Hong Kong Case Law: Decisions & Judgments

Topic

Security interest

Legal area

Court

13 May 2024

CHEN HONGQING v. ASIA CEMENT CORPORATION

Citation

[2024] HKCA 463
Court

Court of Appeal
Case number

CACV408/2023

The Court of Appeal held that despite the plaintiff having been found to have engaged in abusive litigation below, the costs of the plaintiff's voluntarily abandoned appeal should be taxed on the usual party-and-party basis because the appellant's ground of appeal was narrow and not obviously abusive; however, the court granted a certificate for two counsel and made no order as to costs of the argument on costs.
11 Sept 2023

RE WINTAC (HONG KONG) LTD

Citation

[2023] HKCFI 2323
Court

Court of First Instance
Case number

HCCW164/2023

The Company failed to comply with the statutory demand and did not discharge the burden of showing a bona fide dispute on substantial grounds or any valid ground to adjourn or stay the petition; there was no credible evidence that the Petitioner held security for the debt; accordingly the Company was deemed insolvent and a usual winding-up order was made.
10 Aug 2023

CHINA LIFE TRUSTEES LTD v. CHINA ENERGY RESERVE AND CHEMICALS GROUP OVERSEAS CO LTD AND ANOTHER

Citation

[2023] HKCA 966
Court

Court of Appeal
Case number

CACV340/2022

On the objective evidence the requisite intention for a Quistclose trust was not established: the transfers were treated in the accounting and corporate structure as inter-company transfers giving rise to receivables/payables, there were no contemporaneous restrictions or segregated trust arrangements clearly preserving beneficial interest in the payer, and the evidence did not prove any enforceable security over US$70,000,000; accordingly the funds belonged beneficially to the 1st defendant and the garnishee order should be made absolute without exclusion.
10 Aug 2023

CHINA LIFE TRUSTEES LTD v. CHINA ENERGY RESERVE AND CHEMICALS GROUP OVERSEAS CO LTD AND ANOTHER

Citation

[2023] HKCA 966
Court

Court of Appeal
Case number

CACV337/2022

Objective evidence (banking and accounting entries, contemporaneous communications and the corporate group structure) showed the US$120m was treated as inter-company transfers and beneficially owned by the 1st defendant; there was no objective indication Trading retained beneficial interest or control to found a Quistclose trust; no security interest over the US$70m was established; accordingly the garnishee order should be made absolute without excluding the US$70m.
12 Aug 2022

CHINA LIFE TRUSTEE LTD v. CHINA ENERGY RESERVE AND CHEMICALS GROUP OVERSEAS CO LTD AND ANOTHER

Citation

[2022] HKCFI 2523
Court

Court of First Instance
Case number

HCA146/2020

Leave to appeal was required for the garnishee order absolute; leave was granted to the Ad Hoc Committee and D1 on the question of whether a Quistclose trust existed because those grounds had a reasonable prospect of success, and leave was granted to China Life on the disposal of the US$70 million on the ground of interests of justice; leave was refused on appeals concerning express and resulting trusts and no stay of execution was granted; costs were ordered as specified.
9 Mar 2022

BINCHUANG RESOURCES CO., LTD v. LOCKWOOD GROUP LTD AND ANOTHER

Citation

[2022] HKCFI 739
Court

Court of First Instance
Case number

HCA2167/2019

The court found on the balance of probabilities that the 1st Defendant breached the loan agreement by failing to advance the loan and by transferring and causing disposal of the pledged shares absent any event of default; the Portfolio Protection Arrangements proviso did not justify the transfers on the evidence; the 1st Defendant had no arguable defence to the breach of contract claim; accordingly an interim payment under O.29 r.11 was justified and the court exercised its discretion to order payment of 75% of the assessed value of the shares (HK$72.54 million) being HK$54,405,000 payable wi…
26 Mar 2021

DING HUIRONG v. CHINA TIMES SECURITIES LTD AND ANOTHER

Citation

[2021] HKCA 419
Court

Court of Appeal
Case number

CACV122/2020

The Agreement was properly characterised as a loan secured by a security interest in the pledged shares; accordingly the equitable doctrine of the equity of redemption applied and contractual provisions purporting to waive or extinguish the mortgagor's right to surplus proceeds or to prevent redemption were clogs and invalid; the Order 14A determination was properly entertained given the plaintiff's adoption of the Agreement and undertakings, and the appeals were dismissed.
24 Apr 2018

CHUNG YUEN CHU AND ANOTHER v. COSIMO BORRELLI AND OTHERS

Citation

[2018] HKCFI 849
Court

Court of First Instance
Case number

HCMP2093/2017

The pledges are not irredeemable and do not contain provisions repugnant to the equitable right to redeem because mortgages may secure non-monetary or contingent obligations for an uncertain period, surviving obligations do not prevent termination under the pledges as drafted, and the pledgees' power to judge satisfactory performance is constrained by an implied duty of honesty and good faith; accordingly the declaration sought was dismissed.
18 Jan 2018

FWD LIFE INSURANCE CO (BERMUDA) LTD v. CHENG WING YIU DUMAS also known as CHENG WING YIU FREDDIE AND ANOTHER

Citation

[2018] HKCFI 91
Court

Court of First Instance
Case number

HCMP2365/2014

On construction of the PFL01 Letter clauses 7, 8 and 9, the court concluded that set-off of the LSB was not automatic; clause 8 conferred a right to set off but not an obligation, while clause 9 operated in substance as a security (assignment for the purpose of securing the PFL01 Loan) limiting the plaintiff to apply the LSB to the PFL01 Loan only. The LSB Rules were not inconsistent with that construction; any balance after applying the LSB to the PFL01 Loan could be dealt with under the LSB Rules. Accordingly the defendants' computation of the judgment debt was accepted and interest to run…
14 Apr 2015

SUPER SPEED LTD (IN LIQUIDATION) v. BANK OF BARODA

Citation

SUPER SPEED LTD (IN LIQUIDATION) v. BANK OF BARODA
Court

Court of Appeal
Case number

CACV184/2014

The Court held the post-petition advances made by the Bank to overdrawn company accounts were loans of the bank's assets and not dispositions of the companies' property within section 182; additionally, on the facts the mortgaged properties were charged to full value immediately before each advance so there was no reduction in the companies' equity and no voidable disposition. The appeals were dismissed.