RE GOLDLORY RESTAURANT LTD

RE GOLDLORY RESTAURANT LTD

The court holds that section 196(2) and rule146(2) confer an unfettered discretion on the court to determine the basis of remuneration for liquidators in summary cases under s227F; the percentage basis is not the default and there is no requirement to show special circumstances to adopt a time cost basis. As a matter of practice the time cost basis should be adopted for summary cases and provided for when a summary procedure order is made to ensure viability and efficiency of the Panel T Scheme and to minimize costs.

Citation
RE GOLDLORY RESTAURANT LTD
Parties
Official Receiver: Official Receiver; Liquidators Firm: Alvarez & Marsal Asia Ltd; Liquidators Firm: Baker Tilly Hong Kong Business Recovery Limited; Liquidators Firm: Kenny Tam & Co.; Liquidators Firm: Gallant Y.T. Ho & Co.; Companies: Goldlory Restaurant Limited and other companies in schedule
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
7 July 2006
Case Number
HCCW1017/2002
Procedural Posture
Company Winding Up; Summary Procedure Remuneration Issue / Interlocutory Determination / Judgment on Referred Issue
Outcome
Issue determined in favour of adopting a time cost basis for remuneration of liquidators in s227F summary winding-up cases; court discretion under s196(2) preserved and percentage basis not treated as default
Legal Topics
Liquidator Remuneration, Summary Winding Up (s227 F), Time Cost Vs Percentage Basis, Court Discretion Under S196(2)
Source Language
EN
Company Law Insolvency Law Statutory Interpretation Civil Procedure Liquidator Remuneration Summary Winding Up (s227 F) Time Cost Vs Percentage Basis Court Discretion Under S196(2)

Case Brief

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Parties

Official Receiver

Official Receiver

Alvarez & Marsal Asia Ltd

Liquidators Firm

Baker Tilly Hong Kong Business Recovery Limited

Liquidators Firm

Kenny Tam & Co.

Liquidators Firm

Gallant Y.T. Ho & Co.

Liquidators Firm

Goldlory Restaurant Limited and other companies in schedule

Companies

Procedural Posture

Company Winding Up; Summary Procedure Remuneration Issue / Interlocutory Determination / Judgment on Referred Issue

Legal Issues

  1. 1 Whether remuneration of liquidators appointed under s227F should be fixed on a percentage basis or on a time cost basis
  2. 2 Whether rule 146(2) mandates a percentage default which displaces the court's discretion under s196(2)
  3. 3 Whether special circumstances must be shown to depart from a percentage basis in summary cases

Ratio Decidendi

The court holds that section 196(2) and rule146(2) confer an unfettered discretion on the court to determine the basis of remuneration for liquidators in summary cases under s227F; the percentage basis is not the default and there is no requirement to show special circumstances to adopt a time cost basis. As a matter of practice the time cost basis should be adopted for summary cases and provided for when a summary procedure order is made to ensure viability and efficiency of the Panel T Scheme and to minimize costs.

Court Disposition

Issue determined in favour of adopting a time cost basis for remuneration of liquidators in s227F summary winding-up cases; court discretion under s196(2) preserved and percentage basis not treated as default

Orders

  • As a matter of practice, time cost basis to be adopted and provided for when a summary procedure order under s227F is made
  • Costs of the earlier hearing on 23 March 2006 reserved