WANG TEH HUEI AND ANOTHER v. DONALD QUINTIN CHEUNG AND OTHERS

WANG TEH HUEI AND ANOTHER v. DONALD QUINTIN CHEUNG AND OTHERS

Because the respondents advanced a good arguable and bona fide case to establish beneficial ownership and the general practice is to resolve genuine ownership disputes before proceeding with petitions for corporate relief, the court stayed the Companies Winding Up petition (section 168A buy-out) pending determination of the separate action on beneficial ownership; the cross-application to stay the action failed.

Citation
WANG TEH HUEI AND ANOTHER v. DONALD QUINTIN CHEUNG AND OTHERS
Parties
1st Plaintiff; 4th Respondent: Wang Teh Huei; 2nd Plaintiff; 5th Respondent: Nina Teh Huei Wang; 1st Defendant; 1st Petitioner: Donald Quintin Cheung; 2nd Defendant; 2nd Petitioner: Loretta Wan-Ling Cheung; 3rd Defendant; 3rd Petitioner: Frank Chi-Yuen Cheung; 1st Respondent: Fester Corporation Limited; 2nd Respondent: China Chem Investment Company Limited; 3rd Respondent: Chime Corporation Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
14 April 1987
Case Number
HCA5808/1986
Procedural Posture
Companies Petition Under Companies Ordinance (s.168 a Buy Out) and Related Civil Action for Declarations (constructive Trust) / Interlocutory Motions for Stay and Determination of Pleadings; Hearing on Stay (motions)
Outcome
Motion to stay the Companies Winding Up No. 234 (petition) granted pending determination of Action No. A5808 of 1986; cross-motion to stay Action No. A5808 refused; interlocutory preparation of evidence to be permitted.
Legal Topics
Unfairly Prejudicial Conduct, Buy Out Under Section 168 a, Constructive Trust, Estoppel, Stay of Proceedings
Source Language
EN
Company Law Equity Civil Procedure Unfairly Prejudicial Conduct Buy Out Under Section 168 a Constructive Trust Estoppel Stay of Proceedings

Case Brief

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Parties

Wang Teh Huei

1st Plaintiff; 4th Respondent

Nina Teh Huei Wang

2nd Plaintiff; 5th Respondent

Donald Quintin Cheung

1st Defendant; 1st Petitioner

Loretta Wan-Ling Cheung

2nd Defendant; 2nd Petitioner

Frank Chi-Yuen Cheung

3rd Defendant; 3rd Petitioner

Fester Corporation Limited

1st Respondent

China Chem Investment Company Limited

2nd Respondent

Chime Corporation Limited

3rd Respondent

Procedural Posture

Companies Petition Under Companies Ordinance (s.168 a Buy Out) and Related Civil Action for Declarations (constructive Trust) / Interlocutory Motions for Stay and Determination of Pleadings; Hearing on Stay (motions)

Legal Issues

  1. 1 Whether the companies petition (section 168A buy-out) should be stayed pending determination of beneficial ownership in separate action
  2. 2 Whether beneficial ownership issue should be determined within the petition proceedings
  3. 3 Whether estoppel prevents respondents from denying petitioners' beneficial ownership

Ratio Decidendi

Because the respondents advanced a good arguable and bona fide case to establish beneficial ownership and the general practice is to resolve genuine ownership disputes before proceeding with petitions for corporate relief, the court stayed the Companies Winding Up petition (section 168A buy-out) pending determination of the separate action on beneficial ownership; the cross-application to stay the action failed.

Court Disposition

Motion to stay the Companies Winding Up No. 234 (petition) granted pending determination of Action No. A5808 of 1986; cross-motion to stay Action No. A5808 refused; interlocutory preparation of evidence to be permitted.

Orders

  • Stay granted in Companies Winding Up No. 234 until determination of Action No. A5808 of 1986
  • Stay of Action No. A5808 refused