RE GOLDLORY RESTAURANT LTD

RE GOLDLORY RESTAURANT LTD

The court held that s196(2) and rule146(2) do not compel the percentage basis as the default in summary cases; the court has unfettered discretion and, as a matter of practice, the time cost basis should be adopted for liquidators in summary winding-up under s227F and provided for at the time the summary procedure order is made; no special circumstances need be shown to adopt time costs.

Citation
RE GOLDLORY RESTAURANT LTD
Parties
Respondent / Official Receiver: Official Receiver; Liquidators (panel Firm) / Applicant: Alvarez & Marsal Asia Limited; Liquidators (panel Firm) / Applicant: Baker Tilly Hong Kong Business Recovery Limited; Liquidators (panel Firm) / Applicant: Kenny Tam & Co.; Companies Subject to Winding Up: Goldlory Restaurant Limited & others (companies listed in schedule)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
7 July 2006
Case Number
HCCW456/2001
Procedural Posture
Company Winding Up (summary Procedure) Statutory Interpretation Reference / Determination of Referred Issue in Chambers (final Decision)
Outcome
Issue determined: time cost basis adopted as practice for remuneration of liquidators in summary winding-up under s227F; court not bound to apply percentage basis as default; no requirement to show special circumstances to adopt time costs.
Legal Topics
Liquidators' Remuneration, Summary Winding Up Under S227 F, Basis of Fees (time Cost V Percentage), Companies (winding Up) Rules R146(2), Companies Ordinance S196(2)
Source Language
EN
Company Law Insolvency Law Statutory Interpretation Civil Procedure Liquidators' Remuneration Summary Winding Up Under S227 F Basis of Fees (time Cost V Percentage) Companies (winding Up) Rules R146(2) +1 more

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Parties

Official Receiver

Respondent / Official Receiver

Alvarez & Marsal Asia Limited

Liquidators (panel Firm) / Applicant

Baker Tilly Hong Kong Business Recovery Limited

Liquidators (panel Firm) / Applicant

Kenny Tam & Co.

Liquidators (panel Firm) / Applicant

Goldlory Restaurant Limited & others (companies listed in schedule)

Companies Subject to Winding Up

Procedural Posture

Company Winding Up (summary Procedure) Statutory Interpretation Reference / Determination of Referred Issue in Chambers (final Decision)

Legal Issues

  1. 1 Whether remuneration of liquidators appointed under s227F should be assessed on a percentage basis (as per fee scales) or on a time cost basis
  2. 2 Whether rule 146(2) makes percentage basis the default absent a court order or whether the court has unfettered discretion under s196(2) to fix remuneration on other bases
  3. 3 Whether special/exceptional circumstances must be shown to depart from percentage basis in summary cases

Ratio Decidendi

The court held that s196(2) and rule146(2) do not compel the percentage basis as the default in summary cases; the court has unfettered discretion and, as a matter of practice, the time cost basis should be adopted for liquidators in summary winding-up under s227F and provided for at the time the summary procedure order is made; no special circumstances need be shown to adopt time costs.

Court Disposition

Issue determined: time cost basis adopted as practice for remuneration of liquidators in summary winding-up under s227F; court not bound to apply percentage basis as default; no requirement to show special circumstances to adopt time costs.

Orders

  • Adopt time cost basis as the basis of remuneration for liquidators in summary procedure orders under s227F and provide for that basis when making the summary procedure order
  • Costs of earlier hearing on 23 March 2006 reserved; Official Receiver and parties to inform the court by letter within 7 days what order as to costs they seek