GINFAX DEVELOPMENT LTD v. JAZZ PHOTO (HONG KONG) LTD (in liquidation)

GINFAX DEVELOPMENT LTD v. JAZZ PHOTO (HONG KONG) LTD (in liquidation)

The payments were validated because they were made in good faith and in the ordinary course of business by a supplier unaware of the winding up petition when the post-dated cheques were deposited; there was no evidence the transactions were intended to prefer the supplier, so validation under section 182 was appropriate.

Citation
GINFAX DEVELOPMENT LTD v. JAZZ PHOTO (HONG KONG) LTD (in liquidation)
Parties
Applicant: Ginfax Development Limited; Respondent (in Liquidation): Jazz Photo (Hong Kong) Ltd; Liquidators: Joint and Several Liquidators
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
8 June 2009
Case Number
HCCW1165/2003
Procedural Posture
Companies (winding Up) No.1165 of 2003 / Application for Validation of Post Petition Dispositions Under Section 182
Outcome
Application allowed; payments validated.
Legal Topics
Validation of Dispositions, Post Petition Payments, Preferential Transactions, Section 182 Companies Ordinance
Source Language
EN
Company Law Insolvency Law Commercial Law Validation of Dispositions Post Petition Payments Preferential Transactions Section 182 Companies Ordinance

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Parties

Ginfax Development Limited

Applicant

Jazz Photo (Hong Kong) Ltd

Respondent (in Liquidation)

Joint and Several Liquidators

Liquidators

Procedural Posture

Companies (winding Up) No.1165 of 2003 / Application for Validation of Post Petition Dispositions Under Section 182

Legal Issues

  1. 1 Whether payments made after presentation of a winding up petition are void under section 182
  2. 2 Whether the payments were made in good faith and in the ordinary course of business
  3. 3 Whether the payments constituted an attempt to prefer the supplier

Ratio Decidendi

The payments were validated because they were made in good faith and in the ordinary course of business by a supplier unaware of the winding up petition when the post-dated cheques were deposited; there was no evidence the transactions were intended to prefer the supplier, so validation under section 182 was appropriate.

Court Disposition

Application allowed; payments validated.

Orders

  • Validation of 15 payments totaling HK$582,119.79 made by cheques on 22 and 25 October 2003 pursuant to section 182 of the Companies Ordinance, Cap.32.