SHE WAI HUNG v. JULIANO LIM AND OTHERS

SHE WAI HUNG v. JULIANO LIM AND OTHERS

The court held that the correct valuation date was 18 May 1997 and that, given the factual findings and incomplete disclosure by the 1st respondent, a combined valuation approach (80% net asset approach, 20% earnings approach) using management accounts and the Review Report was appropriate; after adjustments (deduct...

Source-derived case information.

Citation
SHE WAI HUNG v. JULIANO LIM AND OTHERS
Parties
Petitioner: She Wai Hung; 1st Respondent: Juliano Lim; 2nd Respondent: Johnathan Lim; 3rd Respondent (company): Golden Bright Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
26 November 2007
Case Number
HCMP6472/2001
Procedural Posture
Section 168 a Companies Ordinance Petition (unfairly Prejudicial Conduct) / Valuation Hearing and Final Decision (court Determined Valuation)
Outcome
1st respondent ordered to purchase petitioner’s 4,000 shares at an adjusted purchase price; interest awarded; costs ordered (order nisi)
Legal Topics
Unfairly Prejudicial Conduct Under S168 a, Share Buyout Valuation, Expert Qualification and Weight, Use of Audited Vs Management Accounts, Interest and Costs
Source Language
en
Company Law Equity and Remedies Valuation Law Evidence (expert Witnesses) Civil Procedure Unfairly Prejudicial Conduct Under S168 a Share Buyout Valuation Expert Qualification and Weight +2 more

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Parties

She Wai Hung

Petitioner

Juliano Lim

1st Respondent

Johnathan Lim

2nd Respondent

Golden Bright Limited

3rd Respondent (company)

Procedural Posture

Section 168 a Companies Ordinance Petition (unfairly Prejudicial Conduct) / Valuation Hearing and Final Decision (court Determined Valuation)

Legal Issues

  1. 1 Whether the petitioner was entitled to relief under s168A (found established in earlier judgment)
  2. 2 Proper valuation date and methodology for the petitioner’s 40% share (18 May 1997)
  3. 3 Admissibility, qualification and weight to be accorded to rival accounting experts

Ratio Decidendi

The court held that the correct valuation date was 18 May 1997 and that, given the factual findings and incomplete disclosure by the 1st respondent, a combined valuation approach (80% net asset approach, 20% earnings approach) using management accounts and the Review Report was appropriate; after adjustments (deduct land/building value and a 30% reduction for doubtful trade debts) the Company value was HK$8,067,811.75 and the petitioner’s 40% equated to HK$3,227,124.70; after deducting the petitioner’s shortfall in loan contribution of HK$496,671.25 the purchase price ordered payable by the 1st respondent was HK$2,730,453.45, with interest and costs as directed.

Court Disposition

1st respondent ordered to purchase petitioner’s 4,000 shares at an adjusted purchase price; interest awarded; costs ordered (order nisi)

Orders

  • 1st respondent to pay purchase price of HK$2,730,453.45 to petitioner for 4,000 shares (40%)
  • Interest to run on the purchase price from 18 May 1997 to 27 February 2004 at 1% above the HSBC prime rate prevailing during that period and thereafter at the prevailing judgment rate until payment