): Lionstar Manufacturing Limited; 3rd Defendant (original Action); Counterclaimant Representative: Peter Anthony Rakich; 1st Defendant (by Counterclaim); Controller of Transworld Camp: Stephen John Cummins; 2nd Defendant (by Counterclaim); Controller of Transworld Camp: 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
HCA1888/2019
Procedural Posture
Consolidated High Court Civil Actions (hca 2400/2018 & HCA 1888/2019): Contract and Tort (fraudulent Misrepresentation) / Trial and Final Judgment (trial Conducted in Absence of Transworld Camp)
Outcome
Fuku's claim dismissed for want of prosecution; Rakich Camp's counterclaim successful: Agreement rescinded ab initio; monetary and costs orders made in favour of Rakich Camp.
Legal Topics
Fraudulent Misrepresentation, Rescission of Contract, Specific Performance (claimed), Damages for Deceit, Agency Liability for Wrongful Acts, Costs and Interest Orders
Source Language
EN
Contract Law Tort (deceit/fraud) Equity (rescission) Agency Law Civil Procedure (trial in Absence) Fraudulent Misrepresentation Rescission of Contract Specific Performance (claimed) +3 more

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Parties

Fuku Group Limited (formerly Lionstar Group Limited)

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

Rakich Investments 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); Counterclaimant Representative

Stephen John Cummins

1st Defendant (by Counterclaim); Controller of Transworld Camp

Victor Edmond McCluskey

2nd Defendant (by Counterclaim); Controller of Transworld Camp

Transworld Capital Limited

4th Defendant (by Counterclaim)

Procedural Posture

Consolidated High Court Civil Actions (hca 2400/2018 & HCA 1888/2019): Contract and Tort (fraudulent Misrepresentation) / Trial and Final Judgment (trial Conducted in Absence of Transworld Camp)

Legal Issues

  1. 1 Was the Agreement for sale of HSR shares (Heshan Factory) or for sale of the Lionstar Business?
  2. 2 Were false representations made as to Fuku's ownership of HSR?
  3. 3 Did Steve and Vic know the representations were false (fraud)?

Ratio Decidendi

On the contemporaneous documents and emails and the parties' conduct the Agreement was for transfer of HSR shares; the representations that Fuku owned HSR were false; Steve and Vic knew (or were reckless) as to the falsity; Rakich relied on those representations and suffered losses and therefore validly elected rescission and is entitled to damages and repayment due under the loan note; consequently Fuku's claim is dismissed and Rakich's counterclaim succeeds with specified monetary and interest orders and costs.

Court Disposition

Fuku's claim dismissed for want of prosecution; Rakich Camp's counterclaim successful: Agreement rescinded ab initio; monetary and costs orders made in favour of Rakich Camp.

Orders

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