RE UNITED HONG KONG LTD. (Company Number: 478403)

HCCW000013A/2001

HCCW 13/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING UP NO. 13 OF 2001

____________

	IN THE MATTER OF the Companies Ordinance, Chapter 32
	AND
	IN THE MATTER of UNITED HONG KONG LIMITED

____________

Coram: Hon Yuen J in Court

Dates of Hearing: 11 January 2002

Date of Decision: 11 January 2002

_____________

D E C I S I O N

_____________

1. This is an application for an order that all further proceedings in the winding-up of a company by the name of United Hong Kong Limited ("the Company") be stayed. The history of the matter is as follows.

2. On 21 May 2001 I made an order winding up the Company. The petition was based upon a Small Claims Tribunal award, which had been made in favour of the Company's solicitors. The reasons for the winding-up appear in my written judgment on 21 May 2001 and I will not repeat them here. Suffice it to say that the amount for which the Small Claims award was made was small. Nevertheless, the Small Claims award was not set aside and the Company steadfastly refused to pay that award. Consequently it was wound up.

3. Two months after the winding-up, on 31 July 2001, a motion was issued on behalf of Mr Man Yuen Sing, who was purportedly a contributory of the Company, making an application to stay the winding-up of the Company.

4. Under S.209 of the Companies Ordinance, the Court may, at any time after an order for winding-up, on the application either of the liquidator or the Official Receiver or any creditor or contributory and on proof to the satisfaction of the Court that all proceedings in relation to the winding-up ought to be stayed, make an order staying the proceedings, either altogether or for a limited time on such terms and conditions as the Court thinks fit.

5. It turned out from the evidence that Mr Man Yuen Sing, the Applicant on the motion had no locus standi to make the application because he was neither a creditor nor contributory of the Company. There is therefore an application now by Mr Man Yin Leung, Mr Man Yuen Sing's brother, who is a contributory, to join in the application and to be substituted as the new applicant. It is clear that the Court can order Mr Man Yuen Sing to cease to be the applicant and Mr Man Yin Leung to be substituted as applicant under O.15 r.6 and I so order.

6. The second issue is whether the winding-up should be stayed. The Statement of Affairs filed after the winding-up order showed that there was a deficiency of liabilities over assets in the sum of about $1.55 million. However, it would appear from the balance sheet and from the evidence before me that in respect of these liabilities, a substantial amount was owed to related parties, and these related parties have now all agreed to either waive the liabilities or to allow time to the Company to pay them.

7. Of the liabilities listed, there was owed to Mr Man Yin Leung a sum of $2.86 million. This amount has been waived by him and I have been shown a deed of waiver. That leaves a balance of about $830,000 by way of a debt due to Miss Man Yuen Kay, who is a sister of Mr Man Yin Leung and Mr Man Yuen Sing, and she has filed an affidavit allowing time to the Company to repay that loan. Further, there is an amount of about HK$700,000 which is owing to a company by the name of James Aluminium. That is a company controlled by Mr Man Yuen Sing and his wife, and that company has allowed time to the Company to repay. There is a further loan from Gulford (which apparently is a smaller loan). Gulford is also controlled by the Man family and it has also allowed time to the Company to pay.

8. That leaves only outside creditors being the petitioner and a small amount of HK$10,000 owing to accountants. As far as the petitioner is concerned, it has no objection because it has accepted a personal guarantee from Mr Man and therefore it is no longer interested in looking to the assets of the company.

9. The upshot of the waiver of the $2.86 million debt owed previously to Mr Man Yin Leung is that the balance sheet of the Company would be dramatically changed from showing net liabilities of $1.55 million to net assets of $1.3 million.

10. I have taken into account the fact that the motion was issued more than two months after the winding-up of the company. I have also taken into account the fact that a stay of all proceedings in the winding-up of a company is not the best status that a company can be in.

11. However, I am minded to exercise my discretion to grant the order in the present case because primarily this is a family company whose business is only in the holding of a property which has been rented out to the company of one of the members of the family. If the liquidation were to proceed, the property may well have to be sold in the liquidation process and that would obviously be unsatisfactory as far as the tenant company is concerned. Given that there is no risk to the public in this case because this company has never traded, and there are no external creditors who are prejudiced, I would in the rather unique circumstances of this case give an order staying further proceedings in the winding-up of this company.

	(MARIA YUEN)
	Judge of the Court of First Instance
	High Court

Representation:

Mr Roland Lau, instructed by P H Chin & Co, for the Applicant and Mr Man Yin Leung

Mr J Glen from the Official Receiver's Office Petitioner, Absent

HCCW000013/2001

HCCW 13/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO. 13 OF 2001

____________

IN THE MATTER of Companies Ordinance, Chapter 32 and IN THE MATTER of UNITED HONG KONG LIMITED (Company Number: 478403)

____________

Coram: Hon Yuen J in Court

Date of Hearing: 21 May 2001

Date of Judgment: 21 May 2001

 

_______________

J U D G M E N T

_______________

 

1. In this matter, the petition is based on an award from the Small Claims Tribunal. The award was for $30,000.00 and was made in June 2000. A statutory demand was served in December 2000 and the petition was presented in January 2001. The affirmation of the Petitioner (which is a firm of solicitors) was made verifying the petition in January 2001.

2. There have been filed in court two affirmations of Mr Man Yuen Sing, a director of the Company. Basically, the Company says that the Petitioner firm of solicitors had been negligent in the performance of its duties as solicitors, and it is further said that the Bill of Costs was incorrect. However, it is important to note that the Small Claims Tribunal award has not been set aside. Apparently, what had happened was that the Company had appealed the award to To DHCJ who had held that Miss Lun, the adjudicator, had acted correctly when entering judgment against the Company. Miss Lun was acting upon an unless order given by Miss Au Yeung, another Small Claims Tribunal adjudicator. Consequently, To DHCJ advised the Company to revert to Miss Au Yeung in relation to the unless order which she gave. This, apparently, the Company did.

3. However, on 4 December 2000 the Registrar of the Small Claims Tribunal wrote to the Company as follows:

"Thank you for your letter of 23 November 2000. Section 27A of the Small Claims Tribunal Ordinance, Cap. 338 provides that an application for review by a party should be made within 7 days from the date of an award or order. The order which you wish to review was made on 28 April 2000. Hence, it has been a long time [here I would add in parentheses: 8 months] since the period set down for review expired. This tribunal no longer has jurisdiction to review this order.

Moreover, your application for leave to appeal in these 2 claims were refused by To DHCJ on 6 September 2000. Under Section 28(3) of the Small Claims Tribunal Ordinance Cap. 338 a "refusal by the court of first instance to grant leave to appeal shall be final." There is nothing this Tribunal can do with these two claims."

And there it would appear, the matter ended.

4. The petition was presented as I have said in January 2001. According to Mr Man of the Company, there were attempts made by the Company for a compromise of the situation although that is not set out in the evidence before me.

5. What has transpired is that, apparently, about a week ago Mr Man wrote to the Tribunal again seeking, it would appear, to change its mind in relation to the position which the Tribunal had set out in the letter of 4 December 2000 that I have referred to earlier. It seems to me that it is far too late for Mr Man to do anything about it.

6. The Small Claims Tribunal award having stood notwithstanding an appeal to To DHCJ, the Petitioner is entitled ex debito justitiae to a winding-up order unless the Company manages to persuade me that there is any reason why in the exercise of my discretion the winding-up order should not be made.

7. It is the Company's case that it has recently started miscellaneous proceedings against the firm and it was argued that the winding-up should be adjourned pending the resolution of these miscellaneous proceedings.

8. It seems to me that the matter should have been ventilated properly at the Small Claims Tribunal. The Company having failed in its challenge to the Petitioner's claim in the Small Claims Tribunal, I see nothing which causes me to exercise my discretion against the making of a winding-up order which, as I have said, should follow ex debito justitiae from a judgment debt.

9. Accordingly, I would reject the Company's applications and I will make the usual winding-up order.

 

 

	(MARIA YUEN)
	Judge of the Court of First Instance High Court

 

Representation:

Petitioner in person, present

Company, (leave to appear by a director, Man Yuen Sing, granted by Master)

Mr J Glen, from the Official Receiver's Office