CHINA PROPERTIES GROUP LTD v. THE STOCK EXCHANGE OF HONG KONG LTD

HCAL 658/2023

[2023] HKCFI 1885

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 658 OF 2023

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D E C I S I O N

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1.  The applicant in these proceedings (“Company”) is a company incorporated in the Cayman Islands which was listed on the main board of the Hong Kong Stock Exchange in 2007. However, its shares were suspended from trading in April 2021, primarily then due to a delay in publication of certain annual results for the then applicable financial year. A resumption deadline therefore was triggered of 30 September 2022, and the Exchange gave certain resumption guidance to be met before the resumption of trading could be put into place within that deadline. The deadline having passed on 4 November 2022, the Listing Committee of the Exchange decided to cancel the listing of the Company.

2.  On 15 November 2022, the Company applied for a review of the Listing Committee’s decision and such a review is, of course, a review which was carried out by the Listing Review Committee (“LRC”), and which heard the review application on 3 February 2023. In the Company’s submissions to the LRC, it accepted that it had not fulfilled all of the resumption guidance before the resumption deadline, but it sought an extension of time to 30 June 2023 in order to do so.

3.  The decision of the LRC was to uphold the decision of the Listing Committee, notified to the Company by a letter dated 6 April 2023. After some correspondence relating to a possible stay of the cancellation of listing, the Company commenced these proceedings on 5 May 2023, and since that time, the application for the de-listing has been put on hold by the Exchange.

4.  Matters have taken a different turn because on 31 May 2023, Mr Justice Anthony Chan made a winding-up order against the Company on the ground that it was unable to pay its debts and that there was no reasonable prospect of such debt being paid within a reasonable time. The Official Receiver was appointed as the provisional liquidator, but both the Official Receiver and a petitioning creditor took out certain applications which were dealt with by Mr Justice Anthony Chan on 23 June 2023 just last Friday.

5.  Shortly prior to that, the Official Receiver had written to the court in essence to identify that the Official Receiver had only just been appointed following the winding-up order being made, that it had remarkably little information about the Company’s affairs, that it was unable to raise any funding to continue this application, and that therefore a neutral stance was being taken on the application made in these proceedings, albeit that there was a faint invitation to the court to consider potentially granting a short adjournment for the purposes of seeing what might happen if liquidators were appointed.

6.  At the hearing before Mr Justice Anthony Chan on 23 June 2023, private liquidators were appointed and Ms Tiffany Wong, being one of them, has come to court this morning to pursue an application first raised in a letter on Friday afternoon last week, suggesting that I should adjourn these proceedings for three weeks on a basis explained in the letter and again touched on by Ms Wong this morning. In short, the liquidators only having just been appointed, they wish to have an opportunity to look at the materials and the position of the Company as quickly as they can, and to identify whether a view should be taken as to further pursuit of these proceedings.

7.  In the context of the bigger picture of the winding-up exercise, which might, depending on how rosy the picture of the Company really is, lead to future potential schemes of arrangement being identified sometime down the time track. Three weeks is the period that is sought, essentially to ascertain as much as possible the position of the Company and to take a view within that period, and, as the letter informed me, potentially to take any relevant legal advice.

8.  I am not prepared to grant that adjournment. It seems to me that Ms Sara Tong, Senior Counsel, who leads Mr Joshua Chan for the Exchange in these proceedings, is absolutely right when she says that the application for leave to apply for judicial review in these proceedings has plainly been rendered academic in light of the winding-up order made against the Company. The Company is, as a result of being put into liquidation after the winding-up order, bound to be de-listed irrespective of the merits of the proposed grounds of review put forward in the application in these proceedings.

9.  I see no great public interest reason for these proceedings to go ahead when the issue raised by them is, in my view, academic. For that reason alone, as Ms Tong says, then the application for leave falls to be dismissed.

10.  In light of that, I do not think I need to go in any great detail into the three proposed grounds of review identified in the application. But I would comment that I tend to agree, having considered the matters over the last few days, with the benefit of Ms Tong’s skeleton argument, that none of the grounds has any reasonable prospect of success in raising any reasonable argument which should lead to the grant of leave to apply for a judicial review.

11.  Ms Tong says, and I agree, that the appointment of liquidators does not make any difference to the outcome of this application and that there is no procedural unfairness to the applicant or its creditors if this application is dealt with now by its dismissal. Indeed, it might be thought that the avoidance of further legal costs by the Company through its liquidators is actually in the better interest of the Company and its creditors.

12.  That also tallies with Ms Tong’s point that the Company has now been suspended from trading for 26 months since April 2021, a period well in excess of the usual 18-month deadline for resumption of trading, and where the Company’s originally requested extension is about to expire. Those are matters also pointing to why this application should fall to be dealt with now.

13.  For all those reasons, I therefore dismiss the Company’s application for leave to apply for judicial review. That seems to me to be inevitable.

14.  In the exercise of my broad discretion as to costs, I make the order that the costs of these proceedings should be paid by the Company to the Exchange, to be taxed if not agreed with certificate for two Counsel.