RE SAFE STEEL FURNITURE FACTORY LTD

RE SAFE STEEL FURNITURE FACTORY LTD

The petitioner proved a breakdown of mutual trust amounting to conduct unfairly prejudicial to his interests; although this established just and equitable grounds for winding-up, both companies were solvent and trading so the appropriate remedy is relief under s.168A rather than winding-up; an expert valuation of...

Source-derived case information.

Citation
RE SAFE STEEL FURNITURE FACTORY LTD
Parties
Petitioner: Wong Sum Hui; Respondent (company): Safe Steel Furniture Factory Limited; Respondent (company): Lai Kan Company Limited; Intervener: Official Receiver
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
12 August 1987
Case Number
HCCW319/1986
Procedural Posture
Companies Winding Up / Judgment
Outcome
Court found good cause for winding-up on just and equitable grounds but, because both companies are solvent and continuing, declined immediate winding-up and granted entitlement to relief under s.168A; directed valuation and further hearing to determine specific orders.
Legal Topics
Just and Equitable Winding Up, Unfairly Prejudicial Conduct (s.168 A), Shareholder Oppression, Remedies for Minority Shareholders
Source Language
en
Company Law Insolvency Law Equity Just and Equitable Winding Up Unfairly Prejudicial Conduct (s.168 A) Shareholder Oppression Remedies for Minority Shareholders

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Summary, issues, holding and outcome

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Parties

Wong Sum Hui

Petitioner

Safe Steel Furniture Factory Limited

Respondent (company)

Lai Kan Company Limited

Respondent (company)

Official Receiver

Intervener

Procedural Posture

Companies Winding Up / Judgment

Legal Issues

  1. 1 Whether petitioner established just and equitable ground for winding-up under s.177(1)(f)
  2. 2 Whether the affairs of the companies were conducted in a manner unfairly prejudicial to the petitioner under s.168A
  3. 3 Whether alternative remedies or solvency of companies make winding-up inappropriate

Ratio Decidendi

The petitioner proved a breakdown of mutual trust amounting to conduct unfairly prejudicial to his interests; although this established just and equitable grounds for winding-up, both companies were solvent and trading so the appropriate remedy is relief under s.168A rather than winding-up; an expert valuation of company assets and the petitioner’s interest must be undertaken to determine the purchase/other orders under s.168A.

Court Disposition

Court found good cause for winding-up on just and equitable grounds but, because both companies are solvent and continuing, declined immediate winding-up and granted entitlement to relief under s.168A; directed valuation and further hearing to determine specific orders.

Orders

  • Petitioner entitled to relief under Companies Ordinance s.168A for affairs conducted in manner unfairly prejudicial to his interests
  • Expert valuation to be obtained of the assets of Safe Steel Furniture Factory Limited and Lai Kan Company Limited and of the petitioner's share interests