LIN LESTER CHI KEE v. CHAN LEUK FU AND ANOTHER

LIN LESTER CHI KEE v. CHAN LEUK FU AND ANOTHER

The company was a quasi‑partnership formed on mutual trust; the 1st respondent unjustifiably excluded the petitioner from management and acted in bad faith by using company funds and assets to set up and benefit New West US; the 10th Floor property was held on constructive and resulting trust for the company because...

Source-derived case information.

Citation
LIN LESTER CHI KEE v. CHAN LEUK FU AND ANOTHER
Parties
Petitioner: Lin Lester Chi Kee; 1st Respondent: Chan Leuk Fu; 2nd Respondent: Nu-West Natural Products Corp. Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
3 August 2007
Case Number
HCCW293/2006
Procedural Posture
Winding Up Petition Under Companies Ordinance (s.168 A) / Judgment (court of First Instance)
Outcome
Company ordered to be wound up on just and equitable grounds; order nisi that 1st respondent pay petitioner's costs
Legal Topics
Winding Up, Just and Equitable, Quasi‑partnership, Unfairly Prejudicial Conduct, Constructive Trust, Resulting Trust, Misappropriation of Corporate Funds, Buy‑out Vs Winding Up
Source Language
en
Company Law Trusts and Equity Insolvency Fiduciary Duties Commercial Disputes Winding Up Just and Equitable Quasi‑partnership +5 more

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Summary, issues, holding and outcome

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Parties

Lin Lester Chi Kee

Petitioner

Chan Leuk Fu

1st Respondent

Nu-West Natural Products Corp. Limited

2nd Respondent

Procedural Posture

Winding Up Petition Under Companies Ordinance (s.168 A) / Judgment (court of First Instance)

Legal Issues

  1. 1 whether the company was a quasi‑partnership
  2. 2 whether petitioner was unjustifiably excluded from management
  3. 3 whether 1st respondent misappropriated company funds to set up a rival

Ratio Decidendi

The company was a quasi‑partnership formed on mutual trust; the 1st respondent unjustifiably excluded the petitioner from management and acted in bad faith by using company funds and assets to set up and benefit New West US; the 10th Floor property was held on constructive and resulting trust for the company because funds of the company were used and there was a common intention; given the breakdown, insolvency risks and impracticality of a buy‑out, winding up the company on just and equitable grounds was the appropriate remedy.

Court Disposition

Company ordered to be wound up on just and equitable grounds; order nisi that 1st respondent pay petitioner's costs

Orders

  • Order that Nu‑West Natural Products Corp. Limited be wound up
  • Order nisi that the 1st respondent, Chan Leuk Fu, pay the petitioner's costs