Hong Kong Case Law: Decisions & Judgments

Topic

Voidable transactions

Legal area

Court

1 Mar 2019

The Liquidator of ALMOND LTD t/a TAO CO (in a creditors’voluntary winding up) v. CHEONG CHAN KAO (a bankrupt) AND OTHERS

Citation

[2019] HKCFI 634
Court

Court of First Instance
Case number

HCMP1078/2018

To establish a voidable preference under the Companies Ordinance the Official Receiver must prove (i) the company was insolvent at the time of the transaction, (ii) the transaction put the recipient in a better position than other creditors, and (iii) the decision to enter the transaction was influenced by a subjective desire to improve that creditor's position; desire may be inferred from circumstances and influence need not be decisive.
21 Jan 2019

RE K C K GARMENT FACTORY LTD

Citation

[2019] HKCFI 585
Court

Court of First Instance
Case number

HCCW300/2014

The liquidators failed to prove the requisite subjective desire to prefer the 1st respondent: the payments were made to reduce guarantors' contingent liabilities and to attempt to prolong the company's trading; evidence (including requests to extend the loans and lack of contemporaneous demands) was inconsistent with a desire to prefer the 1st respondent, so the summons against Hong Kong Construction Financing Limited is dismissed. Separately, where the presumption in s50(5) Cap 6 applies to payments to an associate (Apparel Partner Ltd) and relevant respondents did not contest, the declarati…
13 Nov 2017

OSMAN MOHAMMED ARAB AND WONG KWOK KEUNG, THE JOINT AND SEVERAL LIQUIDATORS OF KAM TOYS & NOVELTY MANUFACTURING LTD (IN CREDITORS’ VOLUNTARY LIQUIDATION) v. CASHBOX CREDIT SERVICES LTD

Citation

OSMAN MOHAMMED ARAB AND WONG KWOK KEUNG, THE JOINT AND SEVERAL LIQUIDATORS OF KAM TOYS & NOVELTY MANUFACTURING LTD (IN CREDITORS’ VOLUNTARY LIQUIDATION) v. CASHBOX CREDIT SERVICES LTD
Court

Court of First Instance
Case number

HCMP637/2017

The Court of Appeal held the liquidators failed to prove the subjective desire required by s.266(4); although the Cashbox loan had suspicious features, the evidence established a commercial purpose (leveraging the HK$30m deposit and providing working capital) and absence of evidence that the directors positively wished to prefer Cashbox; accordingly the payment was not an unfair preference and the liquidators' appeal was dismissed.
9 Feb 2017

OSMAN MOHAMMED ARAB AND WONG KWOK KEUNG, THE JOINT AND SEVERAL LIQUIDATORS OF KAM TOYS & NOVELTY MANUFACTURING LTD (IN CREDITORS’ VOLUNTARY LIQUIDATION) v. CASHBOX CREDIT SERVICES LTD

Citation

OSMAN MOHAMMED ARAB AND WONG KWOK KEUNG, THE JOINT AND SEVERAL LIQUIDATORS OF KAM TOYS & NOVELTY MANUFACTURING LTD (IN CREDITORS’ VOLUNTARY LIQUIDATION) v. CASHBOX CREDIT SERVICES LTD
Court

Court of First Instance
Case number

HCMP1908/2016

Although the Company was insolvent at the time of the Payment, the Applicants failed to prove that the directors were influenced by a subjective desire to improve the Respondent's position in event of the Company's insolvent liquidation; therefore the Payment was not an unfair preference and the Originating Summons is dismissed.
7 Jul 2015

CHINA CONSTRUCTION REALTY LTD v. LUCKY DRAGON LTD AND OTHERS

Citation

CHINA CONSTRUCTION REALTY LTD v. LUCKY DRAGON LTD AND OTHERS
Court

Court of First Instance
Case number

HCA1237/2012

The summons to admit the supplemental witness statement and second affirmation was dismissed because Empire Star and Zhang failed to comply with the unless order without a satisfactory explanation, their disclosure was late and selective, and allowing the material at this late stage would unfairly prejudice the plaintiff's ability to prepare for the imminent trial; accordingly relief from sanction under Order 2 rule 5(1) was refused and the application dismissed with costs nisi.
21 Feb 2014

GE TRANSPORTATION (SHENYANG) CO, LTD v. A-POWER ENERGY GENERATION SYSTEMS,LTD AND OTHERS

Citation

GE TRANSPORTATION (SHENYANG) CO, LTD v. A-POWER ENERGY GENERATION SYSTEMS,LTD AND OTHERS
Court

Court of First Instance
Case number

HCA1720/2013

On the pleadings the court was satisfied Head Dragon and ANE had notice of A-Power's indebtedness and, by transferring Liaoning shares at a significant undervalue after an interim/arbitral order, intended to render A-Power judgment‑proof; that disposition was voidable under s.60 CPO and also supported liability for inducing breach; accordingly default judgment was entered setting aside the transfer and ordering consequential relief and assessment of damages.
17 Dec 2012

TAI WEALTHY ELECTRONICS (HK) LTD AND ANOTHER v. SUPER SPEED LTD

Citation

TAI WEALTHY ELECTRONICS (HK) LTD AND ANOTHER v. SUPER SPEED LTD
Court

Court of First Instance
Case number

HCCW273/2012

The court refused to exercise its discretion to grant validation because the sales exhibited suspicious circumstances and appeared to be at undervalue, jeopardising creditors' interests; the transactions were not shown to be normal commercial dealings and court approval was therefore denied.
5 Nov 2008

TRADEPOWER (HOLDINGS) LTD (IN LIQUIDATION) v. TRADEPOWER (HONG KONG) LTD AND OTHERS

Citation

TRADEPOWER (HOLDINGS) LTD (IN LIQUIDATION) v. TRADEPOWER (HONG KONG) LTD AND OTHERS
Court

Court of Appeal
Case number

CACV101/2008

TRADEPOWER (HOLDINGS) LTD (IN LIQUIDATION) v. TRADEPOWER (HONG KONG) LTD AND OTHERS
15 Oct 2007

AKAI HOLDINGS LTD (IN COMPULSORY LIQUIDATION) v. DOMINE KO CHEONG WING AND ANOTHER

Citation

AKAI HOLDINGS LTD (IN COMPULSORY LIQUIDATION) v. DOMINE KO CHEONG WING AND ANOTHER
Court

Court of Appeal
Case number

CACV430/2006

The Court held the amended points of claim were arguable and the writ and its endorsements provided sufficient notice to avoid the waiver within limitation; the fraud and knowledge allegations alleged sufficient facts to require trial rather than summary strike out, and therefore leave to amend and the action should proceed; appeal dismissed.
11 May 2005

DARACH E. HAUGHEY AND ANOTHER v. LAM WAI PING STELLA AND OTHERS

Citation

DARACH E. HAUGHEY AND ANOTHER v. LAM WAI PING STELLA AND OTHERS
Court

Court of First Instance
Case number

HCB276/2002

The court found on the balance of probabilities that the bankrupt deliberately transferred funds to the 1st respondent and caused acquisition through Irving with the intention of placing assets beyond his creditors; those transfers (HK$3,583,600 and HK$7,470,600 applied to Park Place, and US$2,000,000 to Grainger) were gifts/transactions at an undervalue under s 49 and are void against the Trustees, entitling Trustees to repayment and to the net sale proceeds of Park Place.