WILLWIN DEVELOPMENT (ASIA) CO LTD AND ANOTHER v. WEI XING AND OTHERS

WILLWIN DEVELOPMENT (ASIA) CO LTD AND ANOTHER v. WEI XING AND OTHERS

The Court stayed further proceedings against SHENZHEN WILLWIN TECHNOLOGY COMPANY LIMITED because the Mainland compulsory liquidation order and appointment of a new liquidation committee meant the company could only act through the new liquidators; in the absence of expert PRC law evidence the Court assumed the Mainland position aligns with Hong Kong practice requiring a stay until the liquidators decide to continue. Because BKT and Wen failed to disclose fully the liquidation status and post-liquidation communications (notably Du's email), the Court ordered costs against WW and BKT for wasting court time and Xing's costs.

Citation
WILLWIN DEVELOPMENT (ASIA) CO LTD AND ANOTHER v. WEI XING AND OTHERS
Parties
1st Plaintiff: WILLWIN DEVELOPMENT (ASIA) COMPANY LIMITED; 2nd Plaintiff: SHENZHEN WILLWIN TECHNOLOGY COMPANY LIMITED; 1st Defendant: WEI XING; 2nd Defendant: EVOLUTION SOLUTION LIMITED; 3rd Defendant: HU YING
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
1 August 2017
Case Number
HCA797/2012
Procedural Posture
Civil: Post Judgment Account of Profits, Company Liquidation and Related Interlocutory Applications / Interlocutory Application for Stay of Proceedings and Challenge to Solicitor Representation; Accounts and Discovery Outstanding
Outcome
Further proceedings stayed as against SHENZHEN WILLWIN TECHNOLOGY COMPANY LIMITED until further order of the Court; costs of the summons ordered against WILLWIN DEVELOPMENT (ASIA) COMPANY LIMITED and Benny Kong & Tsai in favour of Wei Xing, to be taxed if not agreed
Legal Topics
Compulsory Liquidation, Stay of Proceedings, Solicitor Retainer and Authority, Accounting for Profits, Costs and Disclosure
Source Language
EN
Company Law Civil Procedure Equity Litigation Costs Cross Border Insolvency Compulsory Liquidation Stay of Proceedings Solicitor Retainer and Authority +2 more

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Parties

WILLWIN DEVELOPMENT (ASIA) COMPANY LIMITED

1st Plaintiff

SHENZHEN WILLWIN TECHNOLOGY COMPANY LIMITED

2nd Plaintiff

WEI XING

1st Defendant

EVOLUTION SOLUTION LIMITED

2nd Defendant

HU YING

3rd Defendant

Procedural Posture

Civil: Post Judgment Account of Profits, Company Liquidation and Related Interlocutory Applications / Interlocutory Application for Stay of Proceedings and Challenge to Solicitor Representation; Accounts and Discovery Outstanding

Legal Issues

  1. 1 Whether proceedings against SWT should be stayed following a Mainland compulsory liquidation order and replacement of liquidators
  2. 2 Whether Benny Kong & Tsai (BKT) had authority to continue acting for SWT after change of liquidators
  3. 3 Whether solicitors breached duty of candour by failing to disclose SWT's liquidation status and recent communications from new liquidators

Ratio Decidendi

The Court stayed further proceedings against SHENZHEN WILLWIN TECHNOLOGY COMPANY LIMITED because the Mainland compulsory liquidation order and appointment of a new liquidation committee meant the company could only act through the new liquidators; in the absence of expert PRC law evidence the Court assumed the Mainland position aligns with Hong Kong practice requiring a stay until the liquidators decide to continue. Because BKT and Wen failed to disclose fully the liquidation status and post-liquidation communications (notably Du's email), the Court ordered costs against WW and BKT for wasting court time and Xing's costs.

Court Disposition

Further proceedings stayed as against SHENZHEN WILLWIN TECHNOLOGY COMPANY LIMITED until further order of the Court; costs of the summons ordered against WILLWIN DEVELOPMENT (ASIA) COMPANY LIMITED and Benny Kong & Tsai in favour of Wei Xing, to be taxed if not agreed

Orders

  • Further proceedings in this action are stayed as against SHENZHEN WILLWIN TECHNOLOGY COMPANY LIMITED until further order of this Court
  • The liquidation of SHENZHEN WILLWIN TECHNOLOGY COMPANY LIMITED does not affect the 1st plaintiff's conduct of the accounting exercise and related matters continue