(合作办学合同书).docVIP

(合作办学合同书) A BC DE FG HI JK LM NO RS TU V由此A BC DE FG HI JK LM NO RS TU VHCA1221/xxIN THEHIGH COURTOF THEHONG KONGSPECIAL ADMINISTRATIVEREGION COURTOF FIRSTINSTANCE ACTIONNO.1221OFxx_BETWEEN PINEENTERPRISES LIMITEDPlaintiff andCYBER STRATEGYLIMITED1st DefendantLECTURE KITPANY LIMITED2nd Defendantand WOO PAK HAYEDWARD1st ThirdParty LAWSHIU KAIANDREW2nd ThirdParty_HCCW593/xxIN THEHIGH COURTOF THEHONG KONGSPECIAL ADMINISTRATIVEREGION COURTOF FIRSTINSTANCE PANIESWINDING-UP PROCEEDINGSNO.593OFxx_IN THEMATTER ofUnion Resources(Educational Development)Limited ANDIN THEMATTER ofSections168A and177 (1)(f)of theCompanies Ordinance(Cap32)-2-A BC DE FG HI JK LM NO RS TU VA BC DE FG HI JK LM NO RS TU V由此BETWEEN PINEENTERPRISES LIMITEDPetitioner andLECTURE KITPANY LIMITED1st RespondentUNION RESOURCES(EDUCATIONAL DEVELOPMENT)LIMITED2nd Respondent_(HCA1221/xxand HCCW593/xxare heardand triedtogether pursuant to theorder ofHigh Court Judge Poondated31Julyxx)Before:Deputy HighCourtJudgeTo inCourt Datesof Hearing:17-21,24-25,27-28Septemberxx,2-3Octoberxx,5-6,8-9,12-14Novemberxx,4,7-8,14,30-31Januaryxxand1,4FebruaryxxDate ofJudgment:14Marchxx_J UD GM EN T_INTRODUCTION1.This is a trialof twoactions,namely HCCW593/xxand HCA1221/xx,ordered to be triedtogether pursuantto theorder ofPoon J.The disputearose outof four agreements inconnection with the saleby Pine Enterprises Limited(“Pine”)of itsshares inUnion Resources(Educational Development)Limited(“UR Limited”)to Lecture Kit-3-A BC DE FG HI JK LM NO RS TU VA BC DE FG HI JK LM NO RS TU V由此Company Limited(“Lecture Kit”).The shares in UR Limited wereduly transferredto Lecture Kit on13Mayxx.Pine plainedof breachof theagreements.On1Augustxx,Pine petitionedfor thewinding upof UR Limited onjust andequitable groundunder HCCW593/xx.On7Junexx,Pine alsomenced actionHCA1221/xxagainst Lecture Kit andits parentpany Cyber Strategy Limited(“Cyber Strategy”)for breachof agreement.Cyber Strategy and Lecture Kit counterclaimedagainst the1st and2nd ThirdParties for false representation.I considerthe main action isHCA1221/xx.2.The Plaintiffand the1st ThirdParty are represented by Mr Poon SC andMs LindaChan.The Defendantsarerepresented by MissAngela Gwiltand MrC YLi whojoined in as leadingcounsel on the12th dayof trial.The2nd ThirdParty,who isa practisingsolicitor,appeared inperson exceptfor thelast dayof thetrial when he isrepresentedbyMs ElsieYiu.3.By theseventh dayof thetrial,the partieswere stillentangled inpre-trial matters.Rather thanto haveboth actionsadjourned andre-fixed,I consideredit in the bestinterest of all partiesto continuehearing the main actionand to adjourn thewinding upaction.Hence,on myown motion,I adjournedHCCW593/xxtoadate to be fixedand continuedhearing HCA1221/xx.I amglad to have takenthat course,because as the evidenceunfolds,it becameobvious that the evidence in thewinding upaction wouldbe highlyprejudicial to the Defendantsin the main actionand the evidence in the main action wouldalso beprejudicial to the Respondentsin thewinding upaction.In thisjudgment,I shallrefer tosome of theevidencein thewinding upaction for the purpose of settingout thebackground in which thematerial issueswhich Ihave todecide in the-4-A BC DE FG HI JK LM NO RS TU VA BC DE FG HI JK LM NO RS TU V由此main actionarose.I donot relyon any of thoseevidenceinmy assessmentof credibilityof witnessesor findingof fact in themainaction.I makeno findingof factin respectof thewinding upaction either,not evena provisionalview.4.On the13th dayof trial,shortly afteropening the defence case,the Defendantsoffered todiscontinue the third party proceedings againstthe2nd ThirdParty,Andrew Law,with costs.The offerwas not aepted becauseof disagreementon thescale ofcosts.Andrew Lawcontinued as a thirdparty.But forall practicalpurposes,the Defendantshave abandonedtheir claimagainst Andrew Law.The issue as between the Defendantsand AndrewLaw iswhether AndrewLaw isentitled tohave hiscosts onindemnity basis.5.The dispute is abouttwo of the four agreements.On12Aprilxx,Pine,Cyber Strategy and Lecture Kit entered into threeagreements inconnection with the saleand purchaseof shares in UR Limited.On the same day,they alsoentered intoa fourthagreement withUR Limitedto regulatetheir managementof UR Limited.6.Under the Sale and Purchase Agreement,Lecture Kitpurchased fromPine51%of itsshares inUR Limited(i.e.510,002shares)and Pinepurchased fromCyber Strategy20%of itsshares inLecture Kit(i.e.1,000shares).In essence,that was a shareswap agreement.The principalasset of UR Limitedwas,and stillis,its whollyowned subsidiary,Union ResourcesLimited Educational Development(Yanjiao)Company Limited(“UREDY”)which ownsa pieceof land(“the Campus”)in thePeoples Republicof China(“PRC”).-5-A BC DE FG HI JK LM NO RS TU VA BC DE FG HI JK LM NO RS TU V由此7.Under the Lecture Kit ShareholdersAgreement,Cyber Strategy agreed to repurchase Pines1,000shares inLecture Kitat HK$12.5million ifLecture Kit is notlisted by12Aprilxxand Cyber Strategyagreedto depositits510,002shares inUR Limitedwith MessrsAndrewLaw&Franki Hoas custodian.8.Under the Option Agreement,Lecture Kitgranted anirrevocable optionto Pio callupon Lecture Kit toissuea convertible notefor HK$20million withinterest,in considerationof Pines agreement to procureEdward Woo to waivehis directors loanto UR Limited.Pursuant tothis agreement,Edward Woosigned aletter ofrelease confirminghis agreementto releaseand discharge“all loansand liabilitieshitherto dueand owingby”UR Limitedto him,whether listedor notlisted in the booksof UR Limited,and which was notless thanHK$53,547,843.9.The saleand purchaseof the shares inUR Limitedwas pletedon13Mayxx.Pursuant to the Option Agreement,aconvertible note in the adjustedamount of HK$20.65million wasexecuted byLecture Kit,which wassubsequently dated1Februaryxxwith amaturity dateon1Februaryxx.The disputebetweentheparties isrelated to the Lecture Kit ShareholdersAgreement and the convertible note issuedpursuantto the OptionAgreement.10.On2Julyxx,Gary Ho,for and on behalfof UREDY,entered into the Cooperation Agreement(合作辦學合同書)with ChinaInstitute ofDefence&Science Technology(“CIDST”)in providingeducational services.CIDST tookpossession of the Campusand operateda jointeducational institutewith UREDYthere.On10Novemberxx,UREDY demandedCIDST tovacate the Campus forhaving failed to-6-A BC DE FG HI JK LM NO RS TU VA BC DE FG HI JK LM NO RS TU V由此obtain abank loanwhichwas a termof theCooperationAgreement.After somenegotiations,on4Februaryxx,UREDY andChina DefenceTechnology Centre(Beijing)(“CDTC”)reached an agreement for the saleof the Campus toCDTC forRMB50million(“Campus Sale Agreement”).CDTC paidUREDY RMB10million on12Februaryxx.On5Marchxx,UREDY paidRMB9million to Beijing AIRStrategy andInformation TechnologyLimited(“Beijing AIR”)purportedly tosettle debtsdue fromURLimited and UREDYto variouspanies withinthe AIRgroup.On29Aprilxx,UREDY enteredinto twoconsultancy agreementswith AIR Logistics InternationalLimited(“AIRLogistics”)under whichUREDY wouldpay AIRLogistics RMB9.744million ayear forprofessional realtymanagement adviceand RMB35.01million ayear forreal estatedevelopment advice.11.CDTC defaultedin payingthe balancedue under the CampusSaleAgreement.That wasfollowed byarbitration proceedingsinthe PRC and then anagreementto sell alltheshares in UREDYto JeavonLimited,a nomineeof CDTC(“Jeavon Agreement”)on3Februaryxx.The JeavonAgreement wasterminated on30Julyxx.12.The listingof Lecture Kit did not materialiseby12Aprilxx.Cyber Strategyrefused torepurchase the1,000sharesinLecture Kitheld by Pine andrefused tohonour the convertible note.On1Augustxx,Pine petitionedfor thewinding upof URLimited.On13Septemberxx,Asian InformationResources(Holdings)Limited(“AIR Holdings”)enteredintoanagreementtosellEleson Inc together with its chainof subsidiariesincluding Cyber Strategyand Lecture Kit to BeijingOlympics Limitedfor HK$50,000.On7Junexx,Pine mencedthemainaction.-7-A BC DE FG HI JK LM NO RS TU VA BC DE FG HI JK LM NO RS TU V由此THE ISSUES13.Pine claims against Cyber Strategy damagesfor breachof theLecture KitShareholdersAgreement inthe sumof HK$12.5million forits failuretorepurchasethe1,000sharesinLecture Kitand againstLecture Kitthe sumof aboutHK$25.5million under the convertiblenote.In addition,Pine seeksa declarationthat the510,002shares ofand inURLimitedhave beenand arecharged infavour of Pine assecurity forpayment ofall sumsowed byCyber Strategyand LectureKit under theLectureKitShareholdersAgreement and theconvertiblenote.14.In essence,the defence of Cyber StrategyandLectureKit is that they enteredintothe four agreementsas aresult ofcertain false representations made byPine,Edward Wooand AndrewLaw andcertain non-disclosures inthe courseof negotiationof thefour agreements.They alsoclaim that they weredischarged fromtheir liabilityunder theconvertiblenoteas Edward Woo hadfailed toply withthe condition precedent bywaiving hisdirectors loanto URLimited of the requisite amount.They seeka declarationthat thefour agreementsare rescinded and counterclaimfor damagesforfalse representation and non-disclosure.In addition,they alsomake similarclaimsagainstEdward Wooand AndrewLaw asthird parties.15.There isno disputethat the Plaintiff hadperformed itsobligations under the Sale and Purchase Agreement and has exercisedits optionunder theOptionAgreement.The factualdisputeiswhether the Plaintiff had procured Edward Wooto waive the requisite amount of loan.Subject tothe Plaintiffdischarging that burden,the burdenwould thenbe on the Defendants to provethe false representations andnon-disclosures in-8-A BC DE FG HI JK LM NO RS TU VA BC DE FG HI JK LM NO RS TU V由此order tohave thefour agreementsrescindedandrelieved of their liabilityunder thefouragreements.The allegedfalse representations andnon-disclosures16.The Defendantspleaded defence is excessive,confusing andoverlapping.In broadterms,the defencesare false representation,non-disclosure andnon-fulfilment ofcondition precedent.Mr PoonSC andMr Liadopt differentapproaches tothe interpretationof thepleaded defence.To considertheir submissions,it isnecessary forme toquote thepleaded defencein full.The relevantpleadings areparagraphs5(f),5(g),5(h),6(c),6(d),6(e)and7of theAmended Defence and Counterclaim(“AD&CC”):“5(f)Edward Woowarranted andrepresented toGary Hothat theCampuscan be used toestablish an institution thereunderthename“The East West Cultural Exchange Village”for thepurpose ofpromoting educationand culturalexchange.5(g)As afurther and/or alternativeproposal,Edward Woowarranted andrepresented toGary Hothat theCampuscan be used and/or developedas ahotel,spa,sports centreor residentialbuildings.5(h)In orabout Januaryxx,Gary Howent toinspect theCampusupon thearrangement of the1st and2nd ThirdParties.At thetime of the inspection,theCampuswas notoupied andwas vacant.As aresult,the Defendantswere ledto believethatEdward Woosintention and/or proposalwere genuineand that theCampuswas ina stateof vacantpossession.6(c)Prior tosigning the Sale and Purchase Agreement and theLectureKitShareholdersAgreement,Edward Woofailedtodisclose the following matterstothe Defendants:-(i)There arebuilding certificatesnumbered013088and014809for the buildings erected on theCampuswhich wouldhave shownthat the buildings wereused asteaching premises,premises for the staffand premises for thestudents.Aording tothe lawsof China,when thatbeing thecase,theCampustogether withthebuildingscannot be mortgaged tothe bankto obtain finance.In thepremises,such buildingcertificates constitute-9-A BC DE FG HI JK LM NO RS TU VA BC DE FG HI JK LM NO RS TU V由此an encumbrance or restrictions ontheCampus,in breachof Clauses3.31(C)and(E)of the Sale and Purchase Agreement and suchdefects haverendered thechance ofURLimitedand2nd Defendantbeing listednugatory.(ii)Pursuant tothe DecemberAgreementon2nd Decemberxx,CIDST hadacquired certainrights including,inter alia,the rightto oupyand tofurther developtheCampus.In breachof Clauses3.17,3.18,3.31(B)and(F)of the Sales and Purchase Agreement,CIDST andits variousdivisions werestill oupyingtheCampusatthedate ofsigning of theSaleandPurchaseAgreement and theLectureKitShareholdersAgreement.(iii)On13Marchxx,UREDY hadmade anapplication tothe EconomicPlanning BureauintheYanjiao DevelopmentZone Authorityinthe PRC andsubmitted aCampus ExpansionPlan.6(d)Edward Woowarranted andrepresented tothe Defendantsthat theCampuscan beused forvarious purposesincluding but not limitedto establishingan institutionand/or hotel,spas andother buildings.AsEdward Woowell knewthat their representations wereuntrue andtheir proposalscould neverbe materialiseddue tothe oupation of theCampusby CIDST,theirrepresentationswere falseand weremade fraudulentlyand/or recklessly(“False Representations”),withtheview toinduce the Defendantstoenter intotheSaleandPurchaseAgreement andtheLectureKitShareholdersAgreement.6(e)The Defendantshad relied onthe False Representationsand wereinduced by theFalse Representations toenter intotheSaleandPurchaseAgreementandtheLectureKitShareholdersAgreement.7.(h)herein,the Defendantsare dischargedfrom its liability totheSaleandPurchaseAgreementandtheLectureKitShareholdersAgreement for reason ofFalseRepresentationsmadebyEdward Wootothe Defendants.”By reason of the matters pleaded in paragraph6(c)to(The wordsinare mysubstitutions inplace ofthose inthe originalpleading forconsistent readingand toreflect theabandonment of thethirdpartyproceedingsagainst AndrewLaw.)-10-A BC DE FG HI JK LM NO RS TU VA BC DE FG HI JK LM NO RS TU V由此17.Mr Lisubmits that the Defendantshave pleadedfive false representationsandnon-disclosures madeby Edward Woo onnumerous oasionsbetween latexxand Januaryxx.Those representationsare: (1)the village representation:the Campus could beused toestablish aninstitution thereunderthename of“East WestCultural ExchangeVillage(東西方文化交流村)”for thepurposeofpromoting educationaland culturalexchange(paragraph5(f)of the AD&CC); (2)the user representation:the Campuscould beused and/or developedas ahotel,spa,sports centreor residentialbuildings(paragraphs5(g)and6(d)of the AD&CC); (3)the vacantpossession representation:the Campus was notoupied byothers(paragraph5(h)of theAD&CC; (4)the loanrepresentation:the amountof loanowed byURLimitedto Edward Woo wasHK$53,547,843;and (5)the mortgagerepresentation:the Campuscould bemortgaged to obtain finance.The firstthree representationsare basedon paragraphs5(f),5(g),5(h)and6(d)of theAD&CC.The fourthrepresentation had been pleaded as anon-disclosure in paragraph6(c)(iv)of theDefenceandCounterclaim,but wasdeleted fromparagraph6(c)of theAD&CC.Whether thisplea isone of false representationor non-disclosure,it isunnecessary becausethe-11-A BC DE FG HI JK LM NO RS TU VA BC DE FG HI JK LM NO RS TU V由此Plaintiff bearsthe burdenof provingthat PinehadprocuredEdward Wootowaivethe requisiteamountofloan.If Edward Woo hadonly waived a loan ofalesser amount,which iswhat Mr Lis submissionis premisedon,the Plaintiffwould failin anyevent.On theother hand,if thePlaintiff sueedsin dischargingthatburden,there could be nobasis onwhich toraise thatdefence.That defenceis superfluousandhasbeen rightlydeleted fromthe pleading.The fifthrepresentation hasbeen pleadedas anon-disclosure in paragraph6(c)(i).However,Mr Lisubmits that it isa representationwhich necessarilyarises fromor underpinsthe userrepresentation andthe vacantpossession representation.18.On theother hand,Mr PoonSC drawsa distinction between“non-disclosures”pleaded inparagraph6(c)and“false representations”defined inparagraph6(d).He submits,firstly,that underparagraph6(d),“false representations”was definedas“the Campuscan beused forvarious purposesincluding butnot limitedto establishinganinstitutionand/or hotel,spas andother buildings”which arerepetitions of the false representations pleaded in paragraphs5(f)and5(g)butnomore.Secondly,he submitsthat the“non-disclosures”pleaded inparagraph6(c)are bydefinition excludedfrom being“false representations”by virtueof paragraph6(d).He alsorefers toparagraph6(e)as conclusivelysupporting his argument that“false representations”relied onby the Defendants donot includeanyof the“non-disclosures”.19.Mr PoonSC thenrefers tothe Defendantsanswer tothePlaintiffs requestfor furtherand betterparticulars of the falsitypleaded inparagraph5(f)and5(g)of theAD&CC.In theiranswer,the Defendantsconfirmed thatboth representationswere falsein that,contrary tothe representations,-12-A BC DE FG HI JK LM NO RS TU VA BC DE FG HI JK LM NO RS TU V由此“in fact,CIDST had oupied andacquired certainrights tofurther developtheCampus.The buildingcertificates forthebuildingserectedontheCampusfurther disclosedthat thebuildings wereused asteaching premises,premisesforthe staffand premisesforthestudents andas suchcannot bemortgaged tothe bankto obtainfinance andconstitute anencumbranceorrestrictionsontheCampus.”(Words inare mysubstitutions forconsistent reading.)The secondpart ofthe answerrelates tothe mortgagerepresentation.Mr PoonSC submitsthat insofarasthe first partoftheanswer isconcerned,the Defendantsare allegingthat itwas CIDSTs oupationofthe Campus whichrendered thevillagerepresentationandtheuserrepresentationfalse.Thus thefalsity doesnot liein whether the Campuscould beused toestablish the“East WestCultural ExchangeVillage”or couldbeusedand/or developedasahotel,spa,sports centreor residentialbuildings,but that the Campuscould notbeused for thosepurposes duetothe oupation byCIDST.Edward Woodidnotdeny thathe hadmentioned aboutestablishing theEast WestCultural ExchangeVillage andin thatconnection theuse towhich the Campuscouldbe put.The buildingcertificate showsthatthe Campus wasto beused asthe“EastWestCulturalExchangeVillage”.The buildingplan showsthe typeof facilities,including hotel,spa andsports centrewhich werepermitted tobe built.The realfactual issues