JOHN ROBERT LEES AND ANOTHER v. SHEE YIP SHING

JOHN ROBERT LEES AND ANOTHER v. SHEE YIP SHING

Section 197 does not provide the court with power to compel delivery; the correct power is s211. The summary procedure under s211 is not available where ownership is disputed and the respondent refuses to submit to it. Accordingly the liquidators' summons framed under s197 (which should have been under s211) must be...

Source-derived case information.

Citation
JOHN ROBERT LEES AND ANOTHER v. SHEE YIP SHING
Parties
Applicant Joint and Several Liquidator: John Robert Lees; Applicant Joint and Several Liquidator: Desmond Chung Seng Chiong; Respondent: Shee Yip Shing
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
10 August 2005
Case Number
HCCW373/2002
Procedural Posture
Companies (winding Up) / Hearing of Summons Under S197 and Inter Partes Application for Continuation of Injunction (chambers Hearing; Substantive Hearing of 3 August 2005)
Outcome
Section 197 summons dismissed (should have been made under s211); ex parte injunction continued on undertakings; leave given to commence High Court action; costs allocated.
Legal Topics
Section 197 Companies Ordinance, Section 211 Companies Ordinance, Constructive Trust, Restraint Orders, Interim Injunctions, Jurisdiction to Order Delivery of Company Property
Source Language
en
Company Law Insolvency Law Civil Procedure Equity and Trusts Injunctions Section 197 Companies Ordinance Section 211 Companies Ordinance Constructive Trust +3 more

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Parties

John Robert Lees

Applicant Joint and Several Liquidator

Desmond Chung Seng Chiong

Applicant Joint and Several Liquidator

Shee Yip Shing

Respondent

Procedural Posture

Companies (winding Up) / Hearing of Summons Under S197 and Inter Partes Application for Continuation of Injunction (chambers Hearing; Substantive Hearing of 3 August 2005)

Legal Issues

  1. 1 Whether section 197 empowers the court to order delivery of third party property to liquidators
  2. 2 Whether the court should use the summary s211 procedure where ownership of the property is in dispute
  3. 3 Whether funds paid into the respondent's accounts were held on constructive trust for the company

Ratio Decidendi

Section 197 does not provide the court with power to compel delivery; the correct power is s211. The summary procedure under s211 is not available where ownership is disputed and the respondent refuses to submit to it. Accordingly the liquidators' summons framed under s197 (which should have been under s211) must be dismissed. However, because the liquidators demonstrated an arguable case, the court will continue the ex parte injunction on the liquidators' undertakings and grant leave to commence proceedings to recover the funds, with limited liberty for the respondent to withdraw a fixed living sum.

Court Disposition

Section 197 summons dismissed (should have been made under s211); ex parte injunction continued on undertakings; leave given to commence High Court action; costs allocated.

Orders

  • Section 197 summons dismissed
  • Ex parte injunction continued pending determination of inter partes summons in the forthcoming High Court action, on the liquidators' undertaking to issue proceedings by 12 September 2005 and to file an inter partes summons within 7 days thereafter