LAU CHO KWAN, LEO AND ANOTHER v. CORNWALL AGENCY CO LTD

LAU CHO KWAN, LEO AND ANOTHER v. CORNWALL AGENCY CO LTD

Court held that the Company must issue replacement share certificates in respect of the identified certificates once plaintiffs execute the deeds of indemnity in the form appended to the Company's letter and tender HK$5 per certificate; the Company was not entitled to require a bank or insurance guarantee in the circumstances of this private company with articles restricting transfers; plaintiffs failed to plead or prosecute a viable claim and must bear 60% of costs on a party and party basis to be assessed as a gross sum, with specified timetables for lodging and commenting on costs.

Citation
[2020] HKCFI 2681
Parties
1st Plaintiff: LAU CHO KWAN, LEO; 2nd Plaintiff: LAU BETTY BARBARA; 1st Defendant (discontinued): LAU SIU FAN, ELAINE; 2nd Defendant: CORNWALL AGENCY COMPANY LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
21 October 2020
Case Number
HCA617/2020
Procedural Posture
Company Law Share Certificate Dispute / Chambers Decision on Paper (disposal on Written Submissions)
Outcome
Order that Company issue replacement share certificates on conditions; costs order nisi against plaintiffs for 60% of costs; discontinuance of 1st defendant noted
Legal Topics
Replacement Share Certificates, Articles of Association, Indemnity, Statutory Declaration, Costs
Source Language
EN
Company Law Civil Procedure Replacement Share Certificates Articles of Association Indemnity Statutory Declaration Costs

Case Brief

Summary, issues, holding and outcome

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Parties

LAU CHO KWAN, LEO

1st Plaintiff

LAU BETTY BARBARA

2nd Plaintiff

LAU SIU FAN, ELAINE

1st Defendant (discontinued)

CORNWALL AGENCY COMPANY LIMITED

2nd Defendant

Procedural Posture

Company Law Share Certificate Dispute / Chambers Decision on Paper (disposal on Written Submissions)

Legal Issues

  1. 1 Whether the Company was obliged to issue replacement share certificates under Article 15 of its Articles of Association
  2. 2 Whether the Company could require a bank or insurance guarantee as part of the indemnity before issuing replacement certificates
  3. 3 Whether plaintiffs provided adequate proof of loss and valid statutory declarations enforceable in Hong Kong

Ratio Decidendi

Court held that the Company must issue replacement share certificates in respect of the identified certificates once plaintiffs execute the deeds of indemnity in the form appended to the Company's letter and tender HK$5 per certificate; the Company was not entitled to require a bank or insurance guarantee in the circumstances of this private company with articles restricting transfers; plaintiffs failed to plead or prosecute a viable claim and must bear 60% of costs on a party and party basis to be assessed as a gross sum, with specified timetables for lodging and commenting on costs.

Court Disposition

Order that Company issue replacement share certificates on conditions; costs order nisi against plaintiffs for 60% of costs; discontinuance of 1st defendant noted

Orders

  • Within 7 days after plaintiffs have executed the deeds of indemnity in the forms appended to the Company's letter dated 9 September 2020 and tender payment of HK$5 for each certificate, the Company shall issue replacement certificates in respect of CACL 5 (464 shares), CACL 6 (250 shares) and CACL 15 (119 shares) to...
  • Costs order nisi: plaintiffs shall pay 60% of the costs of the action to the Company on a party and party basis to be assessed by way of gross sum assessment