Hong Kong Case Law: Decisions & Judgments

Topic

Shareholder deadlock

Legal area

Court

22 Dec 2014

CHU CHUNG MING AND ANOTHER v. LAM WAI DAN AND OTHERS

Citation

CHU CHUNG MING AND ANOTHER v. LAM WAI DAN AND OTHERS
Court

Court of First Instance
Case number

HCCW377/2011

The court found that denial of access to company documents and the continued maintenance of a nominal licence rent benefiting a company wholly owned by the respondents after March 2011 amounted to conduct both unfair and prejudicial to the petitioners as members; other complaints (assault, bank mandate, and alleged excessive cost of works) did not establish unfairness. The appropriate remedy was an order under s168A for the respondents to purchase the petitioners' shares at a fair market price.
30 Mar 2012

CHAN CHUN MING BILL v. BILLION VINS COLLECTION LTD AND OTHERS

Citation

CHAN CHUN MING BILL v. BILLION VINS COLLECTION LTD AND OTHERS
Court

Court of First Instance
Case number

HCCW444/2008

Judge found the importation arrangements were within Bill's authority and were not improper; the cheque made payable to Billion Group was known and not misappropriated; Bill accepted and sought to account for balances; breakdown of mutual trust and confidence justified winding up under s177(1)(f); misconduct sufficient to disentitle relief was not established, therefore winding up ordered (order nisi).
3 Jul 2009

ACHIEVE GOAL HOLDINGS LTD v. ZHONG XIN ORE-MATERIAL HOLDING CO LTD

Citation

ACHIEVE GOAL HOLDINGS LTD v. ZHONG XIN ORE-MATERIAL HOLDING CO LTD
Court

Court of First Instance
Case number

HCA1987/2005

The application failed because the interim receivers' ratification was a legitimate exercise to defend Zhong Xin's interests in mainland litigation, was expressly without prejudice to the parties' rights in this action, the purported settlement facts relied on by the applicants were incorrect or post‑dated the ratification, no enforceable right had vested in the Angola defendants before ratification, and the applicants pursued the wrong procedural route to challenge the receivers.
18 Jun 2009

CONSTELLA LTD v. SUPER EASTERN LTD AND ANOTHER

Citation

CONSTELLA LTD v. SUPER EASTERN LTD AND ANOTHER
Court

Court of First Instance
Case number

HCCW175/2006

The court found the parties' relationship was commercial cooperation not a quasi-partnership; there was at most an understanding to seek equal board representation but the conduct complained of did not amount to a sufficiently serious or sole repudiatory breach by respondents to justify winding up; both sides contributed to the breakdown and tit-for-tat conduct; petitions dismissed and petitioners ordered to pay respondents' costs.
29 May 2008

KWOK KWAI KONG v. LO KWING CHIU AND OTHERS

Citation

KWOK KWAI KONG v. LO KWING CHIU AND OTHERS
Court

Court of First Instance
Case number

HCMP592/2008

The application is dismissed because section 114B is a procedural power and is not an appropriate vehicle to resolve a shareholding deadlock or to alter substantive voting rights by reducing quorum or appointing a chairman to break an equal-share deadlock; the applicant invoked the wrong procedure and alternative remedies (derivative action or s.168BC) were available.
22 Dec 2006

NG SHUI LAN v. HONG CHUNG SING

Citation

NG SHUI LAN v. HONG CHUNG SING
Court

Court of First Instance
Case number

HCCW398/2006

The court held the provisional liquidators application would not have succeeded because delay in disclosure did not demonstrate real jeopardy and the petitioner should have used s121; costs of that application (including Official Receiver costs of HKD 4,900) are payable by the petitioner to the 1st respondent. The court appointed receivers and managers over the company's properties to resolve the shareholders' deadlock and ordered the 1st respondent to pay the costs of the receivership application to the petitioner, with liberty to apply to vary the receivers' scope.
21 Apr 2006

LEE KWAN KIT v. LEE SUN LAN TOBACCO CO. AND OTHERS

Citation

LEE KWAN KIT v. LEE SUN LAN TOBACCO CO. AND OTHERS
Court

Court of First Instance
Case number

HCCW377/2005

The court found on the uncontested petitioner evidence that there was an irretrievable breakdown of mutual trust, exclusion of the petitioner from management, mismanagement and improper withdrawals; accordingly a case was made out to wind up the Company on the just and equitable ground and the Company should be wound up with sale of the property and distribution of net proceeds in accordance with shareholdings; costs were ordered against the opposing shareholders as specified.
18 Jun 2004

RE B F CONSTRUCTION COMPANY LTD

Citation

RE B F CONSTRUCTION COMPANY LTD
Court

Court of First Instance
Case number

HCCW691/2004

There was a good prima facie case for winding up under s177(1)(a) and (f) and, given the prolonged director deadlock, deteriorating finances and practical risks to ongoing obligations, it was appropriate to appoint provisional liquidators to preserve assets, ensure continuity and allow immediate regulation of the company; the existing provisional liquidators from CCIF were pragmatically suitable and any actual conflicts could be addressed by the court.
6 Nov 2003

PARALLEL MEDIA GROUP PLC AND ANOTHER v. WORLD SPORT GROUP (ASIA) LTD

Citation

PARALLEL MEDIA GROUP PLC AND ANOTHER v. WORLD SPORT GROUP (ASIA) LTD
Court

Court of First Instance
Case number

HCMP4023/2003

There was a serious issue to be tried on unfair prejudice; the petitioners' undertaking to provide an open‑ended interest‑free credit facility meant damages would not be adequate and the balance of convenience favoured immediate appointment of a manager with limited powers to pay existing and future liabilities to creditors in order to prevent likely liquidation and preserve the company's valuable contractual rights.
17 Jun 2003

NINA KUNG v. TAN MAN KOU AND OTHERS

Citation

NINA KUNG v. TAN MAN KOU AND OTHERS
Court

Court of First Instance
Case number

HCMP2248/2003

Where equal shareholder deadlock prevents auditors being appointed at AGMs and there is ongoing litigation between shareholder camps that creates a legitimate requirement that auditors be objectively independent of both camps, the court will, under s.131(2), appoint auditors who are objectively independent. Applying that test, the court dismissed the applications to appoint WM Sum/WO Lo in HCMP 2108 and 2248 but granted the JA's application in HCMP 2162 to appoint Nelson Wheeler (1st–33rd respondents) and Moores Rowland (34th–39th respondents). Costs orders were made accordingly and the JA's…