GERMAIN ELECTRONIC LTD v. LDB SALES CO LTD

GERMAIN ELECTRONIC LTD v. LDB SALES CO LTD

The court held that the statutory demands could not be set aside because the costs order of 24 April 2008, as certified by the allocatur, created a valid joint and several debt against the Company and Mr and Mrs Chaiko who had asserted a counterclaim in their personal capacity; the allocatur stood because it had not been challenged at taxation and no successful appeal or review had been obtained, and therefore the creditor was entitled to enforce the debt and present bankruptcy petitions; the winding up petition was unopposed and a winding up order was made.

Citation
GERMAIN ELECTRONIC LTD v. LDB SALES CO LTD
Parties
Applicant (hcsd 5/2009): Robert Bruce Chaiko; Applicant (hcsd 6/2009): Liu Yuen Kwan also known as Peggy Liu; Respondent (hcsd 5/2009 and HCSD 6/2009) and Petitioner (hccw 259/2009): Germain Electronic Limited; Respondent (hccw 259/2009): LDB Sales Company Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
7 January 2010
Case Number
HCCW259/2009
Procedural Posture
Applications to Set Aside Statutory Demands and a Winding Up Petition Heard Together / Judgment Delivered (hearing 13 October 2009; Judgment 7 January 2010)
Outcome
Applications to set aside the statutory demands dismissed; winding up order made against LDB Sales Company Limited; order nisi that Mr and Mrs Chaiko pay the Creditor's costs of their applications, taxed if not agreed.
Legal Topics
Statutory Demand, Winding Up Petition, Costs Order, Strike Out, Allocatur, Taxation of Costs, Limitation/statute Barred
Source Language
EN
Company Law Insolvency Civil Procedure Costs Law Bankruptcy Statutory Demand Winding Up Petition Costs Order +4 more

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Parties

Robert Bruce Chaiko

Applicant (hcsd 5/2009)

Liu Yuen Kwan also known as Peggy Liu

Applicant (hcsd 6/2009)

Germain Electronic Limited

Respondent (hcsd 5/2009 and HCSD 6/2009) and Petitioner (hccw 259/2009)

LDB Sales Company Limited

Respondent (hccw 259/2009)

Procedural Posture

Applications to Set Aside Statutory Demands and a Winding Up Petition Heard Together / Judgment Delivered (hearing 13 October 2009; Judgment 7 January 2010)

Legal Issues

  1. 1 Whether the statutory demands against Mr and Mrs Chaiko should be set aside
  2. 2 Whether a costs order made against the Company and the Chaikos personally gives rise to a debt recoverable by statutory demand and bankruptcy petition
  3. 3 Whether shareholders/directors can be personally liable for company debts absent personal liability

Ratio Decidendi

The court held that the statutory demands could not be set aside because the costs order of 24 April 2008, as certified by the allocatur, created a valid joint and several debt against the Company and Mr and Mrs Chaiko who had asserted a counterclaim in their personal capacity; the allocatur stood because it had not been challenged at taxation and no successful appeal or review had been obtained, and therefore the creditor was entitled to enforce the debt and present bankruptcy petitions; the winding up petition was unopposed and a winding up order was made.

Court Disposition

Applications to set aside the statutory demands dismissed; winding up order made against LDB Sales Company Limited; order nisi that Mr and Mrs Chaiko pay the Creditor's costs of their applications, taxed if not agreed.

Orders

  • Winding up order made against LDB Sales Company Limited with costs.
  • Applications by Robert Bruce Chaiko and Liu Yuen Kwan to set aside statutory demands dismissed.