CHAINTOWER CO LTD AND OTHERS v. SNOWBRIGHT CO LTD AND OTHERS

CHAINTOWER CO LTD AND OTHERS v. SNOWBRIGHT CO LTD AND OTHERS

Because Clause 10 of the Miramar Joint Venture Agreement and Article 33 of Armatys' articles expressly permitted Gwynedd to transfer shares to Carrian Holdings without other shareholders' consent, the court refused to imply a term prohibiting transfer to an insolvent transferee; an implied term cannot contradict an express contractual right and the agreement was too detailed and commercial to justify such an implication. The plaintiffs' injunction was unjustified and their claim dismissed.

Citation
CHAINTOWER CO LTD AND OTHERS v. SNOWBRIGHT CO LTD AND OTHERS
Parties
1st Plaintiff: Chaintower Co. Ltd.; 2nd Plaintiff: Wise Maneon Investment Ltd.; 3rd Plaintiff: Miramar Hotel & Investment Company Ltd.; 1st Defendant: Snowbright Co. Ltd.; 2nd Defendant: Carrian Holdings Ltd.; 3rd Defendant: Gwynedd Investments Ltd.; 4th Defendant: The Hong Kong Land Co. Ltd.; 5th Defendant: Armatys Estates Ltd.
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
28 February 1983
Case Number
HCA11877/1983
Procedural Posture
Civil Contractual/joint Venture Dispute / Judgment (interlocutory Injunction Application)
Outcome
Plaintiffs' claim dismissed; interim injunction discharged
Legal Topics
Implied Terms, Share Transfer, Joint Venture Agreements, Guarantee Liability, Insolvency, Registration of Transfers
Source Language
EN
Contract Law Company Law Property Law Equity and Trusts Injunctions Implied Terms Share Transfer Joint Venture Agreements +3 more

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Parties

Chaintower Co. Ltd.

1st Plaintiff

Wise Maneon Investment Ltd.

2nd Plaintiff

Miramar Hotel & Investment Company Ltd.

3rd Plaintiff

Snowbright Co. Ltd.

1st Defendant

Carrian Holdings Ltd.

2nd Defendant

Gwynedd Investments Ltd.

3rd Defendant

The Hong Kong Land Co. Ltd.

4th Defendant

Armatys Estates Ltd.

5th Defendant

Procedural Posture

Civil Contractual/joint Venture Dispute / Judgment (interlocutory Injunction Application)

Legal Issues

  1. 1 Whether a term should be implied into the joint venture/guarantee to prohibit transfer of Armatys shares to Carrian Holdings when insolvent
  2. 2 Whether the plaintiffs were entitled to an injunction restraining registration of the transfer
  3. 3 Whether an implied term can contradict an express contractual right to transfer shares

Ratio Decidendi

Because Clause 10 of the Miramar Joint Venture Agreement and Article 33 of Armatys' articles expressly permitted Gwynedd to transfer shares to Carrian Holdings without other shareholders' consent, the court refused to imply a term prohibiting transfer to an insolvent transferee; an implied term cannot contradict an express contractual right and the agreement was too detailed and commercial to justify such an implication. The plaintiffs' injunction was unjustified and their claim dismissed.

Court Disposition

Plaintiffs' claim dismissed; interim injunction discharged

Orders

  • Interim injunction granted ex parte on 21 September 1983 discharged
  • Claim by plaintiffs dismissed