TIN CHI PING v. CHOW WAI FAN AND OTHERS

HCCW 661/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 661 OF 2006

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D E C I S I O N

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1.  I have before me a summons issued by the respondents for an order that that part of the proceedings regarding whether or not the petitioner was the sole originating source of the contributions paid to the company in relation to the shareholding of Koh Choi Yu Shirley be dealt with as separate proceedings.

2.  The petition is an unfair prejudice petition with a winding up order sought as an alternative remedy.  The difficulties between the parties arise in this way.  The petitioner became a shareholder after the transfer of Ms Koh’s shares to him in 2004.  Ms Koh had been his wife and the shares were transferred pursuant to the terms of settlement of their matrimonial proceedings.

3.  It appears that the 2^nd and 3^rd Respondents, the other shareholders and directors of the Company, were closer to Ms Koh than the petitioner.  After the petitioner became a director he became concerned about the fact that according to the 2^nd and 3^rd respondents the books of the company recorded the shareholders as having made loans to the company prior to him becoming a shareholder of which he was unaware. He was also concerned when Ms Koh notified the company that she was prepared to write off her loan.  The petitioner asked for documents demonstrating that the loans had been made.  The documents were not forthcoming.  His relationship with the 1^st and 2^nd respondents deteriorated.

4.  The respondents argue that the petition alleges first that the petitioner funded the acquisition of Ms Koh’s shares and secondly that this has a bearing on his rights in these proceedings.  I accept that the petition does appear to suggest this although I am unable to understand how, if the petitioner did provide such funding and Ms Koh held the shares as bare trustee for the petitioner, it is material to the determination of the petition.  The respondents say that it is an issue that cannot be properly determined in these proceedings, because Ms Koh is not a party.  They say that the petitioner should first determine the funding issue in other proceedings with Ms Koh.  I disagree.  Even accepting, which it seems to me is doubtful, that the funding question has any material bearing on the determination of the petition it is a matter the petitioner can try and prove in these proceedings.  He can adduce documents and if he so wishes subpoena his wife.  If this evidence is insufficiently probative he will be unsuccessful.

5.  I dismiss the summons and order that the 1^st and 2^nd respondents pay the petitioner’s costs to be taxed if not agreed forthwith.  I note that the company is an applicant.  It clearly should not be.

If, which in practice it may not, it has incurred any costs in respect of this application I order that they are paid by the 1^st and 2^nd respondent.