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Xu Liu Chun v Wu Chang Jiang And Another

Judgment Cited authorities 6 Cited in 2 Precedent Map Related
Vincent
Judgment Date27 August 2019
Neutral Citation[2019] HKCA 975
Year2019
Judgement NumberCAMP160/2019
Subject MatterMiscellaneous Proceedings
CourtCourt of Appeal (Hong Kong)
CAMP160/2019 XU LIU CHUN v. WU CHANG JIANG AND ANOTHER

CAMP 160/2019

[2019] HKCA 975

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 160 OF 2019

(ON AN INTENDED APPEAL FROM HCMP NO 3166 OF 2014)

---------------------------

IN THE MATTER of Jiang Yuan International Development Limited

and
IN THE MATTER of section 724 of the Companies Ordinance, Cap 622.

---------------------------

BETWEEN
XU LIU CHUN Petitioner

and
WU CHANG JIANG (吳長江) 1st Respondent
JIANG YUAN INTERNATIONAL DEVELOPMENT LIMITED 2nd Respondent
(江源國際發展有限公司)

----------------------------

Before: Hon Lam VP and Barma JA in Court
Date of Hearing: 22 August 2019
Date of Decision: 22 August 2019
Date of Handing Down Reasons for Decision and Assessment of Costs: 27 August 2019

___________________________

REASONS FOR DECISION
AND ASSESSMENT OF COSTS

___________________________

Hon Barma JA (giving the Reasons for Decision and Assessment of Costs of the Court):

1. This was a renewed application for leave to appeal, and for a stay of execution pending appeal, against the judgment of DHCJ Patrick Fung SC dated 23 April 2019 whereby the 1st respondent (“the respondent”) was ordered, inter alia, to pay into court US$1.2 million as an interim payment for the purchase from the petitioner of 12,000 shares in the 2nd respondent (“the Company”). At the conclusion of the hearing, we dismissed the application upon certain undertaking given by the petitioner, and ordered the respondent to pay the petitioner’s costs of the application to be assessed on a gross sum basis. We now hand down our detailed reasons, and our assessment of costs.

2. By a summons dated 6 May 2019, the respondent sought leave to appeal against the Judgment and a stay of execution pending appeal before the judge. On 27 June 2019, the judge refused leave to appeal but he granted a stay conditional upon the due prosecution of an application for leave to appeal by the respondent before this court. By a summons dated 11 July 2019, the respondent renewed his application for leave to appeal to this court.

The judgment below

3. The background of this case is set out in [1] – [9] in the judgment of this court delivered on 18 April 2019 ([2019] HKCA 355). The petitioner is the minority shareholder in the Company, holding 40% of its shares, while the respondent holds the remaining 60%. One of the main businesses of the Company is road repair works for the Angolan government.

4. On 4 December 2014, the petitioner filed a petition pursuant to sections 724 and 725 of the Companies Ordinance, Cap 622 seeking a buy-out order in respect of his shares, on the ground that the affairs of the Company were being conducted in a manner unfairly prejudicial to his interests. In a judgment given on 13 July 2018, DHCJ Lee (as he then was) held that the petitioner had established unfair prejudice based on the withdrawal of US$4.4 million from the Company by the respondent in favour of a company owned by the respondent and his wife (see DHCJ Lee’s judgment at [97] – [100]) and the denial of financial information concerning the Company to the petitioner (see the same judgment, at [101] – [107]).

5. DHCJ Lee ordered that the respondent should buy out the shares in the Company held by the petitioner, and that the shares should be valued on the following basis: (a) by reference to the assets, profitability and future prospects of the Company as at 4 December 2014 (the date of the petition); (b) taking into account the unilateral withdrawal of US$4.4 million by the respondent; and (c) without any discount for a minority shareholding.

6. By a summons dated 2 November 2018, the petitioner applied for interim payment by the respondent for 40% of the sum of US$4.4 million pursuant to sections 724 and 725 of the Ordinance and also pursuant to RHC Order 29, rules 10-13.

7. In the judgment dated 23 April 2019, DHCJ Patrick Fung SC allowed the application for interim payment to the extent that the respondent was ordered to pay into court the sum of US$1.2 million for the 12,000 shares held by the petitioner, which had a par value of US$100 per share. At the time of the hearing before DHCJ Fung SC, an appeal to the Court of Appeal by the petitioner, and a cross-appeal by the respondent, against the judgment of DHCJ Lee were awaiting judgment, and DHCJ Fung SC gave leave to the petitioner to have the sum paid out to him in the event that the respondent’s cross-appeal was unsuccessful.

8. On 18 April 2019, in [2019] HKCA 355 (CACV 380/2018) the Court of Appeal (differently constituted) dismissed the appeal by the petitioner and the cross-appeal by the respondent against the judgment by DHCJ Lee. To date, however, no payment in has been made by the respondent.

Grounds of appeal

9. By his draft Notice of Appeal, the respondent raises two broad grounds of appeal against the interim payment ordered by DHCJ Patrick Fung SC. He submits first, that the court has no jurisdiction to make the order for interim payment (“the Jurisdiction Point”), and secondly, that the court in any event exercised its discretion wrongly (“the Discretion Point”).

10. In relation to the Jurisdiction Point, the respondent...

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2 cases
  • Magnus Leonard Roth v Vitaly Orlov And Another
    • Hong Kong
    • Court of First Instance (Hong Kong)
    • 23 January 2020
    ...paid under a buyout order. The Court of Appeal did not consider the contrary position to be arguable: see Xu Liu Chun v Wu Chang Jiang [2019] HKCA 975 at 36. In response to the application, Roth has (via Mr McLeish’s skeleton submissions) since offered to make an interim payment of US$15 mi......
  • Vitaly Orlov v Magnus Leonard Roth And Another
    • Hong Kong
    • Court of First Instance (Hong Kong)
    • 23 January 2020
    ...paid under a buyout order. The Court of Appeal did not consider the contrary position to be arguable: see Xu Liu Chun v Wu Chang Jiang [2019] HKCA 975 at 36. In response to the application, Roth has (via Mr McLeish’s skeleton submissions) since offered to make an interim payment of US$15 mi......

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