Disclaimer: These articles do not constitute legal advice and seek to set out the general principles of the law. Detailed advice should therefore be sought from a legal professional relating to the individual merits and facts of a particular case. The photographs included in this document are for decorative purposes only and should not be taken as a depiction of any matter related to the cases summarised. The views and opinions expressed in these articles are solely those of the members authoring them and do not necessarily reflect the official policy or position of Denis Chang’s Chambers, or of any other member or members of Denis Chang’s Chambers.
Insights
This edition of DCC Commercial Digest features a selection of significant judgments released in February 2025. Curated by Matthew Suen, Chris Wong and Eunice Lui. This issue highlights six noteworthy cases, each accompanied by a concise summary. Our aim is to provide valuable insights into recent legal developments and enhance understanding of critical issues in commercial law.
Summary of Cases
Case 1: No fork in the road: commencing a writ action does not preclude the issuing of a statutory demand as a means to seek repayment
VPower Group Holdings Ltd v CRRC Hong Kong Capital Management Co Ltd [2025] HKCFI 551
Date of Judgment: 3 February 2025
Coram: DHCJ Kent Yee
This decision debunks an often-made argument that commencing a writ action would indicate a creditor’s knowledge that there would be factual disputes in a debt claim, and makes it clear that issuing a writ does not preclude a creditor from later issuing a statutory demand to pursue winding-up proceedings.
Case 2: “Deadlock” is not unfair: a warning to unfair prejudice petitioners who seek receivership orders
Vasily Trubnikov v Julimar Management Limited & Ors [2025] HKCFI 575
Date of Judgment: 6 February 2025
Coram: Linda Chan J
In this case, the Companies Judge, the Hon. Linda Chan J, refused to appoint interim receivers for a company despite allegations of unfair prejudice and deadlock between its 50% shareholders. This decision makes clear that “deadlock” while potentially justifying a just and equitable winding-up, does not automatically amount to unfair prejudice under sections 724-725 of the Companies Ordinance. It also serves as a reminder that the Court may be reluctant to disrupt business operations through interim receivership in shareholders disputes, especially where the subject company is a going concern with a buy-out order is sought.
Case 3: The burden of proof lies with the Plaintiff when both parties’ case theories are improbable
CB v Anthorp Brian Drew [2025] HKDC 208
Date of reasons for decision: 14 February 2025
Coram: DDJ David Chan
This case deals with the situation where both the Plaintiff’s and the Defendant’s cases are improbable. The court confirmed that the elimination of one improbable theory does not automatically validate the other, and the Plaintiff must independently discharge her burden of proof.
Case 4: Evergrande’s subsidiary and guarantor Tianji Holdings wound up by Court despite disputes on liability and Tianji Holding’s sole director was ordered to pay costs
In the matter of Tianji Holdings Limited [2025] HKCFI 765
Date of Judgment: 17 February 2025
Coram: Linda Chan J
The Court of First Instance ordered the winding-up of Tianji Holdings, a key subsidiary and guarantor of China Evergrande Group (CEG). In this case, the Court confirmed the requirements of a statutory demand and the threshold which the company must pass when dealing with previous admissions of indebtedness. The sole director of Tianji was also ordered to pay costs for unreasonably resisting the petition.
Case 5: Unfair preference transactions
Chen Yung Ngai Kenneth and Sun Wing Sze (being the joint and several liquidators of Best Year Enterprises Limited) (in liquidation) v Sin Kwok Lam & Anor [2025] HKCFI 741
Date of decision: 24 February 2025
Coram: Mr Recorder William Wong SC
In this case, the Court of First Instance ruled that three payments totalling HK$14.3 million made by Best Year Enterprises Limited (in liquidation) to its sole director, Mr Sin, and a related entity, EPL, constituted unfair preferences under Section 266 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance. The decision highlights the rigorous application of statutory presumptions and evidentiary standard in unfair preference claims, particularly against controlling insiders and connected persons.
Case 6: Postponing commencement of limitation period for deliberate concealment
Sun Tian Gang & Anor v Changchun High & New Technology Industries Development Parent Company & Ors [2025] HKCA 188
Date of reasons for judgment: 26 February 2025
Coram: Hon Kwan VP, Cheung and Au JJA
In this case, the Court of Appeal clarified the application of Section 26 of the Limitation Ordinance in relation to postponing the commencement of limitation period for deliberate concealment. The decision emphasises the objective standard of reasonable diligence in investigation, and reinforces the balance between a plaintiff’s right to pursue claims and the need to avoid prejudice to defendants in cases involving delayed discovery of concealed facts.