Answer for Question 1

If Robert wants to transfer interest and porperties to his son, they need a proper
instrument of transfer, and lodge the transfer with the company, last but not least, other
directors must all approve for this case, and no one in the existing directors accept the
offer.
As Robert wants to make his son to be director, that may refer to the appointment
of director issue.
Based on the fact that Wong&Co.is a private company (s11, Cap622), the
statement is as follows.
1.The transfer of business interest and porperties
1.1Requirement for instrument of transfer (s150, Cap622), “A company must not
register a transfer of shares in the company unless a proper instrument of transfer has
been delivered to the company.”
1.2Registration of transfer or refusal of registration (s151, Cap622) states that,
“The transferee or transferor of shares in a company may lodge the transfer with the
company.”
1.3Wong&Co.is a private company, thus the Articles of Association restrict a
member’s right to transfer shares (s11, Cap622), usually presented in two forms:
1.3.1Rights of pre-emption. (s160, Cap622).“…applies if a company’s articles
give a member or class of members of the company a right of pre-emption or right to
purchase shares in the company on the occurrence of an event that constitutes a
transmission of the right to the shares by operation of law.”
1.3.2Powers of directors to refuse. The directors can refuse to register shares at its
discretion. Courts have frequently applied the bona fide doctrine to cases where certain
powers is exercised for the proper purpose and all powers is exercised for the benefit
of the company. See ,e.g., Re Smith and Fawcett Ltd (1942)Ch 304 (no evidence to
show that director did not act bona fide).
2. Appointment of subsequent directors
It can be either to replace existing directors or as additional directors. Appointment
of further directors is carried out as articles provide. Most company articles allow for
the appointment of directors by ordinary resolution of the shareholders , or by a
decision of the directors.
In addition to giving notice of the first directors, every company must give notice
to the register of any change among its directors. This includes any change to the
register of directors’ residential addresses.
Answer for Question 2
1. the legitimacy of the shares’transfer in this case
When we transfer the shares, we need certification of share transfer (s154, Cap622),
 also need registration (s151, Cap622), in these case, Kennedy keeps the papers of his
business (which include shares transfers and contract notes) in a safe at the clinic. It is
vague whether the transfer has been registered or not, or whether Kennedy registered
to be the owner of the company or not.
But, since Kennedy bought the clinic from his classmate Rhoda Duong, according
to s158, Cap622, we know that it is a transmission of shares by operation of law, which
says, (1)if the right to shares is transmitted to a person by operation of law and the
person notifies the company in writing that the person wishes to be registered as a
member of the company in respect of the shares, that’s exactly what Kennedy suits, so,
we now don’t need the certification of share transfer, and we conclude that the clinic is
now belong to Kennedy.
2. the company type of the clinic
Since the “limited company must not be registered without “limited”, and it has a
share capital, according to “Type of companies” described, we know that the company
is an unlimited private company with a share capital or a company limited by shares. If
the company is an unlimited private company, Kennedy may need to pay his own asset
for the company’s debt, but if it is a limited private company, Kennedy should not
confront the unlimited liability.
3.Limited liability or unlimited liability.
If the company is an unlimited private company, the owners of the company have
an unlimited liability, so Kennedy need to sell his personal asset to satisfy the
judgement debt. However, if the company is a limited private company, Kennedy then,
shouldn’t suffer from the unlimited liability, and has no need to sell his personal asset
to satisfy the judgement debt.
Answer for Question 3
1. Whether Wing Chan can represent Duke Antonio?
According to the “apparent authority” in agent law (Business law in Hong Kong D. K.
Sri. Cap8 8.044), which means, an agent, by the virtue of his position, as the power to
make transaction on behalf of his principal. As Andrew is the owner of the limited
company, we absolutely can recognize that Andrew is the representative of the
company in this case.
2. Whether Ron Yung can represent BBQ Smart Ltd?
Since Moses is the senior sales representative of TOL, we see that his position is
implied the representative relationship between him and TOL, and according to the
“Agent by contract” in agent law (Business law in Hong Kong D. K. Sri. Cap8 8.025),
we admit that Moses can represent TOL.
3. Explain Duke Antonio and BBQ Smart Ltd are legal entities.
 A company is a legal entity distinct from its members or shareholders, it has legal
personality, which is often as an “artificial person” or a “body corporate”. So, the

company(Maximum) has the right to sue or claim TOL, and ask for compensation，if

it has the need. In the case Salomon v Salomon and Co Ltd, also discuss the topic
about a company’s separate legal entity issue.
4. What is the essence of this case? Or what will Duke Antonio claim for?
When Andrew buy this oven from Moses or TOL, the contract between Maximum and
TOL has already made, as “companies can make any contracts, their capacity is the
same as that of a natural person.” (Business law in Hong Kong D. K. Sri. Cap4 4.137).
In this case, what Moses said before that described this oven is not the same as what
the oven really is. For example, the Model X failed to preheat at 300 degrees Celsius
(it could only preheat at 200 degrees Celsius), the internal flipping mechanism did not
work at all. So, that may refer to a contract vitiating factor: Misrepresentation.
“Misrepresentation is a false representation of fact made orally or in writing, or by
conduct.” (Business law in Hong Kong D. K. Sri. Cap4 4.242), In case Shun Kong v Chui
Ting Lin, misrepresentation also referred. The purpose of a misrepresentation is to
induce the representee to contract, and if the person who induce buyer to the contract
has a dishonest intent, we called this behavior as fraudulent misrepresentation, and
that is exactly what Moses did. And a contract vitiated by misrepresentation is
voidable.
5. Remedies
Remedies for fraudulent misrepresentation depends on whether it is a term of the
contract or not.
Where a fraudulent misrepresentation has induced the contract, but is not a term of
contract, the representee may: (1) rescind the contract; and/or (2) claim damage in the
tort of deceit.
Where a fraudulent misrepresentation becomes a term of the contract, the representee
may (1) sue for rescission; or (2) claim damages for breach of contract, or (3) claim
damage in the tort of deceit. (Business law in Hong Kong D. K. Sri. Cap4 4.261)
Here in the case, we suit the second situation. So, Maximum has a claim against TOL,
for rescission, breach of contract and damage in the tort of deceit.
Rescission involves restoring the innocent party, that is Maximum, to the position as
if no contract was ever made, however, it seems Maximum cannot be put back into
the position they were in before the contract was made, since they have already lost
many customers, so, in addition to the remedies of rescission, Maximum can also
claim damage in the tort of deceit or breach of contract. The case Crystal Palace FC
(2000) Ltd v Dowie also talked about this.
The basis for awarding damages in the tort of deceit is that the plaintiff is to be put in
the position he would have been in had the representation not been made, in the
circumstances, Maximum may ask for compensation for HK$2,000,000 plus lost from
customers.
The basis for awarding damage for contract is to put the representee in the same
position as if the representation had been true and contract had been performed, in this
situation, Maximum may ask for compensation for HK$3,000,000 plus lost from
customers.