DR. YIP CHI HIM ROGER AND ANOTHER v. LEE KWOK LEUNG AND ANOTHER

DR. YIP CHI HIM ROGER AND ANOTHER v. LEE KWOK LEUNG AND ANOTHER

Court found plaintiffs (Yip/Capital) made false and fraudulent representations that Tabatha was a clean pink‑sheet shell and that reverse‑merger would be used; Lee relied on those representations and was induced to pay US$350,000 under Tabatha Contract; no contemporaneous or credible evidence justified a consensual change to direct filing or any written amendment; rescission was valid and restitution awarded. On defamation, Lee's allegations that Yip had defrauded were substantially true and s.26 applied to any ancillary imputations about an honorary doctorate; plaintiffs' defamation claim failed.

Citation
DR. YIP CHI HIM ROGER AND ANOTHER v. LEE KWOK LEUNG AND ANOTHER
Parties
1st Plaintiff: Roger Yip; 2nd Plaintiff: Characters Capital Group Ltd (Capital); 1st Defendant: Lee Kwok Leung (Stephen Lee); 2nd Defendant: Green Dragon Wood Products Co. Ltd
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
30 June 2015
Case Number
HCA356/2009
Procedural Posture
Civil Defamation, Fraudulent Misrepresentation and Breach of Contract Concerning OTCBB Listing / Judgment
Outcome
Judgment for defendants (Lee/Green Dragon) on misrepresentation and defamation claims; rescission upheld; plaintiffs' primary contractual claim dismissed; restitution awarded to Lee
Legal Topics
Reverse Merger, Direct Filing, OTCBB Listing, Stock Purchase Agreement, Rescission and Restitution, Justification Defence to Defamation, Malicious Falsehood, Damages Calculation
Source Language
EN
Defamation Contract Fraud Misrepresentation Rescission Commercial/corporate Law Securities Law Reverse Merger +7 more

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Parties

Roger Yip

1st Plaintiff

Characters Capital Group Ltd (Capital)

2nd Plaintiff

Lee Kwok Leung (Stephen Lee)

1st Defendant

Green Dragon Wood Products Co. Ltd

2nd Defendant

Procedural Posture

Civil Defamation, Fraudulent Misrepresentation and Breach of Contract Concerning OTCBB Listing / Judgment

Legal Issues

  1. 1 Whether plaintiffs (Yip/Capital) made fraudulent misrepresentations inducing purchase of Tabatha and Listing/EECL contracts
  2. 2 Whether defendants (Lee/Green Dragon) validly rescinded contracts and are entitled to restitution/damages
  3. 3 Whether Lee's emails to Yip constituted defamatory publication and, if so, whether defences of justification/qualified privilege apply

Ratio Decidendi

Court found plaintiffs (Yip/Capital) made false and fraudulent representations that Tabatha was a clean pink‑sheet shell and that reverse‑merger would be used; Lee relied on those representations and was induced to pay US$350,000 under Tabatha Contract; no contemporaneous or credible evidence justified a consensual change to direct filing or any written amendment; rescission was valid and restitution awarded. On defamation, Lee's allegations that Yip had defrauded were substantially true and s.26 applied to any ancillary imputations about an honorary doctorate; plaintiffs' defamation claim failed.

Court Disposition

Judgment for defendants (Lee/Green Dragon) on misrepresentation and defamation claims; rescission upheld; plaintiffs' primary contractual claim dismissed; restitution awarded to Lee

Orders

  • Roger Yip and Characters Capital Group Ltd to pay Lee US$350000 plus interest at 2.5 percent above the best lending rate of the Hong Kong bank from 9 April 2009 until judgment
  • Claim by Characters Capital Group Ltd for payment under the Listing Contract dismissed