CHU CHUNG MING AND ANOTHER v. LAM WAI DAN AND OTHERS

HCCW 377/2011

[2023] HKCFI 2539

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 377 OF 2011

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BETWEEN

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JUDGMENT

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Introduction

1.  This is the adjourned hearing of para 2 of the Petitioners’ summons dated 5 August 2022 (“Summons”). Para 2 of the Summons reads:

“The purchase price payable by the 1^st and 2^nd Respondents to the Petitioners to purchase the Petitioners’ shares in the 3^rd Respondent shall carry interest at:

(a) judgment rate from 22^nd December, 2014, being the date the 1^st and 2^nd Respondents were ordered to buy the shares of the Petitioners, to the date of payment; or

(b) such rate and for such period as this Honourable Court may deem fit”.

2.  A brief history of the proceedings, for the present purpose, is as follows.

3.  On 22 December 2014, this Court handed down its Judgment on liability (“Main Judgment”) and ordered the Respondents[1] to buy out the Petitioners’ 50% interest in the 3rd Respondent ie the Company in question under the then s 168A of Companies Ordinance, Cap 32 (“Buy Out Order”).

4.  On 8 October 2015, this Court ordered the parties (“Appointment Order”) to jointly appoint an independent professional valuer, being a certified public accountant, or failing agreement as may be appointed by the president of the Hong Kong Institute of Certified Public Accountants (“Institute”) upon the application of either party with or without the consent of the other, to value the fair market price of the Petitioners’ shares in the Company. In the Appointment Order, the date of the valuation was set at 8 October 2015 (“Valuation Date”). This court also ordered the parties to jointly appoint an independent surveyor for the purpose of determining the fair market value of all immovable property of the Company ie the Land and the Shop in question (“Properties”) as at the Valuation Date.

5.  Subsequently, the parties 2016 KPMG who issued a revised draft valuation report on 18 November 2021 (“Draft”). At p 13 of the Draft, KPMG set out the valuation summary of the Company. At p 18 of the Draft, KPMG recognized and followed this Court’s direction that there should be no minority shareholding discount. However, they opined that “when valuing private companies, it is important to take into account a marketability discount to reflect the fact that there is no ready market for them.” Ultimately, KPMG selected a discount of 10% for the lack of marketability of the Petitioners’ equity interest.

6.  In the Draft, KPMG assessed the fair market price of the Petitioners’ shares in the Company at HK$18.4 million. That figure remained the same in KPMG’s Final report dated 9 January 2023.

7.  The Petitioners disagreed with KPMG on the 10% marketability discount.

8.  By para 1 of the Summons, the Petitioners sought an Order disallowing the marketability discount by KPMG. By an Order of this court dated 29 November 2022 (“2022 Order”), para 1 of the Summons was dismissed with costs to the Respondents. Para 2 of the Summons was adjourned to a date to be fixed. Hence, the present hearing.

9.  Shortly after the 2022 Order, on 6 December 2022, the Respondents paid HK$18.4 million to the Petitioners as the purchase price of the Petitioners’ shares in the Company.

10.  At the present hearing, the Respondents do not dispute that they should pay interest on the purchase price. The remaining disputes boil down to:

a. The commencement date from which interest started to accrue: the Petitioners submit it should run from the Judgment Date (22 December 2014), whereas the Respondents submit the Valuation Date (8 October 2015) is more appropriate (“Issue 1”);

b. The applicable interest rate: the Petitioners submit it should be at the judgment rate, whereas the Respondents submit it should be at the commercial rate ie prime plus 1% per annum (“Issue 2”);

c. the 3 periods during which interest should be disallowed on the ground of undue delay by the Petitioners: the Petitioners submit there should not be any disallowance of interest whereas the Respondents submit interest should be disallowed in whole or in part for the 3 periods in which the Petitioners have caused undue delay to the valuation process (“Issue 3”).

Deliberation

Issues 1 and 2

11.  The purpose of a buy-out Order is not to reward the Petitioners or to penalize the Respondents but to provide a fair compensation to the Petitioners for selling their shares in the Company so as to effect a clean break.

12.  In valuing a company for the purposes of ascertaining the price to be paid for shares to be acquired by one party from another ordered in a petition based on unfair prejudice, the overriding consideration is fairness as between the parties. The statutory framework of the remedies for unfair prejudice confers on the court a wide discretion to do what is considered fair and equitable between the parties in all the circumstances of the case, in order to put right and cure for the future the unfair prejudice which the petitioner has suffered at the hands of the other shareholders of the company: Re New Century Iatrical Inv. Management Ltd [2020] 3 HKLRD 464 at [29] - [30].

13.  Since the court has a wide discretion to do what is considered fair and equitable between the parties in all the circumstances of the case, the same overriding consideration as to fairness between the parties should apply not just in relation to the valuation of the Company, but to all aspects of a buy-out Order including the formula for the calculation and payment of interest on the purchase price. It is also trite that generally an award of interest is within the discretion of the Court.

14.  According to the draft Order provided by Mr Lo to this court at the hearing, in gist, the Petitioners are seeking interest at Judgment rate from 22 December 2014 ie date of the Buy Out Order to 6 December 2022 ie the date of payment of the purchase price by the Respondents. On the Petitioners’ calculation, the amount of interest comes to over HK$11.7 million. Mr Yuen does not dispute interest should cease to run after 6 December 2022, for obvious reasons. But he submits interest should only commence to run from the valuation date ie 8 October 2015.

15.  In support of his position, Mr Lo refers this court to the Court of Appeal decision of Re LehmanBrown Ltd unrep. CACV 272 of 2011, Kwan, Chu and Barma JJA, 13 March 2013. Since Mr Lo heavily relies on Re LehmanBrown Ltd in relation to Issues 1 and 2, this court shall examine that case in some detail.

16.  The background of that case can be found at [1], [2], [5] and [6] as follows:

“1. On 15 November 2011, Harris J gave judgment (“the Liability Judgment”) after an eight-day trial in October 2011 in two petitions under section 168A of the Companies Ordinance, Cap 32, which had been ordered to be heard together. He dismissed the petition and granted relief on the cross-petition. A subsequent hearing was held for the assessment of the value of the petitioner’s share in the company, which he ordered to be sold to the cross-petitioner, and for the assessment of damages payable to the cross-petitioner as a result of unfairly prejudicial conduct of the petitioner. After a three-day trial in September 2012, the judge gave judgment on 28 November 2012 (“the Remedies Judgment”). He assessed the value of the petitioner’s share in the company at US$1.4 million and damages payable to the cross-petitioner at US$716,055.

2. This is an appeal of the petitioner from the Liability Judgment and the Remedies Judgment…

…

5. The judge found that Lehman Management has failed to establish any unfairly prejudicial conduct on the part of Effiscient. He dismissed the petition with costs to Effiscient. He found that Effiscient has established unfair prejudice on the part of Lehman Management and is entitled to relief under section 168A. As Mr Brown is an accountant and has been running the Company since its inception, he held it appropriate to order Lehman Management to sell its one share in the Company to Effiscient. He ordered a court expert to be appointed to prepare a report on the value of Lehman Management’s share in the Company…

6. The material parts of the order made by the judge in the Liability Judgment (“the Order”) on the valuation of the Company, the assessment of damages and directions on payment provide as follows:

‘5. The Court Expert shall report to the Court on the value of the shares in the Company as at the date of the Petitioner’s Petition (“the Valuation Date”). The Expert Valuation Report shall value the shares in the Company on the basis of the fair market value of the business as at the Valuation Date…’” (emphasis added)

17.  At [97] of the Judgment, Kwan JA (as she then was) concluded that interest to Lehman Management on the net sum payable on the purchase price of its share[2] at the prevailing judgment rate from the date of the Liability Judgment until payment. This court has little doubt that the learned Judge had a rationale in mind when she ordered interest should commence to run at the prevailing judgment rate from the date of the Liability Judgment which was before the purchase price was assessed at US$1.4 million on 28 November 2012. However, it does not appear from the Judgment itself that the same had been seriously argued before the Court of Appeal. As one shall see later, Kwan VP took a different view on the applicability of Judgment rate in the subsequent decision of Re New Century Iatrical Inv. Management Ltd.

18.  This court shall deal with the rate of interest first.

19.  As stated by DHCJ Eugene Fung SC in Wan Chi Hing v Strong Master Corporation Ltd unrep, HCA 1554 of 2013, 8 December 2015 at [19(2)], a matter of principle, post-judgment interest is a penal rate imposed where a judgment for a quantified sum has not been paid. It is charged at a rate determined periodically by the Chief Justice by order, at a rate significantly higher than commercial rates of interest, designed to encourage prompt satisfaction of judgment debts: see Ming An Insurance Co (HK) Ltd v Ritz-Carlton Ltd (No 2) (2009) 12 HKCFAR 158 at §65 (Ribeiro PJ). The purpose of post-judgment interest is not to compensate a successful party, but to encourage the paying party to honour a money judgment as soon as possible: see Man Ping Nam v Man Fong Hang (No 2) (2007) 10 HKCFAR 140 at §23 (Ribeiro PJ).

20.  While Wan Chi Hing is an ordinary writ action in which an ascertained judgment sum was awarded to the plaintiff, this court cannot see the difference in principle between that case and the present one regarding the penal nature of adopting the judgment rate for post-judgment interest after a judgment sum has been quantified.

21.  In Re New Century Iatrical Inv. Management Ltd unrep, HCMP 3353 of 2014, G Lam J (as he then was), 26 April 2018, an unfair prejudicial case, the learned Judge ordered the 2nd to 4th respondents to sell to the petitioner all of their shares in Company at a price to be determined by a valuer or joint valuers. The date of valuation was set at the date of the Judgment in which the Judge made a buy out Order. As far as interest is concerned, the learned Judge ordered the petitioner to pay the respondents interest on the price of the shares from the date of the Judgment until the determination of the price at the rate of 1% above prime per annum, and thereafter at judgment rate until payment. The appeal against G Lam J’s decision was dismissed on appeal.

22.  It can be seen that G Lam J’s award of interest at judgment rate only after the determination of the purchase price is in line with the rationale identified by DHCJ Eugene Fung SC in Wan Chi Hing of encouraging the paying party to honour a money judgment as soon as possible.

23.  In the present case, the purchase price was only finally fixed at the time of the Final Report of KPMG dated 9 January 2023. In this court’s view, awarding judgment rate before there was a finally ascertained sum for payment is contrary to principle and does not serve the purpose of encouraging the paying party to honour a money judgment as soon as possible.

24.  For the above reasons, this court agrees with Mr Yuen that the appropriate interest rate should be the commercial rate ie prime plus 1%.

25.  Regarding the date from which interest should commence, the choice is between the date of the Buy Out Order or the Valuation Date.

26.  In support of his position, Mr Lo refers this court to the Court of Appeal decision in Re New Century Iatrical Inv. Management Ltd.

27.  The Judgment of G Lam J (as he then was) in the first instance has already been summarized above. In dismissing the appeal against the learned Judge’s decision, Kwan VP said this at [58]:

“The [trial Judge’s] award of interest on the price of the shares is from the date of judgment until the determination of the price at 1% above prime per annum and thereafter at judgment rate until payment. In other words, the award is not in respect of the pre-judgment period or what has been characterized as “quasi-interest” (ie not awarded qua interest), which serves as a proxy to measure the increment in value of the outgoing shareholder’s investment in the company and in an appropriate case to reflect the fact that the remaining shareholder has had the use of the other’s investment since the valuation date (Re Lehmanbrown Ltd, CACV 272/2011, 13 March 2013, at §§90 to 96; Vitaly Orlov v Magnus Leonard Roth & Anr at §398). The judge’s award of interest to run from the date of judgment is on the usual basis and wholly unexceptional. There is no basis to interfere with his discretion in this respect.” (emphasis added)

28.  For the present purpose, this court is only concerned with the commencement date of the accrual of interest. There is no issue in relation to pre-judgment interest as such. As far as the commencement date is concerned, both the trial Judge and the Court of Appeal in Re New Century Iatrical Inv. Management Ltd were ad idem: it should be the date of the Judgment ie the date of the buy out Order.

29.  Mr Yuen submits to this court that there is no authority that interest should commence to run earlier than the date of valuation. In this court’s view, that is neither here nor there. The date of valuation is at the discretion of the trial Judge, which may be the date of the petition, as in the case of Re Tai Lap Investment Co Ltd [1999] 1 HKLRD 384, or the date of the buy out Order, as in the case of Re New Century Iatrical Inv. Management Ltd., or a date after the buy out Order, as in the present case. As G Lam J put it in Re New Century Iatrical Inv. Management Ltd at [130], regarding the date of valuation, the overriding principle is that it should yield a fair value. To this end it is generally desirable that the shares to be sold should be valued as nearly as possible to the actual date of sale. Thus a useful starting point is the date of the buy-out order or the date of the valuation.

30.  Rather, it is Mr Yuen who is unable to refer this court to any authority for the proposition that the commencement date of interest should always or at least normally be the date of valuation and the rationale of it.

31.  In this court’s view, as at the Buy Out Order, the Petitioners are entitled to be paid the purchase price. It is just as a matter of practicalities that the purchase price cannot be ascertained until sometime later. If so, as a matter of principle, the Petitioners should be awarded interest as from the date of the Buy Out Order even though the sum has yet to be ascertained. In other words, the Petitioners’ entitlement to a sum of money as the purchase price of their shares has been crystallised as at the date of the Buy Out Order, in which case, their entitlement to interest should also commence from that date.

Issue 3

32.  In Lo Yuk Sui v Fubon Bank (HK) Ltd [2017] 2 HKLRD 477, this court explained the relevant principles in disallowing interest on the ground of undue delay as follows:

“39. The relevant principles are set out by Au J in Hong Kong Electric Co Ltd v Commissioner of Rating and Valuation, unrep; LDGA No 224 of 2004; LDRA No 358 of 2004; 12 April 2010 at [19]:

‘…it is trite that interest can be disallowed if the claimant is guilty of delay:

(1) As said by Watkins LJ in Birkett v Hayes [1982] 1 WLR 816 at 825:

‘It is … wrong that interest should run during a time which can properly be called unjustifiable delay after the date of the writ. During that time the plaintiff will have been kept out of the sum awarded to him by his own fault. The fact that the defendants have had the use of the sum during that time is no good reason for excusing that fault and allowing interest to run during that time.’ (emphasis added)

(2)These principles are further stated by Jackson J in Claymore Services Ltd v Nautilus Properties Ltd [2007] BLR 452 at 460:

‘(1) Where a claimant has delayed unreasonably in commencing or prosecuting proceedings, the court may exercise its discretion either to disallow interest for a period or to reduce the rate of interest.

(2) In exercising that discretion the court must take a realistic view of delay. In the case of business disputes, litigation is for all parties an unwelcome distraction from their proper business. It is not reasonable to expect any party to take every litigious step at the first possible moment, or to concentrate on litigation to the exclusion of all else. Delay should only be characterised as unreasonable for present purposes when, after making due allowance for the circumstances, it can be seen that the claimant has neglected or declined to pursue his claim for a significant period.

(3) When determining what disallowance or reduction of interest should be made to mark a period of unreasonable delay, the court should bear in mind that the defendant has had the use of the money during that period of delay.’”(emphasised added)

33.  The aforesaid principles in Lo Yuk Sui v Fubon Bank (HK) Ltd are accepted and adopted by both Mr Lo and Mr Yuen.

34.  Mr Yuen for the Respondents has identified 3 periods in which interest should be disallowed. They are set out in detail in paras 29 to 45 of his skeleton and shall not be repeated here.

Phase 1 - 15 July to 23 November 2013

35.  The gist of Mr Yuen’s submission is that during that period, the Petitioners have dragged their feet regarding the appointment of the valuer.

36.  When one looks at the available correspondence during that period, what happened was this:

a. On 26 April 2016, the Institute informed the parties the names of the 3 CPA firms nominated by the president of the Institute for appointment as the valuer.

b. On 15 July 2016, the Petitioners’ solicitors informed the Respondents’ solicitors that all 3 CPA firms had declined to accept appointment as the valuer in this case. The Petitioners’ solicitors therefore proposed, in order to save parties’ time and costs, the appointment of a partner of Deloitte to be the valuer.

c. On 21 July 2016, the Respondents’ solicitors, in response, suggested that the Respondents would request the Institute to nominate 3 other valuers. There is however no evidence that the Respondents had followed up on their own suggestion, even though they were free to do so under the terms of the Appointment Order.

37.  From the Respondents’ chronology of Events regarding delay, the next event was the Petitioners’ summons dated 14 September 2016 for the appointment by each of the Petitioners and the Respondents of a professional valuer of their choice and that any disputes between the Petitioners’ valuer and the Respondents’ valuer shall be brought before this court for adjudication.

38.  By an Order dated 23 November 2016, the Petitioners’ summons was dismissed. Instead, this Court directed that the parties shall within 15 days from this Order jointly appoint an independent professional valuer, being a certified public accountant, or failing agreement as may be appointed by the president of the Institute upon the application of either party with or without the consent of the other, to value the fair market price of the Petitioners’ shares in the Company.

39.  On such evidence, this court is unable to accept the Respondents’ submission that the Petitioners have dragged their feet regarding the appointment of the independent valuer such as to cause undue delay to the proceedings.

40.  By letters dated 18 and 29 December 2015 respectively, the parties had agreed to the random selection procedure suggested by the Institute in the nomination of 3 CPA practices from the Institute’s database. This random procedure had the disadvantage of selecting nominees who for reason of resources, expertise or otherwise could not or would not accept the appointment, as happened in the present case. It was therefore not unreasonable for the Petitioners, in the interest of time, to suggest the appointment of a partner of Deloitte to be the independent valuer. At least, Deloitte would not have resources or expertise problems. In fact, Deloitte was one of the candidates nominated by the Institute in their letter dated 23 December 2016. It was up to the Respondents to agree or disagree with the Petitioners’ suggestion or come up with their own suggestion. In case no agreement could be reached, the only alternative was to make use of the mechanism in the Appointment Order of seeking an appointment by the president of the Institute by adhering to the Random Selection Procedure or opting for the alternative ie the List System, as explained in the Institute’s letter dated 19 May 2015. Either party could have but had failed to do that. If there was delay, the Respondents conduct was also a cause of the delay.

Phase 2 – 6 November 2019 to 14 January 2021

41.  Regarding this phase, the Respondents’ case is this.

42.  By late 2019, there were various disputes between the parties, the most important one of which was whether the illegal structures located on the Land owned by the Company should be valued. Initially on 6 November 2019, the Petitioners asked for the appointment of another building surveyor to assist GCA (the appointed valuation surveyor) and such request was maintained in subsequent correspondence. Then, on 25 February 2020, the Petitioners took a complete U-turn and no longer requested such additional appointment. Hence, the Petitioners had wasted some 4 months in arguing whether such additional appointment was necessary.

43.  This court has looked into the correspondence.

44.  There was indeed some discussion as to whether all the building structures on the Land were “authorized” and how they should be valued, if at all.

a. In the email on 6 November 2019 from the Petitioners only said they “agree to appoint building surveyor asap”. It is unclear with whom the Petitioners agreed with.

b. In the email on 21 November 2019, GCA also agreed to appoint a building surveyor “to verify the legality of the buildings and structures on Land asap.”

c. In the email dated 11 December 2019, the Respondents’ solicitors suggested that there was no need to appoint another surveyor to determine the issue of whether structures erected on the Land were authorized or not.

d. By an email dated 18 December 2019 from Jeff Liu of GCA to the parties, GCA’s position was stated as thus:

“Agreed to appoint a building surveyor to verify the legality of the buildings and structures on the land asap…. As to verify the legality of the buildings and structures is not the expertise of GCA, GCA is not in the right position to conduct such exercise. We would suggest the Petitioners and the Respondents to confirm to appoint a Building Surveyor, who has relevant expertise, to conduct such exercise.” (emphasis added)

e. By the email dated 25 February 2020, the Petitioners indicated their latest position as follows:

“…we are of the view that Greater China can assume that all the building structures covered by the short term waiver were legal as at the valuation date and will be [sic] continue to be so for valuation purpose. Therefore, it is not necessary to appoint another building surveyor to determine the legality of the structures.”

45.  It would appear to this court that up to 25 February 2020, GCA was unsure and both parties were unable to agree on how to go about valuing the Land and the structures on it, in light of the uncertainty about the legality or otherwise of the structures. There is thus no basis for the Respondents to accuse the Petitioners of having unreasonably wasted 4 months in arguing whether such additional appointment was necessary. Every interested party had contributed to the delay.

46.  Thereafter, correspondence ensued between the parties, GCA and KPMG again on whether illegal structures should be included in the valuation process. GCA expressed the “prudent”[3] or “conservative”[4] view that they should not but in case of disagreement, requested clarification from this court.

47.  On 14 January 2021, the Petitioners issued a summons seeking in para 1 thereof an Order that for purpose of valuation of the Land pursuant to the Order dated 8 October 2015, the Valuer and the Surveyor should include the value of all structures on the Land as at the Valuation Date.

48.  By Order dated 27 April 2021 of DHCJ MK Liu, the Deputy Judge granted an Order in terms of para 1 of the said summons, with the rider at para 2 of the Order that in assessing the value of those structures, the risk of enforcement actions by the Building Authority, if any, should be taken into account. The Deputy Judge then made no order as to costs concerning para 1 of the said summons.

49.  It thus can be seen that the Petitioners were justified in not accepted GCA’s “prudent” or “conservative” view that illegal structures should not be included in the valuation process. On the contrary, they heeded the advice of GCA to seek and eventually obtained a clarification from the Court that all structures, illegal or otherwise, should be included in the valuation process.

50.  It is true that in the email from KPMG dated 14 August 2020, it was said that the Petitioners’ solicitors were preparing to make an application to Court on that issue and other unrelated issues. But on the available evidence, the Respondents are unable to show that the delay of about 5 months from August 2020 to January 2021 constituted unreasonable and undue delay on the part of the Petitioners. This court stresses again that it is in the interest of both parties who are free to take whatever steps to expedite the valuation process. If the Respondents considered the taking out of the summons on 14 January 2021 to be undue delay, why could they not have taken out a summons to seek clarification from the court earlier?

51.  For these reasons, this court does not accept that there was such undue and unjustified delay on the part of the Petitioners during Phase 2 so as to deprive them of interest in that period.

Phase 3 - 7 February to 29 November 2022

52.  Regarding this phase, the Respondents’ case is fairly straightforward.

53.  KPMG issued the Draft dated 18 November 2021 in which they adopted a marketability discount of 10%. The rationale for adopting it was explained in the Draft.

54.  Since their email dated 7 February 2022, the Petitioners had been objecting to the adoption of marketability discount in the valuation process. By emails dated 11 March and 26 May 2022, KPMG explained in greater detail the importance of adopting marketability discount for shares in a private company which had no ready market for them. This is really basic and is well known to inter alia practitioners of companies law.

55.  By their email dated 8 July 2022, the Petitioners indicated that:

“Since the parties cannot reach agreement on the issue of marketability discount, we are in the course of preparing an application to court to seek clarification on the issue.

We are of the view that the final report shall be prepared after the court has given its direction on the matter.”

56.  By their email dated 27 July 2022, the Petitioners advised that they would take out an application to this court for direction soon and that pending the court’s direction, they would not agree to the issuance of the final valuation report.

57.  The impasse among the parties resulted in the Petitioners issuing the Summons on 5 August 2022 seeking an Order inter alia disallowing the marketability discount by KPMG. In the 2022 Judgment, that part of the Summons was dismissed. At paras 31 to 33 of that Judgment, this court concluded as thus:

“31. To conclude, this court has directed the parties to jointly appoint a single independent professional valuer to value the fair market price of the Petitioners’ shares in the Company. It is up to KPMG to apply their professional expertise to conduct the valuation. What the present application boils down to is that the Petitioners are dissatisfied with the methodology of KPMG in applying a marketability discount and asks this court to disallow KPMG from doing so. Mr Lo is unable to refer this Court to any authorities which support the present application save for the general principles stated by Kwan VP in Re New Century Iatrical Inv Management Ltd at [29] - [30] which emphasize that the overriding consideration is fairness as between the parties. Given that KPMG is jointly appointed by the parties and they therefore should be taken to accept that the firm have the requisite expertise to conduct the valuation, this court cannot see any unfairness as between the parties in deferring to KPMG’s chosen methodology.

32. In Chan Luen Yan and Ors v Chan Tin Chai and Ors unrep, HCCW 211 of 2007, 3 July 2013, Ng J at para 23, this Court laid down the principle governing challenges to the valuation of a single joint valuer as follows:

‘…I would hold that, on a matter of opinion (as opposed to fact or law), unless patent errors can be demonstrated on the face of the report, the court should be very slow to intervene with the chosen expert’s determination solely on the ground that one party has subsequently found and engaged another expert who holds a different opinion…’

33. The opinion referred to in that passage refers to the opinion of the chosen valuer. The principle, which is not disputed by Mr Lo, applies to a case where the challenge is backed up by the opinion of another expert. It should apply a fortiori to the present case where the Petitioners’ challenge is not so backed up. Applying that principle to the present case, this Court cannot find any patent errors on the face of the Draft, and for that reason also, this Court is not minded to grant the present application.” (emphasis added)

58.  It seems to this court that the Petitioners’ insistence in disallowing the marketability discount and effectively demanding KPMG not to issue the final valuation report was unreasonable and has caused undue delay to the finalisation of the valuation process, even after making due allowance for the circumstances of this case. This court therefore agrees with Mr Yuen that interest should not accrue during Phase 3 ie from 7 February to 29 November 2022.

Disposition and costs order nisi

59.  In the premises, this court hereby orders that the purchase price payable by the 1st and 2nd Respondents to the Petitioners shall carry interest at the rate of prime plus 1% from 22 December 2014 to 6 December 2022, save that no interest is payable from 7 February to 29 November 2022.

60.  Since both the Petitioners and the 1st and 2nd Respondents are only partly successful in this application, a fair Order for costs is that the parties shall bear their own costs of and occasioned by paragraph 2 of the Summons, certificate for counsel.