GALAXY CHINA DEEP VALUE FUND v. TANG JUN AND OTHERS

GALAXY CHINA DEEP VALUE FUND v. TANG JUN AND OTHERS

Plaintiffs were not obliged to mitigate while specific performance orders were in force and their duty to mitigate arose only after those orders were discharged by consent on 28 November 2014; there was no available market for the 1.5 million consolidated Put Option Shares at any relevant time and the shares had...

Source-derived case information.

Citation
GALAXY CHINA DEEP VALUE FUND v. TANG JUN AND OTHERS
Parties
Plaintiff: Galaxy China Opportunities Fund; Plaintiff: Galaxy China Deep Value Fund; Plaintiff: Galaxy Master Fund SPC; 1st Defendant: Tang Jun (唐駿); 2nd Defendant: Leung Wing Lun Alan (梁詠倫); 3rd Defendant: Min Renmei (閔仁美); 4th Defendant: Gaotime Corporation Limited (港澳資訊有限公司); 5th Defendant: First Jet Investments Limited (先積投資有限公司); 6th Defendant: Shanghai Conngame Network Limited (上海聯游網絡科技有限公司)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
22 May 2015
Case Number
HCA1630/2011
Procedural Posture
Assessment of Damages (post Summary Judgment) / Assessment Hearing Following Summary Judgments and Consent Orders
Outcome
Judgment for plaintiffs on assessment of damages; defendants ordered to pay damages, interest and costs
Legal Topics
Specific Performance, Mitigation of Damages, Sale of Shares, Put Option, Damages Assessment, Interest
Source Language
en
Contract Commercial Equity Securities Specific Performance Mitigation of Damages Sale of Shares Put Option +2 more

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Parties

Galaxy China Opportunities Fund

Plaintiff

Galaxy China Deep Value Fund

Plaintiff

Galaxy Master Fund SPC

Plaintiff

Tang Jun (唐駿)

1st Defendant

Leung Wing Lun Alan (梁詠倫)

2nd Defendant

Min Renmei (閔仁美)

3rd Defendant

Gaotime Corporation Limited (港澳資訊有限公司)

4th Defendant

First Jet Investments Limited (先積投資有限公司)

5th Defendant

Shanghai Conngame Network Limited (上海聯游網絡科技有限公司)

6th Defendant

Procedural Posture

Assessment of Damages (post Summary Judgment) / Assessment Hearing Following Summary Judgments and Consent Orders

Legal Issues

  1. 1 Whether plaintiffs had duty to mitigate and, if so, when it arose
  2. 2 Whether an available market existed for the Put Option Shares such that mitigation by sale was reasonable
  3. 3 Proper measure of damages in lieu of specific performance

Ratio Decidendi

Plaintiffs were not obliged to mitigate while specific performance orders were in force and their duty to mitigate arose only after those orders were discharged by consent on 28 November 2014; there was no available market for the 1.5 million consolidated Put Option Shares at any relevant time and the shares had only nominal residual value; damages assessed as contract re‑purchase price (US$0.55 per pre‑consolidated share) less a nominal residual value of US$1,000 per plaintiff's holding, yielding awards of US$2,199,000 to P1, US$879,000 to P2 and US$219,000 to P3; interest at judgment rate from 17 October 2012 was awarded; defendants jointly liable

Court Disposition

Judgment for plaintiffs on assessment of damages; defendants ordered to pay damages, interest and costs

Orders

  • Defendants to pay US$2,199,000 to Galaxy China Opportunities Fund (HCA 1629/2011)
  • Defendants to pay US$879,000 to Galaxy China Deep Value Fund (HCA 1630/2011)