ONC Corporate Disputes and Insolvency Quarterly
Dear Clients and Friends,
This special newsletter aims to regularly update practitioners on important and noteworthy cases in the areas of corporate disputes and insolvency in Hong Kong, the UK and other common law countries. In this issue, we have highlighted:
· 5 Corporate Insolvency Cases
· 3 Cross-border Insolvency Cases
Our selection of cases and our analysis of them may not be exhaustive. Your comments and suggestions are always most welcome. Please feel free to contact me at [email protected]
Best regards,
Ludwig Ng
Partner, Solicitor Advocate
ONC Lawyers
HEADLINES OF THIS ISSUE
Corporate Insolvency Cases
1. A contributory (as opposed to a creditor) petitioning for the winding-up of a company should normally show a “tangible interest” in the assets of the company or a ‘need for investigation’, which entitles him to ask for the winding up of the company
Haw Par Pharmaceutical Holdings Pte. Ltd v Hua Han Health Industry Holdings Ltd [2019] 4 HKLRD 286
2. Relevant factors that Court will take into account in giving retrospective sanction
Re Moulin Global Eyecare Trading Ltd (in liquidation) [2019] 4 HKLRD 643
3. The requisite intention to gift must be proved to establish transaction at undervalue on the basis of gift
Ho Man Kit v Sure Lead Ltd [2019] HKCFI 2914
4. Petitioner ordered to pay costs on a common fund basis for failing to explain why a winding-up order was sought in the petition
Wong Wai Tung v Lam Chun Fung and Another [2019] HKCFI 3034
5. Once privileged, always privileged – legal advice attaching to the documents subsisted notwithstanding the dissolution of the company
Addlesee v Dentons Europe LLP [2019] EWCA Civ 1600
Cross-border Insolvency Cases
6. Indonesian bankruptcy proceedings recognized in Singapore
Heince Tombak Simanjuntak and others v Paulus Tannos and others [2019] SGHC 216
7. Limits of assistance – it is not open to the assisting court to appoint a different person as the foreign representative
8. Hong Kong Court recognized and assisted Mainland liquidators for the first time
Re CEFC Shanghai International Group Limited [2020] HKCFI 167
Restructuring Cases
9. English High Court held that a scheme of arrangement only affect the rights of the creditors of a scheme company in their capacity as creditors, not other rights they have, such as proprietary rights in property
Re Instant Cash Loans Limited [2019] EWHC 2795 (Ch)
10. In considering whether a scheme of arrangement is propounded for a permissible purpose for the general benefit of the scheme creditors, the Court will take into account the rate of return to scheme creditors and the amount of the restructuring and liquidation expenses
Corporate Disputes Cases
11. Assessing the value of his shares is a proper purpose for a shareholder to seek inspection of the company’s documents and accounts, particularly where a long-standing substantial shareholder is seeking to protect his economic interest as a shareholder
Selvaraj (Moorthy) v GMT Industrial Ltd [2019] 4 HKLRD 572
12. Court of Appeal: those who alleged fraud should carry the burden of proof and the proper remedy for a forged transfer is to seek a rectification of the share register and the company is a necessary party to the claim
Ngan Pui Chi and Another v Bao Quan [2019] 4 HKLRD 135
13. Singapore Court of Appeal: discount for lack of control would typically apply where the buyout of a minority shareholding was made pursuant to a consent order in the absence of any finding on the issue of minority oppression
Liew Kit Fah and others v Koh Keng Chew and others [2019] SGCA 78
Bankruptcy Cases
14. An application for a non-commencement order under the Bankruptcy Ordinance (Cap 6) should be made inter-partes
Re Cai Sui Xin [2019] HKCFI 2547
15. Bankruptcy petition dismissed as the creditor failed to do all that was reasonable for the purpose of bringing the statutory demand to the debtor’s attention and to cause personal service of the demand to be effected
Re Luo Xing Juan Angela [2019] HKCFI 2674
16. To prove a debtor has carried on business in Hong Kong, it is not enough to show that a person is running his company’s business even though he is the sole beneficiary shareholder and in complete control. There must be some evidence of activities on the part of the debtor over and above those attributable to the company to show that the debtor has carried on business of his own
Re Chen Mei Huan also known as Liu Chen Mei Huan also known as Liu Mei Huan Chen [2019] HKCFI 3028
17. Singapore High Court: an annulment of bankruptcy order is not conditional upon all debts being proven
18. Court of Appeal warned against debtor’s opportunistic attempts to invoke the Lasmos approach in the future to stay winding-up/bankruptcy petition by invoking arbitration agreement
Sit Kwong Lam v Petrolimex Singapore Pte. Ltd [2019] HKCA 1220
19. Trustees in Bankruptcy found not in breach of their duties to act with reasonable care and skill, as they had limited funding available to them at the timed
Lau Chun Ming v Deloitte Touche Tohmatsu (A Firm) [2019] HKCFI 2722