PAGANO, MARIO v. SAPONARO, CLAUDIO AND OTHERS

HCMP 1953/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1953 OF 2015

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IN THE MATTER OF section 633 of the Companies Ordinance (Cap 622)
and
IN THE MATTER OF Brightex Corporation Limited

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BETWEEN
PAGANO, MARIO Petitioner
and
SAPONARO, CLAUDIO 1st Respondent
ALPHA CONCEPT LIMITED 2nd Respondent
BRIGHTEX CORPORATION LIMITED 3rd Respondent
____________

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Before: Hon Harris J in Chambers

Date of Hearing: 21 June 2016
Date of Decision: 21 June 2016

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D E C I S I O N

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1. I have before me an amended originating summons dated 12 August 2015 issued by the applicant seeking a declaration that he is absolutelyentitled to the one issued share currently registered in the name of the 2nd respondent in the 3rd respondent. The 2nd respondent is owned and controlled by the 1st respondent.

2. The applicant’s claim relies on a written declaration of trust dated 17 October 2012 which on its face provides quite clearlythat the 2nd respondent holds the share in the 3rd respondent as nominee of the applicant, and that the applicant is entitled to all dividends, rights and interests accruing to theshare and that such rights and interests are held on trust by the 2nd respondent for the applicant. The declaration of trust was executed on behalf of the 2nd respondent by the 1st respondent.

3. When the originating summons (prior to its amendment) first came on before me, the 1st respondent was legally represented and sought leave to file evidence to contest the application on the grounds that he had acquireda beneficial interest in the share. Subsequently, his solicitors filed their own affirmation exhibiting a draft affidavit of the1st respondent. The 1st respondent’s affidavit was never sworn and filed. The 1st and 2nd respondents’ solicitors came off the record and the 1st and 2nd respondents have taken no further role in the proceedings and did not attend the hearing today contesting the application.

4. In the circumstances it seems to me that the court can properly proceed on the basis that the application is uncontested and thatthe court should make an order which leads to the execution of an instrument of transfer of the share to the applicant and an ancillaryorder providing for the rectification of the 3rd respondent’s register of members.

5. Mr Brewer who appeared on behalf of the applicant reminded me of the Privy Council’s decision in Nilon Limited v Royal Westminster Investments SA[1], in which the Privy Council held that the statutory provision in the British Virgin Islands which provides for a similar procedureto that under which the application before me has been brought (namely Order 85) could only be used for a summary determination ofan applicant’s right to an order for rectification:

“where the applicant has a right to registration by virtue of a valid transfer of legal title, and not merely a prospective claimagainst the company dependant on the conversion of an equitable right to a legal title by an order for specific performance of acontract.” (see Lord Collins at paragraph 51)

6. Mr Brewer brought this decision to my attention when the matter first came on before me, at which time it appeared that the applicationmight be contested and as a result of the Privy Council’s decision, it might be argued that Order 85 was not the appropriate procedureto adopt for the resolution of the applicant’s claims.

7. As matters as have transpired, the application had not been contested. It seems as a result that the decision in Nilon is not relevant. The applicant is entitled to the declaration that it seeks confirming that the declaration of trust has the effectthat it purports to have namely, it provides that the 2nd respondent holds the share on trust for the applicant and also an order for the execution of an instrument of transfer for the conveyanceof the legal title in the share to the applicant.

8. It seems to me that although at the date of this hearing, an instrument of transfer has not yet been executed (and I intend to orderthat it is executed by the Registrar, as it seems inherently unlikely that the 1st respondent, who is in Italy, will do so), in my view the court can still properly proceed on the basis that the position is thatthe applicant has for all practical purposes, a valid transfer of legal title. I will therefore also make an order for rectificationof the 3rd respondent’s register of members. I have been invited to make a gross sum assessment of costs of the proceedings which I do insum of HK$380,000.

(Jonathan Harris)
Judge of the Court of First Instance
High Court

Mr John Brewer, instructed by Dundons, for the applicant

The 1st respondent was not represented and did not appear

The 2nd respondent was not represented and did not appear

The 3rd respondent was not represented and did not appear



[1] [2015] UKPC 2