VANGUARD BAGS (HK) CO (OPERATED BY SUNMOST INVESTMENTS LTD) v. CREATIVE ASIA LTD

HCCW324/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO. 324 OF 2011

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BETWEEN

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D E C I S I O N

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1.  I have before me a winding-up petition issued on 7 October 2011 by Vanguard Bags (HK) Company seeking an order against Creative Asia Limited.

2.  The petition relies on a debt of US$601,870.56 arising under a judgment obtained pursuant to Order 14 of the Rules of the High Court.

3.  On 14 September 2011 a statutory demand was served by the Petitioner’s solicitors for payment of that debt plus interest and costs.

4.  The matter in the normal way was heard by the company master on 14 December 2011 and adjourned to be heard before me today.

5.  The company was represented by Mr Alan Lee.  There appears to be no dispute about the underlying debt or the fact that the company is currently unable to pay it.  Mr Lee sought an adjournment of the petition of 14 days in order to file evidence dealing with an alleged claim that the company has for US$3.5 million against a British company.

6.  As I understand it, what it suggested is that the petition should be adjourned until the company has had the opportunity to recover that claim and settle its debt to the Petitioner.

7.  It is, of course, well established that a judgment creditor is entitled in the normal way to a winding-up order ex debito justitiae.  If a company wishes to seek the court’s indulgence and that of its creditors in order to try and put together some arrangement for the settlement of its debts without a winding-up order, it is incumbent upon a company to deal

promptly with a petition such as the present one.

8.  The company has had since September to put together a satisfactory proposal for restructuring or rescheduling the repayment of its debts.  Before me today I have been presented with nothing of substance.

9.  In the circumstances I will make the normal winding-up order.

10.  I would also, for the benefit of company law practitioners and their clients, emphasise that it is important that when petitions to wind-up a company on the ground of insolvency are presented, that companies deal with such petitions quickly and properly and that I expect for any hearing before me evidence to be filed in order to justify an adjournment of a petition of the sort that has been sought today.