RE HSIN CHONG CONSTRUCTION CO LTD

RE HSIN CHONG CONSTRUCTION CO LTD

A validation order under s182 was warranted because the payments were in the ordinary course necessary to complete a nearly finished project and prevent serious prejudice; the provisional liquidators had adequate notice but failed to present substantive opposition or justification for their requested adjournment, so the court granted the validation order and refused the adjournment and the provisional liquidators' costs application.

Citation
[2019] HKCFI 1211
Parties
Applicant / Interested Party: Samsung C&T Corporation; Company (provisional Liquidators Appointed): Hsin Chong Construction Company Limited; Provisional Liquidators: Osman Mohammed Arab and Lai Wing Lun
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
7 May 2019
Case Number
HCCW239/2018
Procedural Posture
Companies (winding Up) Proceedings / Application for Validation Order Under S182 Prior to Substantive Winding‑up Hearing
Outcome
Validation order granted in terms of paragraphs 1 to 5 of the summons; provisional liquidators' adjournment refused; provisional liquidators' costs application refused
Legal Topics
Validation Order, Section 182 Cap 32, Provisional Liquidator Duties, Payments in the Ordinary Course, Winding Up Petition
Source Language
EN
Company Law Insolvency Law Civil Procedure Commercial Law Validation Order Section 182 Cap 32 Provisional Liquidator Duties Payments in the Ordinary Course +1 more

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Parties

Samsung C&T Corporation

Applicant / Interested Party

Hsin Chong Construction Company Limited

Company (provisional Liquidators Appointed)

Osman Mohammed Arab and Lai Wing Lun

Provisional Liquidators

Procedural Posture

Companies (winding Up) Proceedings / Application for Validation Order Under S182 Prior to Substantive Winding‑up Hearing

Legal Issues

  1. 1 Whether payments into and out of a joint venture bank account made in the ordinary course after presentation of a winding up petition can be validated under section 182 of Cap 32
  2. 2 Whether the provisional liquidators should be required to provide consents or execute documents to give effect to the validation order
  3. 3 Whether the adjournment sought by the provisional liquidators should be granted and whether their conduct in failing to file submissions justified refusal of adjournment

Ratio Decidendi

A validation order under s182 was warranted because the payments were in the ordinary course necessary to complete a nearly finished project and prevent serious prejudice; the provisional liquidators had adequate notice but failed to present substantive opposition or justification for their requested adjournment, so the court granted the validation order and refused the adjournment and the provisional liquidators' costs application.

Court Disposition

Validation order granted in terms of paragraphs 1 to 5 of the summons; provisional liquidators' adjournment refused; provisional liquidators' costs application refused

Orders

  • Validation order made in terms of paragraphs 1 to 5 of the summons validating payments into and out of the Joint Venture Account in the ordinary course of business
  • Provisional liquidators to provide consents and/or execute documents reasonably required to give effect to the validation order