Hong Kong Case Law: Decisions & Judgments

Topic

Transaction at undervalue

Legal area

Court

25 Apr 2025

BGA HOLDINGS LTD (IN LIQUIDATION) (formerly known as BEIBU GULF OCEAN SHIPPING (GROUP) LTD AND OTHERS v. CHU KONG AND OTHERS

Citation

[2025] HKCFI 1671
Court

Court of First Instance
Case number

HCA631/2022

The application is dismissed because, although plaintiffs established a good arguable case on liability (including for the Lohas Transaction), they failed to demonstrate a good arguable case on quantum in relation to the Ausca Transaction (FTI valuation flawed for ignoring the post‑valuation 'Fundamental Change') and failed to show objective evidence of a real risk of dissipation; delay and balance of convenience therefore preclude Mareva relief.
24 Feb 2025

CHEN YUNG NGAI KENNETH and SUN WING SZE (being the Joint and Several Liquidators of BEST YEAR ENTERPRISES LTD (In Liquidation)) v. Sin Kwok Lam AND ANOTHER

Citation

[2025] HKCFI 741
Court

Court of First Instance
Case number

HCMP973/2022

The court found the Company was insolvent at the time of the payments; Enhance Pacific received the payments as conduit/agent for Mr Sin so they were effectively payments to Mr Sin; Mr Sin failed to prove any oral assignment, subrogation or secured interest and failed to establish running account or absence of desire to prefer; accordingly the three payments totalling HK$14,300,000 were unlawful unfair preferences under s266 and must be set aside and repaid by Mr Sin.
11 Sept 2023

RE LIU JIANGYUAN

Citation

[2023] HKCFI 2326
Court

Court of First Instance
Case number

HCB1227/2023

The court made a bankruptcy order because the statutory demand remained unsatisfied establishing insolvency under the Bankruptcy Ordinance, the debtor failed to comply with Bankruptcy Rules r.68 and provided no explanation or affidavit for the delay, and she produced no credible, precise evidence of any substantive defence to the Guarantee despite having the documents for over a year; accordingly there was no bona fide dispute on substantial grounds to resist the petition.
9 Jul 2020

WONG KA SEK and WONG KA LAM KING, The Joint and Several Trustees of the property of LEUNG SIU WAI, a bankrupt v. KWOK SIN MAN KAT

Citation

[2020] HKCFI 1502
Court

Court of First Instance
Case number

HCB1440/2014

Trustees failed to adduce direct evidence or sufficient circumstantial evidence to show the bankrupt had the requisite state of mind or that the transfer was 'significantly less' than what the respondent was entitled to under a legitimate S.7 ancillary relief outcome; the consent order fell within the range of reasonable family court settlements and there was no proven collusion, fraud or intent to prefer creditors; accordingly the statutory prerequisites for relief under s.49, s.50 and s.60 were not satisfied and the summons was dismissed.
2 Dec 2019

HO MAN KIT and Kong Sze Man Simone the Joint and Several Liquidators of Eternal Diamonds Corporation Limited (in creditors’ voluntary liquidation) v. SURE LEAD LTD

Citation

[2019] HKCFI 2914
Court

Court of First Instance
Case number

HCMP2021/2018

Plaintiffs failed to prove the requisite intention to gift or that the companies received no consideration; they relied solely on a gifts theory and did not establish a transaction on terms providing for no consideration or that the transfer constituted a transaction at an undervalue. Mere transmission of money absent proof of the requisite intention or absence of consideration does not establish a statutory transaction at undervalue, and accordingly the plaintiffs' claims were dismissed.
25 Jul 2019

YEUNG LUI MING AND LAI KAR YAN as the Joint and Several Trustees of the Property of WONG YUK TUNG (a bankrupt) v. TANG MO LIN, IRENE AND ANOTHER

Citation

[2019] HKCFI 1848
Court

Court of First Instance
Case number

HCA1197/2015

The court found on the evidence that the Agreement, the Deed and the transfer of the 38 cemetery sites were linked and formed one composite transaction entered into within two years of the presentation of the bankruptcy petition; Bright Success was the legal and beneficial owner of the 38 sites prior to transfer; the Perfecta group was insolvent or in dire financial distress at the relevant time; the consideration involved substantial set-offs of indebtedness and a cash portion but, viewed from the companys perspective, the transaction was at undervalue and therefore voidable under the insol…
1 Aug 2018

PATRICK COWLEY AND ANOTHER (The Joint and Several Trustees in Bankruptcy of the Property of the Bankrupt) v. ALL POWERFUL HOLDING LTD AND ANOTHER

Citation

[2018] HKCFI 1802
Court

Court of First Instance
Case number

HCB104/2017

The court granted Chabra (freezing) injunctions against APHL and APIL and limited disclosure against APIL because the Trustees established a good arguable case that the 2015 share transfer was at an undervalue and made with intent to defraud creditors, that Mr Lau retained substantive control of the trust and companies creating a real risk of dissipation, and the balance of convenience favoured preserving the assets for creditors; the trustees must give a cross-undertaking limited to HK$40,000,000, indemnified by HSBC; the corporate veil need not be pierced at this stage and lawful winding up…
8 Feb 2018

LAU SIU HUNG AND ANOTHER v. CHOW SAI YIP AND ANOTHER

Citation

[2018] HKCFI 249
Court

Court of First Instance
Case number

HCB3640/2015

The court accepted the respondents' credible evidence and documentary receipts showing they provided at least HK$300,000 and agreed set‑offs for unpaid occupation compensation, thereby rebutting the presumption under s.50(5); the Assignment was not a transaction at an undervalue nor an unfair preference and the trustees' summons must be dismissed.
5 Dec 2017

OSMAN MOHAMMED ARAB AND ANOTHER v. NG SHUI CHING, IRENE AND ANOTHER

Citation

OSMAN MOHAMMED ARAB AND ANOTHER v. NG SHUI CHING, IRENE AND ANOTHER
Court

Court of First Instance
Case number

HCA311/2014

On the balance of probabilities the court found the loans from Mrs Ng were genuine advances, the Declaration of Trust of 1 November 2009 conveyed beneficial interest in the 55% shares to Mrs Ng and the later transfer documents simply formalised that position; Mr Ng was solvent when the trust was created and the transfer was supported by consideration so there was no transaction at undervalue, no unfair preference and no intent to defraud creditors; the Vehicle was purchased with Mrs Ng's funds and held on trust for her; the Trustees' application to set aside the transfers was dismissed.
29 Jul 2016

OSMAN MOHAMMED ARAB AND ANOTHER v. LAM YING LUNG, ALAN

Citation

OSMAN MOHAMMED ARAB AND ANOTHER v. LAM YING LUNG, ALAN
Court

Court of First Instance
Case number

HCA653/2011

On the balance of the contemporaneous documents, pattern of family payments, tax returns, and surrounding circumstances the Judge found the Father intended in October 1996 to make a gift of the property to the Bankrupt or to benefit the Bankrupt (so the Bankrupt was the beneficial owner). Accordingly the Declaration of Trust (29 May 2009) and Vesting Assignment (1 Dec 2009) were transactions at an undervalue and/or unfair preferences and/or voidable dispositions under s60 CPO. The court exercised its wide remedial discretion under ss49(2),50(2) and 51A(1) BO to vest the property in the Truste…