HONG KONG SPECIAL ADMINISTRATIVE REGION.docx

HONG KONG SPECIAL ADMINISTRATIVE REGION.docx

《HONG KONG SPECIAL ADMINISTRATIVE REGION.docx》由会员分享，可在线阅读，更多相关《HONG KONG SPECIAL ADMINISTRATIVE REGION.docx（29页珍藏版）》请在冰豆网上搜索。

HONGKONGSPECIALADMINISTRATIVEREGION

HCA1138/2005

INTHEHIGHCOURTOFTHE

HONGKONGSPECIALADMINISTRATIVEREGION

COURTOFFIRSTINSTANCE

ACTIONNO.1138OF2005

____________

INTHEESTATEOFCHEUNGKUNGHAI,DECEASED

BETWEEN

CHEUNGPUIYUEN1stPlaintiff

CHEUNGPHEICHIET2ndPlaintiff

CHEUNGPOHCHOO3rdPlaintiff

WONGPOHGEAKalsoknownas

CHEUNGPOHGEAK4thPlaintiff

CHEUNGYEECHING5thPlaintiff

CHEUNGPOHLUCKalsoknownas

KWANPOHLUCK6thPlaintiff

CHEUNGPOHCHITalsoknownas

LAUPOHCHITalsoknownas

LAUCHEUNGPOHCHIT7thPlaintiff

CHEUNGPOHCHEOK（suingforandon

behalfoftheEstateofCHEUNGKungHai,Deceased）8thPlaintiff

and

WORLDCUPINVESTMENTSINC.

（incorporatedunderthelawsoftheRepublicofLiberia）1stDefendant

DORANLIMITED

（incorporatedunderthelawsoftheRepublicofLiberia）2ndDefendant

PROFIT-TAKINGCOMPANYINC.

（incorporatedunderthelawsoftheRepublicofLiberia）3rdDefendant

FOURPILLARSINVESTMENTSLIMITED

（incorporatedunderthelawsoftheBritishVirginIslands）4thDefendant

MEGABESTSECURITIESLIMITED

（incorporatedunderthelawsoftheBritishVirginIslands）5thDefendant

CHINLANHONG

（suedasExecutorandTrusteeoftheEstateof

CHEUNGKungHai,Deceased）6thDefendant

CHEUNGKEEWEE

（suedasExecutorandTrusteeoftheEstateof

CHEUNGKungHai,Deceased）7thDefendant

CHEUNGLINWEE

（suedasExecutorandTrusteeoftheEstateof

CHEUNGKungHai,Deceased）8thDefendant

____________

Before:

HonReyesJinChambers

DatesofHearing:

4-8,11&15September2006

DateofJudgment:

22September2006

_______________

JUDGMENT

_______________

I.INTRODUCTION

On2October2000,attheageof84,CheungKungHai（CKH）diedanimmenselyrichman.Remarkably,CKHbuiltuphisfortunedespitethefactthathemerelyhadaprimaryschooleducation,onlyspokeFujianesewithlimitedCantonese,andcouldneitherread,speaknorwriteEnglish.

1.Inhislifetime,CKHmaintained2households.OneconsistedofhiswifeLimBee,hisoffspringbyoradoptedwithher（CheungKwongWai（deceased）,CheungChinChye（deceased）,CheungTheamSiew,CheungPohGeak,CheungPohChoo,CheungYeeChing,CheungPoKam,CheungPohLuck,CheungPohChitandCheungPohCheuk）,andgrandchildrenofthoseoffspring.TheotherconsistedofhisconcubineChinLanHong,hisoffspringbyher（CheungKeeWee,CheungLinWee,CheungYingWai,CheungPohChuan,CheungPohSuanandCheungPohYuen）andgrandchildrenofthoseoffspring.

2.LimBeediedinFebruary1977.ChinLanHong,whomCKHtookasaconcubinein1947,isnowabout80yearsold.

3.Byhiswilldated26July1996CKHappointedChinLanHong,CheungKeeWeeandCheungLinWeeashisexecutors.UnderthewillCKHlefthisestateupontrustforsale.Uponsale,thenetproceedsoftheestatearetobedistributedamongsurvivingmembersofbothCKH’shouseholdsintheproportionsspecifiedinthewill.

4.QuestionshavearisenastopreciselywhatassetsfallwithinCKH’sestatefordistributionamonghisheirs.Inparticular,thereisabitterdisputebetweenCKH’s2householdsabouttheownershipof3 Liberiancompanies（Worldcup,Profit-takingandDoran）.

5.Intheseproceedings,Iprimarilyhavetodeterminewhetherin1985CKHgiftedtheentireissuedsharecapitalofWorldcupandProfit-taking（comprising500shares）togetherwith1ofthe2issuedsharesofDorantoChinLanHong.

6.TheLiberiancompaniesaretheultimateholdingcompaniesofnumerousHongKong-registeredsubsidiarycompanies.Thosesubsidiariesownsubstantialassets（includingrealestateandsharesinlistedcompanies）.BeneficialownershipoftheLiberiancompaniesthusprimafaciemeansbeneficialownershipandcontrolofthesubstantialassetsheldbythesubsidiaries.

7.CKH’shouseholdbyChinLanHong（collectively,theChinfaction）contendthatFourPillars（controlledbyKeeWee,LinWeeandYingWai）currentlyownsWorldcupand1shareinDoran.TheysaythatMegabest（controlledbyChinLanHong）currentlyownsProfit-taking.

8.ItistheChinfaction’scasethatCKHtransferredtherelevantshares（atthattimeallinbearerform）toChinLanHongin1985outofloveandaffectionforherashiswife.Insupportofthiscase,theChinfactionpointstostatutorydeclarationsexecutedbyCKHin11Januaryand10February1996.

9.InJuly1998ChinLanHongsoldtherelevantshares（bythennolongerinbearer,butinregisteredform）toFourPillarsforanominalamount.InOctober2002FourPillarssoldProfit-taking’s500sharestoMegabestfor$8,000,000.

10.ThePlaintiffs（whobelongtoCKH’shouseholdbyLimBee）denythatCKHintendedtotransferanybeneficialinterestintheLiberiancompaniesortheirsubsidiariestoChinLanHongin1985.ItisthePlaintiffs’casethat,althoughCKHmayhavehandedoverbearersharesfortheLiberiancompaniestoChinLanHongin1985,hedidsopurelyforsafe-keepingpurposes.CKHnotmeanChinLanHongtohavemorethanabarelegaltitletothosecompanies.

11.Further,thePlaintiffssaythatbeforeandafterhandingoversharestoChinLanHongin1985（includingtheperiodfollowinghisstatutorydeclarationsin1996）CKHbehavedasiftheLiberiancompaniesandtheirsubsidiarieswhollybelongedtohim.ThePlaintiffspointtosuchconductasnegativingthe1996declarationsthatCKHintendedtomakeapresentofbeneficialinterestsintheLiberiancompanies’sharestoChinLanHong.

12.ThereneverhavingbeenanyrealgiftoftheLiberiancompanies’shares,thePlaintiffscontendthatonCKH’sdeaththebeneficialinterestintheLiberiancompaniesandtheirsubsidiariesformedpartofCKH’sestate.

13.IfIfindthatallorsomepartoftheLiberiancompaniesdidnotbelongtoCKH,Ihavetodecide2subsidiaryissues.

14.ThefirstconcernsthebeneficialownershipoftheassetsheldbytheLiberiancompaniesandtheirsubsidiaries.

15.ThesecondconcernstheamountsduefromCKHtotheLiberiancompaniesatthetimeofhisdeath.

16.TheChinfactionclaimsthat,throughouthislife,CKHwithdrewsubstantialsumsfromtheLiberiancompaniesandtheirsubsidiaries.Suchsumswereinexcess（theChinfactionsays）oftheamountswhichCKHinjectedintothoseentities.Thus,theChinfactionsaysthatonhisdeathCKHowedWorldcup$76,501,395.13;Profit-taking$22,743,584.78andDoran$19,409,347.38.

17.TheLiberiancompaniesacceptthatthesumsduetothemarenolongerrecoverablebecauseanyclaimforsuchdebtswouldbetime-barred.TheydonotnowclaimanythingfromCKH’sestateinrespectofsuchdebtsoranypartofthem.

18.ThePlaintiffsdenythatthedebtamountscalculatedbytheChinfactionarecorrect.ThePlaintiffsinsteadsuggestthat,onaproperaccounting,theLiberiancompaniesoratleastsomeofthemareindebtedtoCKH.

II.BACKGROUND

Thissectionsetsoutbackgroundsfactson4relevanttopics.

19.SectionAintroducestheLiberiancompaniesandtheiractivitiesbothbeforeandaftertheclaimedgiftofbearersharestoChinLanHongin1985.

20.SectionBsetsoutthecircumstancessurroundingthetransferofbearersharestoChinLanHongin1985.

21.SectionCsetsoutthecircumstancesleadingtotheexecutionbyCKHofstatutorydeclarationsin1996.

22.SectionDexplainsthemannerinwhichtheCKHgroupofcompanieskeptaccounts.HereIusetheexpression“CKHgroupofcompanies”merelyasaconvenient,shorthandwayofdenotingthecollectivityoftheLiberiancompanies,thesubsidiariesoftheLiberiancompanies,andcompaniesindisputablyowned（inwholeorpart）byCKH（includingcompaniesassociatedwiththeLiberiancompanies）.

A.TheLiberiancompanies

A.1Worldcup

Worldcupwasincorporatedon30August1984.Itsfirstdirectorswereappointedon21September1984.TheywereCKH（President）,ChinLanHong（Secretary）andCorrineHoh（thewifeofYingWai）（Treasurer）.

23.ByOctober1984CKHheldallWorldcup’s500bearershares.ButheappearsnevertohavedetachedthemfromtheircounterfoilsinWorldcup’ssharecertificatebook.TheshareseachhadaparvalueofUS$1.00.

24.Until2003,noneoftheLiberiancompanieshadanyauditedfinancialstatements.In2003auditedfinancialstatementswerepreparedbyPriceWaterhouseforall3Liberiancompaniesshowingtheirfinancialpositionasat30September2000（justbeforeCKH’sdeath）.

25.Asat30September2000Worldcuphad14subsidiaries（includingPearchgold）.Thosesubsidiariesinturnheldequityinterestsin8associatedcompanies（suchasPearchgold’s49.99%interestinEHingCheungRealty）.

26.Mostofthose14subsidiarieshadbeenacquiredbytheendof1984,longbeforeanyquestionoverWorldcup’sbeneficialownershiparises.TheexceptionsareBest-O-Best,KarigoldandJollifast.

27.Inadditiontothe14subsidiariesjustreferredto,WorldcupalsoheldMiddylandandChaseView.Butthese2companieshadbeendisposedofin1989and1991respectively.

28.AsatSeptember2000,Worldcuphadinvestedonlyabout$9,000inits14subsidiaries.ThislowcapitalisationcannotaccountforthesubstantialacquisitioncostsofassetsheldbyWorldcup’ssubsidiaries.

29.Thus,betweenitsincorporationandSeptember2000Worldcup’ssubsidiarieshadacquiredrealestatecosting$68million,unlistedsharesanddebenturestockcostingover$22millionandlistedsharesinWahHahRealtycostingover$2million.

30.ItappearsfrominvestigationsbyMr. Grimsdick（thePlaintiffs’forensicaccountingexpert）thatinalmosteverycasetheassetsacquiredbyWorldcup’ssubsidiariescamefromCKHhimselforfromaCKH-relatedcompany（asopposedtoanunconnectedthirdparty）.

A.2Profit-taking

Profit-takingwasincorporatedon17July