Hong Kong Case Law: Decisions & Judgments

Topic

Reflective loss rule

Legal area

Court

31 Oct 2022

CHEUNG YUK FUNG v. YIP CHI KEUNG AND ANOTHER

Citation

[2022] HKDC 1208
Court

District Court
Case number

DCCJ259/2019

Leave to appeal was refused because none of the proposed grounds showed a reasonable prospect of success: the trial concession together with pleaded facts and evidence supported a restitutionary order against both defendants including the non‑party 2nd defendant for unjust enrichment/money had and received; the pleading was sufficient; reflective loss did not apply because the company never received the misapplied funds; agency and receipt arguments lacked merit.
24 Feb 2022

AGRITRADE RESOURCES LIMITED THROUGH THE JOINT PROVISIONAL LIQUIDATORS NG KIAN KIAT, OON SU SUN AND E. ALEXANDER WHITTAKER AND ANOTHER v. ASHOK KUMAR SAHOO

Citation

[2022] HKCA 280
Court

Court of Appeal
Case number

CAMP224/2021

The Court refused leave to appeal because the Judge was entitled to find a good arguable case of unexplained misappropriation (US$5,060,000), clear evidence of self‑dealing in the CCDs and misapplication of US$2,450,000 in the Gupta Steel transaction, and a resulting real risk of dissipation; the alleged errors (reflective loss, fund‑flow interpretation, quantum, non‑disclosure, wife transfer, 2nd plaintiff standing) do not show a reasonable prospect of success or a basis to disturb the Judge's discretion.
23 Oct 2020

ROBERT VON PALACE KOLBATSCHENKO AND ANOTHER v. LEE, IO VAI IVAN AND ANOTHER

Citation

[2020] HKCFI 2650
Court

Court of First Instance
Case number

HCA402/2020

Recorder Pow held that plaintiffs had a good arguable case on the existence of a wider oral Trust Arrangement supported by contemporaneous documents and that, although there was deliberate non-disclosure of a Swiss conviction, that omission was not so material as to have prevented the ex parte judge making the order; accordingly the ex parte Mareva injunction was continued until trial or further order and an order nisi for costs was made against the defendants.
19 Aug 2019

GURDAS S CHOITHRAMANI v. THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD

Citation

[2019] HKCA 941
Court

Court of Appeal
Case number

CACV117/2014

Leave to appeal was refused because the plaintiff's reliance on Wilson failed: there was no exceptional express contractual undertaking by the bank to maintain the plaintiff's personal reputation so no stand-alone personal cause arose; claims based on wrongful procurement of Esquire's judgment were reflective of the company's loss and barred; the plaintiff lacked locus given vesting of rights in the trustee and the issues were not reasonably arguable or of general/public importance.
5 Sept 2017

WAH NAM GROUP LTD v. RODERICK JOHN SUTTON AND ANOTHER

Citation

WAH NAM GROUP LTD v. RODERICK JOHN SUTTON AND ANOTHER
Court

Court of First Instance
Case number

HCA960/2015

The court held that the consent order was made pursuant to s200(5) not s205 and therefore did not operate as a statutory release of the former liquidators; the Sanction Decision sanctioning the settlement did not preclude separate claims for misappropriation/negligence not resolved by that sanction; HCA960/2015 was struck out because the pleaded loss was merely reflective (company’s loss reflected in shareholder diminution) and thus plainly unsustainable, whereas HCA962/2015 pleaded direct company causes of action (misappropriation of shareholdings) and could not be struck out; limitation, no…
5 Sept 2017

RE WAH NAM GROUP LTD (In Compulsory Liquidation)

Citation

RE WAH NAM GROUP LTD (In Compulsory Liquidation)
Court

Court of First Instance
Case number

HCCW166/2000

On strike‑out jurisdiction the court held that (1) the 2012 Consent Order was made under s200(5) not s205 and therefore did not operate as a statutory s205 release discharging the former liquidators; (2) Wah Nam's claim in HCA960/2015 is barred by the reflective loss rule and the pleadings are plainly unsustainable so HCA960/2015 is struck out and dismissed; (3) HCA962/2015 (claims by Great Strategy and Crystal Services) do not suffer from the reflective loss bar and are not plainly unsustainable, but certain pleading defects and particular paragraphs require amendment and leave to amend is g…
24 Aug 2017

BASAB INC. AND ANOTHER v. SUPERB GLORY HOLDINGS LTD AND ANOTHER

Citation

BASAB INC. AND ANOTHER v. SUPERB GLORY HOLDINGS LTD AND ANOTHER
Court

Court of Final Appeal
Case number

FAMV16/2017

Leave to appeal was refused because the plaintiffs’ claims were barred by the no reflective loss principle: the plaintiffs were not secured creditors, their asserted independent causes of action did not avoid the rule because the losses were recoverable by the company, and the new argument based on the BVI refusal to grant derivative leave was not an available or arguable exception and could not be raised for the first time in this court.
1 Jun 2006

RE OCEAN TIME DEVELOPMENT LTD

Citation

RE OCEAN TIME DEVELOPMENT LTD
Court

Court of First Instance
Case number

HCCW338/2004

The court exercised its discretion to allow GGI to appeal out of time; it accepted audited accounts and supporting evidence as sufficient to prove GGI a creditor of Tinson (HK$41,911,916) and Goldgood (HK$36,965,867) and Ocean Time to the extent of HK$875,155, but rejected evidence for additional sums where unsupported; the tort/fiduciary claim against the liquidators was struck out because the losses pleaded were purely reflective of Ocean Time’s loss and thus not recoverable by GGI individually, the proper remedy being misfeasance proceedings under s276.
1 Jun 2006

RE OCEAN TIME DEVELOPMENT LTD

Citation

RE OCEAN TIME DEVELOPMENT LTD
Court

Court of First Instance
Case number

HCCW336/2004

Court exercised discretion to allow GGI to challenge liquidators' rejections out of time; accepted audited accounts and supporting evidence were sufficient on balance of probabilities to establish GGI as creditor of Tinson for HK$41,911,916 and admitted amended proof; accepted audited accounts established GGI as creditor of Goldgood for HK$36,965,867 but rejected additional unsubstantiated HK$801,936.09; accepted audited accounts established GGI as creditor of Ocean Time for HK$875,155 but rejected additional claimed sums; struck out GGI's separate action against the liquidators because the l…
11 Jan 2006

LANDUNE INTERNATIONAL LTD v. CHEUNG CHUNG LEUNG RICHARD

Citation

LANDUNE INTERNATIONAL LTD v. CHEUNG CHUNG LEUNG RICHARD
Court

Court of Appeal
Case number

CACV225/2005

The Court held that the Company's claimed loss was merely reflective of the Subsidiary's loss because the Subsidiary was actively pursuing recovery and any recovery by the Subsidiary would make good the Company's loss; accordingly the rule against reflective loss barred the Company's cross-claim and there was no bona fide substantial cross-claim to defeat the winding up petition, so the appeal was dismissed.