The legal battle over shares held by CA Pacific yesterday ended in a bittersweet victory for one group of clients of the collapsed brokerage firm. A judge ordered that the shares be returned to the clients but said liquidation will now be costly, time consuming and could lead to a potential 'unjust result'. Liquidators face the prospect of analysing 11,000 clients' accounts after Madam Justice Maria Yuen Ka-ning decided the investors have a proprietary interest as rightful owners of their shares. The process of carving up the shares may pose 'extremely difficult' administrative problems, the judge conceded. There was a shortfall of $500 million in shares when CA Pacific Securities and its margin financing arm collapsed in January. Clients were owed $1.4 billion in shares, but it had only $900 million in shares on hand. Proceeding with the liquidation will take 'substantial time and money to unravel, and indeed may lead to an unjust result', the judge told the Court of First Instance. She said this might be a case 'where some other form of arrangement may be fairer and less expensive'. 'However I, should not at this stage attempt any formulation of a proposal before hearing from the liquidators and possibly opposing camps of individual beneficiaries,' she said. Liquidators will now consider this suggestion and nevertheless proceed to examine and analyse each client's account, PricewaterhouseCoopers partner Jan Blaauw said. 'We had identified this particular route as time consuming, and that was one of the driving forces for finding an alternative,' he said. One of the difficulties ahead would be considering the position of marginal clients. Further applications may have to be made to the judge on the matter, Mr Blaauw said. Investors had been divided into two classes in the court battle - those with a proprietary claim were jubilant on hearing the decision. 'I think this is a reasonable, fair and legal judgment although some other clients may not be happy,' said client Chan Kam-tim, who will recoup about 94 per cent of his total claim. The other class of investors were those who would best benefit if the shares were sold and equally distributed. Madam Justice Yuen rejected claims by counsel for this class that the securities held by CA Pacific were held as part of its general assets. She found no change had been effected by trading through the Central Clearing and Settlement System (CCASS). It had been argued that under CCASS rules, the broker is not regarded as an agent, but is treated as the principal in its trades. When CA Pacific Securities executed clients' orders through CCASS, it was acting as an agent, the judge stated. 'It follows that when such securities were acquired, the law would regard the client as having the beneficial interest in them . . . ,' she said.