Ku Kin Pong v. Yat Chun Expand Ltd and Another
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[2026] HKCFI 1765 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE COMPANIES (WINDING-UP) PROCEEDINGS NO 41 OF 2024 __________________
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________________ D E C I S I O N ________________ I. INTRODUCTION 1.Before me are:-
II. BACKGROUND 2.The 1st Respondent (the “Company”) is a company incorporated in Hong Kong. The registered shareholders are the Petitioner and the 2nd Respondent. There is dispute over whether they are equal shareholders or whether the 2nd Respondent holds 2 shares while the Petitioner holds 1 share only. 3.At the material times, one Elitevalue Limited (“Elitevalue”) was the tenant of Man Sha Lok Wui (“Man Sha Lok Wui”) (an unincorporated association) in respect of Lot 204RP in DD 105 (“Lot 204RP”). Elitevalue, in turn, sub-let Lot 204RP to the Company. The Company, in turn, sub-sub-let part of Lot 204RP to one Ocean First Logistics Limited (“Ocean First Logistics”) and the remaining part of Lot 204RP to one Dragon Container Services Limited (“Dragon Container”). 4.While Man Sha Lok Wui was the landlord of Lot 204RP vis-à-vis Elitevalue, it was, however, not the registered owner of Lot 204RP. The registered owner of Lot 204RP was, instead, one Man Shui Tong Wui (“Man Shui Tong Wui”), another unincorporated association. 5.On 23 June 2023, Man Shui Tong Wui entered into a tenancy agreement with Kenwell Limited (“Kenwell”) in respect of Lot 204RP. III. THE PETITIONER’S CLAIM IN THE RE-AMENDED PETITION 6.The Petitioner’s claim in the Re-Amended Petition is, in summary:-
7.The Petitioner seeks a winding up order as the only substantive relief. IV. THE 2ND RESPONDENT’S DEFENCE IN THE POINTS OF DEFENCE 8.The 2nd Respondent’s defence in the Points of Defence is, in summary:-
V. ISSUES 9.Broadly, the issues as crystalised by the pleadings are:-
VI. PROCEDURAL BACKGROUND 10.CMC directions were given. Discovery of documents had taken place, and shortly before the parties were to file witness statements in February 2025, the Petitioner filed the Amendment Summons on 24 January 2025. 11.After the witness statements were filed in February 2025, no progress had been made. On 9 February 2026, the 2nd Respondent filed the Striking Out Summons (which is a Re-Amended Summons originally filed on 24 January 2025, subsequently on 11 September 2025 and finally on 9 February 2026 in its current form). 12.No further CMC directions have been sought or given. Also, no milestone dates have been fixed. In respect of the two Summonses before me, neither party, rightly in my view, takes any point on delay. VII. THE P’S AMENDMENT SUMMONS 13.By the P’s Amendment Summons, the Petitioner seek to introduce amendment by adding §§15A-F:-
14.First, the settlement agreement (the “Settlement Agreement”) in §15B is, in my view, irrelevant and thus should be struck out for the following reasons:-
15.For §§15A and C-F, Mr Leo Remedios, leading Mr Alvin Cheng, counsel for the 2nd Respondent, submits that the plea is, according to the Petitioner’s case, “grave misconduct” as pleaded in 15A, and when reading this against the Points of Reply §13 which pleads to “fraud” for the same or similar event in §§15A and C-F, as well as the Witness Statement of the Petitioner which also uses the word “fraud” to describe the events, the plea is a plea of fraud. Mr Remedios submits that, since this is a plea of fraud, sufficient particulars should be pleaded but there are none, and so these paragraphs should be struck out. 16.I agree that insofar as it is regarded as a plea of fraud, the particulars, if any, are insufficient. However, “fraud” is used in the Points of Reply and the Witness Statement, but not in the proposed amendment in the Amendment Summons. Instead, “secret profit” is used in §15E, which in my view accurately describe the events pleaded in §§15A and C-F. Insofar as there is allegation of fraud in the Points of Reply and Witness Statement not supported by particulars, such allegation may be struck out, but this does not mean that §§15A and C-F should also be. 17.Mr Remedios refers me to the tenancy agreement between Glory Creative and the Company. He highlights that:-
18.However, the real complaint about secret profit in the proposed amendment is not just that the 2nd Respondent, through Glory Creative, received rents from the Company without the Petitioner’s knowledge. The real complaint about secret profit in the proposed amendment is that without the Petitioner’s knowledge, the 2nd Respondent persuaded Elitevalue not to renew the sub-tenancy with the Company (§15C(a)) and to grant a subtenancy to Glory Creative (§15(b)). Therefore, even assuming that the Petitioner knew that the 2nd Respondent was a shareholder of and otherwise somehow interested in Glory Creative, it does not follow that he knew that the 2nd Respondent was doing all such persuasion to Elitevalue behind his back to the prejudice of the Company’s interests. As such, with respect, I disagree with Mr Remedio’s submissions that the secret profit allegation is bound to fail and/or made not bona fide. 19.In the circumstances, I give leave for the amendment per §§15A and C-F of the draft Re-Re-Amended Petition. 20.As a result, an additional issue between the parties is whether without the Petitioner’s knowledge, the 2nd Respondent persuaded Elitevalue not to renew the tenancy with the Company and to grant a tenancy to Glory Creative, and if so, whether the 2nd Respondent wrongfully made profits from such transactions. VIII. LEGAL PRINCIPLES IN RELATION TO STRIKING OUT 21.The legal principles in relation to striking out are well established. I only have to state the following for the present purpose:-
IX. THE PETITIONER’S WITNESS STATEMENT A. §§5-6 (last part), 7(b), (c) and 7 last three sentences 22.For §§5-6 (last part), 7(b), (c) and 7 last three sentences of the Petitioner’s Witness Statement, they are all matters in support of the quasi-partnership. Although they are relevant to the issue of quasi-partnership, they are not pleaded in the Re-Amended Petition, and therefore, the 2nd Respondent has not been given a chance to reply in the Points of Defence and the Witness Statement. 23.Mr Remedios submits that these are matters that should have been pleaded in the Re-Amended Petition. Mr Chong submits that the matters are now in the Petitioner’s Witness Statement, and the 2nd Respondent would be able to deal with them or has already dealt with them in the evidence, and to require the Petitioner to plead the matters in the Petition is a waste of time and costs. In fact, similar submissions are made on other parts sought to be struck out. 24.In my view, these matters should have been pleaded in the Re-Amended Petition. Mr Chong’s submissions may have force if the 2nd Respondent has proceeded on the basis that these matters are part of the Petitioner’s case, for example, by applying to file another round of witness statements to respond to these matters. However, the 2nd Respondent has not done that, but instead, in the submissions, makes it clear that he does not accept that the matters in the evidence would define the scope of dispute. Equally important, in my view, is that if the Petitioner would be able to rely on the matters in the evidence at this stage to define the scope of dispute, there could be no end as to, and the 2nd Respondent may well be left to guess, what else in the evidence would subsequently be relied upon to further define the scope of dispute. For example, evidence on the various matters is put into the Witness Statement, but it is not at all clear whether these matters are relied upon as particulars in support of the quasi-partnership or some other issues. 25.It remains for me to say that one way to deal with such striking out application is, usually at such a relatively early stage of proceedings, to amend the pleadings by pleading these matters or provide voluntary particulars as to such matters (which would, but for the absence of pleadings, be relevant) mentioned in the evidence. However, nothing of that sort has been done, despite the 2nd Respondent’s stance made clear by way of the striking out application itself and in the submissions that he would not agree that the evidence would be used to define the scope of dispute. 26.Therefore, in my view, these paragraphs should be struck out. B. Heading (B) & §§8-18 (1st six lines) and 19 27.Heading (B) & §§8-18 (1st six lines) and 19 of the Petitioner’s Witness Statement is about the Settlement Agreement and the arrangement extraneous to the Settlement Agreement. For the Settlement Agreement, I have already explained above why it is irrelevant. For the extraneous arrangement, it is not pleaded anywhere in the pleadings, and thus is also irrelevant. 28.In the circumstances, these parts should be struck out. C. Parts of §18 29.Those parts of §18 of the Petitioner’s Witness Statement sought to be struck out is concerning the extraneous arrangement, which is, as mentioned above, not pleaded. These parts should be struck out. D. §§20-23 30.§§20-23 of the Petitioner’s Witness Statement is concerning the profit distribution. This is pleaded in §5 of the Re-Amended Petition. I note that there is no dispute that the profit was distributed evenly between the Petitioner and the 2nd Respondent: see Points of Defence §§13-14. Although there is no dispute about the even distribution of profit, because it is something pleaded in the Re-Amended Petition, and the reason for the even distribution (equal partnership) is not the same as that provided by the 2nd Respondent (his deliberate choice but no equal partnership), I think the Petitioner should be permitted to mention all these matters. 31.These paragraphs also contain a complaint that the Petitioner has been denied access the accounting documents of the Company which the Petitioner says would show the profit distribution. These matters are only incidental to the matter about the distribution of profits. I would also allow the same to be in. For the avoidance of doubt, whether these accounting documents should or should not be disclosed for the fair disposal of the matter and/or saving costs is not a matter before me. 32.In the circumstances, I refuse to strike out §§20-23 of the Petitioner’s Witness Statement. E. Heading (E) & §§24-25 33.§24 mentions that after Wong left, he left the same with the partnership and did not retrieve any value of his investment. This is something which should have been pleaded in the Re-Amended Petition to explain why on paper, upon Wong’s leaving, Wong’s share was transferred to the 2nd Respondent, something which would on the face of it contradict the Petitioner’s case of equal right to participate pleaded in the Re-Amended Petition and thus should have been set out upfront in the Re-Amended Petition. So that the 2nd Respondent may have his own case about whether Wong left the investment with the partnership or not. However, this has not been pleaded at all. 34.§25 of the Petitioner’s Witness Statement sets out that after Wong left the Company, the value of the interest of the remaining partners, namely, the Petitioner and the 2nd Respondent, “swelled”, as reflected from the equal profit distribution. This equal, “swelled” value may support the equal right to participate. However, again, this is not pleaded. 35.In the circumstances, I strike out Heading (E), and §§24-25. F. §26 (2nd line and last two lines) – 30 36.§26 (2nd line and last two lines) – 30 of the Petitioner’s Witness Statement is, again, concerning distribution of profit and denial of access to accounting documents. For the same reasons given in relation to §§20-23 of the Petitioner’s Witness Statement, I refuse to strike out §26 (2nd line and last two lines) – 30 of the Petitioner’s Witness Statement. G. §32 37.§32 of the Petitioner’s Witness Statement mentions that Wong transferred his share to the 2nd Respondent upon the 2nd Respondent’s misrepresentation. This is not pleaded at all. If this is relied upon in support of the equal right to participate, it should have been pleaded in the Re-Amended Petition, but it is not. If this is not relied upon for this purpose, then it appears irrelevant. 38.Therefore, I strike out §32 of the Petitioner’s Witness Statement. H. §§36 (2nd – 4th lines) & 37 (1st three lines) 39.§§36 (2nd – 4th lines) & 37 (1st three lines) of the Petitioner’s Witness Statement concern the Petitioner’s discovery that Man Sha Lok Wui had no title to Lot 204RP and the Petitioner’s telling the 2nd Respondent about such discovery. These, in my view, are evidence for the pleas in §§8-9 of the Re-Amended Petition. They are relevant, and I refuse to strike out §§36 (2nd – 4th lines) & 37 (1st three lines) of the Petitioner’s Witness Statement. I. §§38 (3rd line onwards), 39, 43-44, 46 40.§§38 (3rd line onwards), 39, 43-44, 46 of the Petitioner’s Witness Statement mention:-
41.Mr Chong submits that these are relevant to why there was irreconcilable difference between the Petitioner and the 2nd Respondent as to the continuation of the tenancy between Elitevalue and the Company. With respect, I am unable to appreciate such submissions and further, I cannot see how these paragraphs are relevant at all. 42.I therefore strike out §§38 (3rd line onwards), 39, 43-44, 46 of the Petitioner’s Witness Statement. J. §§47 and 48 43.§§47 and 48 of the Petitioner’s Witness Statement mention the 2nd Respondent’s inability to call a directors’ or shareholders’ meeting and the 2nd Respondent’s application in HCMP 2299/2023 for calling a shareholders’ meeting. Mr Chong submits that these are in response to the Points of Defence §30(b)(5) that the Petitioner breached his duty in failing to attend directors’ meetings. He apparently submits that it was in the first place that the 2nd Respondent was unable to call any meeting. Such matter, in my view, appears to be relevant. 44.However, the parts sought to be struck out are the Petitioner’s own interpretation of HCMP 2299/2023. Insofar as necessary, disclosure of a copy of Harris J’s decision of 20 March 2024 ([2024] HKCFI 1119) in HCMP 2299/2023 would be sufficient. Any Petitioner’s own interpretation of the matter is his opinion, which should be struck out as irrelevant. K. §49 45.§49 of the Petitioner’s Witness Statement concerns, again, the denial of access to accounting documents that would show distribution of profits. For the reasons given for §§20-23 of the Petitioner’s Witness Statement, I refuse to strike out §49. L. Heading (B) and §§50-53 46.Heading (B) and §§50-53 of the Petitioner’s Witness Statement is in line with §§12-13 of the Re-Amended Petition. Mr Remedios’ complaint is that the figures mentioned in §50 of the Petitioner’s Witness Statement is not pleaded. The issue is whether the payments should have been made at all, rather than the amount. In this sense, the figures are evidence only. The 2nd Respondent does not have to respond to the figures specifically; rather, the 2nd Respondent has to respond to whether such payments should have been made in the first place upon the 2nd Respondent’s representation that he was the owner of the relevant land lots pleaded in §§12-13 of the Re-Amended Petition. I make it clear that the introduction of the figures into the evidence does not mean that there is any live dispute over the dollars and cents. 47.In other words, the figures are relevant as evidence, but the figures per se are not really in issue. In my view, it would be too artificial to strike out the figures only. In the circumstances, I refuse to strike out §§50-53 of the Petitioner’s Witness Statement. M. §§54-56, 58-63 48.§§54-56, 58-63 of the Petitioner’s Witness Statement are in line with §§15A and C-F of the Re-Re-Amended Petition, except that the last part of §60 (“I have been advised by my legal representative and verily believe that this constituted fraud… loss and damages to me and the Company as well”) is, first, opinion, and second, scandalous in that no proper particulars of fraud can be found, whether in pleadings or in evidence. 49.In the circumstances, I strike out this part of §60, and refuse to strike out the other paragraphs and the remaining part of §60. N. §64 50.§64 of the Petitioner’s Witness Statement states the Petitioner’s knowledge that Ocean First Logistics has not been repaid rental deposits deposited with the Company. This is in line with the Petitioner’s plea that the 2nd Respondent insisted upon the Company’s sub-subletting of Lot 204RP to Ocean First Logistics pleaded in §10(b) of the Re-Amended Petition, and is thus relevant. I refuse to strike out §64. O. §§65-66 (1st two lines) 51.§§65-66 (1st two lines) of the Petitioner’s Witness Statement is related to the Settlement Agreement. Further, the purpose of setting up the Company to take advantage of the Settlement Agreement mentioned in §65 is inconsistent with the plea at §7 of the Re-Amended Petition which does not refer to any Settlement Agreement. For the reason above that the Settlement Agreement is irrelevant and such purpose, not pleaded in any event, is also irrelevant, I strike out §§65-66 (1st two lines) of the Petitioner’s Witness Statement. X. WONG WAI KEUNG’S WITNESS STATEMENT A. §§7-8 (last 4 lines), 9-10 and §§12(b)-19 52.§§7-8 (last 4 lines), 9-10 and §§12(b)-19 of Wong Wai Keung’s Witness Statement are all matters in support of the quasi-partnership. Although they are relevant to the issue of quasi-partnership, they are not pleaded in the Re-Amended Petition. 53.For the same reasons for striking out §§5-6, 7(b), (c) and 7 last three sentences and §§12(b)-19 of the Petitioner’s Witness Statement, I strike out these paragraphs of Wong Wai Keung’s Witness Statement. B. §§20-24 54.§§20-24 of Wong Wai Keung’s Witness Statement is in relation to the Settlement Agreement. For the reason given above that the Settlement Agreement is irrelevant, I strike out §§20-24 of Wong Wai Keung’s Witness Statement. C. §§29-32 55.§§29-32 of Wong Wai Keung’s Witness Statement is, essentially that after Wong left the Company, the 2nd Respondent exerted undue influence or made misrepresentation inducing Wong to transfer his share to the 2nd Respondent contrary to Wong’s intention. These matters are something which would on the face of it contradict or explain the transfer of Wong’s share to the 2nd Respondent in relation to the Petitioner’s case of equal right to participate. Thus, these are matters that should have been pleaded, but are not. 56.In the circumstances, for the same reasons for striking out §§5-6, 7(b), (c) and 7 last three sentences of the Petitioner’s Witness Statement, I strike out §§29-32 of Wong Wai Keung’s Witness Statement. XI. CHAN KWAI KWAN’S WITNESS STATEMENT A. §§4, 6-9 57.§§4, 6-9 of Chan Kwai Kwan’s Witness Statement is in relation to the Settlement Agreement. As explained above, the Settlement Agreement is irrelevant and thus these paragraphs are irrelevant. I strike out these paragraphs. B. §§12, 14-21 58.§§12, 14-21 of Chan Kwai Kwan’s Witness Statement is, in my view, evidence in relation to §15C of the Re-Re-Amended Petition about the 2nd Respondent persuading Elitevalue not to renew the tenancy with the Company and to grant a tenancy to Glory Creative. Save and except for the first sentence of §16 mentioning Clause 3 of the Settlement Agreement which authorised Chan Kwai Kwan to handle the matters in relation to the relevant land lot, which has not been pleaded as the basis for the 2nd Respondent’s authority to handle the matters, I refuse to strike out the remaining part of §16 and other paragraphs. XII. POINTS OF REPLY A. §§5(a)-(d), 6, 7, 9, 10, 16(a) and 25 59.§§5(a)-(d), 6, 7, 9, 10, 16(a) and 25 of the Points of Reply are matters in support of the quasi-partnership. These are matters that should have been pleaded in the Re-Amended Petition. For the same reason for striking out §§5-6, 7(b), (c) and 7 last three sentences of the Petitioner’s Witness Statement, I strike out these paragraphs. B. §§13, 16(d) and 24(b) 60.§§13, 16(d) and 24(b) of the Points of Reply are wrongdoings of the 2nd Respondent not pleaded in the Re-Amended Petition at all. These wrongdoings should be pleaded in the Re-Amended Petition. Even if Mr Chong is right in submitting that these are simply conclusions drawn on the matters already pleaded in the Re-Amended Petition, where the conclusions would be relied upon as part of the Petitioner’s causes of action, these should be pleaded in the Re-Amended Petition. If the conclusions would not be so relied upon and those were just conclusions on the facts already pleaded, then there would not be any need to plead the conclusions in the Points of Reply. Either way, these matters should not be in the Points of Reply. 61.Therefore, I strike out these paragraphs. C. Parts of §18 62.Those parts of §18 of the Points of Reply sought to be struck out are about the affirmation filed in HCMP 2117/2023. §18 is in reply to the Points of Defence plea at §30(b)(1), (2) and (4) that the Petitioner made an affirmation and provide information to Kenwell in HCMP 2117/2023. §18 of the Points of Reply say that the affirmation was filed in the Petitioner’s own personal capacity simply setting out the truth, thus effectively saying that the affirmation and the information was provided not in breach of any fiduciary duty to the Company. I think §18 is relevant (although whether I agree that this constitutes a valid reply to the allegation of breach of fiduciary duty is another matter), and so I refuse to strike it out. XIII. CONCLUSION 63.In the circumstances, on the P’s Amendment Summons, I make the following order:-
64.On the R2’s Striking Out Summons:-
65.For the summary assessments, I order that the receiving party shall lodge and serve a statement of costs within 3 days from today, the paying party shall lodge and serve a list of objections within 3 days thereafter, and the summary assessments shall be conducted on paper thereafter. 66.The parties are reminded of Peter Ng J’s Order made on 6 February 2025 in relation to the directions to be complied with upon the determination of the P’s Amendment Summons and the R2’s Striking Out Summons. 67.It remains for me to thank counsel for their assistance.
Mr K.M. Chong, instructed by Samuel Chow Solicitors, for the Petitioner The 1st Respondent is not represented and absent Mr Leo Remedios, leading Mr Alvin Cheng, instructed by Alex To & Co. Solicitors, for the 2nd Respondent The Official Receiver is absent | ||||||||||||||||||||||||||||||||
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