CPO s.60 and tort of conspiracy to injure

In China Construction Reality Ltd v Sino Business Services Proprietary Ltd ([2011] HKEC 436) the plaintiff sold shares in a company that controlled a valuable development opportunity to the first defendant. At the request of the first defendant the shares were transferred to another company in the same group. The first defendant failed to pay the agreed price for the shares and the plaintiff obtained judgment in Australia. In the meantime, the shares had been transferred to another company, Lucky Dragon. The plaintiff claimed that this had been done to put the assets beyond its reach so as to avoid meeting the judgment debt. It succeeded in its claim under Conveyancing and Property Ordinance, section 60 that the transfer to Lucky Dragon had been a disposition made with the intent to defraud creditors. Lucky Dragon failed to convince the court that the transfer to it had been made for valuable consideration and in good faith. As a result, it could not rely on the defence in section 60(3).  The plaintiff also succeeded in its claim that Lucky Dragon had been part of a conspiracy to injure it (see para. 323 of the judgment).

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