VAREX & CO. GmbH

HCCW 1021/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 1021 OF 2002

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J U D G M E N T

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1. This is a petition to wind-up the Company presented by two petitioners, Stanislav Belan and MMK Metal Worldwide Ltd, who have not appeared today.

2. I am told by Mr Michael Leung, who appeared for the Company, that the debt in the petition being the taxed costs awarded to the petitioners in High Court Action No. 18076 of 1999 on 14 February 2001 in the sum of HK$717,186.00, has been paid in full by the Company on 13 November 2002. Hence, the Company seeks an order that the petition be dismissed.

3. Mr Leung further submitted that it would be appropriate to make no order as to costs. The justification for this would seem to be as follows. It is alleged that there is a collateral purpose of the petitioners in bringing this winding-up petition. I was referred to paragraph 9 of the petition in which it would appear that the petitioners had expressed the hope that certain shares, the beneficial ownership of which is in dispute in High Court Action No. 17492 of 1999, would be used to settle the petitioning debt. It was submitted that this shows that the petition was brought to stifle the defence in that High Court Action and so the petition was brought for a collateral purpose.

4. It is a fact that the petitioning debt is not in dispute. That the debt has not been paid until recently since the allocatur was issued in February 2001 is also not in dispute. It seems to me that the objective of bringing this petition is to obtain payment from the Company. How the Company would choose to pay off the petitioning debt is, of course, a matter for the Company, whether by monetary payment or by transfer of the shares which are in dispute.

5. I am not persuaded that the petition was brought for an improper purpose with no genuine objective to enforcing the payment of the petitioning debt. As the payment of this debt was made only on 13 November 2002, after the petition was presented, I order the Company to pay the petitioner's costs in this petition, to be taxed if not agreed. I further order that the petition be dismissed.