Hong Kong Case Law: Decisions & Judgments

Topic

Sanction of compromise

Legal area

Court

22 Nov 2023

RE PA SHUN INTERNATIONAL HOLDINGS LTD

Citation

[2023] HKCFI 3037
Court

Court of First Instance
Case number

HCMP1140/2023

The Court sanctioned the Scheme because it was proposed for a permissible restructuring purpose, the unsecured creditors formed a single class, the Scheme Meeting was effectively properly informed and achieved the statutory majorities under s.674(1)(a), the Scheme provided materially better and secured recoveries than liquidation, and the Company demonstrated sufficient connection with Hong Kong; limited non‑compliance with the Convening Order was not prejudicial and did not invalidate the meeting.
21 Jun 2023

RE R.E. DAVER & CO LTD (In Liquidation)

Citation

[2023] HKCFI 1657
Court

Court of First Instance
Case number

HCCW23/2021

The application was dismissed because (1) the alleged purchaser correspondence was repeatedly marked "subject to contract"/"without prejudice," and there were no exceptional circumstances to depart from the ordinary effect of those words so no binding agreement was formed; and (2) the Property was owned by DCK, not the Company, so there were no questions relating to the assets of the Company engaging Schedule 25 Part 1 para 3(a)(ii) and s199.
10 Oct 2018

WAH NAM GROUP LTD v. RODERICK JOHN SUTTON AND ANOTHER

Citation

[2018] HKCA 687
Court

Court of Appeal
Case number

CACV217/2017

The Court of Appeal dismissed the appeals and upheld the strike‑out because Wah Nam's pleaded loss derived solely from the fall in value of its interest in Summit Mass and was identical to the loss pleaded by its subsidiaries; therefore Wah Nam's direct claim against the Former Liquidators was barred by the no reflective loss principle and should be struck out.
10 Oct 2018

WAH NAM GROUP LTD v. RODERICK JOHN SUTTON AND ANOTHER

Citation

[2018] HKCA 687
Court

Court of Appeal
Case number

CACV215/2017

The appeal was dismissed because Wah Nam's pleaded loss was the same as that claimed by its subsidiaries and was therefore reflective; a shareholder cannot pursue a direct claim for loss that derives solely from diminution in value of its interest in a company and must look to the company (including derivative proceedings) so the claim was rightly struck out.
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…
25 Feb 2015

RE HUN KAI FINANCE CO LTD

Citation

RE HUN KAI FINANCE CO LTD
Court

Court of Appeal
Case number

CACV31/2014

The Court held the judge did not err: the correct threshold for an s276 enquiry is that there be a sufficient prima facie basis to warrant inquiry (not the full striking out standard), and on the evidence the judge's exercise of discretion to refuse inquiry and to regard the Liquidator's compromise as reasonable fell within the range of proper decisions; common law derivative relief cannot pursue a liquidator and vicarious liability against BDO defendants was unsustainable given the Liquidator's personal appointment; leave under s168BC would not be prima facie in the interest of the company.…
30 Jun 2014

RE KB (ASIA) LTD

Citation

RE KB (ASIA) LTD
Court

Court of First Instance
Case number

HCMP307/2013

The Scheme was not sanctioned because the court was not satisfied that the classes were properly constituted: Rak Industries Limited, as holder of a floating charge over receivables, had legal rights materially dissimilar to unsecured creditors and should not have been treated as part of the unsecured class; additionally related/family creditors had collateral interests so their votes should be discounted; as a result a statutory majority was not achieved and the Scheme failed.
9 Aug 2007

RE ADVANCED WIRELESS GROUP LTD

Citation

RE ADVANCED WIRELESS GROUP LTD
Court

Court of First Instance
Case number

HCMP683/2007

The court sanctioned the scheme because the statutory requirements of section 166 were satisfied: the class of creditors entitled to vote was properly constituted (ACE River did not require a separate class), the limited non‑compliance with service directions was technical and waived as negligible, the explanatory materials adequately disclosed risks, and an overwhelming bona fide majority of creditors had commercially decided the scheme provided a better return than liquidation; accordingly the court exercised its discretion to sanction the scheme.
18 Sept 2001

RE ETYUE LTD.

Citation

RE ETYUE LTD.
Court

Court of First Instance
Case number

HCMP421/2001

The Court sanctioned the scheme because the statutory provisions of s166 were complied with, the creditor class was fairly represented with no evidence of coercion, and a reasonable man of business would approve the proposal given the Company's severe liquidity problems and creditor approval in number and value.
7 Dec 2000

Re UDL Management Ltd.

Citation

Re UDL Management Ltd.
Court

Court of Appeal
Case number

CACV261/2000

The court held that class composition is determined by similarity of legal rights rather than subjective individual interests; the participating internal creditors did not have sufficiently dissimilar legal rights to require separate meetings; treating Nishimatsu's contingent claim as valued at nil for voting was a bona fide and equitable decision with adequate safeguards; statutory requirements under s.166 were met and the judge properly exercised discretion to sanction the schemes, therefore the appeals were dismissed.