Your World of Legal Intelligence
 Hong Kong | 1-800-335-6202

Lau Chun Ming v Deloitte Touche Tohmatsu(a Firm)

Judgment Cited authorities 7 Cited in Precedent Map Related
Vincent
Judgment Date12 October 2015
Subject MatterCivil Appeal
Judgement NumberCACV22/2015
CourtCourt of Appeal (Hong Kong)
CACV22/2015 LAU CHUN MING v. DELOITTE TOUCHE TOHMATSU(a firm)

CACV 22/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 22 OF 2015

(ON APPEAL FROM HCCL 24 OF 2013)

________________________

BETWEEN
LAU CHUN MING Plaintiff
and
DELOITTE TOUCHE TOHMATSU (a firm) Defendant

________________________

Before : Hon Cheung and Yuen JJA in Court
Date of Hearing : 30 September 2015
Date of Judgment : 12 October 2015

_________________

J U D G M E N T

_________________

Hon Cheung JA :

I. Appeal against refusal to strike out claim

1. This is an appeal by the defendant against the judgment of Ng J who dismissed the defendant’s application to strike out the plaintiff’s claim on the ground that it discloses no reasonable cause of action.

II. Background

2. The background of this case is succinctly set out in the following part of the judgment below :

‘ 4. The Plaintiff is a creditor of Mr Ma Koon Sik (“Ma”) for an unpaid judgment sum of over HK$30 million awarded in HCCL 111 of 1996.

5. On 6 August 2002, the Plaintiff instituted bankruptcy proceedings against Ma. On 30 October 2002, Master S. Kwang granted a Bankruptcy Order against Ma and the Official Receiver became the provisional trustee of Ma’s estate.

6. It is pleaded at paragraph 6 of the Statement of Claim that by a contract (“Contract”) between the Plaintiff and the Defendant as evidenced by or contained in a Chinese letter issued by the Defendant (“Letter”) and signed by its senior manager 楊磊明 on 16 October 2002 and by the Plaintiff on 21 November 2002, in consideration of the payments stipulated therein including an initial payment of a non-refundable deposit of HK$100,000 (“Deposit”), the Defendant agreed that it would have had its partner/supervisor Lai Kar Yan Derek (“Lai”) and Darach E. Haughey (“Haughey”) to seek appointment as the Joint and Several Trustees of the estate of Ma (“Trustees”) and to assist the Plaintiff to handle or otherwise deal with the property of Ma already charged by the Plaintiff.

7. At paragraph 7 of the Statement of Claim, the Plaintiff pleaded the payment of the Deposit pursuant to the Contract and the appointment of Lai and Haughey as the Trustees at a general meeting of creditors on 21 November 2002.

8. At paragraph 8 of the Statement of Claim, the Plaintiff pleaded an implied term of the Contract that the Defendant covenanted that Lai and Haughey would carry out their duties as Trustees with proper skill and competence and reasonable care in inter alia tracing and recovering the property of Ma, keeping the Plaintiff informed of possible claims for recovering and/or realizing the property of Ma and bringing claims for recovering and/or realizing the property of Ma.

9. At paragraph 9 of the Statement of Claim, it is pleaded, further or in the alternative, that by reason of the relationship between the two arising from the facts stated in paragraphs 6 and 7, the Defendant owed a tortious duty of care towards the Plaintiff (“Duty of Care”) which is coterminous with the duties of the Trustees as those pleaded in paragraph 8.

10. After reciting a series of events which tend to suggest Lai and Haughey have been derelict in their duties, the Plaintiff pleaded at paragraph 44 that the Defendant was in breach of the Contract and the Duty of Care and was negligent. While most of the failures particularized under that paragraph were in substance failures of Lai and Haughey, it is reasonably clear from paragraph 44 (t) that chief among the Plaintiff’s complaint against the Defendant is its failure to ensure the two would act with reasonable skill and care in their position as Trustees of Ma’s estate.

11. To complete the picture,

(1) by a resolution passed at the general meeting of creditors on 29 June 2009, Lai and Haughey were removed as Trustees and replaced by Messrs. Yat Ming Cheung and Rainier Hok Chung Lam;

(2) on 11 December 2009, Lai and Haughey applied to the Court for an order for release (“Release Order”) under section 94(1) of the Bankruptcy Ordinance, Cap 6 (“BO”);

(3) on 28 January 2010, Master Hui granted the Release Order to Lai and Haughey.’

III. The Judge’s decision

3. The basis of the Judge’s decision to dismiss the defendant’s application is as follows :

‘ 18. In my view, the present position is not dissimilar to what happened in A & J Fabrications Ltd v Grant Thornton [1998] 2 BCLC 227.

19. In that case, the plaintiffs, who were the majority creditors of a company in liquidation, entered into a contract with the defendant accounting firm, whereby in consideration of payment of the defendant’s fees up to a certain amount, the defendant agreed that an insolvency practitioner from its firm would seek appointment as liquidator of the company. An insolvency practitioner from the defendant was duly appointed liquidator. He was subsequently replaced by another practitioner from the defendant firm. The Plaintiffs claimed that in breach of the contract and a duty of care, the defendant had failed to supply the services required of it.

20. The defendant applied to strike out the plaintiffs’ statement of claim as disclosing no reasonable cause of action. One of the arguments was that the plaintiffs should have sued the liquidators personally and not the firm because only the liquidators had the necessary powers to inter alia sue the directors for misfeasance and so on (which the plaintiffs complained were not exercised). The firm did not have any such powers and therefore could not have been in breach of any duty to the plaintiffs.

21. Jacob J (as he then was) rejected the defendant’s argument and observed at 230g-i that:

“I think the point is misconceived. It is true that it is employees of the firm who were the liquidators, but they only took their position as such by virtue of the contract between the plaintiff and Grant Thornton. Grant Thornton, in accepting the consideration of £5,000, were contracting to put their man in as liquidator. Of course once in as liquidator he would owe his duties to the company. But there is nothing inconsistent between the pleaded contract and the employee having duties to the company. The pleaded contract is, in short, that the employee/liquidator undertakes to do a proper job as liquidator. That is what Grant Thornton contracted would happen.”

22. At 232f, Jacob J rejected the defendant’s further argument that the plaintiffs had got the wrong party:

“Mr. Collings says, again, that...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT