Zhang Jizhi v Hong Kong Tv International Media Group Ltd And Another

CACV 95/2022, CACV 96/2022 &

CAMP 5/2024

[2024] HKCA 302

On Appeal From [2022] HKCFI 308

CACV 95/2022

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 95 OF 2022

(ON APPEAL FROM HCA NO 624 OF 2019)

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AND

CACV 96/2022

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 96 OF 2022

(ON APPEAL FROM HCA NO 624 OF 2019)

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AND

CAMP 5/2024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 5 OF 2024

(ON AN INTENDED APPEAL FROM HCA NO 624 OF 2019)

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(Heard together)

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REASONS FOR JUDGMENT

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Hon Chow JA (giving the Reasons for Judgment of the Court):

INTRODUCTION

1. On 3 August 2020, Master Sabrina Ho gave summary judgment for the Plaintiff against the 1^st and 2^nd Defendants, ordering (i) the 1^st and 2^nd Defendants to jointly and severally pay the Plaintiff damages for breach of contract in the sum of HK$11,904,754; or (ii) alternatively, the 1^st Defendant to make restitution to the Plaintiff by paying the sum of HK$11,904,754 on the ground of unjust enrichment. The Master also made an order dismissing the 1^st Defendant’s summons dated 23 July 2020 (“New Evidence Summons”) to file the affirmation of Wong Chi Man affirmed on 21 July 2020 (“Wong’s Affirmation”). Exhibited to Wong’s Affirmation was the 3^rd affirmation of Yang Zhang (“Yang 3”), the secretary to the board of directors of the 1^st Defendant, which the 1^st Defendant intended to rely upon to resist the Plaintiff’s summary judgment application. The 1^st and 2^nd Defendants were not satisfied with the judgment and order made by the Master and appealed to a judge in Chambers.

2. On 28 January 2022, Marlene Ng J gave judgment (“the Judgment”) dismissing:

(1) the 1^st Defendant’s appeal against the summary judgment given by the Master;

(2) the 1^st Defendant’s appeal against the Master’s order dismissing the New Evidence Summons;

(3) the 1^st Defendant’s application by summons dated 30 June 2021 (“D1’s Amendment Summons”) to amend its Defence dated 26 June 2019 (“D1’s Defence”);

(4) the 2^nd Defendant’s appeal against the summary judgment given by the Master; and

(5) the 2^nd Defendant’s application by summons dated 13 January 2021 (“D2’s Amendment Summons”) to amend his Defence dated 24 July 2019 (“D2’s Defence”).

3. By 2 notices of appeal both dated 25 February 2022 (“D1’s NOA” and “D2’s NOA” respectively), the 1^st and 2^nd Defendants appealed against the Judgment to the Court of Appeal.

4. By a summons dated 3 January 2024 (“the Leave Summons”), the 1^st Defendant further applied to the Court of Appeal for leave to appeal against the Judge’s order (“the New Evidence Order”) dismissing its appeal against the Master’s order dismissing the New Evidence Summons.

5. At the conclusion of the hearing on 9 January 2024, this Court dismissed D1’s NOA, D2’s NOA and the Leave Summons with costs to the Plaintiff, with reasons to be given later, which we now do.

BRIEF BACKGROUND FACTS

6. The 1^st Defendant, Hong Kong TV International Media Group Limited (香港衛視國際傳媒集團有限公司),incorporated in Hong Kong on 19 December 2008, is a licensed broadcasting non-domestic television programme service provider in Hong Kong.

7. Between 18 November 2009 and 25 August 2018, the 2^nd Defendant was a director and the Chairman of the 1^st Defendant. He was also a substantial shareholder, holding 23.12% of all the issued capital, of the 1^st Defendant. In 2018, he changed his name from Gao Hongxing (高洪星) to Ko Hong Sing (高宏興).

8. The Plaintiff was an intended investor in the shares of the 1^st Defendant.

9. By a written agreement in Chinese titled 投資入股協議書 (Share Investment Agreement) dated 19 April 2016 (“the Agreement”) made between:

(1) “香港衛視國際傳媒集團有限公司 Hong Kong TV International Media Group Ltd (以下簡稱 ‘香港衛視’) 股東代表並董事局主席高洪星先生”, as 甲方 (Party A); and

(2) the Plaintiff, as 乙方 (Party B),

the Plaintiff agreed to acquire 4,632,200 shares (“the Shares”) in the 1^st Defendant at the consideration of HK$11,904,754 (HK$2.57 per share).

10. There is no dispute that the Plaintiff was the 乙方 (Party B) to the Agreement. One of the main issues dividing the parties is who was the 甲方 (Party A) to the Agreement. The Agreement was executed by 甲方 in the following manner:

“甲方: 香港衛視國際傳媒集有限公司 (蓋章)

[company chop of D1]

股東代表: (簽字) [D2’s signature]”

11. The Agreement contained, inter alia, the following express terms:

(1) Recital Preamble - 香港衛視國際傳媒集團有限公司是一家由香港特區政府2008年12月19日批准的國際衛視電視臺 (簡稱香港衛視)…

(2) Recital 1 - 香港衛視是以經營電視傳媒為主和進行其他文化傳媒產業投資及經營文化產業基金的大型傳媒集團，註冊資本為壹拾億元港幣。為增強香港衛視實力，儘快做大做強，經2012年度香港衛視第1次股東會決議，通過了授權董事局處理股權變動事宜的決議.

(3) Recital 2 - 乙方同意按照本合同約定的條款和條件通過股權投資的方式入股.

(4) Clause 1(2) - 現在乙方投資入股香港衛視，認購肆佰陸拾叁萬貳仟貳佰股股份 (此部分股份從原股東轉讓或增資), 按照原每股價格2.57元港幣，以現金出資港幣壹仟壹佰玖拾萬肆仟柒佰伍拾肆元整，按2016年4月19日匯率0.8400折合人民幣壹仟萬元整.

(5) Clause 2(2) - 甲方有義務在乙方轉讓款到達指定帳戶的五個工作日內向香港政府相關機構報送有關法律手續，及時完成有關股權變更手續，以確保乙方的利益.

(6) Clause 2(5) - 在股權轉讓過程中涉及的厘印稅費 (按千分之二計) 由甲乙雙方各負擔百分之五十.

(7) Clause 2(7) - 如香港衛視後續進行增資擴股或上市時，乙方享有對新股東而言的原始股東的一切權利與義務.

(8) Clause 2(9) - 回購協議：若甲方主體或其關聯子公司兩年内未能上市，按照香港銀行公佈的同期存款利率計算回購股份.

(9) Clause 3 - 乙方保證在合約簽訂後十日內將50%投資港幣伍佰玖拾伍萬貳仟叁佰柒拾柒元整，折合人民幣伍佰萬元整匯入香港衛視賬戶或其委託收款的銀行賬戶；餘下50%投資款港幣伍佰玖拾伍萬貳仟叁佰柒拾柒元整，折合人民幣伍佰萬元整於2016年5月15日之前匯入香港衛視賬戶或其委託收款的銀行賬戶…

(10) Clause 4(1) - 本合同任何一方向本合同其他各方陳述如下：(1) 其有完全的民事權利能力和民事行為能力參與、訂立及執行本同，或具有簽署與履行本合同所需的一切必要權力與授權，並且直至本合同所述股權轉讓擴股完成，仍將持續具有充分履行其在本合同項下各項義務的一切必要權力與授權.

(11) Clause 9 - 本合同作為解釋香港衛視股東之間權利和義務的依據，長期有效，除非各方達成書面合同修改；本合同在不與香港衛視章程明文衝突的情況下，視為對香港衛視股東權利和義務的解釋並具有最高效力.

12. By a series of 12 payments made between 28 April 2016 and 18 May 2016, the Plaintiff paid the full consideration in the total sum of HK$11,904,754 (“the Sum”) to the 1^st Defendant for the acquisition of the Shares under the Agreement. On 18 May 2016, the 1^st Defendant issued a receipt to the Plaintiff for the Sum. The receipt described the relevant payments as being for 股權投資款 (share investment sum).

13. According to the Plaintiff, although he had paid the full consideration for the Shares, the 1^st and the 2^nd Defendants failed, in breach of the Agreement, to allot or transfer the Shares to him.

14. There is evidence that, in or about September 2017, the 2^nd Defendant as transferor and the Plaintiff as transferee signed an undated Instrument of Transfer and undated Bought and Sold Notes in respect of 4,632,200 shares in the 1^st Defendant (collectively “the Undated Documents”). However, no transfer of shares pursuant to the Undated Documents has ever been registered in the register of members of the 1^st Defendant.

15. On 8 January 2019, Zhong Lun Law Firm (the Plaintiff’s former solicitors) served a statutory demand on the 1^st Defendant seeking repayment of the sum of HK$11,904,754. By a letter from LCP (the 1^st Defendant’s former solicitors) to Zhong Lun Law Firm dated 23 January 2019, the 1^st Defendant denied its liability to repay the sum on the ground that it was not a party to the Agreement.

16. By a letter from Deacons (the Plaintiff’s current solicitors) to the 1^st Defendant and the 2^nd Defendant dated 5 March 2019, the Plaintiff accepted their wrongful repudiation of, and terminated, the Agreement, and demanded for the return of the Sum. Neither the 1^st Defendant nor the 2^nd Defendant acceded to the Plaintiff’s demand.

17. On 9 April 2019, the Plaintiff commenced the present action against the 1^st and 2^nd Defendants claiming, inter alia, (i) damages for breach of contract, and (ii) repayment of the Sum on the ground of unjust enrichment. There was also a claim based on constructive/resulting trust, but it was not relied upon in the summary judgment application, and does not require further consideration in the present appeal.

18. In D1’s Defence, the 1^st Defendant raises the following grounds of defence to the Plaintiff’s claims:

(1) It is not a party to the Agreement. The parties to the Agreement are the 2^nd Defendant, being the representative of the then existing shareholders of “HKTV” (ie the 1^st Defendant) as Party A, and the Plaintiff as Party B.

(2) The 1^st Defendant received payments in the total sum of HK$11,904,754 from the Plaintiff on behalf of the 2^nd Defendant and/or the then existing shareholders of HKTV, and the Sum was subsequently transferred by the 1^st Defendant to Zheng Hao Yun (“Zheng”), being the 2^nd Defendant’s assistant/agent/servant, without knowledge of any breach of contract or wrongdoing on the part of the 2^nd Defendant or any other parties. The 1^st Defendant changed its position bona fide by transferring the Sum to Zheng on behalf of the 2^nd...