LAU KOON YING MATTHEW, as the Executor of the estate of LAU YIU WING, deceased (“the Deceased”) v. LAU TARK WING AND ANOTHER

LAU KOON YING MATTHEW, as the Executor of the estate of LAU YIU WING, deceased (“the Deceased”) v. LAU TARK WING AND ANOTHER

The master erred in law and in the exercise of discretion by awarding compound interest: there was insufficient evidence that the defendants used the sums in a commercial or trading manner or otherwise put themselves in a position to attract a presumption of compounded profit, and the master misunderstood and misapplied the legal principle permitting compound interest in lieu of an account of profits. The appropriate remedy is simple interest; extension of time to appeal is granted limited to the ground attacking compound interest; other parts of the master's orders stand.

Citation
[2020] HKCFI 2107
Parties
Plaintiff; Executor of the Estate of LAU YIU Wing, Deceased: LAU KOON YING MATTHEW; 1st Defendant; Sued in Personal Capacity and as Executor of Estate of TANG MEI HO: LAU TARK WING; Defendant; Company Controlled by LAU TARK WING (party to 2305 and 2306 Actions): WING HING RESOURCES LIMITED; Defendant; Company Controlled by LAU TARK WING (party to 2306 Action): CABA RESOURCES LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
21 August 2020
Case Number
HCAP23/2013
Procedural Posture
Appeal From Master's Decision on Taking of Accounts and Related Probate and Civil Actions / Judgment on Appeal and Application for Extension of Time (decision Dated 21 August 2020)
Outcome
Appeal allowed in part. Extension of time to appeal granted limited to challenge to compound interest (Ground 1). Compound interest awarded by the Master set aside and replaced by simple interest. All other parts of the Master's Orders upheld.
Legal Topics
Compound Interest, Taking of Accounts, Surcharge and Falsification of Accounts, Extension of Time to Appeal, Fiduciary Duty, Pre Judgment Interest Period, Deduction for Construction Costs
Source Language
EN
Equity Trusts Probate Civil Procedure Remedies for Breach of Fiduciary Duty Compound Interest Taking of Accounts Surcharge and Falsification of Accounts +4 more

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Parties

LAU KOON YING MATTHEW

Plaintiff; Executor of the Estate of LAU YIU Wing, Deceased

LAU TARK WING

1st Defendant; Sued in Personal Capacity and as Executor of Estate of TANG MEI HO

WING HING RESOURCES LIMITED

Defendant; Company Controlled by LAU TARK WING (party to 2305 and 2306 Actions)

CABA RESOURCES LIMITED

Defendant; Company Controlled by LAU TARK WING (party to 2306 Action)

Procedural Posture

Appeal From Master's Decision on Taking of Accounts and Related Probate and Civil Actions / Judgment on Appeal and Application for Extension of Time (decision Dated 21 August 2020)

Legal Issues

  1. 1 Whether compound (compound) interest was properly awarded in lieu of an account of profits
  2. 2 Whether interest should run from the dates of accrual (1992/1997) or from commencement of proceedings because of plaintiff delay
  3. 3 Whether construction costs should be credited/deducted from amounts due

Ratio Decidendi

The master erred in law and in the exercise of discretion by awarding compound interest: there was insufficient evidence that the defendants used the sums in a commercial or trading manner or otherwise put themselves in a position to attract a presumption of compounded profit, and the master misunderstood and misapplied the legal principle permitting compound interest in lieu of an account of profits. The appropriate remedy is simple interest; extension of time to appeal is granted limited to the ground attacking compound interest; other parts of the master's orders stand.

Court Disposition

Appeal allowed in part. Extension of time to appeal granted limited to challenge to compound interest (Ground 1). Compound interest awarded by the Master set aside and replaced by simple interest. All other parts of the Master's Orders upheld.

Orders

  • Extension of time to appeal granted in respect of Ground 1 only
  • Compound interest in the Master's Orders to be replaced by simple interest