Hong Kong Case Law: Decisions & Judgments

Topic

Loss of substratum

Legal area

Court

16 Jul 2018

HUNG WAN HOI GILBERT AND OTHERS v. LEE MAN BIU AND OTHERS

Citation

[2018] HKCFI 1658
Court

Court of First Instance
Case number

HCCW372/2014

The court found the Petitioners had conducted the Company's affairs in a manner unfairly prejudicial to the Respondents by obstructing access to books and records, excluding legitimately appointed directors under the shareholders agreement, and diverting potential corporate opportunities; the Petitioners' petition for winding up was dismissed but the Respondents' petition was granted in part by ordering a buy‑out of the Respondents' shares (against the primary wrongdoer, Lee Man Biu) at fair value as at 30 June 2012, without minority discount, with unpaid capital notionally treated as paid an…
14 Jun 2017

CHAN HUNG FOOK AND ANOTHER v. LO SUI LIN AND ANOTHER

Citation

CHAN HUNG FOOK AND ANOTHER v. LO SUI LIN AND ANOTHER
Court

Court of First Instance
Case number

HCCW208/2016

The strikeout summons was dismissed because, accepting the petitioners' pleaded facts for strikeout purposes, there is a prima facie case that the company is a small family vehicle operating under an informal arrangement attracting equitable considerations and that alternative remedies do not plainly dispose of the petition. Given the disputes and the imminent URA-related value at stake, an interim receiver should be appointed to preserve the company's affairs pending a speedy trial of the winding up petition; the originating summons for an EGM should have no order made pending the petition t…
10 Jul 2015

HUI WAH CHUEN v. SIU KWOK SUN AND ANOTHER

Citation

HUI WAH CHUEN v. SIU KWOK SUN AND ANOTHER
Court

Court of First Instance
Case number

HCCW318/2014

The petition did not adequately plead particular facts justifying a winding-up order as an alternative to a buyout; the re-amendments were insufficiently specific (notably the unsupported loss of substratum allegation) and therefore the winding-up prayer had no realistic prospect of success; accordingly the court struck out the winding-up relief and permitted limited re-amendment excluding the unsupported loss of substratum allegation.
9 Oct 2013

HO CHI WA AND ANOTHER v. HO KING WAI, TERRY AND OTHERS

Citation

HO CHI WA AND ANOTHER v. HO KING WAI, TERRY AND OTHERS
Court

Court of First Instance
Case number

HCCW433/2012

Paragraph 5 was struck out because the court is satisfied there is no realistic prospect that, after trial, a winding-up order would be made: the Petitioners produced no evidence to show respondents would be unwilling or unable to comply with a buy-out order and the company’s financial position and assets (no debt, a flat asset, ongoing trading profit) do not support a winding-up order.
15 Mar 2013

HO PO YENG v. HO MING CHUN AND OTHERS

Citation

HO PO YENG v. HO MING CHUN AND OTHERS
Court

Court of First Instance
Case number

HCCW100/2011

Petition dismissed because the evidence of mismanagement was general and not sufficiently serious to constitute unfair prejudice or breaches of duty; loss of substratum was not established as the company's objects included property/rental activities which remained viable and supported by a majority of shareholders; accordingly neither a just and equitable winding up under s177(1)(f) nor a s168A buy-out order was justified.
7 Mar 2008

LUK KWOK ON AND ANOTHER v. LUK KEUNG JOHN AND OTHERS

Citation

LUK KWOK ON AND ANOTHER v. LUK KEUNG JOHN AND OTHERS
Court

Court of First Instance
Case number

HCCW485/2007

The court refused to strike out the petition in its entirety but ordered that the opening paragraph of paragraph 15 and sub‑paragraphs (a)–(d) be struck out unless the petitioners applied within 14 days and successfully obtained permission to amend to provide particulars; all other challenged paragraphs were not struck out. The court found the petitioners had established a prima facie case on loss of substratum but declined to appoint provisional liquidators because there was insufficient evidence of assets being in imminent jeopardy or urgency to justify the appointment. Costs orders were ma…
18 Feb 2008

CHEUNG SAI LUN v. LAU TAI CHIN FRANCIS AND ANOTHER

Citation

CHEUNG SAI LUN v. LAU TAI CHIN FRANCIS AND ANOTHER
Court

Court of First Instance
Case number

HCMP1344/2007

The application for extension of time was refused because the overall justice did not require extension: the intended appeal lacked reasonable prospects given the judge's findings that the Company was defunct (loss of substratum) and that there was no binding share transfer agreement, and the asserted grounds of error (misconduct disentitling relief and denial of opportunity to be heard) were unpersuasive on the record.
18 May 2007

CHEUNG SAI LUN v. LAU TAI CHIN FRANCIS AND ANOTHER

Citation

CHEUNG SAI LUN v. LAU TAI CHIN FRANCIS AND ANOTHER
Court

Court of First Instance
Case number

HCCW677/2004

Winding up order granted because the Company had ceased operations and lost its substratum and there was a breakdown of mutual trust and confidence; there was no binding unconditional agreement to sell the petitioner’s shares for a nominal consideration (the annexure was unsigned); petitioner’s misconduct did not bar winding up on the substratum ground; petition was not a collateral abuse.
6 May 2004

RE: SAINT POWER INDUTSRIAL LTD

Citation

RE: SAINT POWER INDUTSRIAL LTD
Court

Court of First Instance
Case number

HCCW1309/2002

The court ordered winding up on the just and equitable ground: the company's commercial substratum had been lost and that loss was caused by the respondent's diversion of the Shanghai WFOE business to Sun Power/Sun Power Shanghai and by deadlock/loss of mutual trust between the two shareholder-directors. The insolvency ground was not made out at presentation because the debt was capable of being disputed in good faith, notably in light of the 6 September 2002 support letter; however the state of affairs at hearing justified winding up.
1 Jun 2001

YU LAI PING WANDY v. CHAN KUEN AND OTHERS

Citation

YU LAI PING WANDY v. CHAN KUEN AND OTHERS
Court

Court of First Instance
Case number

HCCW1147/1999

The Court preferred the petitioner's evidence, found the company had no real trading activity, there was a breakdown of mutual trust and confidence, the petitioner was excluded from management and denied access to documents, there was improper conduct and misappropriation by the 1st and 2nd respondents and no viable buy‑out alternative; on those grounds it was just and equitable to order compulsory winding up and to order the 1st and 2nd respondents to pay the petitioner's costs.