CHINACULTURE.COM LTD v. LAM TING BALL, PAUL AND OTHERS

CHINACULTURE.COM LTD v. LAM TING BALL, PAUL AND OTHERS

The court refused to admit additional expert evidence on Mainland planning prospects because it would not add material value and would introduce hypothetical complexity; but allowed structured corporate finance expert evidence, directing the judge to draft issues reflecting market practice and what would reasonably have informed IPO pricing.

Citation
[2020] HKCFI 1698
Parties
Plaintiff (statutory Derivative): CHINACULTURE.COM LIMITED; 1st Defendant: LAM TING BALL PAUL; 2nd Defendant: TSUI HO CHUEN PHILIP; 3rd Defendant: CHONG CHI KWAN; 4th Defendant (company): CNT GROUP LIMITED (北海集團有限公司)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
24 July 2020
Case Number
HCA2902/2017
Procedural Posture
Statutory Derivative Action / Case Management / Pre Trial (trial Fixed to Commence 9 November 2020 for 25 Days)
Outcome
Court refused application to admit additional Mainland planning expert evidence regarding converting the Property's use; directed that corporate finance expert issues be finalised by the judge and that parties comment on the drafted issues within seven clear days; trial remains fixed to 9 November 2020.
Legal Topics
Spin Off/ipo Pricing, Derivative Claim, Expert Evidence on Valuation, Land Redevelopment Valuation, Corporate Finance Valuation Practice
Source Language
EN
Company Law Securities Law Evidence (expert) Real Property Valuation Corporate Finance Spin Off/ipo Pricing Derivative Claim Expert Evidence on Valuation +2 more

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Parties

CHINACULTURE.COM LIMITED

Plaintiff (statutory Derivative)

LAM TING BALL PAUL

1st Defendant

TSUI HO CHUEN PHILIP

2nd Defendant

CHONG CHI KWAN

3rd Defendant

CNT GROUP LIMITED (北海集團有限公司)

4th Defendant (company)

Procedural Posture

Statutory Derivative Action / Case Management / Pre Trial (trial Fixed to Commence 9 November 2020 for 25 Days)

Legal Issues

  1. 1 Whether the paint business was disposed at an undervalue due to failure to reflect value of Shajing land in CPM IPO pricing
  2. 2 Whether additional expert evidence on Mainland town planning and prospect of converting land use was necessary and admissible
  3. 3 How corporate finance experts should be instructed to opine on IPO pricing and whether prospectus price range was reasonable

Ratio Decidendi

The court refused to admit additional expert evidence on Mainland planning prospects because it would not add material value and would introduce hypothetical complexity; but allowed structured corporate finance expert evidence, directing the judge to draft issues reflecting market practice and what would reasonably have informed IPO pricing.

Court Disposition

Court refused application to admit additional Mainland planning expert evidence regarding converting the Property's use; directed that corporate finance expert issues be finalised by the judge and that parties comment on the drafted issues within seven clear days; trial remains fixed to 9 November 2020.

Orders

  • Application to adduce additional expert opinion evidence on prospects of converting the use of the Property is refused
  • The judge's draft issues for corporate finance experts are to be provided to parties for comment within seven clear calendar days