Wheelock Marden epic in final round
Wheelock Marden's epic legal battle with a Danish finance company has finally entered the top court - and Hong Kong record books as one of the SAR's longest and most expensive civil trials.
The dispute has spanned two decades, been fought in three courts and incurred legal costs likely to outstrip the original damages claim of US$92 million. Two defendants have also died.
A 15-day trial at the Court of Final Appeal, which began yesterday, will bring the marathon battle to a close.
The case goes back to 1983 and 1984 - when a subsidiary of Wheelock Marden was granted loans by Aktieselskabet Dansk Skibsfinansiering (ADS).
ADS claimed Wheelock Maritime International was insolvent at the time it borrowed the money - it subsequently went into liquidation in 1985 - and was not in a position to repay the funds it had borrowed.
Its directors either knew this or should have known this, the Danish company alleged. Deceased taipan John Marden was one of the defendants.
This argument was rekindled yesterday as ADS said the court had to decide whether there was anything misleading in the way the financial health of the company was presented when the loans to the Wheelock Marden unit were made.
A six-month battle at the Court of First Instance found in favour of ADS, and Wheelock Marden was ordered in an 800-page judgment to pay 188.9 million Danish kroner (about HK$194.65 million) damages in March 1997.
This was later increased to 337.81 million kroner to take interest into account.
Moreover, Wheelock Marden - then a subsidiary of Wharf Holdings - was ordered to pay $100 million of the costs incurred by ADS, and its own costs of about $250 million.
The ruling was overthrown in June 1998, when the Appeal Court ruled the evidence came 'nowhere near' to establishing that Wheelock Marden had deliberately misled one of its creditors.
Moreover, Wheelock Marden and former directors Robert Brothers, William Lees and Leung Hon-wah, who is also now dead, were also cleared in respect of claims that they had been responsible for fraudulent trading in relation to Wheelock Maritime.
The appeal costs would have raised the legal bill incurred by the parties substantially, as will the Court of Final Appeal hearing.
By comparison, one of Hong Kong's most expensive criminal prosecutions was estimated to have cost $210 million. The Tomson Pacific trial cost at least $52 million, and the prosecution of Chim Pui-chung about $30 million.