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

FAMV No. 11 of 2009

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

 MISCELLANEOUS PROCEEDINGS NO. 11 OF 2009 (Civil)

(ON APPLICATION FOR LEAVE TO APPEAL FROM
CACV No. 101 of 2008)

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Appeal Committee: Mr Justice Bokhary PJ, Mr Justice Chan PJ and Mr Justice Ribeiro PJ

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 DETERMINATION

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Mr Justice Ribeiro PJ:

1.  The present proceedings were commenced by the liquidators of the respondent to set aside a transaction instituted by the respondent’s controlling shareholders and directors (the 4^th and 5^th applicants) as a disposition of property made with intent to defraud creditors, and therefore voidable under section 60 of the Conveyancing and Property Ordinance (Cap 219).  The same transaction also founds a personal claim against the directors for misfeasance.

2.  The details of the transaction are set out in the judgments of Mr Recorder Jat SC[1] and Le Pichon JA in the Court of Appeal[2] below. 

3.  The Recorder dismissed the respondent’s claim on the ground that it had failed to prove a dishonest intent on the part of the directors.  His decision was reversed by the Court of Appeal which granted the relief sought under section 60 and in the misfeasance proceedings.

4.  The applicants contend that the Court of Appeal was wrong to arrive at the conclusion that the directors were dishonest as this involved reversing clear findings to the contrary by the Recorder without any adequate basis for doing so.  We are invited to grant leave on the “or otherwise” ground in this context.

5.  We are satisfied that the proposed appeal also raises questions as to what proof of dishonest intent under section 60 entails and that these are of the requisite importance to be submitted to the Court for decision.  We therefore grant leave to appeal on both bases. 

6.  Mr McCoy SC, for the applicants, contends that the issue of misfeasance stands or falls together with this section 60 claim.  Mr Fung SC, for the respondent, challenges this, so that the validity of the Court of Appeal’s conclusion as to misfeasance will be in issue on the appeal.  It is unnecessary for us to discuss the applicants’ submission made in writing that the leave to appeal is as of right in the present case.