Hong Kong Case Law: Decisions & Judgments

Topic

Unfairly prejudicial conduct (s.168a)

Legal area

Court

24 Jun 2016

LEE JONG RONG AND ANOTHER v. GREAT CHOICE CONSULTANTS LTD AND OTHERS

Citation

LEE JONG RONG AND ANOTHER v. GREAT CHOICE CONSULTANTS LTD AND OTHERS
Court

Court of Appeal
Case number

CACV152/2015

On the pleaded facts the Court of Appeal held the petitioners sufficiently pleaded that the BVI company was, on the face of the draft amended petition, effectively the holding company of Top Trend with Hong Kong assets and thus there was a sufficient connection to permit the Hong Kong court to exercise its discretionary winding‑up jurisdiction; however the petitioners failed to plead that the BVI company had an established place of business in Hong Kong required for s.168A relief, so that limb of the appeal was dismissed.
2 Jul 2009

WONG YUN KEUNG AND OTHERS v. SAI KUNG P.L.B. (MAXICAB) (NO.1 & 2) CO LTD AND OTHERS

Citation

WONG YUN KEUNG AND OTHERS v. SAI KUNG P.L.B. (MAXICAB) (NO.1 & 2) CO LTD AND OTHERS
Court

Court of First Instance
Case number

HCCW358/2008

Given the company's solvency, the existence of an effective alternative remedy under s.168A (court-ordered buy-out or sale of shares), the petitioners' prior position that buy-out was a viable option, and the absence of evidence explaining a preference for winding up, it was plain and obvious there was no real prospect of a winding-up order; therefore the winding-up prayers and specified paragraphs must be struck out.
21 Nov 2008

YIP KWAI CHOR v. KING FUNG CONSTRUCTION WORK CO LTD AND ANOTHER

Citation

YIP KWAI CHOR v. KING FUNG CONSTRUCTION WORK CO LTD AND ANOTHER
Court

Court of Appeal
Case number

CACV381/2007

The Court of Appeal upheld the trial judge's findings of fact: the oral 50:50 profit-sharing agreement was proved; the five payments totaling HK$2,500,000 were not recoverable loans but payments made with the consent of the directors; Sing Yip was liable for HK$3,247,828 to the company; a number of company cheque payments were misapplied by Lau; Lau diverted the West Kowloon subcontract for secret profit; removal of Yip was unfairly prejudicial. The appeals were dismissed and the trial orders (including buy-out directions and payment orders) were affirmed.
26 Oct 2007

YEARICH LTD v. MOSTOP LTD AND OTHERS

Citation

YEARICH LTD v. MOSTOP LTD AND OTHERS
Court

Court of First Instance
Case number

HCMP847/2007

The court held that allegations must, in substance, concern the conduct of the affairs of the subject company to sustain a s.168A petition; where a company is dormant or a shelf company with no assets or activity, allegations about misconduct in other active companies are insufficient as a matter of law to found unfairly prejudicial relief. Applying that test the petitions for four shelf companies were plainly untenable and struck out, while petitions concerning property‑holding companies, Sparkling Wine, Step Further and Insomnia Singapore were not plainly unarguable and therefore were retai…
8 Dec 2003

LAM SUM PO v. KAM FAI ELECTROPLATING FACTORY LTD AND OTHERS

Citation

LAM SUM PO v. KAM FAI ELECTROPLATING FACTORY LTD AND OTHERS
Court

Court of First Instance
Case number

HCCW534/2000

On the evidence the petitioner was a nominee shareholder with no beneficial interest in the company shares and therefore lacked locus to bring a s.168A petition; alternatively, even if beneficial ownership were assumed, the petitioner failed to prove unfairly prejudicial conduct by the respondents given petitioner’s misconduct, lawful corporate acts and objective justification for directors’ remuneration; petition dismissed with costs.
18 Nov 2003

KIM SIE JOONG AND ANOTHER v. NG CHEUK NGON AND OTHERS

Citation

KIM SIE JOONG AND ANOTHER v. NG CHEUK NGON AND OTHERS
Court

Court of First Instance
Case number

HCA552/2002

The strike‑out application was dismissed: on the pleadings the plaintiffs have disclosed a reasonable cause of action under the derivative exception to Foss v. Harbottle in respect of the 1st defendant’s purchase of Rich City’s debt because it likely constituted a corporate opportunity and a breach of fiduciary duty; although the share purchase issue is less clear it is not plain and obvious that no case exists; paragraphs require amendment to state the debt was that of Rich City and not Billion Market.
11 Dec 1996

CHUAN WEN SZE v. USINE CO LTD AND ANOTHER

Citation

CHUAN WEN SZE v. USINE CO LTD AND ANOTHER
Court

Court of First Instance
Case number

HCCW104/1990

Judge found on balance of probabilities that Petitioner held a beneficial 25% interest in each company from 1982 onwards; the Respondent's conduct in excluding her and removing her as director was unfairly prejudicial; accordingly ordered the 2nd Respondent to purchase the Petitioner's shares at a fair valuation as at 31 December 1989 without minority discount and stayed winding-up until transfer/payment.
12 Nov 1993

Re MEDIAVISION LIMITED

Citation

Re MEDIAVISION LIMITED
Court

Court of First Instance
Case number

HCCW141/1993

Winding-up on the ground that the substratum has gone was struck out because the company's assets and capacity to resume trading remained and the allegation of final abandonment was speculative; however the petition under s.168A that the affairs are being conducted in a manner unfairly prejudicial to the petitioner survives because it is arguable that the majority are using company assets to benefit themselves and thereby prejudicing the minority, warranting full trial.
12 Aug 1987

RE SAFE STEEL FURNITURE FACTORY LTD

Citation

RE SAFE STEEL FURNITURE FACTORY LTD
Court

Court of First Instance
Case number

HCCW319/1986

The petitioner proved a breakdown of mutual trust amounting to conduct unfairly prejudicial to his interests; although this established just and equitable grounds for winding-up, both companies were solvent and trading so the appropriate remedy is relief under s.168A rather than winding-up; an expert valuation of company assets and the petitioner’s interest must be undertaken to determine the purchase/other orders under s.168A.