CHEN YUNG NGAI KENNETH AND ANOTHER v. HO YUK WAH DAVID (A BANKRUPT) AND OTHERS

HCA 971/2012

[2021] HKCFI 1113

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 971 OF 2012

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D E C I S I O N

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1.  On 28 September 2020, Ng J made a declaration that the 2^nd and 5^th Defendants held and hold all shares of the 6^th Defendant registered in their names for and on behalf of and for the benefit of the 1^st Defendant. Ng J further ordered, amongst others, the 2^nd and 5^th Defendants to take all necessary steps to transfer their respective shareholdings in the 6^th Defendant to the Plaintiffs within 56 days (“Ng J’s order”).

2.  The 56-day period expired on 23 November 2020 without action by the 5^th Defendant.

3.  This is the Plaintiffs’ application under section 25A of the High Court Ordinance, Cap 4 for an order that the Registrar or a suitable person do execute documents on behalf of a defaulting defendant pursuant to Ng J’s order.

4.  Under that section:

“(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 conditions, 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.

(2) A conveyance, contract, document or instrument executed or endorsed in accordance with subsection (1) shall have the same effect as if it had been executed or endorsed by the person originally directed to execute or endorse it.

(3) Nothing herein shall be held to abridge the powers of the Court of First Instance to proceed by attachment against any person neglecting or refusing to execute or endorse any such instrument.”

5.  Applying section 25A, I am satisfied that Ng J’s order was a judgment directing the 5^th Defendant to execute documents to transfer the shareholding in the 6^th Defendant to the Plaintiffs.

6.  Ng J’s order was served on 6 October 2020 on the 5^th Defendant’s then solicitors, Oldham, Li & Nie (“OLN”).

7.  On 9 October 2020, OLN informed the Plaintiffs that their retainer with the 5^th Defendant had been terminated.  OLN obtained an order to formally cease to act for, amongst others, the 5^th Defendant, by an order dated 16 December 2020.

8.  On 15 January 2021, the Plaintiffs issued a formal pre-summons letter to the 5^th Defendant demanding it to comply with Ng J’s order, failing which the Plaintiffs would take out a s.25A application.  In not responding, the 5^th Defendant has neglected or refused to comply with Ng J’s order.

9.  The 5^th Defendant had in fact been struck off the BVI share register on 1 November 2019 for non-payment of annual fee, but the company has not been dissolved yet.  The affidavit of Rosalind Nicholson (barrister qualified to practicing BVI law) deposed that the 5^th Defendant remains in existence as a legal entity.  That opinion tallies with Li Kwan Chuen v Vector Development Ltd [2009] 3 HKLRD 511, Sakhrani J; and Lau Yun Lin v Kwan Tseung Co Ltd [2017] 2 HKLRD 596.

10.  Pursuant to leave granted by this Court, the Plaintiffs have, on 29 March 2021, served this summons filed on 11 February 2021 and the third affirmation of Kenneth Chen in support, out of jurisdiction on the 5^th Defendant in BVI.  Ms Nicholson confirmed that it was valid service under BVI law.

11.  I am satisfied as to service of this summons and that the conditions in section 25A of the High Court Ordinance have been met.  I therefore make an order as follows:

(1) Lam Siu Sun Dennis, a partner of Lee, Wong & Lam, Solicitors for the Plaintiffs be directed under section 25A of the High Court Ordinance (Cap 4) to take all steps and execute all documents as may be necessary (including but not limited to instruments of transfer, and bought and sold notes) to transfer the 5^th Defendant’s shareholding in the 6^th Defendant to the Plaintiffs;

(2) There be liberty to apply;

(3) There be no order as to costs for the hearing on 25 March 2021, the 3^rd affirmation of Hugh David Jr dated 20 April 2021 and the 3^rd affirmation of Dennis Lam dated 21 April 2021; and

(4) Costs of and occasioned by this application be payable by the 5^th Defendant to the Plaintiffs forthwith summarily assessed at $70,000.

12.  I thank Mr Joseph Wong for his assistance.