Hong Kong Case Law: Decisions & Judgments

Topic

Fraudulent preference

Legal area

Court

22 Sept 2014

CHEN MEI HUAN (ALSO KNOWN AS LIU MEI HUAN CHEN) v. SILVER FAITH HOLDINGS LTD AND OTHERS

Citation

CHEN MEI HUAN (ALSO KNOWN AS LIU MEI HUAN CHEN) v. SILVER FAITH HOLDINGS LTD AND OTHERS
Court

Court of First Instance
Case number

HCCW111/2014

The injunction was continued because disclosure of Tronken's accounts revealed substantial director's loans, unclear asset valuations and liabilities that render the company insolvent on the available evidence, creating a real risk that applying the net sale proceeds to repay the director would unfairly prefer the director and prejudice third party creditors; the balance of convenience therefore favoured preserving the proceeds pending fuller investigation and determination.
21 Aug 2014

IGAI COMPANY LTD (IN CREDITORS’VOLUNTARY LIQUIDATION) v. GET NICE (UNION) FINANCE COMPANY LTD

Citation

IGAI COMPANY LTD (IN CREDITORS’VOLUNTARY LIQUIDATION) v. GET NICE (UNION) FINANCE COMPANY LTD
Court

Court of First Instance
Case number

HCMP2739/2013

The originating summons was dismissed because the court found the Respondent was entitled to present the post-dated cheque and, although the cheques were created within the six‑month period and constituted security, the liquidators failed to prove on the balance of probabilities that the transfer into the Company account on 8 July was influenced by the requisite subjective desire to prefer the Respondent; therefore no unfair preference was established and it was unnecessary to determine insolvency at earlier dates.
13 May 2013

DE CHANG FULFILMENT LTD v. MANLEY TOYS LTD AND ANOTHER

Citation

DE CHANG FULFILMENT LTD v. MANLEY TOYS LTD AND ANOTHER
Court

Court of First Instance
Case number

HCA1159/2009

On the balance of probabilities the court found that at the 19 September 2008 meeting the Defendants agreed to re-issue purchase orders and pay De Chang while Smart Union would remain responsible and liable for production and delivery; there was no actionable misrepresentation or economic duress; contemporaneous documents and conduct supported De Chang's case; allegations of fraudulent preference failed because no requisite desire to prefer was proved and SU's insolvency was not established; accordingly De Chang was entitled to judgment for the contract price (subject to limited deductions) a…
29 Nov 2012

LAU SIU HUNG AND ANOTHER v. MAN KWAI FONG

Citation

LAU SIU HUNG AND ANOTHER v. MAN KWAI FONG
Court

Court of First Instance
Case number

HCCW11/2010

Court found the Liquidators proved all required elements: Ms Man was a creditor and associate; the seven payments within the two‑year window gave her a better position in an insolvent liquidation; the Company was insolvent at the time under the cash flow test; the statutory presumption of desire to prefer was not rebutted and the alleged board authorization did not negate the statutory regime; therefore repayments were recoverable and an order nisi was made for repayment of HK$700,000 and costs to the Liquidators.
27 Jun 2012

MOULIN GLOBAL EYECARE HOLDINGS LTD (IN LIQUIDATION) AND OTHERS v. OLIVIA LEE SIN MEI

Citation

MOULIN GLOBAL EYECARE HOLDINGS LTD (IN LIQUIDATION) AND OTHERS v. OLIVIA LEE SIN MEI
Court

Court of First Instance
Case number

HCA167/2008

The court held that payments in full of genuine liabilities (the early redemptions of the Chishore and HSBC notes) could not, as a matter of principle, be treated as losses recoverable from the director; those claims were plain and obvious failures and were struck out. Separately, the claims introducing share repurchases and convertible note redemptions were new causes of action not disclosed in the original statement of claim, were arguable time‑barred and therefore could not be retained by relation‑back in the existing proceeding; those additions were disallowed and must be pursued in separ…
9 Feb 2009

AKAI HOLDINGS LTD (IN COMPULSORY LIQUIDATION) AND OTHERS v. HO WING ON, CHRISTOPHER AND OTHERS

Citation

AKAI HOLDINGS LTD (IN COMPULSORY LIQUIDATION) AND OTHERS v. HO WING ON, CHRISTOPHER AND OTHERS
Court

Court of First Instance
Case number

HCCL37/2005

Court found a good arguable case and a real risk of dissipation (primarily founded on the Lafe distribution and related asset movements) and in exercise of its discretion granted a worldwide Mareva injunction against the 1st defendant, Mr Christopher Ho, limited to US$200,000,000; refused direct Mareva against the 2nd defendant Grande but imposed restraints on Mr Ho's exercise of his beneficial shareholder power over Grande (board approval and 14 days notice) and ordered disclosure from Mr Ho and Grande of assets over US$50,000 with confidentiality protections.
12 Jun 2007

SAM EXPRESS (HK) LTD v. SUPREME DAY INVESTMENT LTD

Citation

SAM EXPRESS (HK) LTD v. SUPREME DAY INVESTMENT LTD
Court

Court of First Instance
Case number

HCMP80/2007

Defendant demonstrated good title: DBS Bank was a bona fide purchaser for value without notice whose title was validly assigned to the defendant and is immune from challenge by Weld‑Tech's liquidators given absence of evidence of fraudulent preference; the defendant's solicitors properly answered the purchaser's requisition and the originating summons must be dismissed.
26 Apr 2007

HIP HING CONSTRUCTION CO LTD v. HOLYROOD LTD

Citation

HIP HING CONSTRUCTION CO LTD v. HOLYROOD LTD
Court

Court of First Instance
Case number

HCCT6/2007

The court held that transfers of the defendant's properties to related companies constituted dissipation because they rendered the defendant's only significant assets unavailable to satisfy a potential arbitration award; the plaintiff satisfied the burden of demonstrating a real risk of dissipation and an undertaking was inadequate protection against enforcement risk, therefore the Mareva injunction should be continued with specified conditions and amendments.
26 Jul 2005

KERRY FREIGHT (HONG KONG) LTD v. DEL PRADO ASIA LTD

Citation

KERRY FREIGHT (HONG KONG) LTD v. DEL PRADO ASIA LTD
Court

Court of First Instance
Case number

HCA2660/2004

The court followed Po Kwong Marble and held that the default judgment was irregular because an acknowledgement of service had been filed before judgment; the judgment is set aside without consideration of the merits of the defence but on terms because the defendant's conduct (retrospective AR1, cessation of operations, delay and apparent attempts to avoid execution) justified protective conditions including payment of the judgment sum into court by a fixed date and costs orders.
7 Feb 2005

VALLAT MAURICE HENRI ROLAND v. PHOENIX TELECOMMUNICATION LTD

Citation

VALLAT MAURICE HENRI ROLAND v. PHOENIX TELECOMMUNICATION LTD
Court

Court of Appeal
Case number

CACV237/2004

The Court of Appeal held that the primary issue — validity and bona fides of the assignment — could not be resolved summarily on affidavits given the contested factual allegations; the judge below was not entitled to grant the declarations sought without trial. The court declined to declare the assignment valid, dismissed Antares' appeal, but, to avoid uncertainty, set aside the garnishee order nisi without prejudice to Vallat's right to re-apply and made specified costs directions between the parties.