CO BUN KA v. HIP SOON TRADING CO LTD AND OTHERS

CO BUN KA v. HIP SOON TRADING CO LTD AND OTHERS

The court found the company to be a quasi‑partnership with entrenched deadlock between shareholders and directors, a loss of mutual confidence, and loss of substratum because the business was ceased by the company and continued by Mr Wong and Mrs Suen under another entity; these facts satisfy the just and equitable ground in s.177(1)(f) and justify a compulsory winding up. Costs were ordered against Mr Wong and Mrs Suen because their refusal to sign voluntary winding up resolutions made the proceedings necessary.

Citation
CO BUN KA v. HIP SOON TRADING CO LTD AND OTHERS
Parties
Petitioner: Mr Co Bun Ka; 1st Respondent: Hip Soon Trading Company Limited; 2nd Respondent: Mr Wong Lam Chung; 3rd Respondent: Mrs Suen Lau Wan Seung (Wendy); 4th Respondent: Mr Shi Xiao Xin; 5th Respondent: Mr Xu Qing Tian
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
16 November 2007
Case Number
HCCW503/2006
Procedural Posture
Winding Up Petition Under Companies Ordinance / Final Hearing and Reasons for Judgment Delivered
Outcome
Order made to wind up Hip Soon Trading Company Limited on just and equitable ground under s.177(1)(f); costs awarded to Petitioner against 2nd and 3rd Respondents
Legal Topics
Quasi‑partnership, Just and Equitable Winding Up, Deadlock on Board and Shareholders, Substratum of Company Lost, Costs Order
Source Language
EN
Company Law Insolvency Law Quasi‑partnership Just and Equitable Winding Up Deadlock on Board and Shareholders Substratum of Company Lost Costs Order

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Parties

Mr Co Bun Ka

Petitioner

Hip Soon Trading Company Limited

1st Respondent

Mr Wong Lam Chung

2nd Respondent

Mrs Suen Lau Wan Seung (Wendy)

3rd Respondent

Mr Shi Xiao Xin

4th Respondent

Mr Xu Qing Tian

5th Respondent

Procedural Posture

Winding Up Petition Under Companies Ordinance / Final Hearing and Reasons for Judgment Delivered

Legal Issues

  1. 1 Whether it is just and equitable to wind up the company under s.177(1)(f)
  2. 2 Whether the company is a quasi‑partnership and there has been a loss of mutual confidence and deadlock
  3. 3 Whether the substratum of the company has been lost by replacement of its business

Ratio Decidendi

The court found the company to be a quasi‑partnership with entrenched deadlock between shareholders and directors, a loss of mutual confidence, and loss of substratum because the business was ceased by the company and continued by Mr Wong and Mrs Suen under another entity; these facts satisfy the just and equitable ground in s.177(1)(f) and justify a compulsory winding up. Costs were ordered against Mr Wong and Mrs Suen because their refusal to sign voluntary winding up resolutions made the proceedings necessary.

Court Disposition

Order made to wind up Hip Soon Trading Company Limited on just and equitable ground under s.177(1)(f); costs awarded to Petitioner against 2nd and 3rd Respondents

Orders

  • Company wound up by order of the court
  • Costs of the petition to be paid by the 2nd and 3rd Respondents to the Petitioner, to be taxed if not agreed