HO WING CHEONG AND OTHERS v. GRAHAM MARGOT AND ANOTHER

HO WING CHEONG AND OTHERS v. GRAHAM MARGOT AND ANOTHER

The Executive Director had no implied authority to speculate with the firm's capital or pledge its credit beyond ordinary course client business; defendant Graham Margot was liable to the employer for losses from unauthorised speculative in-house transactions (notably SNL/Hang Seng futures and unnamed client positions) and for certain misapplied payments, whereas the three-year post-termination restrictive covenant was unreasonable and unenforceable; claims against Norman Ng dismissed; B.I.S. Consultants ordered to repay specified improper charges; costs and formal orders to follow.

Citation
HO WING CHEONG AND OTHERS v. GRAHAM MARGOT AND ANOTHER
Parties
1st Plaintiff: Ho Wing Cheong (trading as Hong Leong Securities); 2nd Plaintiff: Hong Leong Overseas (H.K.) Limited; 3rd Plaintiff: Hong Leong Securities Limited / Hong Kong Securities Limited; 1st Defendant: Graham Margot; 2nd Defendant (service Company): B.I.S. Consultants Limited; 2nd Defendant in One Action: Norman Ng
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
15 April 1987
Case Number
HCA5579/1986
Procedural Posture
Civil Employment/contract/tort (stock Broking) / Trial Judgment (high Court Decision)
Legal Topics
Restrictive Covenants, Implied Authority, Ratification, Unauthorised Trading, Enticing Employees, Recovery of Misapplied Funds
Source Language
EN
Employment Law Contract Law Restraint of Trade Tort (inducing Breach of Contract/misconduct) Agency/authority Restrictive Covenants Implied Authority Ratification +3 more

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Parties

Ho Wing Cheong (trading as Hong Leong Securities)

1st Plaintiff

Hong Leong Overseas (H.K.) Limited

2nd Plaintiff

Hong Leong Securities Limited / Hong Kong Securities Limited

3rd Plaintiff

Graham Margot

1st Defendant

B.I.S. Consultants Limited

2nd Defendant (service Company)

Norman Ng

2nd Defendant in One Action

Procedural Posture

Civil Employment/contract/tort (stock Broking) / Trial Judgment (high Court Decision)

Legal Issues

  1. 1 Whether Executive Director had authority to speculate with house capital and pledge credit
  2. 2 Whether defendant liable for losses from unauthorised in-house speculative transactions (including futures and 'no name' positions)
  3. 3 Whether restrictive covenant forbidding employment with rival for three years was enforceable

Ratio Decidendi

The Executive Director had no implied authority to speculate with the firm's capital or pledge its credit beyond ordinary course client business; defendant Graham Margot was liable to the employer for losses from unauthorised speculative in-house transactions (notably SNL/Hang Seng futures and unnamed client positions) and for certain misapplied payments, whereas the three-year post-termination restrictive covenant was unreasonable and unenforceable; claims against Norman Ng dismissed; B.I.S. Consultants ordered to repay specified improper charges; costs and formal orders to follow.