MEGAWELL FAREAST LTD AND ANOTHER v. TSE SU KIN BENNY AND ANOTHER

MEGAWELL FAREAST LTD AND ANOTHER v. TSE SU KIN BENNY AND ANOTHER

The court found overwhelming evidence of Benny Tse's fraudulent misappropriation and entered judgment against him in his absence; the plaintiffs failed to prove on the balance of probabilities that Lucia Lam knew of or participated in the fraud, so the claim against her was dismissed; the minute of 15 February 2001 constituted an admission that commissions for 2000 were payable, entitling Lucia Lam to 18% of 1% of the combined turnover for 2000 to be agreed or assessed, while her petty cash and dividend claims failed for lack of proof; costs awarded to Lucia Lam up to the time she ceased to have legal representation and leave reserved to apply for taking of accounts under O.43.

Citation
MEGAWELL FAREAST LTD AND ANOTHER v. TSE SU KIN BENNY AND ANOTHER
Parties
1st Plaintiff: Megawell Fareast Limited; 2nd Plaintiff: Bestwell Fareast Limited; 1st Defendant: Tse Su Kin Benny; 2nd Defendant: Lam Dip Yee (Lucia Lam)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
11 July 2005
Case Number
HCA313/2002
Procedural Posture
Civil Action (fraud, Company/shareholder Dispute) / Judgment at First Instance (trial)
Legal Topics
Misappropriation, Shareholder Disputes, Commission Entitlement, Petty Cash Reimbursement, Dividends, Taking of Accounts
Source Language
EN
Company Law Fraud Evidence Equity Costs Misappropriation Shareholder Disputes Commission Entitlement +3 more

Case Brief

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Parties

Megawell Fareast Limited

1st Plaintiff

Bestwell Fareast Limited

2nd Plaintiff

Tse Su Kin Benny

1st Defendant

Lam Dip Yee (Lucia Lam)

2nd Defendant

Procedural Posture

Civil Action (fraud, Company/shareholder Dispute) / Judgment at First Instance (trial)

Legal Issues

  1. 1 Whether Benny Tse misappropriated company funds by use of false invoices and diverted payments into a joint bank account
  2. 2 Whether Lucia Lam knew of or participated in the fraud and is therefore liable
  3. 3 Whether Lucia Lam is entitled to commissions for calendar year 2000 and on what basis

Ratio Decidendi

The court found overwhelming evidence of Benny Tse's fraudulent misappropriation and entered judgment against him in his absence; the plaintiffs failed to prove on the balance of probabilities that Lucia Lam knew of or participated in the fraud, so the claim against her was dismissed; the minute of 15 February 2001 constituted an admission that commissions for 2000 were payable, entitling Lucia Lam to 18% of 1% of the combined turnover for 2000 to be agreed or assessed, while her petty cash and dividend claims failed for lack of proof; costs awarded to Lucia Lam up to the time she ceased to have legal representation and leave reserved to apply for taking of accounts under O.43.