MAN PING NAM AND ANOTHER v. MAN FONG HANG

MAN PING NAM AND ANOTHER v. MAN FONG HANG

The plaintiff failed to prove that the managers' conduct caused any loss; the subsale price to a developer conditioned on vacant possession and on governmental approvals was not a reliable indicator of the market value of a sale without vacant possession; the judge's use of a notional 10% deduction and reliance on rejected valuation comparables was arbitrary and unsustainable; accordingly the award of equitable compensation was set aside, while orders requiring proper accounting for proceeds remain.

Citation
MAN PING NAM AND ANOTHER v. MAN FONG HANG
Parties
1st Appellant: Man Ping Nam; 2nd Appellant: Man Ying Lam; Respondent (surviving Administrator of the Estate of Man Mou Hei): Man Fong Hang
Court
Court of Final Appeal
Jurisdiction
Hong Kong
Judgment Date
27 October 2006
Case Number
FACV5/2006
Procedural Posture
Civil Appeal / Final Appeal (court of Final Appeal) Judgment
Outcome
Appeal allowed; paragraph 1 of the judge's order of 11 December 2003 (as amended 17 March 2004) set aside; costs orders made in favour of defendants with limited exceptions; accounting orders preserved.
Legal Topics
Breach of Trust, Equitable Compensation, Vacant Possession, Valuation Evidence, Accounting by Trustees, Causation
Source Language
EN
Trusts Property Law Equity Land Law Valuation Breach of Trust Equitable Compensation Vacant Possession +3 more

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Parties

Man Ping Nam

1st Appellant

Man Ying Lam

2nd Appellant

Man Fong Hang

Respondent (surviving Administrator of the Estate of Man Mou Hei)

Procedural Posture

Civil Appeal / Final Appeal (court of Final Appeal) Judgment

Legal Issues

  1. 1 Whether the managers sold trust land at a gross undervalue constituting breach of trust
  2. 2 Whether the sub-sale price to a developer with vacant possession is a proper comparator for valuing a sale without vacant possession
  3. 3 Whether a notional 10% discount for lack of vacant possession is a reliable benchmark

Ratio Decidendi

The plaintiff failed to prove that the managers' conduct caused any loss; the subsale price to a developer conditioned on vacant possession and on governmental approvals was not a reliable indicator of the market value of a sale without vacant possession; the judge's use of a notional 10% deduction and reliance on rejected valuation comparables was arbitrary and unsustainable; accordingly the award of equitable compensation was set aside, while orders requiring proper accounting for proceeds remain.

Court Disposition

Appeal allowed; paragraph 1 of the judge's order of 11 December 2003 (as amended 17 March 2004) set aside; costs orders made in favour of defendants with limited exceptions; accounting orders preserved.

Orders

  • Set aside paragraph 1 of the judge's order of 11 December 2003 (as amended 17 March 2004)
  • Order nisi that the plaintiff pays the defendants' costs both in this Court and in the courts below, save for the defendants' costs of complying with the judge's order as to accounts