Gorgeous Beauty Ltd v Liu & Ors
2014
CHANCERY DIVISION
United Kingdom
CORAM
- THE HON MR JUSTICE ARNOLD
Areas of Law
- Contract Law
- Conflict of Laws
- Property and Real Estate Law
- Equity and Trusts
2014
CHANCERY DIVISION
United Kingdom
CORAM
AI Generated Summary
This case focuses on the ownership of a piece of land in Taiwan, involving two branches of a Taiwanese family and their family business. The court ruled in favor of the plaintiff, Gorgeous Beauty Ltd., holding that the land was bought for the collective benefit of the family business shareholders, and invalidated a Declaration of Trust favoring a single family member. The legal principles discussed included the applicable law for trusts and the validity of non-statutory trusts under Seychelles law.
As a matter of substance rather than form, this case is an unfortunate dispute between two branches of a Taiwanese family with regard to the ownership of a plot of land in Taiwan. It is part of a wider dispute which arose out of the running of the family business, Yuan Sheng Aluminium Manufacturing Corporation, also known as Yuan Sheng Corporation (“YSC”).
The Claimant, Gorgeous Beauty Ltd, is a Seychelles international business company (an “IBC”). As explained below, it is owned by five other Seychelles companies. It is common ground that the ownership structure was intended beneficially to reflect the ownership of YSC at the time Gorgeous Beauty was incorporated: 57.63% by LienSheng Liu, his wife Ching-I Yang and their children (“the Lien-Sheng Branch”);
24.75% by Lien-Fa Liu, his wife Mei-Chuan Hsu and their children (“the Lien-Fa Branch”); and 17.62% by Ching-I Yang’s siblings, by Yi-Hui Lin (who was married to one of Ching-I Yang’s sisters) and his children and by one shareholder who was not a member of the family (“the Minor Shareholders”). The First and Second Defendants, Irene Liu and William Liu, are two of Lien-Fa Liu’s three children.
Until July 2012 Irene Liu was the sole director of Gorgeous Beauty. Gorgeous Beauty was originally the legal owner of 99% of the shares in the Fourth Defendant, Gold Wealth LLP, with William Liu being the legal owner of the remaining 1%. In August 2010 Gold Wealth acquired a valuable plot of industrial land in Longtan, Taiwan (“the Longtan Property”) through a Taiwanese subsidiary, Golden Up Silver Corp Ltd (“Golden Up”), also known as Yuan Shang Investment Co Ltd. The Longtan Property was the sole asset of Golden Up, and hence of Gold Wealth, and hence of Gorgeous Beauty. The contract of purchase was signed by Lien-Sheng Liu. The purchase price was NTD (New Taiwanese Dollars) 274,354,189 (approximately US$ 8.6 million at the prevailing exchange rate) payable in instalments.
The case advanced by Gorgeous Beauty (i.e. by the Lien-Sheng Branch) is in very brief summary as follows: the Longtan Property was the intended site for a new YSC factory; it was purchased on behalf of all of YSC’s shareholders; for tax reasons, it was held through the corporate vehicles of Gorgeous Beauty, Gold Wealth and Golden Up; and the purchase price was paid using YSC funds because it was being purchased on behalf of YSC’s shareholders.
The case advanced by Irene and William Liu (i.e. by the Lien-Fa Branch) is in very brief summary