COURTS

Ex-girlfriend accuses Stephen Chow of using 'corporate veil' to avoid payout

PUBLISHED : Thursday, 24 January, 2013, 12:00am
UPDATED : Thursday, 24 January, 2013, 9:40pm

The High Court yesterday began hearing a claim by the former girlfriend of comedian Stephen Chow Sing-chi that he is trying to hide behind his corporation to avoid paying her HK$80 million in commission.

Barristers for Alice Yu Man-fung and Star Royale, which owns the house in which Chow lives, argued whether the company should be struck out as the second defendant in the case.

According to a writ Yu filed with the High Court last year, Chow, the first defendant, benefited from Yu's financial skills and advice throughout the 13 years they were together. In return, he paid her a salary plus a commission.

Yu's suit involves one of four properties in a development on Pollock's Path on The Peak. Called Skyhigh, the development is a joint venture between Star Royale and Ryoden Development. Three of the properties have been sold - the third, owned by Ryoden, for a record HK$800 million in May 2011.

The fourth, owned by Star Royale and Chow's current home, has yet to be sold. Yu is suing for a 10 per cent commission in expectation that Chow's home, if and when it is sold, will also fetch HK$800 million.

Yu claims that Chow would not have been involved in the highly lucrative development at Skyhigh without her assistance.

But the barrister representing Star Royale, Lisa Wong Kwok-ying, said that because Chow is not a director of Star Royale, the company should be struck out of the case because the dispute is only between Yu and Chow.

Under Hong Kong company law, it is legal for a company to have only one shareholder. The "corporate veil" protecting shareholders should not be "pierced" except in cases of fraud or attempts to evade legal responsibility, Wong said.

Barrister Neville Sarony did not challenge Wong's understanding of the law, but said that striking out Star Royale would ignore the "realities" of the case.

"The reality is that [Chow] is using the corporation to shelter behind and say that he has nothing to do with the property… It is an artifice… The court has to look at the real facts."

Deputy High Court judge Mr Justice Michael Burrell said: "[This is] a fairly complex legal situation. It might become utterly academic at the end of the day. I'm puzzling about whether to wait to see if… Yu and the first defendant can find a solution."

Burrell said that within two weeks, he will issue a written decision or announce that he will hold his decision to await further developments.

Neither Yu nor Chow appeared in court yesterday.

The next hearing, at which the parties will submit evidence, is scheduled for March 19.

Correction: A previous version of this article erroneously stated that Stephen Chow was the sole shareholder of Star Royal Limited. Stephen Chow is not a shareholder of Star Royale either directly or indirectly. Star Royale Limited is jointly and equally owned by the Ryoden Group and a discretionary family trust in which Stephen Chow is one of the beneficiaries.