Date of Judgment: 6 March 2025

Coram: Hon Cheng J

In this case, the Court of First Instance affirmed the principle that a contractual termination clause does not necessarily oust termination at common law for repudiatory breaches. The ultimate question essentially boils down to one of contractual interpretation, where the court asks whether the termination clause is worded so as to catch all breaches of contract and to exclude the right to terminate at common law.

Date of Judgment: 17 March 2025

Coram: Mr. Recorder Suen, SC

This case concerns a former director’s and a shareholder’s application for inspection of various accounting records pursuant to sections 373 – 378 and 740 of the Companies Ordinance (Cap. 622). In considering whether the application is made in good faith and for a proper purpose, the CFI held that the provisions in a shareholders’ agreement might form an important factual matrix or context against which the Court would assess such a request.

Date of reasons for decision: 19 March 2025

Coram: Chief Justice Cheung, Mr Justice Ribeiro PJ, Mr Justice Fok PJ, Mr Justice Lam PJ and Mr Justice Allsop NPJ

The decision reinforces the principle that damages for breach of contract must reflect actual loss. Subsidiaries acting as bond-issuing vehicles cannot claim substantial damages for breaches affecting third-party bondholders, who retain separate rights to pursue claims. The ruling also provides guidance on interpreting liquidity clauses, affirming that contractual mechanisms (like loans) must align with the parties’ agreed terms.

Date of Judgment: 21 March 2025

Coram: Hon Kwan VP, Chow JA and Anthony Chan J

The CA dismissed the appeal of Century Venture Holdings Limited (“Century Venture”), upholding the CFI’s ruling that its “Commissioned Claims Recovery Service Agreement” with Chinachem Financial Services Limited (“Chinachem”) had expired by its terms and was not renewed as required by an express term. The Court also affirmed the agreement’s unenforceability due to illegality, finding that Century Venture’s conduct, including improper attempts to influence judicial proceedings in Mainland China, violated public policy in both Mainland China and Hong Kong.

Date of decision: 25 March 2025

Coram: Hon Harris J, President of the Competition Tribunal

The Hong Kong Competition Tribunal ruled on an enforcement action against Prudential Hotel (BVI) Limited (“Prudential”) for facilitating a price-fixing arrangement between Gray Line Tours of Hong Kong Limited and Tink Labs Limited, which violated the First Conduct Rule (the “FCR”). The Tribunal rejected the Competition Commission’s proposed “lump-sum” penalty calculation method, upholding the employment of the structured methodology based on Prudential’s turnover linked to the contravention, resulting in a less-significant penalty of HK$104,000.

Date of reasons for judgment: 25 March 2025

Coram: Hon Au-Yeung J

Facing conflicting authorities, the Court ruled that a vesting order under section 52(1)(e) of the Trustee Ordinance (Cap. 29) is not applicable in cases involving a “category 2” (remedial) constructive trust, such as email fraud, where the defendant is not a “true trustee” but a wrongdoer holding funds for the victim, emphasizing that vesting orders are intended for institutional, not remedial constructive trusts, and garnishee proceedings should be pursued for the purpose of recovery.