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CPA Protect Winter
2009
A Victory for Auditors
In the landmark case of Moore Stephens v Stone & Rolls Ltd, the House of Lords in
England has ruled that a company cannot sue its auditors for failing to spot fraudulent
conduct when the company itself has committed the fraud.
In the autumn 2008 issue of CPA Protect, we
discussed the Court of Appeal decision in Moore
Stephens v Stone & Rolls and its implications for
auditors and their insurers. Thirteen months later,
on 30 July 2009, the long awaited House of Lords’
decision was delivered. By a majority of three to
two, the company’s appeal was dismissed, thereby
upholding the auditors’ defence of ex turpi causa (ie
the principle that no cause of action may be based on
an immoral or illegal act). The House of Lords agreed
with the Court of Appeal that a one-man company
was debarred from bringing a claim against its auditors
where the company had itself committed the fraud.
Inside this issue:
Page 2
The majority / minority
judgments in a nutshell
Page 2
The judgments in further
detail
- Lord Phillips, page 2
- Lord Walker, page 4
- Lord Brown, page 5
All in all, this is a welcome decision for auditors, who
frequently face claims for negligence and breach of
duty in failing to detect fraud within client companies.
However, on further consideration of the reasons
underlying the judgment, it can be seen that the
decision is very narrow in its scope.
Page 7
Conclusion
CPA Protect | Page 1

To recap, this case involved an individual fraudster
duty of the auditors. He thought that the answer
in an insolvency scenario, the auditor’s duty extended
be able to bring a claim in respect of the very
who was the controlling mind and will of the company.
to the public policy question raised by the illegality
to protect the interests of creditors.
conduct that the company had induced them to
It was accepted that, in essence, the individual was
the company. The core issue before the House of
Lords was whether the company (which, in effect,
committed the frauds) could later rely on its illegality
and bring a claim against its auditors for failing to
detect its own fraud.
The judgment runs to more than 120 pages, with
Lords Phillips, Walker and Brown delivering the
majority judgments and Lords Mance and Scott
delivering the minority judgments.
The majority judgments in
a nutshell
In analysing the three majority judgments of Lords
Phillips, Walker and Brown, it can be seen that a
central part of the reasoning is that the fraudster –
Mr Stojevic – was the sole directing mind and will
of the company, and its sole beneficial owner. The
company was, in every sense of the expression,
a one-man company.
In their majority judgments, Lords Walker and
Brown both took the view that the dishonesty of the
controller had to be attributed to the company and
that therefore the company had itself committed the
fraud. They held that the rule in the Hampshire Land
(1896) case – namely, that an agent’s fraudulent acts
are not imputed to the principal – does not apply to a
one-man company. Thus, the company’s claim against
the auditors was based upon its own dishonesty. As
such, it failed on public policy grounds.
Coming to the same conclusion, but adopting different
reasoning, Lord Phillips based his judgment on the
defence required the court to examine whether the
auditors’ duty extended to protect those who would
benefit from the claim. Applying established legal
principles, Lord Phillips held that the auditor’s duty
extended only to the exercise of reasonable care in
providing information to the directors and the body
of shareholders. In this instance, this meant providing
relevant information to the fraudster, Mr Stojevic.
Since the auditors owed no duty to anyone who had
acted dishonestly, the illegality defence applied. Lord
Phillips did not consider attribution to be the relevant
issue.
The minority judgments in
a nutshell
Lord Scott and Lord Mance disagreed with the
majority’s conclusion and held that the ex turpi causa
defence did not apply so as to defeat the company’s
claim. They thought that the fraud within the company
could not be attributed to the company so as to deny
the company a claim against the auditors. In coming
to this conclusion, they both relied on the Hampshire
Land principle.
An important distinguishing factor between the
majority and the minority decisions was their
respective views on the question of whether an
auditor’s duty extends to protecting the interests
of creditors. The majority took the view that the
company suffered no loss once it had gone into
liquidation and that any loss was suffered by its
creditors, to whom the auditors owed no duty.
However, Lord Mance disagreed. He believed that
the company did suffer a continuing loss through the
extraction of assets and its increased deficit and that,
The judgments in further detail
Given the significance and implications of this House
of Lords decision, a more detailed analysis of each of
the judgements is set out below.
Lord Phillips
Common sense
Lord Phillips’ initial reaction was that, as a matter
of common sense, the company’s claim could not
succeed. There were three reasons for this:
1. The company was seeking to put itself forward
as the victim of fraud when it was, in fact, the
perpetrator of the fraud. The true victims of the
fraud were the creditor banks. Although the
company had greater liabilities to the banks, this
was not really a loss that it had suffered. It had
started with nothing and its alleged losses were
sums that it acquired by fraud and then paid
away as part of the same fraud. So, Lord Phillips
reasoned, “if a person starts with nothing and
never legitimately acquires anything, he cannot
realistically be said to have suffered any loss”.
2. The auditors were also the victims of the
company’s fraud. They were induced to act as the
company’s auditors by a fictitious and fraudulent
account of the business, given to them on behalf
of the company by the fraudster, Mr Stojevic.
They were deceived in carrying out their audits
by accounts fraudulently prepared on behalf of
the company. Consequently, the auditors should
carry out.
3. In reality, the claim was brought for the benefit
of banks defrauded by the company on the
grounds that the auditors should have prevented
the business from perpetrating the frauds. It
would not be fair, just and reasonable for the
auditor of a company to owe a duty of care to an
indeterminate class of potential victims in respect
of unlimited losses which they might sustain as
a result of the company’s fraud. In Lord Phillips’
words: “If it would not be fair, just and reasonable
for the banks to have a direct claim, then it would
not seem fair, just and reasonable that they should
achieve the same result through a claim brought
by the company’s liquidators for their benefit”.
He accepted that while common sense matters, it
should not be a convenient alternative to the analysis
of relevant legal principles. He then gave his reasoning
and analysis, summarised below.
Attribution and ex turpi causa
The two other judges who delivered the majority
judgments (Lords Walker and Brown) held that the
Hampshire Land principle did not apply to a one-man
company and so Mr Stojevic’s fraudulent conduct
should be treated as the conduct of the company.
Consequently, the ex turpi causa maxim applied
to defeat the claim. Although Lord Phillips did not
disagree on the law of attribution and the Hampshire
Land principle, he did not think it was a relevant
consideration in the light of the present facts.
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On the issue of attribution, Lord Phillips said this:
the company. The company carried on a fraudulent
in the directing mind and will’s misconduct. Lord
negligently failed to carry out the appropriate due
“Where those managing the company are using it
business, the purpose of which was to benefit the
Phillips’ view was that the law, in its current state,
diligence before advancing money to the company.
as a vehicle for fraud, or where there is only one
company. For these reasons, Lord Phillips considered
does not have any mechanism to prevent fraudulent
However, there was no obvious mechanism by which
person who is managing all aspects of the company’s
that the Hampshire Land principle had no application
shareholders from profiting from their dishonesty.
such a lack of care could be relied on by the auditors
activities, there is no difficulty in identifying the fraud
and did not prevent the attribution of the fraudster’s
To do so would require a lifting of the corporate veil
in answer to the claim brought by the company.
as the fraud of the company”. By way of example, he
fraud to the company.
in order to ensure that the fraudulent shareholders
referred to the Royal Brunei Airlines Sdn Bhd v Tan
could not share in the recovery from the directing
Lord Phillips did not think it was right, therefore, to
(1995) case.
The reason why the ex turpi causa principle did not
mind and will.
hold as a matter of general principle that ex turpi
apply in such circumstances was simply because public
causa did not apply to a claim by a company against
Lord Phillips noted that Stone & Rolls was not carrying
policy did not require its application. Where all the
The same problem arose where a company with
its auditors for failing to detect that the company
on any business at all. The fraudster, in the name of
shareholders were innocent, a claim by the company
independent shareholders was considering a claim
had been operating fraudulently, unless it could be
the company, was pretending to carry on a business
against its directing mind and will would not result in
against its auditors. Contributory negligence would
demonstrated how the difficulties to which he had
that was, in fact, a fiction. The fraudster was using the
any individual shareholder recovering compensation
also be an issue. Clearly, it would not seem fair for a
referred could be resolved. So he could not conclude,
company for his own fraudulent purpose in a manner
for their own wrong. But the position became
company to make a full recovery in damages against
as Lords Scott and Mance had done, that ex turpi
that resulted in substantial payments being made to
murkier if some of the shareholders were complicit
auditors for the benefit of banks which had themselves
causa did not apply to the company’s claim. However,
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he added that he was not persuaded that the ex turpi
circumstances where the underlying business which
an individual officer who could not be expected to
victim of the fraud and consequently the Hampshire
causa principle (or the underlying public policy) would
they had been retained to audit was wholly fictitious.
disclose his own fault”.
Land principle had no application.
necessarily defeat the company’s claim if the company
had independent shareholders.
He considered it was “at least arguable that the illegal
purpose of the contract under which Moore Stephens
were retained rendered it unenforceable at the suit
Lord Walker then reviewed the modern authorities
relating to attribution and said that: “In the case of a
A secondary victim?
Duty of auditors
Lord Phillips then reviewed the case law on the duty
of auditors, and whether their obligations extended
to protecting creditors. While it was arguable that the
scope of an auditor’s duty should extend to protecting
the interests that creditors had in the preservation
of assets in the company, he was not prepared to
depart from the reasoning of the House of Lords in
the Caparo Industries plc v Dickman (1990) case
– namely, that such duties were owed only to the
shareholders as a body.
of Moore Stephens by reason of the application of
the principle in Alexander v Rayson [1936] 1 KB
169”. He continued: “More fundamentally, if party A,
by deceit, induces party B to agree to play a part in
a venture that is wholly fictitious, I find it hard to see
how this can give rise to any duty on the part of
party B”.
Lord Phillips therefore concluded that, in the
circumstances of this case, the person to whom the
auditors owed a duty – namely, Mr Stojevic who was
the company’s sole directing mind and will – was
party to the illegal conduct that formed the basis
one-man company… which has deliberately engaged
in serious fraud, I would follow Royal Brunei (and the
strong line of United States and Canadian authority)
in imputing awareness of the fraud to the company,
applying what is referred to in the United States as
the ‘sole actor’ exception to the ‘adverse interest’
principle”.
Accordingly, the Hampshire Land principle had no
application and was irrelevant in the case of one-man
companies. Put more simply, Lord Walker believed
that where the acts of the fraudster were not, in fact,
targeted at the company, the company was not a
In response to the company’s argument that the
company was a secondary victim of the fraud, Lord
Walker disagreed. He concluded that the company
had not been a victim in any ordinary sense and, as
such, the secondary victim test was irrelevant in the
case of a one-man company.
The “very thing” argument
The company put forward what is known as the
“very thing” argument (see further pages 4-5 of the
autumn 2008 issue of CPA Protect).
Lord Phillips said that “it is difficult to see how the law
can rationally hold an auditor liable when the entire
shareholder body and the entire management is
of the company’s claim. Accordingly, the ex turpi
causa principle provided a complete defence to the
company’s legal action.
embodied in a single individual who knows everything
because he has done everything. If that proposition is
correct, it follows that any breach of duty on the part
of [the auditors] will not sound in damages because it
Lord Walker
Attribution and ex turpi causa
has caused no loss”.
Lord Walker thought that the company was primarily
Accordingly, on the extreme facts of the case, the
intended beneficiaries of the claim fell outside the
scope of any duty owed by the auditors. The sole
person for whose benefit such duty was owed – Mr
Stojevic, who owned and ran the company – was
responsible for the fraud. The scope of the duty
(as opposed to vicariously) liable for the frauds,
because there could be no doubt that Mr Stojevic was
the persona of the company. Lord Walker concluded
that the fraudulent acts of Mr Stojevic were attributed
to the company, as the Hampshire Land case had no
application.
undertaken by the auditors could not extend to those
whom the company might defraud, namely, the
creditors.
After reviewing the cases relating to the Hampshire
Land principle, Lord Walker said: “In all these cases,
there was a company which was the victim of a fraud
Lord Phillips also briefly considered whether the
auditors owed any duty of care to the company in
or serious breach of duty, and the court held that it
was not to be prejudiced by the guilty knowledge of
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The “very thing” that the auditors’ engagement
required them to do was to detect whether the
justice would be the doctrine of contributory
negligence”. He was not convinced that this was
Limitations of ex turpi causa
take the following points into account:
company was engaged in fraudulent action of the
kind that it was, in fact, engaged in. The company
said that “the very thing” argument overrode the ex
turpi causa principle because that principle could not
bar a claim based on the commission of a fraud when
the prevention of the fraud was “the very thing” that
the auditors had been paid to do. To free the auditors
from responsibility from the consequence of their
failure to detect the fraud would be to render their
duty nugatory.
Lord Walker did not share the company’s view on this
point. While checking for fraud was certainly part of
an auditor’s task, Lord Walker said that it was not their
sole or primary task. He held that the essential point
was that a principle of causation could not trump
ex turpi causa where the latter principle applied,
“however short of merits the defendant may be”.
The effect of liquidation
Lord Walker went on to consider the effect of
liquidation on the company’s claim. He noted the
argument that the public policy defence should
not bar claims brought by a company in insolvent
liquidation, where the creditors were innocent parties.
However, he was not prepared to apply a different
a better tool, because “a company’s fraud and its
auditors’ negligence are incommensurable in terms of
blameworthiness and causal potency”.
In summary, Lord Walker was satisfied that the
Hampshire Land principle did not apply, that the
fraudulent acts of Mr Stojevic were attributable to
the company, and that the company was primarily
liable for the frauds. Consequently, the auditors
were entitled to rely on the ex turpi causa rule to
defeat the company’s claim. Lord Walker thought
that a company in liquidation should be treated no
differently to a solvent company and, accordingly, he
was not prepared to expand an auditor’s duty beyond
Caparo. In his view, the legal position was still that
auditors owed no duty to creditors.
Lord Brown
Lord Brown gave short reasons, which “do no more
than echo those of Lord Walker”.
He accepted that the facts of the case were extreme.
Mr Stojevic was the directing mind and will of the
company. The company was, “even on the most
exacting definition of the term”, a one-man company.
Lord Brown went on to stress that he would confine
the ex turpi causa defence to one-man company
frauds. Thus, where innocent shareholders were
involved, there might well be a viable claim (via the
company) against the auditors. But he qualified his
comments as follows:
“This, however, would not be an open-ended
claim, wholly indeterminate as to its potential
scope and extent at the time of the audit, such as
that presently brought. Quite how it would fall to
be confined is no doubt open to argument. But
on one view, it might be limited to the innocent
shareholders’ own loss suffered through the
continuing fraud from the time when, following
a diligent audit, it should have been uncovered
and brought to an end. A claim of that nature
would seem to me to accord altogether more
readily with the policies and principles generally
understood to apply in this context”.
Thus it remains to be seen how courts in future cases
will apply this principle in cases where innocent
shareholders are involved.
The minority judgments: Lord Mance
1. the separate legal identities of a company and its
shareholders;
2. the common law and contractual duties owed by
auditors;
3. the legal and contractual rights that a company
has against those who commit wrongs against it;
4. the distinction between, on the one hand, a
company’s claim for its own net losses (for which
it should be able to sue auditors whose negligence
led to such losses) and, on the other hand, its
creditors’ losses (for which its creditors cannot
sue negligent auditors); and
5. the basic company law principle that the interests
and powers of shareholders yield to those
of creditors in a company that is actually or
potentially insolvent.
After taking these principles into account, Lord Mance
concluded that the auditors could not invoke the ex
turpi causa maxim or deny causation by reference to
the knowledge (and involvement in the fraud) of Mr
Stojevic, if, through the exercise of proper skill and
care, they ought to have detected that the company
was subject to continuing fraud in circumstances
where the company was insolvent and being rendered
increasingly so.
rule to a company in liquidation. Applying the Caparo
decision, that was especially true in the context of an
auditor’s duties that were not owed to a company’s
creditors.
Contributory negligence
In line with Lord Walker, Lord Brown considered that
the Hampshire Land principle did not apply to oneman
companies. In conclusion, he said: “It is on this
basis and this basis alone – the one-man company
or sole actor basis – that I would uphold the Court of
Appeal’s judgment that Stone & Rolls is in no different
or better position than Mr Stojevic himself to resist
Lord Mance delivered a powerful dissenting judgment.
It has been well received by lawyers as well-reasoned
and consistent with established legal principles. It
would not be surprising if some of his comments were
adopted in future decisions on the issues considered
in this case.
Lord Mance did not think it made any difference
whether or not the company was originally
incorporated in order to perpetrate fraud. Whatever
the motives for its incorporation, the company was
not a sham. Once incorporated as a separate legal
entity, it was entitled to be respected as such.
Finally, Lord Walker rejected the company’s
submission that “a more satisfactory tool for doing
the ex turpi causa defence (and the liquidator of
Stone & Rolls is in no better position than either of
them)”.
Essentially, Lord Mance differed from the majority
speeches because, in his opinion, they had failed to
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Insolvency
thing’ that an auditor undertakes is the exercise
of reasonable care in relation to the possibility of
The fact that the company was insolvent at each audit
date was critical, according to Lord Mance. Having
Lord Mance concluded by saying:
A central part of Lord Mance’s reasoning was based
on the insolvency of the company. He did not agree
with the majority that the company could not suffer
any loss simply because it was insolvent. He believed
this would ignore the abstraction of the company’s
assets and wrongly assume that a deficit rendering a
company insolvent was not a loss.
Lord Mance said that, in the case of solvent
companies, it was not disputed that duties were owed
by the directors to the company, as represented
by the body of shareholders. But this duty required
directors of insolvent or borderline insolvent
companies to have regard to the interests of the
company’s creditors as well. This analysis had been
affirmed by the Court of Appeal in West Mercia
Safetywear Ltd v Dodd (1988).
He then looked at the extent of the auditors’ liability
where the company’s directing mind was fraudulent.
He said this:
“Leaving aside situations in which the
directing mind(s) is or are the sole beneficial
shareholder(s), it is obvious – although the Court
of Appeal’s judgment is surprisingly silent on
the point – that an auditor cannot, by reference
to the maxim ex turpi causa, defeat a claim for
breach of duty in failing to detect managerial
fraud at the company’s highest level by attributing
to the company the very fraud which the auditor
should have detected. It would lame the very
concept of an audit – a check on management
for the benefit of shareholders – if the higher
the level of managerial fraud, the lower the
auditor’s responsibility… The fact that a ‘very
financial impropriety at the highest level makes it
impossible for the auditor to treat the company
itself as personally involved in such a fraud, or to
invoke the maxim ex turpi causa in such a case”.
He then went on to reject Lord Phillips’ statement
that “common sense” suggested that the company’s
claim should fail because the auditors were victims
of deceitfully prepared company accounts. To accept
this argument, he believed, would defeat the scope of
auditors’ duties.
Thus, in principle, Lord Mance felt that it was no
answer to an auditor who had failed to discover fraud
to point to the involvement or knowledge on the part
of the company’s directing mind.
He saw no difference where the directing mind also
owned some shares in the company. He believed
this was a matter of basic company law; that the
company’s separate legal personality entitled it to
make a claim.
Where all the shareholders have engaged in fraud
and the company is solvent, the answer is more
straightforward; there is nothing to report (because
the shareholders know the true position), no-one to
complain and therefore no loss.
However, Lord Mance thought the position was very
different where the company was insolvent: “In my
opinion, Moore Stephens’ argument and the majority
conclusion overlook a critical distinction between a
company which is solvent and a company which is
insolvent at the audit date”.
reviewed the relevant authorities, he noted that none
of the cases addressed the present situation of a claim
by the company against its auditors for failure to
pick up a fraudulent scheme rendering it increasingly
insolvent. He also did not think it was inconsistent
with the Caparo or Clarke Pixley (1990) cases to
hold auditors responsible to the company in the
present circumstances. He relied on the following four
reasons:
1. The concern about infinite exposure to third
parties did not exist in the context of a claim by
the company. The company’s claim was to recover
its own loss and not its creditors’ losses, which
were different.
2. The company’s claim for the loss against its
negligent auditors would be the same, irrespective
of whether or not there were shareholders who
were innocent of any involvement in senior
management fraud.
3. It could not be argued that the care to be
expected of the auditors varied according to
whether all of the company’s shares happened to
be owned or controlled by Mr Stojevic.
4. Insolvency introduced new considerations for
the reasons previously explained. The identity of
interest which normally exists between a company
and its shareholders ceased, and the duties of
auditors, like those of directors, must recognise
this. If those in charge of the company acted
contrary to the principles governing insolvency,
then the auditors could no longer treat them as
representing the company and had to take other
action, such as a public report to shareholders or
resignation (which would require the auditors to
give their reasons for resigning).
“It follows that, in my opinion, Moore Stephens
cannot invoke the maxim ex turpi causa or deny
causation by reference to the knowledge of and
involvement in the fraud of Mr Stojevic, if Moore
Stephens ought with proper skill and care to
have detected that Stone & Rolls was subject to
a continuing scheme of fraud in circumstances
in which Stone & Rolls was insolvent and being
rendered increasingly so. Under English law, Stone
& Rolls is thus, in my opinion, entitled to pursue its
present claim against Moore Stephens”.
Contributory fault
While recognising that the House of Lords had not
heard all the arguments on the issue of contributory
fault, Lord Mance made some useful comments
about contributory fault on the part of the company’s
management. He said that the starting point would be
to consider the extent to which contributory fault was
available in respect of non-fraudulent management
failings. This was in regard either to the failings
which the auditors should have detected or different
management failings which nonetheless contributed
to the same loss that the auditors’ negligence allowed
to occur.
However, if the fraud of top management was not
attributed to the company for the purpose of the
ex turpi causa maxim, the obvious conundrum was
why it should be attributed to the company for the
purpose of contributory fault under the Law Reform
(Contributory Negligence) Act 1945.
Despite this problem, in the 2003 case of Barings
plc v Coopers & Lybrand, the contributory fault
CPA Protect | Page 6

(including the heavily-publicised fraud by the
the company is or may be insolvent. Likewise, the
In Lord Scott’s view, a defence based on ex turpi causa
banks) cannot be taken into account for the purpose
derivatives broker, Mr Nick Leeson) that the judge
auditors owed the same duties to creditors, where the
would not have succeeded if Mr Stojevic (or indeed
of contributory fault?
regarded as attributable to the company was
company is or may be insolvent.
the auditors) had been subjected to a misfeasance
recognised as a ground for a substantial reduction in
recovery against the auditors. Further, in Duke Group
Ltd v Pilmer (1999), the court concluded that, while
The minority judgments: Lord Scott
examination under section 212 of the Insolvency Act
1986. Judgment should accordingly be awarded to
the company.
It will be interesting to see whether, in the future, the
reasoning of Lord Mance is adopted in cases involving
the audit of insolvent companies, thereby allowing
the directors’ knowledge of their own fraud on the
company would not be attributed to the business,
the company would still be regarded as vicariously
liable for the directors’ misconduct – and treated as at
fault on the same basis – for the purposes of enabling
negligent auditors to reduce their liability in tort.
In summary, Lord Mance did not think the auditors
could rely on the maxim of ex turpi causa to deny the
company a claim against the auditors because the
fraud within the company could not be attributed
to the company. The company was a separate legal
entity and suffered a loss through increased liabilities.
A director’s duty to a company requires the director
to have regard to the interests of creditors where
Lord Scott came to the same conclusion as Lord
Mance – namely, that the company’s claim could not
be defeated by attributing the fraudulent conduct of
Mr Stojevic to the company.
Lord Scott thought it would be wrong to attribute
Mr Stojevic’s dishonesty to the company so as to
bar a claim by the company against him. This was
because Mr Stojevic’s fraud constituted a breach of
his duty to the business as an officer of the company.
He thought that the same reasoning should apply to
the claim that was brought against the auditors. They
too owed duties as officers of the company and the
claim brought by the business was for breach of those
duties.
Conclusion
It is clear from the three majority judgments that the
central reason behind the House of Lords’ decision
was the fact that the fraudster was, in effect, the
controller of the company and its sole shareholder. It
seems clear from the decision that the ex turpi causa
maxim will not bar a claim by a company with a large
group of independent shareholders (a public company,
for example) where those shareholders are unaware
that the directing mind and will of the company has
involved the company in fraud. But could this decision
be of any help in cases where there is one fraudulent
director/shareholder and one innocent director/
damages to be recovered from auditors for the
benefit of creditors. At the moment, that is not the
case but this area of the law is still clearly evolving.
shareholder who takes no part in the management
of the company? How would other courts construe
the meaning of a “one-man company”? These are
questions that remain unanswered by this House of
Lords’ decision.
The judgment also contains an interesting discussion
on the duty of auditors in an insolvency context.
Where a company is solvent, how can the court
prevent an award of damages from benefiting
dishonest senior management personnel who are also
Chris Sharrock
c.sharrock@kennedys.com.hk
+852 2848 6349
shareholders in the company? On the other hand, if
the company is insolvent, is it fair for the creditors to
Gigi Shuen
benefit from an award of damages when the auditors
g.shuen@kennedys.com.hk
owed them no duty of care, particularly where the
+852 2848 6305
negligent conduct of the creditors (in most cases, the
CPA Protect | Page 7

Contacts
Chris Sharrock
Partner
+852 2848 6349
c.sharrock@kennedys.com.hk
Rupert Skrine
Partner
+852 2848 6301
r.skrine@kennedys.com.hk
Toby Brown
Solicitor
+852 2848 6316
t.brown@kennedys.com.hk
Joanie Ko
Solicitor
+852 2848 6318
j.ko@kennedys.com.hk
Gigi Shuen
Solicitor
+852 2848 6305
g.shuen@kennedys.com.hk
For further information about
any of the articles within this
issue please contact the author
concerned or your usual partner.
This newsletter is designed to
provide a summary of recent case
law. It does not purport to be
comprehensive or to offer legal
advice. All rights reserved.
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