ZHUANG PP HOLDINGS LTD formerly known as CHINA UNITED HOLDINGS LTD AND OTHERS v. LAM HOW MUN PETER AND OTHERS

ZHUANG PP HOLDINGS LTD formerly known as CHINA UNITED HOLDINGS LTD AND OTHERS v. LAM HOW MUN PETER AND OTHERS

The Court accepted plaintiffs' expert valuation (adjusted and cross-checked) that the open market value of the Basement as at 9 May 1997 was HKD 110.5 million. Vigers' valuation of HKD 470 million was manifestly unreasonable: use of small street-level comparables, failure to state saleable area, failure to inspect, exaggerated MTR effect and lack of disclosed comparable analysis demonstrated breach of duty. Negligence caused loss; fixing/collusion allegation not proven on balance but is unnecessary to establish liability. Damages awarded for difference between paid price and true value, less sum recovered from other defendants.

Citation
ZHUANG PP HOLDINGS LTD formerly known as CHINA UNITED HOLDINGS LTD AND OTHERS v. LAM HOW MUN PETER AND OTHERS
Parties
1st Plaintiff: Zhuang PP Holdings Limited (formerly China United Holdings Limited); 2nd Plaintiff: Great Gains International Limited; 3rd Plaintiff: East Champion Limited; 4th Plaintiff: Large Investments Limited; 1st Defendant: Lam How Mun Peter; 2nd Defendant: Kwok Wai Tak (also known as Kwok Han Qiao); 3rd Defendant: Kwok Wai Ming; 4th Defendant: Get Rich Enterprises Limited; 7th Defendant (valuers): Vigers Hong Kong Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
19 August 2009
Case Number
HCA1589/2003
Procedural Posture
Professional Negligence / Breach of Contract (valuation) / Final Trial Judgment (court of First Instance)
Outcome
Judgment for Plaintiffs on professional negligence claim against Vigers Hong Kong Limited
Legal Topics
Valuation Standards, Expert Evidence, Comparables and Adjustments, Causation, Contributory Negligence, Measure of Damages
Source Language
EN
Tort Contract Professional Negligence Evidence Valuation Standards Expert Evidence Comparables and Adjustments Causation +2 more

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Parties

Zhuang PP Holdings Limited (formerly China United Holdings Limited)

1st Plaintiff

Great Gains International Limited

2nd Plaintiff

East Champion Limited

3rd Plaintiff

Large Investments Limited

4th Plaintiff

Lam How Mun Peter

1st Defendant

Kwok Wai Tak (also known as Kwok Han Qiao)

2nd Defendant

Kwok Wai Ming

3rd Defendant

Get Rich Enterprises Limited

4th Defendant

Vigers Hong Kong Limited

7th Defendant (valuers)

Procedural Posture

Professional Negligence / Breach of Contract (valuation) / Final Trial Judgment (court of First Instance)

Legal Issues

  1. 1 Whether Vigers (through valuer Joseph Leung) was negligent in valuing the Basement on 9 May 1997
  2. 2 Whether the valuation was fixed (collusion) between valuer and defendants
  3. 3 Whether the plaintiffs relied on the valuation and causation of loss was established

Ratio Decidendi

The Court accepted plaintiffs' expert valuation (adjusted and cross-checked) that the open market value of the Basement as at 9 May 1997 was HKD 110.5 million. Vigers' valuation of HKD 470 million was manifestly unreasonable: use of small street-level comparables, failure to state saleable area, failure to inspect, exaggerated MTR effect and lack of disclosed comparable analysis demonstrated breach of duty. Negligence caused loss; fixing/collusion allegation not proven on balance but is unnecessary to establish liability. Damages awarded for difference between paid price and true value, less sum recovered from other defendants.

Court Disposition

Judgment for Plaintiffs on professional negligence claim against Vigers Hong Kong Limited

Orders

  • Judgment entered for Plaintiffs in the sum of HKD 257791171.26
  • Interest awarded from date of writ on the judgment sum