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Yeo Boon Ann And Another v Marspan Ltd And Another

Judgment Cited authorities 6 Cited in Precedent Map Related
Vincent
Judgment Date16 September 2021
Neutral Citation[2021] HKCFI 2799
Year2021
Judgement NumberHCMP2230/2020
Subject MatterMiscellaneous Proceedings
CourtCourt of First Instance (Hong Kong)
HCMP2230/2020 YEO BOON ANN AND ANOTHER v. MARSPAN LTD AND ANOTHER

HCMP 2230/2020

[2021] HKCFI 2799

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2230 OF 2020

_________________

IN THE MATTER OF MARSPAN LIMITED (Company No. 124647) (the “Company”)

and

IN THE MATTER OF Order 28 of the Rules of the High Court, Cap 4A and inherent jurisdiction

and

IN THE MATTER OF Section 58 of the Bankruptcy Ordinance, Cap 6

_________________

BETWEEN

YEO BOON ANN and CHAN LEUNG LEE
(the Joint and Several Trustees in bankruptcy of
Margaret Chiu (邱美琪))		 Plaintiff

and
MARSPAN LIMITED 1st Defendant
TAN WAI KEE 2nd Defendant

_________________

Before: Hon Mimmie Chan J in Court

Date of Hearing: 9 June 2021

Date of Judgment: 16 September 2021

_______________

J U D G M E N T

_______________


1. In these proceedings, the joint and several trustees in bankruptcy (“Trustees”) of Margaret Chiu (“MC”) apply to be registered as the shareholders of the 1,000 issued shares in the capital (“Shares”) of Marspan Limited (“Company”), and for a certificate for the Shares to be issued in their names. They also seek an order that the Company and its directors do take all necessary steps to effect the registration and to issue the share certificate to the Trustees.

2. MC was declared bankrupt under an order made by the Court (“Bankruptcy Order”) on 22 April 2020, by which Order the Trustees were also appointed as the provisional trustee of the estate of the bankrupt. At a general meeting of creditors held on 4 August 2020, the Trustees were appointed as the joint and several trustees of the estate.

3. One of the significant assets of MC is her ownership of the Shares in the Company, which Company in turn is the registered owner of Lots 2 and 630, DD 238, Hang Hau Wing Lung Road, Clear Water Bay, Sai Kung in the New Territories (“Property”). According to the annual return of the Company dated 24 May 2018, MC was the registered shareholder of 999 shares in the Company, and CIE Secretarial Services Limited (“CIE”) was the registered shareholder of the remaining 1 share in the Company. The directors of the Company were MC, CIE and ULU Essentials Corporation Limited. Upon the making of the Bankruptcy Order, MC ceased to be a director of the Company under Article 112 (d) of the Company’s Articles.

4. On the documentary evidence and information available to the Trustees, the one share in the Company, registered in the name of CIE, is and was at all material times held on trust for MC. MC herself stated on oath in proceedings before the Court that the one share in the Company was held on trust for her.

5. The Trustees rely on section 58 of the Bankruptcy Ordinance (“Ordinance”), under which the property of a bankrupt shall vest in the Official Receiver on the making of a bankruptcy order, and shall forthwith pass to and vest in any provisional trustee or trustee who is appointed, without any necessary convenience, assignment or transfer. Upon shares in a company being vested in a trustee in bankruptcy, the trustee would be entitled to call upon the company to admit him as a member, or to transfer the shares to another person, provided that such entitlement is stipulated in the articles of association of the company. Counsel relies on In Re Bentham Mills Spinning Company (1879) 11 Ch D 900, and draws analogy from Re Sunrise Air Condition Equipment Ltd [2019] HKCFI 1056 and Lui Fung He v Chartersince Surveyors (Hong Kong Commercial) Ltd [2018] HKCFI 1481, in the context of property vesting in an administrator upon the death of a shareholder.

6. On the Trustees’ case, MC’s ownership in the 999 Shares registered in her name became vested in the Official Receiver upon the making of the Bankruptcy Order, and have become vested in the Trustees by operation of law since their appointment as trustees in bankruptcy on 4 August 2020.

7. The Articles of the Company expressly provide that any person becoming entitled to shares in consequence of the bankruptcy of a member may transfer such shares to himself or to any other person, provided that he produces due evidence of his entitlement (Article 36). Under Article 37, if the person so becoming entitled shall elect to be registered himself, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects. By virtue of Article 38, the person shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the shares. Under Article 13, every member of the Company has the right to a certificate for all the shares registered in his name or to several certificates each for one or more of such shares.

8. On the Trustees’ case, they satisfy the requirements under the Articles for their registration as the holders of the Shares, their entitlement being evidenced by the Bankruptcy Order and the memorandum of their appointment. The Trustees have executed a signed notice in writing pursuant to Article 37 of the Articles of the Company, electing to be registered as the shareholders of the Shares, and they claim that they are entitled to be issued a certificate for the Shares.

9. The Trustees claim that their registration as the shareholders of the Company is essential for their due and proper administration of MC’s estate. The powers to be exercised under section 60 (1) of the Ordinance include doing all things as may be necessary for administering the bankrupt’s estate and distributing its assets, including selling all or any part of the property of MC as the bankrupt. They claim that without being registered as members of the Company, they are unable to call a shareholders’ meeting to appoint themselves as directors, and take control of the board (which upon the making of the Bankruptcy Order was left with only 2 corporate directors), in order to manage the affairs and assets of the Company. They need to exercise their rights as shareholder to obtain access to and inspect the books and accounts of the Company, in order to fully realize the value of the Shares as well as the assets of the Company (which include the Property). The orders sought by the Trustees in these proceedings are, on their case, necessary to enable them to properly carry out or continue to carry out their duties as trustees of MC’s estate.

10. On leave granted by the Court on 5 February 2021, Mr Tan Wai Kee (“Tan”) was joined in these proceedings to oppose the grant of the relief sought by the Trustees. Tan claims to be entitled to 50% of the beneficial interest in the Shares of the Company. According to the evidence filed on behalf of Tan, he is the former husband of MC. They married in 1983, and separated in around 1993....

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