RE: SAINT POWER INDUTSRIAL LTD

RE: SAINT POWER INDUTSRIAL LTD

The court ordered winding up on the just and equitable ground: the company's commercial substratum had been lost and that loss was caused by the respondent's diversion of the Shanghai WFOE business to Sun Power/Sun Power Shanghai and by deadlock/loss of mutual trust between the two shareholder-directors. The insolvency ground was not made out at presentation because the debt was capable of being disputed in good faith, notably in light of the 6 September 2002 support letter; however the state of affairs at hearing justified winding up.

Citation
RE: SAINT POWER INDUTSRIAL LTD
Parties
Petitioner: Mr Hsu Lap Foo; Company: Saint Power Industrial Limited; Opposing Contributory/respondent: Ms Shum Siu Han
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
6 May 2004
Case Number
HCCW1309/2002
Procedural Posture
Companies Winding Up Proceedings / Judgment (final)
Outcome
Winding up order made on the just and equitable ground; petition not upheld on insolvency ground as at presentation
Legal Topics
Winding Up, Just and Equitable Winding Up, Insolvency Petition, Loss of Substratum, Diversion of Corporate Assets, Provisional Liquidation
Source Language
EN
Company Law Insolvency Law Corporate Governance Winding Up Just and Equitable Winding Up Insolvency Petition Loss of Substratum Diversion of Corporate Assets +1 more

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Parties

Mr Hsu Lap Foo

Petitioner

Saint Power Industrial Limited

Company

Ms Shum Siu Han

Opposing Contributory/respondent

Procedural Posture

Companies Winding Up Proceedings / Judgment (final)

Legal Issues

  1. 1 Whether the Company was insolvent such that a winding up order should be made
  2. 2 Whether there had been a breakdown in mutual trust and confidence and deadlock between the two directors/shareholders
  3. 3 Whether the substratum of the company had been lost by diversion of its business to a related entity

Ratio Decidendi

The court ordered winding up on the just and equitable ground: the company's commercial substratum had been lost and that loss was caused by the respondent's diversion of the Shanghai WFOE business to Sun Power/Sun Power Shanghai and by deadlock/loss of mutual trust between the two shareholder-directors. The insolvency ground was not made out at presentation because the debt was capable of being disputed in good faith, notably in light of the 6 September 2002 support letter; however the state of affairs at hearing justified winding up.

Court Disposition

Winding up order made on the just and equitable ground; petition not upheld on insolvency ground as at presentation

Orders

  • Usual winding up order made in relation to Saint Power Industrial Limited
  • Order nisi that Ms Shum Siu Han pay Mr Hsu Lap Foo his costs from the date the petition was amended to introduce the just and equitable ground; no order as to costs prior to that date; costs to be taxed on a party and party basis if not agreed