DAVID KONG v. PINE GROWTH MANUFACTURING CO LTD AND OTHERS

HCCW321/2006
& HCCW322/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 321 OF 2006

___________________

IN THE MATTER of PINE GROWTH MANUFACTURING COMPANY LIMITED (品高飾品製造廠有限公司)

and

IN THE MATTER of Section 168A and Section 177(1)(f) of the Companies Ordinance Cap. 32 of the Laws of Hong Kong

____________________

BETWEEN

DAVID KONG (康大為) Petitioner

and

PINE GROWTH MANUFACTURING COMPANY LIMITED
(品高飾品製造廠有限公司)
1st Respondent
DONG FUNG HOLDINGS LIMITED 2nd Respondent
CHAN KIN 3rd Respondent

____________________

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 322 OF 2006

____________________

IN THE MATTER of PINE DEVELOPMENT LIMITED
(品隹傢俬製造廠有限公司)

and

IN THE MATTER of Section 168A and Section 177(1)(f) of the Companies Ordinance (Chapter 32) of the Laws of Hong Kong

____________________

BETWEEN

DAVID KONG (康大為) Petitioner

and

PINE DEVELOPMENT LIMITED
(品隹傢俬製造廠有限公司)
1st Respondent
CHAN KIT YING CHARLES 2nd Respondent

___________________

Before: Hon. Barma J in Chambers (Open to public)

Date of Hearing: 2 December 2011

Date of Ruling: 2 December 2011

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R U L I N G

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1. I think, in principle, that it is undesirable for the court to have to reopen, time and again, orders that have been made becausethe parties cannot agree on particular aspects of them. I also have doubts as to whether or not I actually have jurisdiction to amendthe orders that I have made, because the matters that are now raised are matters that either were raised or could have been raisedat the previous hearing.

2. In any event, in the circumstances of the case, I am disinclined to amend the order that I made on the last occasion. As far asthe form of the engagement letter is concerned, there is no reason to suppose that it was not originally put forward in a form thatwas drafted by the proposed valuers, FTI Consulting, without input from any party as far as the terms of the engagement letter wereconcerned.

3. The only additional costs that might be incurred (and which might arguably be avoided if the proposed amendment to the engagementletter is included) is in respect of one set of valuations which have already been procured previously, so that there might be acertain amount of wasted expenditure in having to get further valuations if the engagement letter were to be understood as requiringthis. This relates to machinery in Zhanjiang, in respect of which there are already existing valuations submitted by each party. However, even if one were to leave the engagement letter in its original form, I do not see that the valuers would be bound to geta third set of valuations at this late stage, some four years down the road, in respect of that particular machinery. On the otherhand, if there are other assets that require to be valued in respect of which there are no existing independent valuations, thenit seems to me that if the valuers have determined to approach the matter on the basis of a net asset valuation basis, they wouldneed to have valuations, as they have proposed in the original form of appointment letter.

4. In this respect, if they themselves have within their organisation the in-house capability to provide valuations, there is no reasonwhy their in-house valuer should not tender for the valuation process along with any other tenderers. If their tender happens tobe the most economical, then that is the one that will be accepted. On the other hand, if other external valuers are able to dealwith the matter more economically, there is no reason why that should not happen.

5. Thus, having regard to the view that I take of the obligations of the valuer under the relevant paragraph of the letter of engagement,it seems to me that there is no need to amend the letter of engagement further so as to give rise to the potential for a situationin which the valuer might choose, for reasons best known to itself, not to obtain a valuation at all, which I do not think can havebeen their intention.

6. So for that reason, I am not inclined, as a matter of substance, quite apart from my disinclination to revisit my order, to makethe amendment sought in relation to the first point raised by Mr Coleman.

7. As far as the second point raised by Mr Coleman is concerned, the parties now appear to be ad idem, that the extent of the inspectionthat the Petitioner may have of documents provided to the valuers by the Respondents is to be limited in the way that is indicatedin the consent order made in 2007.

8. In those circumstances, I do not think it is strictly necessary to make any amendment to paragraph 4 either.

9. In the circumstances, I do not think that it is necessary to make any change to the order that was made on 10 November and I declineto do so. The consequence is that Mr Coleman’s summonses will simply be dismissed.

(Submissions on Petitioner’s summons)

10. As far as Mr Carolan’s summons is concerned, I will simply direct that the Respondents sign the engagement letter within threedays.

(Submissions on costs)

11. I think having regard to the fact that the order was made and was not complied with and it has been necessary to have this hearingto clarify matters, I think the appropriate order to make would be that the Petitioner’s costs of these applications should bepaid by the Respondents. However, I am not going to order that they be paid on any enhanced basis. Thus, they will be paid on theparty and party basis, to be taxed if not agreed.

(Aarif Barma)
Judge of the Court of First Instance
High Court

Mr Paul Carolan, instructed by Andrew W Y Ng & Co., for the Petitioner

Mr Russell Coleman, SC, leading Mr Anthony Chan, instructed by Messrs C L Chow & Macksion Chan, for the 1st to 3rd Respondents

Official Receiver’s attendance excused