RE LEGEND INTERNATIONAL RESORTS LTD

cacv 223/2006

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 223 of 2006

(on appeal from HCCW NO. 1139 of 2004)

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J U D G M E N T

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Hon Rogers VP:

1.  This is an appeal from a winding-up order which was made by Kwan J on 8 June 2006.  The appeal is brought by the former directors of the company.  We have been told this morning, and it seems to be accepted, that the former directors are neither creditors nor contributories of the company and therefore their locus, or interest is, to say the least, somewhat precarious.  They seek to appeal, not on the grounds of appeal which were first lodged, but on grounds which are set out in a draft notice of appeal supported by evidence which they would, if the amended notice of appeal is allowed, seek to adduce.

2.  In essence, what they are saying is that there was, originally, in the location where this company carried on its business, namely, the Philippines, a petition to restructure the company.  For one reason or another, the Petitioner, who is a major creditor of the company, did not see eye to eye with those who were petitioning in the Philippines, as to that petition and used various, perhaps tactical, means and procedural means in the Philippines to have that petition nullified.  So nothing happened there.

3.  The Petitioner then came to the Hong Kong court and it demonstrated to the satisfaction of the judge below that the company was hopelessly insolvent.  The judge, in her impeccable judgment, said that she did not consider that there was any viable restructuring that had been put forward by those who opposed the winding-up petition, and she made the winding-up order.

4.  The new grounds which are sought to be included in the amended notice of appeal are that the Petitioner itself has now presented another petition in the Philippines in order to try and revive the company.  So be it, but this company cannot be revived except by an order of the Companies Court under a section 166 scheme or some other process.  If an application is made to the court which can be demonstrated to be in some way an abuse or constitute an abuse by having obtained the winding-up order in circumstances where it should not have been obtained, the Companies Court can deal with that, and may well deal with it by refusing any 166 petition or otherwise.

5.  Short of that, the Petitioner has established the grounds for the winding-up and it is up to the Liquidators now to go about their duty.  The Liquidators’ duty is to maximise the assets in the best possible way.  It very often is the case that sometimes, if people are willing to put money into a company, it can be revived, but it is very much dependent upon the major creditors as to whether any revival can take place.  That remains to be seen.  If the Liquidators do not go about that job, no doubt proper complaints can be made to the Companies Judge by those who have an interest in making such a complaint.  If, on the other hand, the Liquidators are unable to go about their duties because they are being prevented, they can always make application to the Companies Judge themselves.

6.  I see no grounds in the proposed grounds of appeal which should be permitted to be argued.  In those circumstances, I consider that the proposed amendment should not be allowed and I would refuse the amendment.

7.  There is nothing further to be done in this appeal because Mr Mok SC, who has appeared on behalf of the former directors, has indicated that he does not wish to pursue any other grounds.  Therefore, this appeal falls to be dismissed.  No doubt an appropriate order will be sought against the former directors and this Court will hear argument as to how that order should be framed.

Hon Le Pichon JA:

8.  I agree.

Hon Stone J:

9.  For my part, I also agree.