YUENG MAN LOONG MAXLY AND ANOTHER v. TSANG SAU HING BEATRICE AND OTHERS

YUENG MAN LOONG MAXLY AND ANOTHER v. TSANG SAU HING BEATRICE AND OTHERS

The court found there was a complete breakdown of trust and an unworkable deadlock in the management of the four companies; the Yeungs were substantially responsible for that breakdown (refusal to allow inspections, obtaining unauthorised facilities, unilateral remittances and public accusations). The alleged accounting practices (Kwok Kee, K Kwok and bonus distributions) had been known to and accepted in substance by the Yeungs so did not amount to unfairly prejudicial conduct under s168A. The withdrawal of US$1.6m from the Joint Account by Tsang Hon Kong was improper vis-à-vis the Yeungs personally but did not make the funds company property and therefore did not found s168A relief....

Citation
YUENG MAN LOONG MAXLY AND ANOTHER v. TSANG SAU HING BEATRICE AND OTHERS
Parties
1st Petitioner (hccw 49 52) and 1st Respondent (hccw130 133): Beatrice Tsang Sau Hing; 2nd Petitioner (hccw 49 52) and 2nd Respondent (hccw130 133): Luana Tsang Sau Kuen; 1st Respondent (hccw49 52) and 1st Petitioner (hccw130 133): Yueng Man Loong Maxly; 2nd Respondent (hccw49 52) and 2nd Petitioner (hccw130 133): Yeung Man Fung; 3rd Respondent (hccw49 52): Lo Wai Yin; 4th Respondent (hccw49 52): Yeung Tung Shing; 5th Respondent (hccw49); 4th Respondent (hccw130): Gold Pleasure Industrial Company Limited; 5th Respondent (hccw50); 4th Respondent (hccw131): Topville Industrial Company Limited; 5th Respondent (hccw51); 4th Respondent (hccw132): Sunville Investment Company Limited; 5th Respondent (hccw52); 4th Respondent (hccw133): Boville Industrial Company Limited; 3rd Respondent (hccw130 133): Tsang Hon Kong
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
21 December 2007
Case Number
HCCW133/2007
Procedural Posture
Companies (winding Up) Petitions and Cross Petitions Under the Companies Ordinance Cap.32 / Judgment of Court of First Instance (trial Concluded)
Outcome
Winding up orders made in respect of Gold Pleasure Industrial Co Ltd, Topville Industrial Co Ltd, Sunville Investment Co Ltd and Boville Industrial Co Ltd on just and equitable grounds; cross-petitions by the Yeungs under s168A dismissed.
Legal Topics
Just and Equitable Winding Up, Unfairly Prejudicial Conduct / S168 a Buy Out, Deadlock and Loss of Mutual Trust, Directors' Duties and Corporate Finance
Source Language
EN
Company Law Insolvency Equity and Fiduciary Obligations Shareholder Disputes Just and Equitable Winding Up Unfairly Prejudicial Conduct / S168 a Buy Out Deadlock and Loss of Mutual Trust Directors' Duties and Corporate Finance

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Parties

Beatrice Tsang Sau Hing

1st Petitioner (hccw 49 52) and 1st Respondent (hccw130 133)

Luana Tsang Sau Kuen

2nd Petitioner (hccw 49 52) and 2nd Respondent (hccw130 133)

Yueng Man Loong Maxly

1st Respondent (hccw49 52) and 1st Petitioner (hccw130 133)

Yeung Man Fung

2nd Respondent (hccw49 52) and 2nd Petitioner (hccw130 133)

Lo Wai Yin

3rd Respondent (hccw49 52)

Yeung Tung Shing

4th Respondent (hccw49 52)

Gold Pleasure Industrial Company Limited

5th Respondent (hccw49); 4th Respondent (hccw130)

Topville Industrial Company Limited

5th Respondent (hccw50); 4th Respondent (hccw131)

Sunville Investment Company Limited

5th Respondent (hccw51); 4th Respondent (hccw132)

Boville Industrial Company Limited

5th Respondent (hccw52); 4th Respondent (hccw133)

Tsang Hon Kong

3rd Respondent (hccw130 133)

Procedural Posture

Companies (winding Up) Petitions and Cross Petitions Under the Companies Ordinance Cap.32 / Judgment of Court of First Instance (trial Concluded)

Legal Issues

  1. 1 Whether the four Hong Kong companies should be wound up on the just and equitable ground (s177(1)(f))
  2. 2 Whether the court should order a buy-out under s168A for alleged unfairly prejudicial conduct
  3. 3 Whether funds in the Joint Account and related ledger entries (Kwok Kee, K Kwok) were company assets or personal

Ratio Decidendi

The court found there was a complete breakdown of trust and an unworkable deadlock in the management of the four companies; the Yeungs were substantially responsible for that breakdown (refusal to allow inspections, obtaining unauthorised facilities, unilateral remittances and public accusations). The alleged accounting practices (Kwok Kee, K Kwok and bonus distributions) had been known to and accepted in substance by the Yeungs so did not amount to unfairly prejudicial conduct under s168A. The withdrawal of US$1.6m from the Joint Account by Tsang Hon Kong was improper vis-à-vis the Yeungs personally but did not make the funds company property and therefore did not found s168A relief....

Court Disposition

Winding up orders made in respect of Gold Pleasure Industrial Co Ltd, Topville Industrial Co Ltd, Sunville Investment Co Ltd and Boville Industrial Co Ltd on just and equitable grounds; cross-petitions by the Yeungs under s168A dismissed.

Orders

  • Winding up order in respect of Gold Pleasure Industrial Company Limited
  • Winding up order in respect of Topville Industrial Company Limited