張才奎所託管中國山水投資有限公司股份相關員工 AND OTHERS v. 張才奎 AND ANOTHER

張才奎所託管中國山水投資有限公司股份相關員工 AND OTHERS v. 張才奎 AND ANOTHER

The applications for declarations of an equitable lien and related relief were dismissed because the Former Receivers failed to prove on the balance of probabilities that any actual or potential indebtedness existed to support the equitable lien: the alleged funding/loans (HK$28m) lacked contemporaneous documentation and essential terms, the evidence was inadequate and speculative, and the discretionary nature of the relief meant it should be refused on the evidence.

Citation
[2021] HKCFI 1805
Parties
Plaintiffs: 1st Group of Relevant employees whose shares in CHINA SHANSHUI INVESTMENT COMPANY LIMITED were held by ZHANG CAIKUI on trust; Plaintiffs: 2nd Group of Relevant employees whose shares in CHINA SHANSHUI INVESTMENT COMPANY LIMITED were held by LI YANMIN on trust; Plaintiffs / Respondents: SH Plaintiffs (Employee Shareholders); Applicants: EY Receivers (Former Receivers); 1st Defendant: ZHANG CAIKUI; 2nd Defendant: LI YANMIN
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
23 June 2021
Case Number
HCA1661/2014
Procedural Posture
Trust Actions (lien Summonses) / Decision Following Hearing on Lien Summonses
Outcome
Lien Summonses dismissed and ancillary order refused; costs nisi in favour of SH Plaintiffs
Legal Topics
Lien, Indemnity, Waiver, Abuse of Process, Declaration, Costs
Source Language
EN
Equity Trusts Receivership Civil Procedure Lien Indemnity Waiver Abuse of Process +2 more

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Parties

1st Group of Relevant employees whose shares in CHINA SHANSHUI INVESTMENT COMPANY LIMITED were held by ZHANG CAIKUI on trust

Plaintiffs

2nd Group of Relevant employees whose shares in CHINA SHANSHUI INVESTMENT COMPANY LIMITED were held by LI YANMIN on trust

Plaintiffs

SH Plaintiffs (Employee Shareholders)

Plaintiffs / Respondents

EY Receivers (Former Receivers)

Applicants

ZHANG CAIKUI

1st Defendant

LI YANMIN

2nd Defendant

Procedural Posture

Trust Actions (lien Summonses) / Decision Following Hearing on Lien Summonses

Legal Issues

  1. 1 Whether court-appointed receivers are entitled to an equitable lien over the Receiver Shares
  2. 2 Standard of proof required to establish an actual or potential indebtedness to support a lien
  3. 3 Whether the Former Receivers waived their lien by prior conduct or releases

Ratio Decidendi

The applications for declarations of an equitable lien and related relief were dismissed because the Former Receivers failed to prove on the balance of probabilities that any actual or potential indebtedness existed to support the equitable lien: the alleged funding/loans (HK$28m) lacked contemporaneous documentation and essential terms, the evidence was inadequate and speculative, and the discretionary nature of the relief meant it should be refused on the evidence.

Court Disposition

Lien Summonses dismissed and ancillary order refused; costs nisi in favour of SH Plaintiffs

Orders

  • Lien Summonses dismissed
  • Order for ancillary relief that shares remain deposited with Court refused