Re Hop Cheong Building Products Ltd. (In Liquidation)

Re Hop Cheong Building Products Ltd. (In Liquidation)

Because there were no allegations of misconduct, negligence or breach of duty against the liquidators and their actions in relation to the sale and shareholders' meeting were taken in the course of administering the liquidation, the court ordered that the costs of defending the Foshan Action are costs of the liquidation to be taxed and paid out of the company's assets, subject to the liquidators' undertaking to account for any amounts recovered.

Citation
Re Hop Cheong Building Products Ltd. (In Liquidation)
Parties
Company (in Liquidation): Hop Cheong Building Products Limited (In Liquidation); Joint and Several Liquidators (applicants): Deloitte Touche Tohmatsu (Dermot Agnew; Joseph Kin Ching Lo); Contributory / Committee of Inspection Member (respondent): Mr So King Kay; Contributory / Committee of Inspection Member (respondent): Mr Li Chin Pang Clement; Contributory / Committee of Inspection Member (respondent): Mr Chow Cheong Wai
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
26 September 2002
Case Number
HCCW941/1998
Procedural Posture
Companies (winding Up) No. 941 of 1998 / Application for Directions Under S.200(3) (interlocutory/chambers Hearing)
Outcome
Application granted. Court ordered liquidators' costs of defending the Foshan Action be costs of the liquidation and payable from the company's assets, subject to an undertaking to account for any amounts recovered.
Legal Topics
Liquidator Costs, Costs of Defending Foreign Proceedings, Committee of Inspection Approval, Validity of Shareholders' Resolutions, Share Transfer
Source Language
EN
Company Law Insolvency (liquidation) Civil Procedure Conflict of Laws (cross Border Litigation) Liquidator Costs Costs of Defending Foreign Proceedings Committee of Inspection Approval Validity of Shareholders' Resolutions +1 more

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Parties

Hop Cheong Building Products Limited (In Liquidation)

Company (in Liquidation)

Deloitte Touche Tohmatsu (Dermot Agnew; Joseph Kin Ching Lo)

Joint and Several Liquidators (applicants)

Mr So King Kay

Contributory / Committee of Inspection Member (respondent)

Mr Li Chin Pang Clement

Contributory / Committee of Inspection Member (respondent)

Mr Chow Cheong Wai

Contributory / Committee of Inspection Member (respondent)

Procedural Posture

Companies (winding Up) No. 941 of 1998 / Application for Directions Under S.200(3) (interlocutory/chambers Hearing)

Legal Issues

  1. 1 Whether liquidators' costs of defending foreign proceedings (Foshan Action) are costs of the liquidation payable out of company assets
  2. 2 Whether liquidators acted improperly or brought a misconceived application disentitling them from recouping costs
  3. 3 Whether approval of the Committee of Inspection was required or feasible before incurring costs

Ratio Decidendi

Because there were no allegations of misconduct, negligence or breach of duty against the liquidators and their actions in relation to the sale and shareholders' meeting were taken in the course of administering the liquidation, the court ordered that the costs of defending the Foshan Action are costs of the liquidation to be taxed and paid out of the company's assets, subject to the liquidators' undertaking to account for any amounts recovered.

Court Disposition

Application granted. Court ordered liquidators' costs of defending the Foshan Action be costs of the liquidation and payable from the company's assets, subject to an undertaking to account for any amounts recovered.

Orders

  • The costs of and occasioned by the liquidators in the Foshan Action are costs of the liquidation and to be taxed and paid out of the Company's assets.
  • Order made upon the undertaking of the liquidators to account to the estate of the Company for any amounts that may be recovered in the Foshan Action.