CALLWIN INTERNATIONAL ELECTRIC CO LTD AND ANOTHER v. DIRECTOR OF ENGINEERING DEVELOPMENT

CALLWIN INTERNATIONAL ELECTRIC CO LTD AND ANOTHER v. DIRECTOR OF ENGINEERING DEVELOPMENT

On the facts the Tribunal found the entire retail business was extinguished by the resumption; the company reasonably discharged its duty to mitigate in the emergency circumstances and given its limited corporate resources and absence of interim compensation; goodwill was assessed at HKD 1,200,000 after allowing for business risks and contingencies; stock loss was assessed at HKD 3,240,000 based on gross stock less apportioned net auction proceeds; severance pay of HKD 103,200 and agreed fixtures of HKD 772,712.30 were awarded; interest awarded from 31 March 1983 to date of payment; costs to applicants.

Citation
CALLWIN INTERNATIONAL ELECTRIC CO LTD AND ANOTHER v. DIRECTOR OF ENGINEERING DEVELOPMENT
Parties
1st Applicant: Callwin International Electric Company Limited; 2nd Applicant: Callwin Electric Company Limited; Respondent: Director of Engineering Development
Court
Lands Tribunal
Jurisdiction
Hong Kong
Judgment Date
17 December 1984
Case Number
LDMT3/1984
Procedural Posture
Mass Transit Reference (compulsory Land Resumption Compensation) / Final Judgment (lands Tribunal)
Outcome
Compensation awarded in favour of 2nd Applicant Callwin Electric Company Limited; 1st Applicant's claim dismissed.
Legal Topics
Compulsory Acquisition, Goodwill Valuation, Mitigation of Loss, Stock Valuation and Auction, Severance Pay, Interest on Compensation
Source Language
EN
Property Administrative Law Employment Commercial Law Compulsory Acquisition Goodwill Valuation Mitigation of Loss Stock Valuation and Auction +2 more

Case Brief

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Parties

Callwin International Electric Company Limited

1st Applicant

Callwin Electric Company Limited

2nd Applicant

Director of Engineering Development

Respondent

Procedural Posture

Mass Transit Reference (compulsory Land Resumption Compensation) / Final Judgment (lands Tribunal)

Legal Issues

  1. 1 Whether resumption wholly extinguished the business or only part of it
  2. 2 Whether the resumed owner discharged the duty to mitigate, including relocation
  3. 3 Appropriate method and quantum for valuation of goodwill

Ratio Decidendi

On the facts the Tribunal found the entire retail business was extinguished by the resumption; the company reasonably discharged its duty to mitigate in the emergency circumstances and given its limited corporate resources and absence of interim compensation; goodwill was assessed at HKD 1,200,000 after allowing for business risks and contingencies; stock loss was assessed at HKD 3,240,000 based on gross stock less apportioned net auction proceeds; severance pay of HKD 103,200 and agreed fixtures of HKD 772,712.30 were awarded; interest awarded from 31 March 1983 to date of payment; costs to applicants.

Court Disposition

Compensation awarded in favour of 2nd Applicant Callwin Electric Company Limited; 1st Applicant's claim dismissed.

Orders

  • Pay Callwin Electric Company Limited HKD 5,315,912.30 as compensation
  • Payment breakdown: goodwill HKD 1,200,000; stock HKD 3,240,000; fixtures HKD 772,712.30; severance pay HKD 103,200