Read the full judgment text of HCMP 006440/1998 on BabelCite. This High Court CFI judgment was delivered on 18 February 2000 before Mr Recorder Kotewall, SC.
Civil law – Companies Ordinance (Cap.32) – s.168A petition – unfairly prejudicial conduct – share dilution – resulting trust – purchase-money resulting trust – presumption of advancement – joint and several guarantee – nominee shareholding – family company dispute – Superyield Holdings Limited incorporated 1981 with nominal capital of HK$100,000 divided into 100,000 ordinary shares – deceased Albert Lam Kwong Leung and 2nd respondent Gordon Lam each held one share as registered shareholders and directors – Company held one share in Superyield Construction Company Limited, which owned the Ascot Villa Property at 37-41 Shatin Heights Road, Shatin – Lam Kwan Realty Ltd held the other subscriber share in Superyield Construction – deceased died 15 February 1996 – on 19 January 1998, 2nd respondent caused the Company to allot 9,998 shares to 3rd respondent Jumbo Finance Limited and Superyield Construction to allot 19,998 shares to the 3rd respondent – dilution of deceased's estate's interest to 0.01% in the Company and 0.005% in Superyield Construction – similar dilutions occurred in other family companies – petitioners, the deceased's wife and four children, brought petition under s.168A as persons beneficially interested in the deceased's one share – whether 2nd respondent paid for the Ascot Villa Property – held yes, 2nd respondent alone arranged the funds including an HK$966,000 bank mortgage and paid the balance of approximately HK$34,000, and serviced the loan from rental income and his own funds – whether deceased and his estate held the share in the Company as 2nd respondent's nominee – held yes, both Superyield Holdings Limited and Superyield Construction were beneficially owned by 2nd respondent, with the deceased having no beneficial interest and his role as shareholder and director being merely to comply with Companies Ordinance requirements – effect of deceased's joint and several guarantee of the mortgage loan – held no beneficial interest conferred, as the presumption of advancement applies between father and son, and there was no evidence of actual intention to benefit the deceased – burden of proof in resulting trust claims – court discussed principles from Calverley v Green (1984) 155 CLR 242, Crisp v Mullings [1976] 2 EGLR 103, and other authorities – presumption of resulting trust applies where legal and beneficial title are separated and one party provides purchase money – but where there is evidence of actual intention, the court gives effect to that intention – where some or all of purchase price is borrowed, joint and several liability under the mortgage constitutes a contribution to the purchase – presumption of resulting trust can be rebutted by presumption of advancement in appropriate relationships – petition dismissed – no order as to costs, given the piecemeal and incomplete discovery by the 2nd and 3rd respondents, with material documents only produced shortly before or during trial.
Legal issues: Whether the 2nd respondent paid for the Ascot Villa Property · Whether the deceased/estate held the share in the Company as the 2nd respondent's nominee · Effect of the deceased's joint and several guarantee on his beneficial interest
Outcome: Petition dismissed. The first and fourth agreed issues were answered in the affirmative: the 2nd respondent paid for the Ascot Villa Property, and the deceased's estate held the share in the Company as the 2nd respondent's nominee with no beneficial interest.
Cited by 2 cases