RE HSIN CHONG CONSTRUCTION CO LTD

RE HSIN CHONG CONSTRUCTION CO LTD

The application for a regulating order was dismissed because the court was not satisfied it was right to deprive creditors of the statutory opportunity to convene and vote at a first meeting: two significant creditors (HSBC and WKCDA) had legitimate, non‑frivolous objections based on procedural failings by the Provisional Liquidators and prior judicial criticisms; the applicants failed to demonstrate that a remote meeting was considered or infeasible; allowing creditors to canvass and choose liquidators was required in the interests of creditors, so dispensing with the first meeting and appointing liquidators by order was inappropriate.

Citation
[2021] HKCFI 559
Parties
Provisional Liquidators / Applicants: Osman Mohammed Arab and Lai Wing Lung; Company (in Liquidation): Hsin Chong Construction Company Limited (In Liquidation); Opposing Creditor / Respondent: West Kowloon Cultural District Authority; Supporting Creditor: AIG Insurance Hong Kong Limited; Opposing Creditor: HSBC; Official Receiver: Official Receiver
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
12 March 2021
Case Number
HCCW239/2018
Procedural Posture
Companies Winding Up Proceedings / Application for Regulating Order; Hearing and Decision
Outcome
Application dismissed
Legal Topics
Regulating Order, Appointment of Liquidators, Committee of Inspection, Dispensing First Creditors Meeting, Remote Meetings/covid 19
Source Language
EN
Company Law Insolvency Civil Procedure Regulating Order Appointment of Liquidators Committee of Inspection Dispensing First Creditors Meeting Remote Meetings/covid 19

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Parties

Osman Mohammed Arab and Lai Wing Lung

Provisional Liquidators / Applicants

Hsin Chong Construction Company Limited (In Liquidation)

Company (in Liquidation)

West Kowloon Cultural District Authority

Opposing Creditor / Respondent

AIG Insurance Hong Kong Limited

Supporting Creditor

HSBC

Opposing Creditor

Official Receiver

Official Receiver

Procedural Posture

Companies Winding Up Proceedings / Application for Regulating Order; Hearing and Decision

Legal Issues

  1. 1 Whether a regulating order should be made under s227A/B Cap 32
  2. 2 Whether to dispense with the statutory first meetings and appoint liquidators
  3. 3 Weight to be given to wishes of creditors including independent creditors

Ratio Decidendi

The application for a regulating order was dismissed because the court was not satisfied it was right to deprive creditors of the statutory opportunity to convene and vote at a first meeting: two significant creditors (HSBC and WKCDA) had legitimate, non‑frivolous objections based on procedural failings by the Provisional Liquidators and prior judicial criticisms; the applicants failed to demonstrate that a remote meeting was considered or infeasible; allowing creditors to canvass and choose liquidators was required in the interests of creditors, so dispensing with the first meeting and appointing liquidators by order was inappropriate.

Court Disposition

Application dismissed

Orders

  • Application for regulating order dismissed
  • Costs of the application payable out of the assets of the Company by the Provisional Liquidators, the Official Receiver, AIG and WKCDA; costs to be taxed if not agreed and paid forthwith