GREAT STRATEGY PROPERTIES LTD AND ANOTHER v. WONG WAI (GEORGE) AND OTHERS

GREAT STRATEGY PROPERTIES LTD AND ANOTHER v. WONG WAI (GEORGE) AND OTHERS

The court held that the consent order did not operate as a statutory release under s205 because the order was made pursuant to s200(5) and the court had deleted s205 from the draft; accordingly the release argument failed. The claim in HCA960/2015 (Wah Nam) was struck out and dismissed on the ground that it impermissibly sought reflective loss. HCA962/2015 (claims by Great Strategy and Crystal Services) was not struck out because those plaintiffs asserted direct losses distinct from reflective loss, pleadings could be amended where defective, limitation and attribution issues were not appropriate for strike out, and the Sanction Decision did not afford the former liquidators immunity from...

Citation
GREAT STRATEGY PROPERTIES LTD AND ANOTHER v. WONG WAI (GEORGE) AND OTHERS
Parties
Plaintiff (company in Liquidation): Wah Nam Group Limited; Former Joint and Several Liquidator: Roderick John Sutton; Former Joint and Several Liquidator: Desmond Chung Seng Chiong; Current Liquidators: Current Joint and Several Liquidators; Plaintiff (hca 962/2015): Great Strategy Limited; Plaintiff (hca 962/2015): Crystal Services; 1st Defendant (alleged Employee/agent): George Wong; 6th Defendant: Ferrier Hodgson
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
5 September 2017
Case Number
HCA962/2015
Procedural Posture
Companies (winding Up) Proceedings; Civil Claims Against Former Liquidators for Negligence/misfeasance; Reflective Loss Issues / Application to Strike Out Pleadings; Judgment on Strike Out Applications
Outcome
Partly allowed: strike-out application granted in part and dismissed in part
Legal Topics
Reflective Loss, Liquidator Release (s200(5) V S205), Sanction of Compromises by Liquidators, Limitation (s31 Knowledge), Abuse of Process/res Judicata, Attribution of Knowledge/bilta Principle, Vicarious Liability, Misfeasance
Source Language
EN
Company Law Insolvency Law Civil Procedure Limitation Law Agency/vicarious Liability Equity and Trusts Reflective Loss Liquidator Release (s200(5) V S205) +6 more

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Parties

Wah Nam Group Limited

Plaintiff (company in Liquidation)

Roderick John Sutton

Former Joint and Several Liquidator

Desmond Chung Seng Chiong

Former Joint and Several Liquidator

Current Joint and Several Liquidators

Current Liquidators

Great Strategy Limited

Plaintiff (hca 962/2015)

Crystal Services

Plaintiff (hca 962/2015)

George Wong

1st Defendant (alleged Employee/agent)

Ferrier Hodgson

6th Defendant

Procedural Posture

Companies (winding Up) Proceedings; Civil Claims Against Former Liquidators for Negligence/misfeasance; Reflective Loss Issues / Application to Strike Out Pleadings; Judgment on Strike Out Applications

Legal Issues

  1. 1 Whether consent order dated 2 May 2012 operated as a release under s205 discharging former liquidators from liability (Release Issue)
  2. 2 Whether the Sanction Decision bars re-litigation or affords immunity (res judicata/sanction)
  3. 3 Whether Wah Nam's claim is barred by the rule against reflective loss

Ratio Decidendi

The court held that the consent order did not operate as a statutory release under s205 because the order was made pursuant to s200(5) and the court had deleted s205 from the draft; accordingly the release argument failed. The claim in HCA960/2015 (Wah Nam) was struck out and dismissed on the ground that it impermissibly sought reflective loss. HCA962/2015 (claims by Great Strategy and Crystal Services) was not struck out because those plaintiffs asserted direct losses distinct from reflective loss, pleadings could be amended where defective, limitation and attribution issues were not appropriate for strike out, and the Sanction Decision did not afford the former liquidators immunity from...

Court Disposition

Partly allowed: strike-out application granted in part and dismissed in part

Orders

  • HCA960/2015 (Wah Nam Group Limited) struck out and the action dismissed
  • HCA962/2015 (Great Strategy and Crystal Services) not struck out; claim to proceed