RE THE INCORPORATED OWNERS OF KAI TAK MANSION (BLOCK THREE)

RE THE INCORPORATED OWNERS OF KAI TAK MANSION (BLOCK THREE)

The court granted a stay of the winding up order under s.209(1) on the ground that the company is currently solvent and the liquidation costs can be provided for, but only on specific terms addressing the Liquidators' legitimate concerns: written undertakings by the applicants' solicitors to pay liquidators' and Official Receiver's fees from the agreed funds, compulsory attendance by the former chairlady to answer the liquidators' questionnaire, disclosure of liquidators' affirmations to owners, transfer of books and documents and handover to the new management committee within specified times, with costs of the application to be borne by the applicants (to be taxed if not agreed).

Citation
RE THE INCORPORATED OWNERS OF KAI TAK MANSION (BLOCK THREE)
Parties
Company: The Incorporated Owners of Kai Tak Mansion (Block Three); Applicants (contributories): Seven contributories of the Company; Joint and Several Liquidators: Messrs Victor Chiu Koon Shou and Tsang Fan Wan; Opposing Contributories: Opposing owners (contributories); Official Receiver: Official Receiver; Creditor/petitioner: Po Fat Construction Co. Ltd
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
21 January 2011
Case Number
HCCW268/2008
Procedural Posture
Companies Winding Up / Application Under S.209 to Stay Winding Up After a Winding Up Order (post Liquidation Stay Application Hearing)
Outcome
Winding up order stayed subject to specified terms and conditions which must be fulfilled before the stay takes effect
Legal Topics
Winding Up, Stay of Winding Up Under S.209, Liquidator Investigations and Duties, Management Committee Obligations, Return of Books and Records
Source Language
EN
Company Law Insolvency Property Law Civil Procedure Statutory Regulation (building Management) Winding Up Stay of Winding Up Under S.209 Liquidator Investigations and Duties +2 more

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Parties

The Incorporated Owners of Kai Tak Mansion (Block Three)

Company

Seven contributories of the Company

Applicants (contributories)

Messrs Victor Chiu Koon Shou and Tsang Fan Wan

Joint and Several Liquidators

Opposing owners (contributories)

Opposing Contributories

Official Receiver

Official Receiver

Po Fat Construction Co. Ltd

Creditor/petitioner

Procedural Posture

Companies Winding Up / Application Under S.209 to Stay Winding Up After a Winding Up Order (post Liquidation Stay Application Hearing)

Legal Issues

  1. 1 Whether the court should exercise its discretion under s.209(1) CO to stay the winding up order
  2. 2 Whether the company is solvent and whether assets are sufficient to meet creditors and liquidation costs
  3. 3 Whether delay or alleged misconduct by former officers justifies continuing the liquidation or further investigation

Ratio Decidendi

The court granted a stay of the winding up order under s.209(1) on the ground that the company is currently solvent and the liquidation costs can be provided for, but only on specific terms addressing the Liquidators' legitimate concerns: written undertakings by the applicants' solicitors to pay liquidators' and Official Receiver's fees from the agreed funds, compulsory attendance by the former chairlady to answer the liquidators' questionnaire, disclosure of liquidators' affirmations to owners, transfer of books and documents and handover to the new management committee within specified times, with costs of the application to be borne by the applicants (to be taxed if not agreed).

Court Disposition

Winding up order stayed subject to specified terms and conditions which must be fulfilled before the stay takes effect

Orders

  • The winding up order dated 27 August 2008 is stayed, such stay to take effect only upon fulfilment of the terms and conditions set out below
  • Messrs Anthony Siu & Co., solicitors for the Applicants, within 7 days unconditionally undertake in writing to the Liquidators to pay the costs of the Liquidators (subject to taxation or legitimate challenge) out of the HK$5,740,000 contributed by all owners of Block 3 held by Messrs Anthony Siu & Co. for that purpose