RE YIU WING INVESTMENT HOLDINGS LTD

HCCW 13/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 13 OF 2007

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J U D G M E N T

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1.  This is a creditor’s petition to wind up Yiu Wing Investment Holdings Limited, formerly known as Yiu Wing Entertainment Company Limited (“the Company”).  The petition was presented by Impact Entertainment (International) Limited trading as Entertainment Impact.

2.  The petition was founded on a judgment debt obtained on 1 November 2006 in DCCJ No. 4550 of 2004 in the sum of HK$826,788.17 with interest and costs to be taxed.  On 17 November 2006, the petitioner served a demand for the judgment debt on the Company.  As the demand was not complied with, this petition was presented on 10 January 2007.  The Company has by its director Cheung Yiu Wing filed an affirmation on 16 March 2007 to oppose the petition.

3.  It does not appear from Cheung Yiu Wing’s affirmation that the judgment debt obtained by the petitioner in the District Court is in dispute.  What he said is that his relationship with Cheung Kwok Chung, the person who controls the petitioner, is not confined to the judgment debt in DCCJ No. 4550 of 2004.  There are other dealings between him, Cheung Kwok Chung and their family members and these other dealings should be taken into account.  He contended that it would be unfair to allow the petitioner to wind up the Company, as that would effectively stop the Company from pursuing claims against Cheung Kwok Chung and his companies.

4.  In his affirmation in opposition, Cheung Yiu Wing mentioned two specific incidents being other claims that the Company and his family member would wish to pursue against Cheung Kwok Chung and other companies of the latter.

5.  The first claim is the subject of High Court Action No. 2315 of 2006 and arose out of a joint venture agreement entered into by the Company, Mandarin Films Distribution Company Limited and Impact Films Investment Limited (“Impact Films”).  Impact Films is another company of Cheung Kwok Chung.

6.  It was alleged that Impact Films was in breach of the joint venture agreement in that it had failed to provide detailed accounts of the joint venture to the parties and that the Company was not given documentation to verify the accounts of the joint venture regarding the alleged loss of about HK$4 million.  It was further contended that the Company should not be liable for 50% of the loss when it was only entitled to 25% of the profits.  Last but not least, Cheung Kwok Chung was under an obligation to indemnify the loss of the Company and has not done so regarding the Company’s loss in the joint venture.

7.  I am unable to see how the claim of the Company in the High Court Action could constitute a ground for opposing the winding-up petition presented by the petitioner, which is a wholly separate entity from Impact Films.  Whatever claims the Company might be able to pursue against this separate company Impact Films would have no relevance to its liability to pay the judgment debt to the petitioner and cannot be relied on in any way as a set-off.

8.  The other claim raised in Cheung Yiu Wing’s affirmation is not even a claim of the Company.  It is in respect of a winding-up petition in HCCW No. 63 of 2007 presented by Angelita International Company Limited (“Angelita”) against Super Impact Production Limited (“Super Impact”).

9.  I am given to understand that Super Impact is a company run by Cheung Kwok Chung.  Angelita is owned substantially by Cheung Yiu Wing’s son, Cheung Wing Sun Sunny.  It was contended that if Angelita should succeed in its winding-up petition and if it should receive any payment or dividends in the winding up of Super Impact, Angelita would be prepared to undertake to pay any such sums on behalf of the Company to discharge the judgment debt to the petitioner.

10.  For the reason as mentioned earlier, this would not constitute a set-off in any way of the judgment debt owed by the Company to the petitioner.  There is no cross-claim of any kind that may be relied on by the Company to reduce or discharge the judgment debt owed by it to the petitioner.

11.  In the event that a winding-up order is made, if the Company has any valid claims against any other entity owned or controlled by Cheung Kwok Chung, any such claim could still be pursued by the liquidator on behalf of the Company, if the liquidator is satisfied as to the merits of the claim and is put in funds to litigate.

12.  The Company is not in a position to settle the judgment debt which is not in dispute.  The best offer it can come up with is to pay the amount at the rate of HK$100,000.00 a month and it would take about 9 months to discharge the judgment debt.  The petitioner’s counsel has informed the court that this offer is not acceptable.  As a judgment creditor, the petitioner is entitled to a winding-up order.  I therefore make an order to wind up the Company.  The petitioner’s costs are to be paid out of the Company’s assets.