LU JUN v. YU QI AND OTHERS

LU JUN v. YU QI AND OTHERS

Where a company is solvent and shareholders have a legitimate financial interest, the company must be provided with the taxation package and an opportunity to comment on provisional liquidators' fees; the Court ordered a specific procedure and timetable for disclosure, comment, and submission of disputed items to the Taxing Master in accordance with the Procedural Guide, and directed that assessed costs be paid out of the company's assets.

Citation
LU JUN v. YU QI AND OTHERS
Parties
Petitioner: Lu Jun; 4th Respondent (the Company): Astrotec Company Limited; 1st Respondent: 1st respondent; 3rd Respondent: 3rd respondent; Former Joint and Several Provisional Liquidator: Lai Kar Yan Derek; Former Joint and Several Provisional Liquidator: Darach Haughey
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
20 September 2016
Case Number
HCCW377/2014
Procedural Posture
Companies (winding Up) Petition Under Section 177(1)(f) Cap 32 / Application for Assessment/taxation of Provisional Liquidators' Costs After Dismissal of Petition and Discharge of Provisional Liquidators
Outcome
Court ordered production of taxation package to the Company, set a procedure and timetable for company comments and responses, referred disputed items to the Taxing Master for assessment, and directed payment of assessed costs out of the Company's assets.
Legal Topics
Provisional Liquidators, Taxation of Costs, Shareholder Disputes, Natural Justice, Court Procedural Guidance
Source Language
EN
Company Law Civil Procedure Costs and Taxation Provisional Liquidators Taxation of Costs Shareholder Disputes Natural Justice Court Procedural Guidance

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Parties

Lu Jun

Petitioner

Astrotec Company Limited

4th Respondent (the Company)

1st respondent

1st Respondent

3rd respondent

3rd Respondent

Lai Kar Yan Derek

Former Joint and Several Provisional Liquidator

Darach Haughey

Former Joint and Several Provisional Liquidator

Procedural Posture

Companies (winding Up) Petition Under Section 177(1)(f) Cap 32 / Application for Assessment/taxation of Provisional Liquidators' Costs After Dismissal of Petition and Discharge of Provisional Liquidators

Legal Issues

  1. 1 Whether a solvent company and its shareholders must be given an opportunity to see and comment on the taxation package for provisional liquidators' fees
  2. 2 Whether the Court Procedural Guide excludes involvement of the company in taxation of provisional liquidators' bills
  3. 3 Whether orders appointing provisional liquidators over solvent companies should require notification to shareholders and limit investigatory powers

Ratio Decidendi

Where a company is solvent and shareholders have a legitimate financial interest, the company must be provided with the taxation package and an opportunity to comment on provisional liquidators' fees; the Court ordered a specific procedure and timetable for disclosure, comment, and submission of disputed items to the Taxing Master in accordance with the Procedural Guide, and directed that assessed costs be paid out of the company's assets.

Court Disposition

Court ordered production of taxation package to the Company, set a procedure and timetable for company comments and responses, referred disputed items to the Taxing Master for assessment, and directed payment of assessed costs out of the Company's assets.

Orders

  • Provisional liquidators to provide the Company a copy of the taxation package dated 9 November 2015.
  • Company to notify provisional liquidators' solicitors in writing within 26 clear calendar days of receipt of the package of disputed items, reasons and proposed amounts, in same format as the package.