Date of Judgment: 2 July 2025

Coram: Mimmie Chan J

This was a dispute between liquidators of the company and the third wife and daughter of the late Mr Lim Por Yen. The Court considered whether a 25-year-old sale of the company’s entire mainland shareholding was at undervalue and breached fiduciary duties. The Defendants argued there was no such dishonest breach of duty as alleged and in any event the transaction had unanimous shareholder approval, invoking the Duomatic principle. The Court held that the principle applies only if the transaction is intra vires, honest, and approved in good faith. Finding the Defendants relied on Mr Lim’s decision without knowledge of undervalue or lack of consideration, the Court found no dishonest breach.

Date of Judgment: 3 July 2025

Coram: Recorder Abraham Chan SC

The Court ordered repayment of HK$2,330,000 interim dividends paid to former directors while the company was insolvent. In so ordering, the Court confirmed directors’ liability to a company’s creditors once insolvency is established, aligning with UK Supreme Court decision in BTI 2014 LLC v Sequana SA [2022] UKSC 25.

Date of Judgment: 17 July 2025

Coram: G Lam and Chow JJA

The Court of Appeal considered an application for leave to adduce new evidence in defendants' appeal, including criminal judgments from the Liaoning Benxi Intermediate and Higher People’s Courts, and two emails with attachments. The Court permitted the emails to be placed before it for consideration without prejudice to admissibility or weight. However, applying the Hollington principle, the court held that foreign criminal judgments are prima facie inadmissible unless estoppel applies. While factual evidence within such judgments may be considered, the Court emphasised it was the defendants’ responsibility to specify admissible portions, and it would not extract relevant evidence from the judgments on their behalf.

Date of Decision: 18 July 2025

Coram: Mimmie Chan J

By this decision, the Arbitration Court reminded practitioners that parties may not unilaterally list a new summons for hearing on the same day as an earlier summons on a different matter, to avoid disrupting court proceedings. Stressing the Arbitration Ordinance’s aim of speedy dispute resolution, the Court warned against interlocutory disputes and emphasised focusing on substantive issues. Applications for security for costs risk refusal if delayed without good reason, and unwarranted applications may incur costs penalties, including against legal counsel.

Date of Judgment: 31 July 2025

Coram: Anthony Chan J

In a novel decision, the Court allowed a winding-up petition based on a Labour Tribunal award for unpaid wages despite the company’s genuine cross-claims. The Court confirmed that section 32 of the Employment Ordinance constituted “special circumstances” for the Court to exercise its discretion in this way. In so doing, the Court confirmed that section 32 offers the unique protection for wage claims and held that delaying payment through cross-claims would undermine the law’s purpose.