KARLA OTTO LTD v. BULENT EREN BAYRAM AND ANOTHER

HCA 821/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 821 OF 2011

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D E C I S I O N

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1.  The plaintiff applies for an order for the 1^st defendant to execute documents transferring shares in the 2^nd defendant from the 1^st defendant to the plaintiff and that the 1^st defendant do sign a notice of resignation of director, failing which the Registrar of the High Court shall be authorised to execute those documents on behalf of the 1^st defendant.

Background

2.  On 24 February 2017, Deputy High Court Judge Hunsworth declared that the 1^st defendant held on trust for the plaintiff shares in the 2^nd defendant registered in his name and the books and records of the 2^nd defendant.

3.  The learned Deputy Judge further adjudged that:

“(4) Any share certificate in or books or records of the 2^nd defendant in the possession, custody or control of the 1^st defendant be delivered up to the plaintiff.

(5) The 1^st defendant resign forthwith as director of the 2^nd defendant.”

4.  The defendants had previously applied to set aside the judgment of Deputy High Court Judge Hunsworth but that application had been dismissed by me on 18 May 2017.

5.  On 1 June 2017, the defendants sought leave to appeal against my order of 18 May.  This application to appeal has not been pursued and no date for hearing has been set down for that application.  No stay of application for execution of either Deputy Judge Hunsworth’s judgment or my order has been granted.  The plaintiff is at liberty to enforce Deputy High Court Judge Hunsworth’s judgment.

6.  It was quite clear that the 1^st defendant had notice of both the orders of Deputy High Court Judge Hunsworth and my own. The solicitors for the 1^st defendant had now come off the record with leave granted by Master M Wong.

7.  On 26 June 2017, the plaintiff had written to the defendants’ then solicitors, demanding performance of paragraphs 2, 4 and 5 of Deputy Judge Hunsworth’s judgment within seven days.  The 1^st defendant has failed, neglected or refused to comply with that demand.  The plaintiff therefore issued the present summons which had been validly served on the defendants’ solicitors on 12 July 2017 before they they came off the record.

8.  As of 2 August 2017, the defendants’ previous solicitors, Lim & Lok had validly come off the record, having filed a certificate of service, pursuant to Master M Wong’s order and in compliance with Order 67, rule (6)(1) of the Rules of the High Court.

Relief

9.  In the light of the 1^st defendant’s conduct in failing to comply with the orders of Deputy High Court Judge Hunsworth, it is appropriate for the court to grant the order requested for by the plaintiff in the summons, subject to what I have to say as follows.

10.  The 1^st defendant shall execute the instrument of transfer of 1,000 shares in the 2^nd defendant, which I am satisifed form the whole shareholding in the 2^nd defendant, in favour of the plaintiff.

11.  The plaintiff also asked that the 2^nd defendant do execute a notice of resignation of director.  The second paragraph of the draft letter of resignation requires the 1^st defendant to confirm that he has no right or claim of whatsoever nature against the company as director for remuneration, compansation for loss of office or otherwise. This matter had not been the subject of adjudication by Deputy High Court Judge Hunsworth.  I do not consider it appropriate to include this paragraph in the notice of resignation.  Accordingly, I will order the 1^st defendant to execute the notice of resignation with only the first paragraph in that draft notice.

12.  The plaintiff has given reasonable time since the judgment of Deputy Judge Hunsworth for the 1^st defendant to transfer the 1,000 shares back to the plaintiff.  I do not see why further time should be given to the 1^st defendant, except the time to notify him of this present order.  Should he fail to execute the documents as required, it is appropriate for the Registrar of the High Court to come to the plaintiff’s assistance to execute the documents on behalf of the 1^st defendant.

13.  I therefore order as follows.  Unless within three days of service of this order upon the 1^st defendant, the 1^st defendant do execute the following documents annexed to the order to be drafted:

(a) Instrument of transfer of the 1,000 shares in the 2^nd defendant from the 1^st defendant to the plaintiff, and

(b) Notice of resignation of director of the 2^nd defendant which shall not include the second paragrpah in the draft letter,

the Registrar of the High Court is authorised to execute the documents on behalf of the 1^st defendant, pursuant to section 25A of the High Court Ordinance.

14.  The plaintiff asks for indemnity costs.  I have taken into account the time taken since the judgment of Deputy High Court Judge Hunsworth was given.  I also take into account the fact that I have dismissed the defendants’ attempt to set aside Deputy Judge Hunsworth’s judgment.

15.  In that judgment of mine, I held that there was no good reason offered by the defendants for their absence from the trial. There had been no fault on the part of the plaintiff and yet she was forced to incur costs to resist the 1^st defendant’s application to set aside the judgment and also to come to court for assistance under the present summons.  She had been awarded indemnity costs by me in the judgment dated 18 May.

16.  In the present case, neither can I see any valid reason for the 1^st defendant to resist performance of the judgment against him.  In the premises, I award costs to the plaintiff on an indemnity basis which shall be summarily assessed by me this afternoon.

Service

17.  Finally, in view of the defendants’ solicitors having ceased to act, the plaintiff shall be at liberty to serve a copy of these reasons for decision and the order that I grant on the 1^st defendant, out of the jurisdiction, at the addresses set out in the paragraph 12 of Ms Lai’s written submission.  I do not read out these addresses in this open judgment but I am satisifed that those addresses were the 1^st defendant’s last known addresses which shall be put into the order to be sealed by this court.  Service at those addresses shall be deemed good service.