In extension of our expertise in advising educational institutions, and in dedication of our service to 10 schools sponsored by The Evangelical Lutheran Church of Hong Kong, our Partner Mr. Mathew Liu gave a seminar talk to teachers at one of the member schools, titled ‘Professionalism and Legal Responsibilities of Teachers’, followed by a roundtable with Senior Graduate Masters/Mistresses (SGM) with fruitful exchange on practical legal questions in school contexts.
We welcome Mr. Qi-Yang Chang and Mr. Frank Oh, Partners of Wong Partnership LLP from Singapore. We enjoyed a valuable exchange on the developments across jurisdictions and dispute resolution practices.
Mr. Tam Wai Choi, Tommy, has retired as Partner and remained as Consultant of the firm from 1 July 2025.
Mr. Tam has dedicated his whole legal career to the firm since joining as a trainee solicitor in 1987. The Partners extend their heartfelt thanks to Tommy for his invaluable contribution to the success of the firm throughout the years.
Our Senior Partner hosted a memorable private dinner for Mr. and Mrs Tam. Please see photo below.
Our Partners Jenny Wong and Mathew Liu have been admitted as Fellow Members of Hong Kong Institute of Arbitrators (HKIArb).
We advised a very famous Hong Kong entrepreneur on a consignment agreement in respect of an artwork worth of over USD 25 million. Our corporate & commercial partner Joseph Wong handled the work.
Art and cultural property law is receiving huge attention in recent years due to the quick appreciation in investment value of art work and the coming on board of famous modern mainland Chinese painters. There are legal intricacies surrounding the acquisition of arts, financing, intellectual property protection, distributions of art legacies within high-net-worth families and family offices, and the resolution of potential disputes. In this regard, we have inter-disciplinary expertise and provide practical, solution-oriented advice.
We have recently successfully resisted an application for setting aside an allotment of company shares of a family asset-holding vehicle (the “Company”) in HCMP 1408/2024.
By way of case background, upon the father’s direction and unanimous approval of surviving shareholders of the Company, shares were allotted to a family member as a new shareholder. One of the existing shareholders retracted his position 3 years after the event, accusing that the allotment was without consideration and against the Company's interests and hence liable to be set aside for it was an exercise of the Company’s powers for an improper purpose.
The Judgment, delivered by Deputy High Court Judge Gary C C Lam, contains a multifaceted analysis on the prevailing law of allotment of shares under the Companies Ordinance (Cap. 622) (“CO”) and the Articles of Association of the company (the “Articles”), particularly in a family context. For practitioners’ easy reference, the following is a nutshell summary of how each legal proposition is analyzed and rejected.
Allotment at a discount prohibited?
1. As the Judge put it, after CO has abolished the nominal or par value attached to shares, there cannot be any discount as such because there is no longer any reference value for considering whether or not an allotment is at a discount.
2. The Judge also rejected the Plaintiff’s submission that section 147 of the CO prohibits allotment at a discount generally.
3. Further, section 170 of CO allows bonus shares to be allotted with or without increasing share capital.
Bonus shares for existing shareholders only?
4. The Plaintiff alleged that bonus shares can only be allotted to existing shareholders. However, the Judge noted that there is nothing in CO which supports this proposition. Rather, bonus shares are frequently issued to employees who are not necessarily existing shareholders.
5. The Plaintiff then tried to rely on section 280 of CO which allegedly deals with bonus shares to employees. This was again rejected, as section 280 is an exemption from prohibition of financial assistance, while section 277(b) states that the prohibition does not apply to the allotment of bonus shares.
6. The Plaintiff also attempted to rely on various provisions in the Articles. Upon a detailed review, none of the provisions take effect to alter the position that the allotment of shares at nil considerable is permissible so long as all existing shareholders and directors agree.
Resolutions Binding
7. The starting point is that the Plaintiff, as both director and shareholder of the Company, signed the relevant resolutions approving the allotment. This is reinforced by contemporaneously recorded conversations.
8. When a person signs a document purporting to have legal effect, he is held to the document even not knowing the contents and terms, and is estopped from denying his approval of the resolutions.
9. The Plaintiff accused that the late father i.e. one of the then existing shareholders and directors was mentally incapable of signing the resolutions. This was rejected as the evidence relied on by the Plaintiff could bring the Plaintiff nowhere in discharging his evidential burden.
10. The Plaintiff also accused that the resolutions were invalid as one of the existing shareholders i.e. the mother had passed away. As the evidence unveils, all the beneficiaries of the mother’s estate assented to the resolutions, hence the Duomatic principle applies. Alternatively, the irregularity principle applies as the surviving shareholders who gave approval accounted for 75% of the shareholding.
Nil Consideration = Improper?
11. As peripheral arguments, the Plaintiff tried to invalidate the resolutions saying it was approved after the allotment of shares, and without a physical meeting.
12. These bring the Plaintiff to his last key allegation, that is, the allotment of shares at nil consideration would be to destroy the pre-existing shareholding proportions by making our client the majority shareholder, hence for an improper purpose.
13. In a family context, the best interest of the Company is determined by the family. In this regard, the Judge finds our client’s evidence overwhelming, that the late Father had the final say and all existing shareholders consented to the allotment. Even in a pure commercial context, if all shareholders agree to have their shareholdings altered, the Court would not invalidate the resolution.
As illustrated above, this is a classic situation where the retracting shareholder desperately exhausted all possible excuses, which are held unsustainable.
We assisted our client and witnesses to put forward evidence spanning decades on how decisions were made within the family and the Company, how the allotment was in line with the family's interests especially the intent of the late father. Leveraging from our experience in shareholder and board disputes in both commercial and family contexts, we also worked closely with Counsel team in formulating legal submissions against the Plaintiff's legal propositions. These efforts bear fruit as the Judge dismissed the application and rejected all legal and factual arguments raised by the Plaintiff. The father’s wish was upheld; the family’s decision remained intact.
This case was led by our Senior Partner Mr. Peter Sit, assisted by Partner Mr. Mathew Liu, Senior Associate Ms. Theresa Law and Associate Ms. Shirley Yu.
Please refer to the full judgment at https://legalref.judiciary.hk/lrs/common/search/search_result_detail_frame.jsp?DIS=168899&QS=%2B&TP=JU.
The Companies Judge annulled a bankruptcy order against our client, concerning a judgment debt exceeding HK$90 million. This ruling, under HCB 3372/2024, addresses key issues related to jurisdiction and due process in bankruptcy proceedings.
The bankruptcy petition was issued against our client, who resides in Mainland China and Australia. A review of the court documents shows that the bankruptcy order should never have been made. Key reasons include:
1. There is no jurisdiction to grant the bankruptcy order as our client was not an ordinary resident in Hong Kong and had not been in Hong Kong for a single day since almost three years preceding the petition.
2. The substituted service order for the bankruptcy petition should be set aside for material non-disclosure e.g. the petitioner did not disclose our client’s foreign addresses known to the petitioner.
3. The petitioner failed to do all reasonable steps to bring the relevant statutory demand to our client’s attention.
In open court, The Honourable Madam Justice Linda Chan granted our client’s application, ruling that the bankruptcy order shall be annulled. The Judge emphasized that the bankruptcy order should not have been made in the first place, and that the status quo ante shall be restored.
Consequently, costs arising from the bankruptcy order, as well as fees and expenses incurred by the trustees and the Official Receiver, will not be charged to our client. The learned Judge also approved our legal costs in full, expressly that our claimed amount is reasonable.
This case is led by our Partner Mr. Mathew Liu, assisted by our Litigation Associate Ms. Crystal Yip. Our Litigation Department has extensive experience representing both petitioners and respondents as well as insolvency practitioners as liquidators in bankruptcy and winding-up proceedings, frequently attending the Companies Court matters.
Our Partner Sidney Ho has been appointed as a Member of the Property Committee of the Law Society of Hong Kong.
The Property Committee performs the following functions :-
1. To promote and advise the profession on good conveyancing practice.
2. To advise the Standing Committee on Standards and Development on means of improving the competence of and supervision of unqualified persons in conveyancing transactions.
3. To determine applications for waiver or modification of the standard forms of Sale and Purchase Agreement.
4. To determine applications for waiver of the Guidelines for Deeds of Mutual Covenant.
5. To respond to enquiries and make determination on the interpretation and application of Rule 5C of the Solicitors' Practice Rules.
6. To review, consider and comment on bills and legislation affecting or relevant to the conveyancing practice, including the Land Titles Ordinance (Cap. 585), its rules and regulations and proposed amendments thereto.
The functions of the Property Committee are pivotal as the conveyancing profession drives reformative developments in multiple key components in the real estate market. It is hoped that our firm’s experience will bring meaningful contributions. Our firm has an established conveyancing practice involving first-hand residential properties for developers and statutory bodies, block acquisition for re-development, as well as many major private transactions with complexities involved. Mr. Ho’s appointment in the Property Committee is an extension of our firm’s dedication to serving the profession and Hong Kong as a whole.
We filed a bankruptcy petition against an individual employer (“Madam So”) for outstanding wages owed to her employees upon instructions from the Protection of Wages on Insolvency Fund Board (“Fund Board”) on 18 July 2023. The bankruptcy petition was strenuously contested by Madam So and adjourned before the Judge for substantive hearing.
At the substantive hearing, the first instance Judge fully accepted our submissions that there is no bona fide dispute of debt on substantial grounds and no genuine cross-claim. The debt was a judgment debt pursuant to an Award of the Labour Tribunal, which Madam So had made no attempt to set aside or appeal against throughout. As Madam So expressed clearly that she had no intention to repay the petitioning debt, the Judge granted a usual Bankruptcy Order against Madam So on 2 May 2024. Please refer to the Reason for Decision handed down on 29 May 2024.
Madam So then appealed against the Bankruptcy Order. Recently, her appeal was dismissed by the Court of Appeal as she had made no valid grounds of appeal, whether error of fact or error of law. In any event, the Court of Appeal is satisfied with the detailed analysis of the Judge at the lower court when he exercised the discretion to grant a Bankruptcy Order. The Court sees no good reason to interfere with the Bankruptcy Order. Please refer to the Judgment handed down by the Court of Appeal on 26 March 2025.
On a separate note, since the granting of the Bankruptcy Order, Madam So has entered into our office on three different occasions to protest and caused harassment, nuisance and/or disturbance, and refused to leave. To ensure the safety and convenience of our clients, guests and occupiers at our office at all times, our firm acted swiftly and assertively by applying for an Injunction Order against Madam So and the judge is satisfied that an injunction is warranted and to be granted. Please refer to the Injunction Order dated 28 February 2025.
The injunction application is led by our Partners Mr. Sidney Ho and Mr. Mathew Liu. The bankruptcy proceedings are led by our Associate Ms. Winnie Hui. As a panel law firm of the Fund Board, we have handled over 250 cases in the past two years involving outstanding wages. We take pride in serving the public interest through our specialized insolvency expertise. We strive to provide assistance to employee even at times of facing unreasonable and fierce opponent.
We advised the controlling shareholder of HK Asia Holdings Limited (港亞控股有限公司) (stock code: 1723) (the “Company”) in relation to the disposal of his controlling stake in the Company, and also advised the Company as the offeree company regarding the mandatory unconditional cash general offer made on behalf of the new investors to acquire the entire issued share capital of the Company pursuant to the Hong Kong Code on Takeovers and Mergers (the “Offer”). The deal also involved a proposed issue of convertible notes by the Company to the new investors. The Offer was successfully closed on 14 March 2025.
The Company, together with its subsidiaries, is principally engaged in the wholesale and retail sales of pre-paid products (such as subscriber identification module (SIM) cards and top-up vouchers) in Hong Kong, and intends to explore investment opportunities relating to cryptocurrencies and blockchain projects following the close of the Offer.
Our ability to steer through intricate legal and regulatory issues involved in public M&As, along with our seamless coordination with other professional parties and swift responses to regulators, have been pivotal in bringing this deal to a close within a tight timeframe. Building on our role in advising the Company on its successful listing on the Main Board of the Hong Kong Stock Exchange in 2018, we are pleased to have supported our valued client in achieving yet another significant milestone as it embarks on a new chapter of development. The deal underscores our commitment to providing strategic guidance and unwavering support to help our clients navigate the opportunities and challenges that lie ahead.
Our team was led by partner Mr. Simon Siu and assisted by senior associate Mr. Olson Lai, associates Mr. Marco Chong and Ms. Sherrie Ma, and trainee solicitors Mr. Andes Leung and Ms. Janice Leung.
We successfully resisted an application for setting aside the registration of a Mainland judgment in the Court of Hong Kong.
The underlying dispute concerns the defendant’s engagement for our client, the plaintiff, to organize a World Electronic Sports Games in Suzhou, PRC. The Games were held, but the defendant defaulted in payment. The Intermediate People’s Court of Suzhou handed down a judgment (the ,“Mainland Judgment”) ordering the defendant to pay a sum above RMB 3 million. Our client registered the Mainland Judgment in the Court of Hong Kong for cross-border enforcement purposes.
To avoid enforcement in Hong Kong, the Defendant raised 5 grounds in support of the set aside application. All 5 grounds were rejected by Deputy High Court Judge Alan Kwong, who held that:-
1. There was a choice of Mainland court agreement within the meaning of Mainland Judgments (Reciprocal Enforcement) Ordinance (Cap. 597) (the “Ordinance”).
2. The Mainland Judgment involves compensation, and not a penalty of punitive nature.
3. The Defendant was indeed summoned to appear before the Mainland Court, and documents were effectively served.
4. The allegation for material non-disclosure is not made out.
5. It is undesirable to de-register and re-register an order just to deal with a clerical error in which the slip rule applies.
There are three takeaways.
First, clients who navigate across options to enforce Mainland judgments may consult lawyers in Hong Kong in order to benefit from the avenues provided under the Ordinance.
Meanwhile, as parties who are subject to Mainland judgments may wish to raise a wide array of complaints during the enforcement process, it is strategically important to differentiate main points of attack against peripheral issues.
Finally, sports law has become a rapidly evolving area of legal practice in Hong Kong. As legal practitioners explore how the legal system can contribute in amicable resolutions of sports-related disputes, let us not forget that the integral function of the Court’s adversarial system continues to play a pivotal role in resolving such disputes judicially.
This case is led by our Partner Ms. Jenny Wong, assisted by Trainee Solicitor Ms. Chloe Fan.
Our Partner Mr. Sidney Ho was appointed as a Member of the Continuing Professional Development (“CPD”) Committee of the Law Society of Hong Kong.
The CPD Committee performs a wide range of functions with regard to the CPD Scheme, i.e. formulate and review policies, procedures and guidelines, monitor implementation and administration, recommend for revision or reform, and determine applications for exemption. The CPD Committee also reviews the Mandatory Practice Management Course and the Risk Management Course.
