THE NEW CHINA HONG KONG GROUP LTD (IN CREDITORS\' VOLUNTARY LIQUIDATION) AND OTHERS v. ERNST & YOUNG (A Firm) AND ANOTHER

THE NEW CHINA HONG KONG GROUP LTD (IN CREDITORS\' VOLUNTARY LIQUIDATION) AND OTHERS v. ERNST & YOUNG (A Firm) AND ANOTHER

On the pleaded facts and evidence the essential facts underpinning the plaintiffs' negligence and contract claims were or should have been known to the companies (via Executive/Credit Committees and key officers) before the relevant limitation cut-offs; s.31 and s.26 were not engaged on any arguable basis; equitable claims correspond to common law claims and are subject to limitation by analogy; accordingly most claims are plainly time-barred and were struck out, save only the audit fees claim against E&Y and the Payment-Outs claim against Wu which were not plainly statute-barred.

Citation
THE NEW CHINA HONG KONG GROUP LTD (IN CREDITORS\' VOLUNTARY LIQUIDATION) AND OTHERS v. ERNST & YOUNG (A Firm) AND ANOTHER
Parties
1st Plaintiff (in Creditors Voluntary Liquidation): THE NEW CHINA HONG KONG GROUP LIMITED; 2nd Plaintiff (in Creditors Voluntary Liquidation): THE NEW CHINA HONG KONG CAPITAL LIMITED; 3rd Plaintiff (in Creditors Voluntary Liquidation): THE NEW CHINA HONG KONG FINANCE LIMITED; 1st Defendant: ERNST & YOUNG (A Firm); 2nd Defendant: WU TING YUK ANTHONY
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
29 August 2008
Case Number
HCCL41/2004
Procedural Posture
Commercial Action (consolidated HCCL 41/2004 & HCCL 2/2005) / Pre Trial Applications: Strike Out and Re Amendment Applications Decided; Preliminary Issues Adjourned
Outcome
Partially allowed: defendants' strike-out applications granted in large part; most claims dismissed as time-barred; limited amendments permitted; two preliminary issue summonses adjourned
Legal Topics
Limitation (limitation Ordinance), Accrual of Cause of Action, Section 31 Knowledge, Section 26 Deliberate Concealment, Attribution of Corporate Knowledge, Audit Conflict of Interest, Strike Out Jurisdiction
Source Language
EN
Company Law Professional Negligence Equity and Fiduciary Duty Limitation Law Restitution Limitation (limitation Ordinance) Accrual of Cause of Action Section 31 Knowledge +4 more

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Parties

THE NEW CHINA HONG KONG GROUP LIMITED

1st Plaintiff (in Creditors Voluntary Liquidation)

THE NEW CHINA HONG KONG CAPITAL LIMITED

2nd Plaintiff (in Creditors Voluntary Liquidation)

THE NEW CHINA HONG KONG FINANCE LIMITED

3rd Plaintiff (in Creditors Voluntary Liquidation)

ERNST & YOUNG (A Firm)

1st Defendant

WU TING YUK ANTHONY

2nd Defendant

Procedural Posture

Commercial Action (consolidated HCCL 41/2004 & HCCL 2/2005) / Pre Trial Applications: Strike Out and Re Amendment Applications Decided; Preliminary Issues Adjourned

Legal Issues

  1. 1 Whether plaintiffs' claims are time-barred under the Limitation Ordinance
  2. 2 When causes of action in tort and contract accrued in respect of 1994 and 1995 accounts
  3. 3 Whether s.31 (knowledge) or s.26 (deliberate concealment) postpone limitation

Ratio Decidendi

On the pleaded facts and evidence the essential facts underpinning the plaintiffs' negligence and contract claims were or should have been known to the companies (via Executive/Credit Committees and key officers) before the relevant limitation cut-offs; s.31 and s.26 were not engaged on any arguable basis; equitable claims correspond to common law claims and are subject to limitation by analogy; accordingly most claims are plainly time-barred and were struck out, save only the audit fees claim against E&Y and the Payment-Outs claim against Wu which were not plainly statute-barred.

Court Disposition

Partially allowed: defendants' strike-out applications granted in large part; most claims dismissed as time-barred; limited amendments permitted; two preliminary issue summonses adjourned

Orders

  • 1st Defendant: strike out paragraphs 7 to 21B and 28 to 79 of Amended Consolidated Points of Claim insofar as they relate to 1st Defendant and strike out prayers (1)(i)-(1)(v); strike out all claims by NCHKFin
  • 2nd Defendant: strike out paragraphs 29, 29B, 36A to 45, 60, 61, 62A to 79, 85 to 89A, 93 to 97 insofar as they relate to 2nd Defendant and strike out prayers (2)(i)-(vi) and (viii); strike out all claims by NCHKGp and NCHKFin