Read the full judgment text of CACV 000172/2006 on BabelCite. This Court of Appeal judgment was delivered on 26 January 2007 before Tang VP, Yam J, Waung J.
Civil appeal – winding up petition – settlement by consent – expert valuation of shares – challenge to expert report – whether mistakes in valuation can be challenged when parties agreed to be bound – whether delay in providing valuation is relevant – stay of appeal under Bankruptcy Ordinance – Companies Ordinance (Cap. 32) s.168A – Bankruptcy Ordinance (Cap. 6) s.14 – The petitioner, the 1st respondent and the 2nd respondent were shareholders in the 3rd respondent company Wing Fung Construction (H.K.) Ltd, the petitioner holding 30% of the shares – The petitioner presented a petition to wind up the 3rd respondent on the just and equitable ground, alternatively for relief under section 168A of the Companies Ordinance (Cap. 32) – The petition was stayed by consent on terms under which the petitioner was to sell his 30% shares at a price to be determined by an independent accountant, with a reasoned determination to be completed within 8 weeks and payment to be made 7 days after the valuation was made known – An independent accountant was appointed but the 8-week period was not met, a draft report being issued in March 2005 and a final report on 16 February 2006 valuing the shares at HK$2,289,500 – No payment was made by the respondents and the petitioner obtained an order for specific performance from Kwan J on 25 April 2006 – The 1st and 2nd respondents appealed in person – Held, dismissing the appeal: (1) where parties agree to be bound by an expert's report, the report cannot be challenged on the ground of mistakes unless the expert departed from his instructions in a material respect, following Jones v Sherwood Computer Services Plc [1992] 1 WLR 277 and Dlugash v Mayers [1997] 2 HKC 814; there was no evidence of any such departure (procedure / evidence); (2) time was not of the essence of the settlement agreement, so delay in issuing the valuation was irrelevant absent operative frustration, and there was no evidence that performance had become impossible or that the delay was attributable to the petitioner (contract / delay); (3) the respondents' application for a stay of the appeal under section 14 of the Bankruptcy Ordinance (Cap. 6) was refused because the bankruptcy proceedings relied in part on the judgment debt under appeal and their progress depended on the outcome of this appeal – Appeal dismissed; stay refused.
Legal issues: Whether the expert valuation report could be challenged for mistakes · Whether delay in providing the valuation report is relevant to the respondents' obligations · Whether to stay the appeal under section 14 of the Bankruptcy Ordinance
Outcome: Appeal dismissed. Application for stay of appeal under section 14 of the Bankruptcy Ordinance refused.
Cited by 4 cases · Cites 1 case