【正文】 HCA 1221/2022IN THE HIGH COURT OF THEHONG KONG SPECIAL ADMINISTRATIVE REGIONCOURT OF FIRST INSTANCEACTION NO. 1221 OF 2022____________BETWEEN PINE ENTERPRISES LIMITED Plaintiffand CYBER STRATEGY LIMITED 1st Defendant LECTURE KIT COMPANY LIMITED 2nd Defendant and WOO PAK HAY EDWARD 1st Third Party LAW SHIU KAI ANDREW 2nd Third Party ____________HCCW 593/2022IN THE HIGH COURT OF THEHONG KONG SPECIAL ADMINISTRATIVE REGIONCOURT OF FIRST INSTANCECOMPANIES WINDINGUP PROCEEDINGS NO. 593 OF 2022____________IN THE MATTER of Union Resources (Educational Development) LimitedAND IN THE MATTER of Sections 168A and 177(1)(f) of the Companies Ordinance (Cap 32)2 / 97BETWEEN PINE ENTERPRISES LIMITED Petitionerand LECTURE KIT COMPANY LIMITED 1st Respondent UNION RESOURCES 2nd Respondent(EDUCATIONAL DEVELOPMENT) LIMITED____________(HCA 1221/2022 and HCCW 593/2022 are heard and tried together pursuant to the order of High Court Judge Poon dated 31 July 2022)Before: Deputy High Court Judge To in CourtDates of Hearing: 17 21, 24 25, 27 28 September 2022, 2 3 October 2022, 5 6, 8 9, 12 14 November 2022, 4, 7 8, 14, 30 31 January 2022 and 1, 4 February 2022 Date of Judgment: 14 March 2022_______________J U D G M E N T_______________INTRODUCTION1. This is a trial of two actions, namely HCCW 593/2022 and HCA 1221/2022, ordered to be tried together pursuant to the order of Poon J. The dispute arose out of four agreements in connection with the sale by Pine Enterprises Limited (“Pine”) of its shares in Union Resources (Educational Development) Limited (“UR Limited”) to Lecture Kit 3 / 97Company Limited (“Lecture Kit”). The shares in UR Limited were duly transferred to Lecture Kit on 13 May 2022. Pine plained of breach of the agreements. On 1 August 2022, Pine petitioned for the winding up of UR Limited on just and equitable ground under HCCW 593/2022. On 7 June 2022, Pine also menced action HCA 1221/2022 against Lecture Kit and its parent pany Cyber Strategy Limited (“Cyber Strategy”) for breach of agreement. Cyber Strategy and Lecture Kit counterclaimed against the 1st and 2nd Third Parties for false representation. I consider the main action is HCA 1221/2022.2. The Plaintiff and the 1st Third Party are represented by Mr Poon SC and Ms Linda Chan. The Defendants are represented by Miss Angela Gwilt and Mr C Y Li who joined in as leading counsel on the 12th day of trial. The 2nd Third Party, who is a practising solicitor, appeared in person except for the last day of the trial when he is represented by Ms Elsie Yiu.3. By the seventh day of the trial, the parties were still entangled in pretrial matters. Rather than to have both actions adjourned and refixed, I considered it in the best interest of all parties to continue hearing the main action and to adjourn the winding up action. Hence, on my own motion, I adjourned HCCW 593/2022 to a date to be fixed and continued hearing HCA 1221/2022. I am glad to have taken that course, because as the evidence unfolds, it became obvious that the evidence in the winding up action would be highly prejudicial to the Defendants in the main action and the evidence in the main action would also be prejudicial to the Respondents in the winding up action. In this judgment, I shall refer to some of the evidence in the winding up action for the purpose of setting out the background in which the material issues which I have to decide in the 4 / 97main action arose. I do not rely on any of those evidence in my assessment of credibility of witnesses or finding of fact in the main action. I make no finding of fact in respect of the winding up action either, not even a provisional view.4. On the 13th day of trial, shortly after opening the defence case, the Defendants offered to discontinue the third party proceedings against the 2nd Third Party, Andrew Law, with costs. The offer was not accepted because of disagreement on the scale of costs. Andrew Law continued as a third party. But for all practical purposes, the Defendants have abandoned their claim against Andrew Law. The issue as between the Defendants and Andrew Law is whether Andrew Law is entitled to have his costs on indemnity basis. 5. The dispute is about two of the four agreements. On 12 April 2022, Pine, Cyber Strategy and Lecture Kit entered into three agreements in connection with the sale and purchase of shares in UR Limited. On the same day, they also entered into a fourth agreement with UR Limited to regulate their management of UR Limited. 6. Under the Sale and Purchase Agreement, Lecture Kit purchased from Pine 51% of its shares in UR Limited (. 510,002 shares) and Pine purchased from Cyber Strategy 20% of its shares in Lecture Kit (. 1,000 shares). In essence, that was a share swap agreement. The principal asset of UR Limited was, and still is, its wholly owned subsidiary, Union Resources Limited Educational Development (Yanjiao) Company Limited (“UREDY”) which owns a piece of land (“the Campus”) in the People’s Republic of China (“PRC”). 5 / 977. Under the Lecture Kit Shareholders’ Agreement, Cyber Strategy agreed to repurchase Pine’s 1,000 shares in Lecture Kit at HK$ million if Lecture Kit is not listed by 12 April 2022 and Cyber Strategy agreed to deposit its 510,002 shares in UR Limited with Messrs Andrew Law a