CHAN YUET MING v. TANG SAU KING AND ANOTHER

CHAN YUET MING v. TANG SAU KING AND ANOTHER

The 1st respondent failed to prove on the balance of probabilities that he beneficially owned the two suit properties; the appropriation of the sale proceeds without informing or consulting the other 50% shareholder breached the inferred common understanding that profits would be shared and was objectively unfairly...

Source-derived case information.

Citation
CHAN YUET MING v. TANG SAU KING AND ANOTHER
Parties
Petitioner: CHAN YUET MING (administratrix of LAU CHI FAI, deceased); 1st Respondent: TANG SAU KING; 2nd Respondent: SHARPART COMPANY LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
15 November 2000
Case Number
HCCW858/1999
Procedural Posture
Companies Winding Up Proceedings (petition Under Companies Ordinance) / Judgment (court of First Instance)
Outcome
Petition allowed in part under s.168A: order that 1st respondent buy out petitioner's share; alternative winding up not granted
Legal Topics
Unfair Prejudice, Buy Out Order, Section 168 a, Beneficial Ownership, Directors' Appointment, Legitimate Expectation, Resulting Trust, Share Valuation, Interest on Award
Source Language
en
Company Law Equity Trusts Insolvency Law Unfair Prejudice Buy Out Order Section 168 a Beneficial Ownership +5 more

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Summary, issues, holding and outcome

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Parties

CHAN YUET MING (administratrix of LAU CHI FAI, deceased)

Petitioner

TANG SAU KING

1st Respondent

SHARPART COMPANY LIMITED

2nd Respondent

Procedural Posture

Companies Winding Up Proceedings (petition Under Companies Ordinance) / Judgment (court of First Instance)

Legal Issues

  1. 1 Whether the 1st respondent conducted the affairs of the company in a manner unfairly prejudicial to the deceased's estate
  2. 2 Whether the 1st respondent beneficially owned the two suit properties and thus was entitled to the sale proceeds
  3. 3 Whether the appointment of a new director after the deceased's death breached any common understanding or legitimate expectation and whether a buy-out valuation should be ordered

Ratio Decidendi

The 1st respondent failed to prove on the balance of probabilities that he beneficially owned the two suit properties; the appropriation of the sale proceeds without informing or consulting the other 50% shareholder breached the inferred common understanding that profits would be shared and was objectively unfairly prejudicial; accordingly a s.168A remedy was appropriate and the court ordered the 1st respondent to buy out the petitioner's share at 50% of the company's unappropriated profit per the 1998 audited accounts, with interest from the date of the petition.

Court Disposition

Petition allowed in part under s.168A: order that 1st respondent buy out petitioner's share; alternative winding up not granted

Orders

  • 1st respondent to buy out the petitioner's 50% share for HKD 7,897,743
  • 1st respondent to pay interest on HKD 7,897,743 at 10% per annum from the date of the petition (27 November 1999)