Read the full judgment text of HCCW 379/2007 & HCMP 1590/2006 on BabelCite. This Court of First Instance judgment was delivered on 1 February 2011 before Harris J.
Companies – winding-up – section 168A petition – unfair prejudice – breach of fiduciary duty – interest – costs – Wing Kai Investment Company Limited, a family company in which the Petitioner and the 1st Respondent were shareholders – main judgment holding 1st Respondent liable to account to the Company for misapplication of company monies – whether court can include interest in valuation of Petitioner's shares despite interest not being expressly pleaded under section 48 of the High Court Ordinance – held yes, under the wide powers of section 168A of the Companies Ordinance, Cap. 32 – whether interest should be simple or compound – held compound, the normal rule for breach of fiduciary duty, applying Westdeutsche Landesbank v Islington LBC and Black v Davies – whether the rate of 1% over prime would be a penalty – held no, the award is not compensation for being held out of money but an accounting for benefits received from breach of duty, applying Komala Deccof & Co SA v Pertamina and China Everbright – IHD Pacific Ltd v Ching Poh – whether the period 1994 to 2006 should be excluded for the Petitioner's dilatoriness – held no, it would give the 1st Respondent the benefit of the use of money he should not have had – interest on dividends to run from 1 month after declaration, interest on joint savings account balance from date account was closed, interest on sum of HK$2,683,199.50 for the agreed period – whether costs should be apportioned because Petitioner complicated the proceedings – held no, following Re Elgindata Ltd. (No. 2), costs to follow the event – winding-up petition dismissed by agreement as Petitioner was substantially successful in the s.168A action – supporting contributories to pay costs of the winding-up petition – 1st to 4th Respondents to pay costs of the s.168A action with certificate for 2 counsel – appeal referred to as CACV 267/2010.
Legal issues: Award of interest for breach of fiduciary duty not expressly pleaded · Whether interest should be compound or simple · Rate and basis of interest award · Period for which interest should be paid · Apportionment of costs in the s.168A action · Disposal of the winding-up petition
Outcome: Winding-up petition dismissed by agreement; valuation of Petitioner's shares to include compound interest on sums for which the 1st Respondent is liable to account for breach of fiduciary duty; 1st to 4th Respondents to pay the costs of the s.168A action; supporting contributories to pay the Petitioner and the Company their costs of and occasioned by the winding-up petition.
Cites 1 case