RICHMAN INTERNATIONAL LTD. v. HARBOUR SIDE LTD.

HCA 21504/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 21504 OF 1998

_______________

______________

J U D G M E N T

______________

1. Only the Plaintiff has appeared at the trial of this action.

2. These proceeding arise out of what has been described as a Share Sale Agreement entered into between the Plaintiff and the Defendant, both British Virgin Island companies, on 21 August 1997.

3. By virtue of that agreement, the Defendant agreed to sell and the Plaintiff to buy shares representating 25% of the entire issued capital of a company known as True Union Enterprise Inc (True Union) and 25% of all money owed by that company to its shareholders.

4. It was provided by that agreement that completion should occur on 12 August 1998.

5. The whole purpose of that agreement and the consideration for the purchase price was so that the Plaintiff could acquire an indirect interest in the property holding of True Union (a company of which the Defendant held a 25% share holding) on the completion date.

6. This is made clear by Clause 2 of the Share Sale Agreement which provided that "the only material asset of the company (True Union) on completion shall be its interest in Haddowe (Limited) and the only material asset of Haddowe (Limited) on completion shall be the property described in the Schedule II hereto". That Schedule specified very substantial areas of the "South Horizon" development in Apleichau.

7. The Plaintiff paid a total of $152,500,00.00 to the Defendant on 21 August 1997 as a deposit and part payment under the terms of the Share Sale Agreement.

8. On the 12 August 1998, the day fixed for performance of the agreement, the Defendant failed to perform it.

9. It is apparent from documents not formally produced in evidence that this was because True Union had failed to complete an agreement referred to as the "Haddowe and Casperson share agreement" whereby it was to acquire inter alia the total shareholding of companies owning the South Horizon Property. That agreement should have been completed on 7 August 1998. The Defendant admits it was not.

10. The Plaintiff's solicitors by letter of 21 September 1998 accepted the Defendant's repudiation of the Share Sale Agreement and demanded a return of the $152,500,000.00 paid by the Plaintiff.

11. There has been no evidence to contradict Plaintiff's case. I am satisfied that the failure of True Union to acquire the interest in the South Horizon property and arising therefrom its failure to complete the Share Sale Agreement on 12 August 1998 amounted to total failure of the Share Sale Agreement.

12. The Plaintiff is accordingly entitled to return of the $152,500,00.00 it paid by way of deposit and part payment.

13. I accordingly give judgment for the Plaintiff in the sum of $152,500,000.00 plus interest thereon at 11.75% from 12 August 1998 until today and thereafter at judgment late until payment.

14. I order that Plaintiff's costs be taxed and paid by the Defendant.