JOHN ROBERT LEES AND DESMOND AND OTHERS v. BURKE, FUNG & LI AND OTHERS

JOHN ROBERT LEES AND DESMOND AND OTHERS v. BURKE, FUNG & LI AND OTHERS

The court found there was a clear intention to create a trust in respect of the $3.5 million but the declared trust failed because the beneficiary was uncertain or the beneficiary entity was never formed or has been dissolved; accordingly a resulting trust arose in favour of Promail and the liquidators were entitled under s197 to recover the sum and interest, and Burke, Fung & Li were ordered to pay the sum and specified costs.

Citation
JOHN ROBERT LEES AND DESMOND AND OTHERS v. BURKE, FUNG & LI AND OTHERS
Parties
Joint and Several Liquidator of Promail International (hk) Limited (in Liquidation) Applicant: John Robert Lees; Joint and Several Liquidator of Promail International (hk) Limited (in Liquidation) Applicant: Desmond Chung Seng Chiong; 1st Respondent Solicitors and Agent Holding Stakeholder Funds: Burke, Fung & Li; 2nd Respondent Company Incorporated to Act as Trustee (struck Off and Dissolved): Billion Points Limited; 3rd Respondent Company Intended as Executive Arm of the Club (struck Off and Dissolved): Promail International Club Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
19 July 2006
Case Number
HCCW373/2002
Procedural Posture
Companies (winding Up) Summons Under Companies Ordinance (s197) / Decision on Summons in Chambers (application by Liquidators for Recovery of Company Funds)
Outcome
Liquidators' summons granted in part: declared trust failed and resulting trust to Promail; liquidators entitled to $3.5 million plus interest; Burke, Fung & Li ordered to pay the sum and hearing costs.
Legal Topics
Resulting Trust, Liquidator Entitlement Under S197, Certainty of Beneficiary, Bona Vacantia, Costs
Source Language
EN
Company Law Trusts Insolvency Law Civil Procedure Resulting Trust Liquidator Entitlement Under S197 Certainty of Beneficiary Bona Vacantia +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 4 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Parties

John Robert Lees

Joint and Several Liquidator of Promail International (hk) Limited (in Liquidation) Applicant

Desmond Chung Seng Chiong

Joint and Several Liquidator of Promail International (hk) Limited (in Liquidation) Applicant

Burke, Fung & Li

1st Respondent Solicitors and Agent Holding Stakeholder Funds

Billion Points Limited

2nd Respondent Company Incorporated to Act as Trustee (struck Off and Dissolved)

Promail International Club Limited

3rd Respondent Company Intended as Executive Arm of the Club (struck Off and Dissolved)

Procedural Posture

Companies (winding Up) Summons Under Companies Ordinance (s197) / Decision on Summons in Chambers (application by Liquidators for Recovery of Company Funds)

Legal Issues

  1. 1 Whether the $3.5 million paid by Promail was held on trust or was an outright gift
  2. 2 If held on trust, whether the beneficiary was sufficiently certain
  3. 3 Whether the intended trust failed and if so whether a resulting trust arose in favour of Promail

Ratio Decidendi

The court found there was a clear intention to create a trust in respect of the $3.5 million but the declared trust failed because the beneficiary was uncertain or the beneficiary entity was never formed or has been dissolved; accordingly a resulting trust arose in favour of Promail and the liquidators were entitled under s197 to recover the sum and interest, and Burke, Fung & Li were ordered to pay the sum and specified costs.

Court Disposition

Liquidators' summons granted in part: declared trust failed and resulting trust to Promail; liquidators entitled to $3.5 million plus interest; Burke, Fung & Li ordered to pay the sum and hearing costs.

Orders

  • Burke, Fung & Li to pay $3,500,000 to the liquidators or as the liquidators may direct
  • Payment of interest accrued on $3,500,000 since 18 September 2000 to the liquidators