FUNG YING CHU v. ONECORP LTD AND ANOTHER

HCCW 121/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING‑UP PROCEEDINGS NO 121 OF 2016

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D E C I S I O N

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1.  On the 20 July 2016 the Company was wound up. The Company is owned jointly by the petitioner and 2^nd respondent.

2.  The petitioner and 2^nd respondent are in the process of finalising divorce proceedings.  The Company came to be wound up as part of that process.  It is now being agreed as part of a global settlement that the winding up of the 1^st respondent should be stayed.

3.  The Company had very few creditors.  With the exception of one small debt of $17,100 due to the accountants providing audit and secretarial fees, all the debts were owed either to the petitioner or the 2^nd respondent or a company jointly owned by them. 

4.  The petitioner and the 2^nd respondent have undertaken to the court to waive any claims they have against the Company or against each other including claims for costs in respect of these proceedings.  It does not seem to me, therefore, that there is any material outstanding issue so far as creditors are concerned which stands in the way of an order staying the winding up being granted.  The Official Receiver has considered the application and provided its comments to the court.  It does not suggest that there is any impediment to an order for a stay being granted. 

5.  The principles upon which the court determines applications of this sort are well established and explained in the decision of Kwan J (as she then was) in Re Outboard Marine Corp Asia Ltd [2003] 1 HKLRD 585 at para 6:

“The power to grant a stay of winding-up proceedings is discretionary. The burden is on the applicant to make out a sufficient case for a stay that carries conviction (Re Calgary and Edmonton Land Co Ltd (in liquidation) [1975] 1 WLR 355 at pp.358H–359A). Before granting a stay, s.209(1) requires ‘proof to the satisfaction of the court that all proceedings in relation to the winding-up ought to be stayed’. Hence, it is not merely sufficient for the applicant to establish that a stay is reasonable in the circumstances. He must satisfy the court that it ought to grant a stay (Krextile Holdings Pty Ltd v Widdows [1974] VR 689 at p.694). Where there are sufficient assets to pay all the creditors and the expenses of the liquidation, the interests of the members, in addition to those of the creditors and the liquidator, would be considered (Re Calgary and Edmonton Land Co Ltd (in liquidation) at p.360C–G). The Court would also consider whether the stay is ‘conducive or detrimental to commercial morality and to the interests of the public at large’ (Re Telescriptor Syndicate Ltd [1903] 2 Ch 174 at p.180; Krextile Holdings Pty Ltd v Widdows at pp.694–695; Wotta Co Ltd & Another v Thomas Brian Stevenson & Another (unrep., HCMP No 3965 of 1999, [1999] HKEC 736).”

6.  I am satisfied that the criteria described by Kwan J are satisfied in the present case and there is no reason not to make the order sought.  I therefore order that there be a permanent stay of the winding up and there be no order as to costs.