ET-China.com International Holdings Ltd v Cheung [2021] NSWCA 24

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: ET-China.com International Holdings Ltd v Cheung [2021] NSWCA 24 Hearing dates: 7–9 September 2020 Date of orders: 03 March 2021 Decision date: 03 March 2021 Before: Bathurst CJ at [1]; Bell P at [2]; Leeming JA at [287] Decision: Appeal dismissed with costs Catchwords: APPEALS – appellate review of factual findings – appellate review of credit findings – interaction between contemporaneous documents and witness testimony – whether an adverse credit finding on one aspect of a witness' evidence requires that his or her evidence should be rejected on all issues CORPORATIONS – directors' duties – whether two directors breached their duties in relation to the sale of shares in a subsidiary of the company of which they were directors – whether transfer of shares in subsidiary company in 2012 transferred the beneficial ownership of those shares in all the circumstances of the case – whether shares transferred for nil consideration – whether sale of shares in subsidiary company in 2013 was at a gross undervalue CORPORATIONS – minutes of board meetings – disputed version of minutes – competing versions of minutes does not mean that one version is necessarily false – when party alleging false minutes did not challenge director who signed minutes with that allegation EQUITY – sham transfer of shares – whether beneficial interest in shares passed on registration of share transfer in circumstances where consideration for transfer of shares not paid – whether transfer of shares for nil consideration was a gift – where no intention on the part of directors to give away company property – where plausible explanation supported by context negated any suggestion that shares were intended to be given away TRUSTS – resulting trusts – whether presumption of a resulting trust over property transferred for nil consideration does not apply to personalty or shares Legislation Cited: Evidence Act 1995 (NSW) ss 60, 136 International Transfer of Prisoners Act 1997 (Cth) Uniform Civil Procedure Rules 2005 (NSW) r 51.36(2) Convention on the Transfer of Sentenced Persons (1983) ETS 112 (entry into force 1 July 1985) Cases Cited: Abalos v Australian Postal Commission (1990) 171 CLR 167; [1990] HCA 47 ASIC v Hellicar (2012) 247 CLR 345; [2012] HCA 17 ASIC v Loiterton [2004] NSWSC 172 ASIC v Macks (No 4) [2020] SASC 209 ASIC v Mitchell (No 2) (2020) 382 ALR 425; [2020] FCA 1098 ASIC v Rich (2009) 236 FLR 1; [2009] NSWSC 1229 Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11 Best v Rosamond [2020] NSWCA 90 Biogen Inc v Medeva plc [1997] RPC 1 HL(E); [1996] UKHL 18 Boensch v Pascoe (2019) 375 ALR 15; [2019] HCA 49 Browne v Dunn (1893) 6 R 67 HL(E) Calverley v Green (1984) 155 CLR 242; [1984] HCA 81 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353; [1956] HCA 28 Devries v Australian National Railways Commission (1993) 177 CLR 472; [1993] HCA 78 Equity Nominees Ltd v Tucker (1967) 116 CLR 518; [1967] HCA 22 Evans v McLean (No 2) [1987] WAR 110 Foss v Harbottle (1843) 2 Hare 461; 67 ER 189 Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 George v Bank of England (1819) 146 ER 1089 Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC (Comm) 3560 Gwe v Commissioner of the Australian Federal Police [2020] NSWCA 247 Hamod v New South Wales [2011] NSWCA 375 Hewett v Court (1983) 149 CLR 639; [1983] HCA 7 Hudson Investment Group Ltd v Australian Hardboards Ltd [2005] NSWSC 716 Jarrett v Perpetual Trustee Co Ltd [2007] NSWSC 1231; (2007) 64 ACSR 552 Jones v Hyde (1989) 85 ALR 23; [1989] HCA 20 Leary v Federal Commissioner of Taxation (1980) 32 ALR 221 Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 Mackreth v Symmons (1808) 15 Ves Jun 329; (1808) 33 ER 778 Magann v The Trustees of the Roman Catholic Church for the Diocese of Parramatta [2020] NSWCA 167 Magnacrete Ltd v Douglas-Hill (1988) 48 SASR 567 Mendonca v Tonna [2020] NSWCA 196 Mirvac (WA) Pty Ltd v Binningup Nominees Pty Ltd [2020] WASC 28 Moore v Whyte [No 2] (1922) 22 SR (NSW) 570 Namrood v Ebedeh-Ahvazi [2017] NSWCA 310 Napier v Public Trustee (WA) (1980) 32 ALR 153 Richard Brady Franks Ltd v Price (1937) 58 CLR 112; [1937] HCA 42 Robinson Helicopter Co Inc v McDermott (2016) 331 ALR 550; [2016] HCA 22 Shephard v Cartwright [1955] AC 431 South Western Sydney Local Health District v Gould (2018) 97 NSWLR 513; [2018] NSWCA 69 Southern Resources Ltd v Residues Treatment and Trading Co Ltd (1990) 56 SASR 455 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588; [1999] HCA 3 Tonna v Mendonca [2019] NSWSC 1849 Warren v Coombes (1979) 142 CLR 531; [1979] HCA 9 Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) (2012) 44 WAR 1; [2012] WASCA 157 Texts Cited: JD Heydon and MJ Leeming, Jacobs' Law of Trusts in Australia (8th ed, 2016, LexisNexis Butterworths) Category: Principal judgment Parties: ET-China.com International Holdings Ltd (First Appellant) Matthew Chik-Hui Ng (Second Appellant) Freada Kwan Cheung (First Respondent) Vision Capital (Asia) Limited (Second Respondent) Financial International Holdings Limited (Third Respondent) Christopher Peter Rose (Fourth Respondent) Marco Marcou (Fifth Respondent) Pyma Pty Ltd (Sixth Respondent) Map ET-China Holdings Pty Ltd (Seventh Respondent) Representation: Counsel: