Mallesons pair fall foul of HK High Court

Two Hong Kong-based partners from Australian firm Mallesons Stephen Jacques will be ordered to pay HK$96.82m (£6.79m) to Yazhou Travel Investment Company, after losing a Hong Kong High Court action.

On 28 January, the Hong Kong High Court ruled against partners David Bateson and Paul Starr (formerly of legacy firm Bateson Starr) and solicitors Lo Wau Ki Gwen and Kau Kin Wah.

A Mallesons spokesman said: “It was an unexpected result. We’re disappointed and will be appealing on all points.”

The case, which was heard by Deputy High Court Judge Muttrie in the Court of First Instance, concerned the naming rights to six floors in a development at 118
Connaught Road West in Hong Kong and the ownership of sign boards outside.

Yazhou, a subsidiary of Southern Airlines Group, paid HK$67.3m (£4.7m) to buy boards from 118’s developers, but later found they were never built, despite appearing on the architect’s model.

Judge Muttrie said the lawyers who had acted for Yazhou and the vendor failed to investigate the title to the sign boards and to advise the company that they did not exist.

As for the naming rights, Judge Muttrie said the lawyers failed to advise Yazhou that it was an implied term of the sale and purchase agreement that the naming right assigned by the vendor was a proprietary right running with the land, and binding and enforceable against all
co-owners of 118.