CHINA MEDICAL TECHNOLOGIES, INC. (IN OFFICIAL LIQUATION) v. KPMG (A FIRM)

CHINA MEDICAL TECHNOLOGIES, INC. (IN OFFICIAL LIQUATION) v. KPMG (A FIRM)

The court found that the liquidators demonstrated good reason to extend the protective writs because they had genuine investigative difficulties, partly attributable to KPMG's failure to provide or produce documents, and that the balance of hardship favored extension because prejudice to KPMG was minimal while prejudice to the insolvent company would be grave; accordingly the court exercised its discretion to extend the writs to 19 June 2018.

Citation
CHINA MEDICAL TECHNOLOGIES, INC. (IN OFFICIAL LIQUATION) v. KPMG (A FIRM)
Parties
Plaintiff (liquidator): China Medical Technologies, Inc. (in official liquidation); Defendant (former Auditor): KPMG (a firm)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
8 August 2017
Case Number
HCA1822/2013
Procedural Posture
Civil — Insolvency/claims Preservation (protective Writs) / Ex Parte Applications to Extend Validity of Protective Writs in Chambers
Outcome
Extension granted
Legal Topics
Protective Writs, Extension of Writ Validity (o 6 R 8(2)), Mutual Taking of Evidence (mainland–hong Kong), Preservation of Documents, O 12 R 8 a Service/compel Service
Source Language
EN
Insolvency Law Company Law Civil Procedure Evidence Commercial Litigation Protective Writs Extension of Writ Validity (o 6 R 8(2)) Mutual Taking of Evidence (mainland–hong Kong) +2 more

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Parties

China Medical Technologies, Inc. (in official liquidation)

Plaintiff (liquidator)

KPMG (a firm)

Defendant (former Auditor)

Procedural Posture

Civil — Insolvency/claims Preservation (protective Writs) / Ex Parte Applications to Extend Validity of Protective Writs in Chambers

Legal Issues

  1. 1 Whether there is good reason to extend validity of protective writs under O 6 r 8(2)
  2. 2 Whether the balance of hardship/convenience favors an extension
  3. 3 Whether defendant's conduct contributed to delay and thus supports extension

Ratio Decidendi

The court found that the liquidators demonstrated good reason to extend the protective writs because they had genuine investigative difficulties, partly attributable to KPMG's failure to provide or produce documents, and that the balance of hardship favored extension because prejudice to KPMG was minimal while prejudice to the insolvent company would be grave; accordingly the court exercised its discretion to extend the writs to 19 June 2018.

Court Disposition

Extension granted

Orders

  • Validity of the 1st, 2nd and 3rd KPMG Protective Writs extended to 19 June 2018