KE ZUNJU v. KE YONGHE

HCCT 41/2019

[2021] HKCFI 1955

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 41 OF 2019

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D E C I S I O N

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INTRODUCTION

1.  This is the Applicant’s application by summons dated 29 October 2020 (the “Summons”) for an order that the Registrar of the High Court (or a solicitor from the Applicant’s solicitors’ firm) be authorized under section 25A of the High Court Ordinance to execute:

(1)  an instrument of transfer of 62.68% of the shares in Fuma International Limited (the “Company”) by the Respondent as transferor to the Applicant as transferee; and

(2)  a written board of directors’ resolution of the Company approving the transfer, directing the Applicant’s name to be entered into the Register of Members of the Company and the issuance of share certificate to the Applicant, and directing the necessary Companies Registry form(s) to be filed.

2.  The Applicant had obtained an arbitration award relating to 62.68% of the shares of the Company against the Respondent from the Xiamen Arbitration Commission (廈門仲裁委員會) on 29 May 2019.  Pursuant to the arbitration award, the Applicant obtained an order from Mimmie Chan J on 11 September 2019 (the “Order”) in the following terms:

(1)  a declaration that 62.68% of the shares in the Company belongs to the Applicant and are his property;

(2)  a declaration that the Share Entrustment Agreement between the Applicant and the Respondent under which the Respondent was entrusted to hold the 62.68% of the shares of the Company on behalf of the Applicant was terminated on 31 October 2017;

(3)  the said 62.68% shares of the Company be transferred to the Applicant and registered in his name; and

(4)  the costs of the arbitration proceedings under the Xiamen Arbitration Commission in the sum of RMB 393,139 be paid by the Respondent to the Applicant.

The Respondent has not complied with the Order in any way.

The law

3.  Section 25A of the High Court Ordinance provides that:

“Execution of instruments by order of Court of First Instance

(1) Where the Court of First Instance has given or made a judgment or order directing a person to execute any conveyance, contract or other document, or to endorse any negotiable instrument, then, if that person –

(a) neglects or refuses to comply with the judgment or order; or

(b) cannot after reasonable inquiry be found,

the Court of First Instance may, on such terms and condition, if any, as may be just, order that the conveyance, contract or other document shall be executed, or that the negotiable instrument shall be endorsed, by such person as the Court may nominate for that purpose.”

4.  The applicant must prove to the satisfaction of the judge that there was a pre-existing judgment which directed the respondent to execute any conveyance or other document; and that the respondent neglected to comply despite usual efforts have been made to request him to do so or that he could not be found.  The pre-existing judgment should usually be a final judgment. 

5.  If the Registrar is the person nominated to execute the document(s), the applicant has to prove to the Registrar that (i) the pre-existing judgment requiring the respondent to execute the documents; and (ii) the judge’s order made under s.25A, have been served on the respondent before the request was made to the Registrar to execute the judge’s order.  The applicant also has to inform the Registrar of any response from the respondent.

6.  If the hearing of the application has been adjourned generally, the party by whom the summons was taken out may restore it to the list on two clear days’ notice to all the other parties on whom the summons was served: Order 32, rule 4 of the Rules of the High Court.

7.  The proceedings under s 25A should, in principle, be inter partes even though the respondent has all along been uncooperative.  Where any party to the summons fails to attend on the first or any resumed hearing thereof, the court may proceed in his absence if, having regard to the nature of the application, it thinks it expedient to do so: Order 32, rule 5(1).  Before proceeding in the absence of any party, the court may require to be satisfied that the summons or, as the case may be, notice of the time appointed for the resumed hearing was duly served on that party: Order 32, rule 5(2).

The procedural history

8.  The proceedings were commenced by way of an inter partes summons dated 29 October 2020.  It was adjourned sine die to enable service to be effected on the Respondent in the Mainland.  Service was eventually effected by Jinjiang City People’s Court (晉江市人民法院) on 20 February 2021. 

9.  Notice of hearing of the Summons on 10 May 2021 was informally served on the Respondent by way of letter dated 30 April 2021 sent to his two addresses as stated in the order of this Court dated 23 December 2020.  In the notice, the Respondent was advised that orders may be made by the Court against him in his absence if he did not attend the hearing.  Upon the Applicant’s application on 3 May 2021, the hearing was vacated for paper determination.  The Respondent did not respond.

Disposition

10.  Allowing for the long public holidays from 1 to 5 May 2021 in the Mainland, the Court deferred making its decision until the end of June 2021.  Having satisfied itself that the application met the requirements under section 25A, that the Summons and the notice of the adjourned hearing were duly served on the Respondent, and that having regard to the nature of the application it is expedient to determine the application in the absence of the Respondent, the Court made an order that the senior partner of the firm of solicitors instructed by the Applicant be authorised to execute the documents mentioned in the Summons and that costs of the Summons be paid by the Respondent to the Applicant, to be taxed, if not agreed.