ACROPOLIS LTD v. W&Q INVESTMENT LTD AND OTHERS

ACROPOLIS LTD v. W&Q INVESTMENT LTD AND OTHERS

The judge found a good prima facie case for winding up based on convincing evidence of a fraudulent placing and related misconduct, concluded the CA Undertakings had been breached and that the company's operations were paralysed by mass resignations and harassment traceable to the New Directors; given urgency and lack of workable alternative the court exercised its discretion to appoint provisional liquidators to preserve and stabilise the business and assets, and refused to require an undertaking as to damages in the special circumstances.

Citation
[2018] HKCFI 1195
Parties
Petitioner (hccw 218/2017): ACROPOLIS LIMITED; 1st Respondent (hccw 218/2017): W&Q INVESTMENT LIMITED; 2nd Respondent (hccw 218/2017): LIU CHANG KIEN WILSON; 3rd Respondent (hccw 218/2017): ZHANG QI ANGEL; 4th Respondent (hccw 218/2017): LAW WING KIT GARY; 5th Respondent (hccw 218/2017): TO LUNG SANG; 6th Respondent (hccw 218/2017): CHAN KOOI POR BENJAMIN; 7th Respondent (hccw 218/2017): CHEUNG DENISE; 8th Respondent (hccw 218/2017): CHAN HIN HAI HENRY; 9th Respondent (hccw 218/2017): KORT WING HO JOSEPH; 10th Respondent (hccw 218/2017): KO KWOK FAI DENNIS; 11th Respondent (hccw 218/2017): TO MAN CHOY JACKY; 12th Respondent (hccw 218/2017): TSANG KWOK SHAN SANDY; 13th Respondent (hccw 218/2017): ZHANG CHENWEI; 14th Respondent (hccw 218/2017) and 1st Plaintiff (hcmp 1721/2017): AESO HOLDING LIMITED; 15th Respondent (hccw 218/2017): WANG KIE; 16th Respondent (hccw 218/2017): LAM CHEUK YU; 3rd Plaintiff (hcmp 1721/2017): AESO LIMITED; 2nd Plaintiff (hcmp 1721/2017): ZHANG QI; 4th Plaintiff (hcmp 1721/2017): CHAN KIN WING; 1st Defendant (hcmp 1721/2017): CHAN SIU CHUNG; 2nd Defendant (hcmp 1721/2017): CHIU FU KEUNG; 3rd Defendant (hcmp 1721/2017): CHEUNG HIU TUNG; 4th Defendant (hcmp 1721/2017): CHENG NGA LAI
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
31 May 2018
Case Number
HCCW218/2017
Procedural Posture
Companies (winding Up) Petition and Related Miscellaneous/company Inspection Proceedings Heard Together / Inter Partes Interim Application for Appointment of Provisional Liquidators; Substantive Originating Summons Adjourned Sine Die
Outcome
Provisional liquidators appointed over Aeso Holding Limited; originating summons in HCMP 1721/2017 adjourned sine die with liberty to restore; costs ordered nisi in favour of petitioner with certificate for two counsel; no undertaking as to damages required from petitioner.
Legal Topics
Provisional Liquidators, Winding Up Petition on Public Interest/fraud Grounds, Appointment of Receivers, Breach of Court Undertakings, Inspection and Production of Company Records, Share Placing and Alleged Collusion, Boardroom Disputes
Source Language
EN
Company Law Insolvency Injunctions and Interim Remedies Corporate Governance Civil Procedure Provisional Liquidators Winding Up Petition on Public Interest/fraud Grounds Appointment of Receivers +4 more

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Parties

ACROPOLIS LIMITED

Petitioner (hccw 218/2017)

W&Q INVESTMENT LIMITED

1st Respondent (hccw 218/2017)

LIU CHANG KIEN WILSON

2nd Respondent (hccw 218/2017)

ZHANG QI ANGEL

3rd Respondent (hccw 218/2017)

LAW WING KIT GARY

4th Respondent (hccw 218/2017)

TO LUNG SANG

5th Respondent (hccw 218/2017)

CHAN KOOI POR BENJAMIN

6th Respondent (hccw 218/2017)

CHEUNG DENISE

7th Respondent (hccw 218/2017)

CHAN HIN HAI HENRY

8th Respondent (hccw 218/2017)

KORT WING HO JOSEPH

9th Respondent (hccw 218/2017)

KO KWOK FAI DENNIS

10th Respondent (hccw 218/2017)

TO MAN CHOY JACKY

11th Respondent (hccw 218/2017)

TSANG KWOK SHAN SANDY

12th Respondent (hccw 218/2017)

ZHANG CHENWEI

13th Respondent (hccw 218/2017)

AESO HOLDING LIMITED

14th Respondent (hccw 218/2017) and 1st Plaintiff (hcmp 1721/2017)

WANG KIE

15th Respondent (hccw 218/2017)

LAM CHEUK YU

16th Respondent (hccw 218/2017)

AESO LIMITED

3rd Plaintiff (hcmp 1721/2017)

ZHANG QI

2nd Plaintiff (hcmp 1721/2017)

CHAN KIN WING

4th Plaintiff (hcmp 1721/2017)

CHAN SIU CHUNG

1st Defendant (hcmp 1721/2017)

CHIU FU KEUNG

2nd Defendant (hcmp 1721/2017)

CHEUNG HIU TUNG

3rd Defendant (hcmp 1721/2017)

CHENG NGA LAI

4th Defendant (hcmp 1721/2017)

Procedural Posture

Companies (winding Up) Petition and Related Miscellaneous/company Inspection Proceedings Heard Together / Inter Partes Interim Application for Appointment of Provisional Liquidators; Substantive Originating Summons Adjourned Sine Die

Legal Issues

  1. 1 Whether a prima facie case for winding up was established on the evidence of fraudulent share placing and related conduct
  2. 2 Whether circumstances justified appointment of provisional liquidators to preserve assets and restore operations
  3. 3 Whether the Court of Appeal undertakings (CA Undertakings) had been breached

Ratio Decidendi

The judge found a good prima facie case for winding up based on convincing evidence of a fraudulent placing and related misconduct, concluded the CA Undertakings had been breached and that the company's operations were paralysed by mass resignations and harassment traceable to the New Directors; given urgency and lack of workable alternative the court exercised its discretion to appoint provisional liquidators to preserve and stabilise the business and assets, and refused to require an undertaking as to damages in the special circumstances.

Court Disposition

Provisional liquidators appointed over Aeso Holding Limited; originating summons in HCMP 1721/2017 adjourned sine die with liberty to restore; costs ordered nisi in favour of petitioner with certificate for two counsel; no undertaking as to damages required from petitioner.

Orders

  • Provisional liquidators to be appointed over Aeso Holding Limited in terms of the draft order submitted on 14 May 2018 (subject to Official Receiver's comments)
  • Petitioner not required to provide an undertaking as to damages