ZHANG XIUHONG v. LIU WENCHEN AND OTHERS

ZHANG XIUHONG v. LIU WENCHEN AND OTHERS

The court entered default judgment against the 4th defendant because the plaintiff’s pleadings and earlier default judgments against the 1st–3rd defendants established that the disputed transfers and removals were forged and void, the claims against the 4th defendant were severable from claims against other defendants, and rectification of the registers and declaratory relief were necessary consequential remedies to do the fullest justice to the plaintiff.

Citation
ZHANG XIUHONG v. LIU WENCHEN AND OTHERS
Parties
Plaintiff: Plaintiff; Defendant (1st): 1st Defendant; Defendant (2nd): 2nd Defendant; Defendant (3rd): 3rd Defendant; Defendant (4th) Nominal Company: 4th Defendant; Defendant (5th) Sole Practitioner of Augustine CY Tong & Co: 5th Defendant; Defendant (6th): 6th Defendant; Defendant (7th) Employee and Director/shareholder of 6th: 7th Defendant
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
20 July 2017
Case Number
HCA2118/2012
Procedural Posture
Civil (company Law, Equitable Remedies and Torts) / Application for Default Judgment / Hearing on Default Judgment Against 4th Defendant; Trial to Follow Against 5th–7th Defendants
Outcome
Default judgment entered against the 4th defendant for rectification of registers and declarations sought; claims against 5th–7th defendants to proceed to full trial
Legal Topics
Rectification of Register of Members, Rectification of Register of Directors, Default Judgment, Fraud, Forgery, Breach of Trust, Dishonest Assistance, Conspiracy to Defraud, Unlawful Interference, Declarations, Costs
Source Language
EN
Company Law Equity Civil Procedure Tort Law Rectification of Register of Members Rectification of Register of Directors Default Judgment Fraud +7 more

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Parties

Plaintiff

Plaintiff

1st Defendant

Defendant (1st)

2nd Defendant

Defendant (2nd)

3rd Defendant

Defendant (3rd)

4th Defendant

Defendant (4th) Nominal Company

5th Defendant

Defendant (5th) Sole Practitioner of Augustine CY Tong & Co

6th Defendant

Defendant (6th)

7th Defendant

Defendant (7th) Employee and Director/shareholder of 6th

Procedural Posture

Civil (company Law, Equitable Remedies and Torts) / Application for Default Judgment / Hearing on Default Judgment Against 4th Defendant; Trial to Follow Against 5th–7th Defendants

Legal Issues

  1. 1 Whether default judgment should be entered against the 4th defendant
  2. 2 Whether the court can order rectification of the register of members under section 633 of the Companies Ordinance (Cap 622)
  3. 3 Whether the court can order rectification of the register of directors and make declarations on judgment in default

Ratio Decidendi

The court entered default judgment against the 4th defendant because the plaintiff’s pleadings and earlier default judgments against the 1st–3rd defendants established that the disputed transfers and removals were forged and void, the claims against the 4th defendant were severable from claims against other defendants, and rectification of the registers and declaratory relief were necessary consequential remedies to do the fullest justice to the plaintiff.

Court Disposition

Default judgment entered against the 4th defendant for rectification of registers and declarations sought; claims against 5th–7th defendants to proceed to full trial

Orders

  • Rectify the 4th defendant’s register of members to remove the 2nd and 3rd defendants and reinstate the 1st defendant as member holding 40,000 shares
  • Rectify the 4th defendant’s register of directors to remove the 2nd and 3rd defendants and reinstate the plaintiff and Mr Zhang Yanjie as directors