BOZELL ASIA (HOLDING) LTD v. CAL INTERNATIONAL LTD AND ANOTHER

BOZELL ASIA (HOLDING) LTD v. CAL INTERNATIONAL LTD AND ANOTHER

The court found BAH had established that debts were owing to it and that CBH was unable to pay its debts within s177(1)(d); the Shareholders' Agreement did not preclude BAH from presenting a winding up petition; the directors' use of s228A was not a sufficient reason to oust the creditors' insolvency petition, and the Section 228A proceedings were stayed to allow compulsory winding up under insolvency provisions to proceed.

Citation
BOZELL ASIA (HOLDING) LTD v. CAL INTERNATIONAL LTD AND ANOTHER
Parties
Petitioner; 4th Defendant (misc Proceedings): Bozell Asia (Holding) Limited; 1st Respondent; 2nd Plaintiff (misc Proceedings): CAL International Limited; 2nd Respondent; 5th Defendant (misc Proceedings): CAL/Bozell Holdings Limited; 1st Plaintiff: Peter De Krassel; 1st Defendant: Francis Roxas Moran; 2nd Defendant: Thomas Yeung Sin Kit; 3rd Defendant: Michael Anderson
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
30 October 1996
Case Number
HCCW506/1995
Procedural Posture
Winding Up (companies Ordinance) and Ancillary Miscellaneous Proceedings / Hearing on Insolvency Issue and Miscellaneous Injunctions; Judgment Delivered
Outcome
Winding up petition on insolvency grounds upheld in substance; directors' Section 228A winding up proceedings stayed and compulsory winding up under insolvency provisions permitted to proceed; duplicated costs disallowed.
Legal Topics
Winding Up, Statutory Demand, Section 177(1)(d) Insolvency, Section 228 a Directors' Winding Up, Shareholders' Agreement Disputes, Declaratory and Injunctive Relief
Source Language
EN
Company Law Insolvency Law Contract Law Equity and Remedies Winding Up Statutory Demand Section 177(1)(d) Insolvency Section 228 a Directors' Winding Up +2 more

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Parties

Bozell Asia (Holding) Limited

Petitioner; 4th Defendant (misc Proceedings)

CAL International Limited

1st Respondent; 2nd Plaintiff (misc Proceedings)

CAL/Bozell Holdings Limited

2nd Respondent; 5th Defendant (misc Proceedings)

Peter De Krassel

1st Plaintiff

Francis Roxas Moran

1st Defendant

Thomas Yeung Sin Kit

2nd Defendant

Michael Anderson

3rd Defendant

Procedural Posture

Winding Up (companies Ordinance) and Ancillary Miscellaneous Proceedings / Hearing on Insolvency Issue and Miscellaneous Injunctions; Judgment Delivered

Legal Issues

  1. 1 Whether CBH was unable to pay its debts within the meaning of Companies Ordinance s177(1)(d)
  2. 2 Whether debts claimed by BAH were owing to BAH or to other Bozell group companies
  3. 3 Whether the Shareholders' Agreement barred BAH from presenting a winding up petition

Ratio Decidendi

The court found BAH had established that debts were owing to it and that CBH was unable to pay its debts within s177(1)(d); the Shareholders' Agreement did not preclude BAH from presenting a winding up petition; the directors' use of s228A was not a sufficient reason to oust the creditors' insolvency petition, and the Section 228A proceedings were stayed to allow compulsory winding up under insolvency provisions to proceed.

Court Disposition

Winding up petition on insolvency grounds upheld in substance; directors' Section 228A winding up proceedings stayed and compulsory winding up under insolvency provisions permitted to proceed; duplicated costs disallowed.

Orders

  • Stay winding up proceedings under Section 228A of the Companies Ordinance
  • Allow winding up proceedings to proceed under compulsory insolvency provisions (Section 177)