RE GOLDLORY RESTAURANT LTD

RE GOLDLORY RESTAURANT LTD

The court held that s196(2) and rule146(2) confer an unfettered discretion upon the court to determine the basis of a liquidator's remuneration in summary cases; the percentage basis applicable to the Official Receiver is not the default. As a matter of practice the court will adopt the time cost basis as the standard in summary winding-up orders under s227F and such basis should be provided for when the summary procedure order is made; no special circumstances need be shown to adopt time costs.

Citation
RE GOLDLORY RESTAURANT LTD
Parties
Companies: Goldlory Restaurant Limited & Twenty Other Companies (see schedule); Official Receiver: Official Receiver; Liquidators Firm: Alvarez & Marsal Asia Limited; Liquidators Firm: Baker Tilly Hong Kong Business Recovery Limited; Liquidators Firm: Kenny Tam & Co.; Liquidators Firm: Messrs Gallant Y.T. Ho & Co.
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
7 July 2006
Case Number
HCCW1046/2002
Procedural Posture
Companies Ordinance Summary Winding Up (consolidated References) / Determination of Statutory Interpretation and Practice Regarding Liquidator Remuneration Basis
Outcome
Issue determined: court declares it has discretion and adopts time cost basis as the standard practice for remuneration of liquidators in summary winding-up cases under s227F; percentage is not the default.
Legal Topics
Liquidator Remuneration, Summary Winding Up, Interpretation of Statute and Rules, Panel T Outsourcing Scheme
Source Language
EN
Company Law Insolvency Civil Procedure Liquidator Remuneration Summary Winding Up Interpretation of Statute and Rules Panel T Outsourcing Scheme

Case Brief

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Parties

Goldlory Restaurant Limited & Twenty Other Companies (see schedule)

Companies

Official Receiver

Official Receiver

Alvarez & Marsal Asia Limited

Liquidators Firm

Baker Tilly Hong Kong Business Recovery Limited

Liquidators Firm

Kenny Tam & Co.

Liquidators Firm

Messrs Gallant Y.T. Ho & Co.

Liquidators Firm

Procedural Posture

Companies Ordinance Summary Winding Up (consolidated References) / Determination of Statutory Interpretation and Practice Regarding Liquidator Remuneration Basis

Legal Issues

  1. 1 Whether remuneration of liquidators appointed under s227F of the Companies Ordinance should be fixed on a percentage basis or on a time cost basis pursuant to s196(2) and rule146(2) in summary winding-up cases

Ratio Decidendi

The court held that s196(2) and rule146(2) confer an unfettered discretion upon the court to determine the basis of a liquidator's remuneration in summary cases; the percentage basis applicable to the Official Receiver is not the default. As a matter of practice the court will adopt the time cost basis as the standard in summary winding-up orders under s227F and such basis should be provided for when the summary procedure order is made; no special circumstances need be shown to adopt time costs.

Court Disposition

Issue determined: court declares it has discretion and adopts time cost basis as the standard practice for remuneration of liquidators in summary winding-up cases under s227F; percentage is not the default.

Orders

  • The court determines that remuneration of liquidators in summary cases under s227F shall, as a matter of practice, be fixed on a time cost basis unless the court orders otherwise.
  • The court holds that s196(2) and rule146(2) confer discretion and do not mandate the percentage basis as the default for summary cases.