YIDONG (HK) LTD v. CHAN KING MAN AND ANOTHER

bjbj HCCW 425/2012 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE COMPANIES (WINDING-UP) PROCEEDINGS NO 425 OF 2012 _________________ IN THE MATTER OF SMARTECH DISPLAY LIMITED and IN THE MATTER OF the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) _________________ BETWEEN YIDONG (HK) LIMITED Petitioner and CHAN KING MAN 1st Respondent SMARTECH DISPLAY LIMITED 2nd Respondent _________________ Before: Hon Harris J in Chambers Date of written submissions from the petitioner: 19 April 2016 Date of written observation from the Official Receiver: 20 April 2016 Date of Decision: 29 April 2016 D E C I S I O N have before me an application made by Yidong (HK) Limited ( Yidong ) pursuant to section 209(1) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap 32 to stay the winding up of the Company. The Company was wound up on the ground of insolvency on 23 January 2013. The present application is straightforward. The Company has two shareholders: Super Deluxe Investments Limited ( Super Deluxe ), which holds 70% of its issued capital, and Chan King Man, who holds the remaining 30%. Super Deluxe was owned by Yiu Chun Pong. Mr Yiu has sold his shares in Super Deluxe to Yidong. Yidong wishes to continue the Company s business which was conducted through a subsidiary in the Mainland, which is synergistic with its own business. Mr Chan agrees. Yidong has already paid all the Company s creditors and taken a novation of most of the debts, which gives it locus to make the present application. Section 209(1) provides: 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. The principles and criteria by reference to which the court determines applications to stay winding up proceedings under section (1) are well established and explained in Kwan s (as she then was) decision in Re Outboard Marine Corp Asia Ltd . Briefly they are as follows: (1) The power to grant a stay of winding up proceedings is discretionary. (2) The burden is on the applicant to make out a sufficient case that carries conviction. Before granting a stay, section (1) requires proof to the satisfaction of the court that all proceedings in relation to the winding up ought to be stayed . (3) Whether there are sufficient assets to pay all the creditors of the company and the expenses of the liquidation. The court will also have regard to the interests of shareholders. (4) The court will also consider whether a stay is conducive or detrimental to commercial morality and to the interests of the public at large. The Liquidators have filed a report confirming that they have identified no matters that require investigation or call into question the propriety of the conduct of the Company s affairs. The fees of the Liquidators and the Official Receiver have been provided for and the Official Receiver has raised no objection to the application. I am satisfied on the evidence before me that the restructuring of the Company s debt will result in it being returned to solvency as Yidong does not intend to enforce debts it has bought. The stay is for a sensible and discernible purpose and all those interested in the liquidation, creditors and Mr Chan, benefit from it and nobody has objected to it. I will, therefore, grant the stay sought. (Jonathan Harris) Judge of the Court of First Instance High Court Ms Elaine Liu, instructed by Philip TF Wong & Co, for the petitioner Chan King Man, the 1st respondent, in person (did not file any written submissions) The provisional liquidator of Smartech Display Limited, the 2nd respondent (did not file any written submissions) Ms Ophelia Lok, Assistant Principal Solicitor for the Official Receiver [2003] 1 HKLRD 585 PAGE - A B C D E F G H I J K L M N O P Q R S T U V A B C D E F G H I J K L M N O P Q R S T U V A B C D E F G H I J K L M N O P Q R S T U V A B C D E F G H I J K L M N O P Q R S T U V h53& gdS)W gd}r h53& h53& h53& h53& h53& h53& h53& gd53& n yt h53& h53& h53& h53& h53& h53& h53& h53& h53& gd53& gd53& zvqm h53& h53& h53& n !v n yt [Content_Types].xml Iw}, $yi} _rels/.rels theme/theme/themeManager.xml K Y, sQ}# theme/theme/theme1.xml w toc'v )I`n 3Vq%'#q x}r :\TZaG I u3 L+M2 e\O* $*c? )6-r IqbJ#x ,AGm T[XF64 E)`# R>QD =(K& =al- 4vfa 0%M0 theme/theme/_rels/themeManager.xml.rels 5 6?$Q K(M&$R(.1 [Content_Types].xmlPK _rels/.relsPK theme/theme/themeManager.xmlPK theme/theme/theme1.xmlPK theme/theme/_rels/themeManager.xml.relsPK <?xml version="1.0" encoding="UTF-8" standalone="yes"?> <a:clrMap xmlns:a="http://schemas.openxmlformats.org/drawingml/2006/main" bg1="lt1" tx1="dk1" bg2="lt2" tx2="dk2" accent1="accent1" accent2="accent2" accent3="accent3" accent4="accent4" accent5="accent5" accent6="accent6" hlink="hlink" folHlink="folHlink"/> ^Y<<7 vZb3 MV;$l A>VT{B HCSD 17/2012 setup CACC 283-2007.dot Judiciary Microsoft Office Word Judiciary Hong Kong HCSD 17/2012 Title <b:Sources SelectedStyle="\APA.XSL" StyleName="APA" xmlns:b="http://schemas.openxmlformats.org/officeDocument/2006/bibliography" xmlns="http://schemas.openxmlformats.org/officeDocument/2006/bibliography"></b:Sources> <?xml version="1.0" encoding="UTF-8" standalone="no"?> <ds:datastoreItem ds:itemID="{D5D42445-C8D1-4A27-87AA-88057A272C44}" xmlns:ds="http://schemas.openxmlformats.org/officeDocument/2006/customXml"><ds:schemaRefs><ds:schemaRef ds:uri="http://schemas.openxmlformats.org/officeDocument/2006/bibliography"/></ds:schemaRefs></ds:datastoreItem> Microsoft Office Word 97-2003 Document MSWordDoc Word.Document.8