HO MAN KIT AND KONG SZE MAN SIMONE JOINT AND SEVERAL LIQUIDATORS OF PLENTIFUL MARK LTD (IN CREDITORS’ VOLUNTARY LIQUIDATION) v. CHU KIN HON

HCMP 2288/2019 & HCMP 525/2020
(HEARD TOGETHER)

[2020] HKCFI 1315

HCMP 2288/2019

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2288 OF 2019

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AND

HCMP 525/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 525 OF 2020

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(HEARD TOGETHER)

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D E C I S I O N

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1.  I have before me an Originating Summons seeking declarations that a resolution purportedly passed by the board of the Company pursuant to s 228A of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap 32, is null, void and invalid. Also, consequential declarations are sought and an order that, the winding-up purportedly commenced is void and should be stayed.

2.  The application is unusual in one respect.  The application is made by a creditor of the Company.  The catalyst for the creditor commencing the application is the fact that the Liquidators who have been appointed in the liquidation have commenced HCMP 2288/2019 seeking to recover money said to be an unfair preference.

3.  Counsel for the Plaintiff in HCMP 525/2020 has advised that s 228A was wrongfully used because it would appear from the documents that he has been able to obtain that 90% of the shareholding could have been voted in favour of putting the Company into an immediate creditors’ voluntary liquidation using a written resolution.  In other words, the Company was in the kind of position discussed in my decision in Re Peking Fur Factory (Hong Kong) Limited [1].

4.  It seems to me that this is correct, as 40% of the shares are held by the two directors, who voted the s 228A resolution and there is a document from a shareholder owning 50% of the remaining shares, Mr Cheng Kin Ning Kenny, indicating that he supported putting the Company into liquidation.  The compelling inference is that a special resolution could have been passed.  This being the case s 228A was wrongly used, and the resolution is void and should be set aside.  I will, therefore, make declarations in the form sought in the Originating Summons.  The costs of the application should be paid out of the Company’s assets.

5.  So far as HCMP 2288/2019 is concerned, Ms Ho who appeared for the Liquidators accepts that the necessary consequence of the Court concluding the s 228A was wrongly used is that the Liquidators’ application needs to be withdrawn.  I will so order.  The Liquidators’ costs of that application shall be paid out of the assets of the Company.

6.  I understand that there is a substantive hearing of the application in HCMP 2288/2019 fixed on the 29 June 2020 before DHCJ Douglas Lam SC. I will direct that the hearing is vacated.