RE CHEONG SHING REPAIR & MAINTENANCE LTD

HCCW 222/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 222 OF 2006

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J U D G M E N T

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1.  This is a petition presented by SKK (Hong Kong) Co. Ltd. to wind up Cheong Shing Repair & Maintenance Limited (“the Company”).  The petitioning debt is the balance of a judgment debt in the sum of $308,066.17 with interest.  The judgment was obtained in DCCJ No. 4734 of 2003 on 11 February 2006.  By that judgment, the Company was ordered to pay the petitioner $518,066.17 with interest.  A demand was served on the Company for the judgment debt on 15 February 2006.  The Company made part payment after service of the demand, in the sum of $210,000.00, leaving the balance outstanding.  This petition was presented on 9 May 2006.

2.  There is one supporting creditor, Lik Shun Electrical Engineering Co. Ltd. (“Lik Shun”).  Lik Shun obtained a judgment against the Company in HCA No. 589 of 2004 on 12 June 2006.  The Company was ordered to pay two sums to Lik Shun, being $952,000.21 and $147,375.00 with interest.

3.  The Company does not dispute the balance of the judgment debt owed to the petitioner or the judgment debt of Lik Shun.  It seeks an adjournment of four weeks, on the basis that it has reasonable prospects of obtaining three sums of account receivables withheld or due by Wing Hong Contractors Limited (“Wing Hong”) and Wing Hong Interior Contracting Limited (“Wing Hong Interior”) (collectively “the Wing Hong companies”) within four weeks.  The adjournment was sought to obtain payment from these two companies.  The total amount alleged to be due from the Wing Hong companies is $3,004,451.67.

4.  I understand Wing Hong is the main contractor of the Company in respect of a government contract for which the Architectural Services Department is responsible and Wing Hong Interior is a subsidiary of Wing Hong.  I have considered the supporting evidence filed by the Company in respect of the debts allegedly due from Wing Hong and Wing Hong Interior.  Among the documents exhibited are the letters from the solicitors of the Wing Hong companies dated 15 June 2006 and 12 July 2006.  It is clear from these letters that the position adopted by the Wing Hong companies is that no money is due from them to the Company for a variety of reasons, it was alleged that Wing Hong has a counterclaim or contra charges against the Company.

5.  The Company may or may not be right that a sum of $3 million odd is due and payable from the Wing Hong companies.  It is clear, however, from the said letters of the solicitors that the Wing Hong companies are not going to release any payment to the Company within four weeks or at all.

6.  I understand from the Company that apart from the claims it has against the Wing Hong companies for the amounts due, the Company has no other source of funds to pay the debts outstanding to the petitioner or to Lik Shun.

7.  The petitioner has no objection to adjourn the petition for four weeks.  Lik Shun however opposes the adjournment, on the basis that the adjournment would serve no useful purpose, as it is clear that no funds would be coming into the Company even with the adjournment.

8.  As I have indicated to counsel for the Company, if the Company is right about the amount due from the Wing Hong companies, these claims could be pursued by the liquidator if the Company is ordered to be wound up.

9.  Further, if full recovery is subsequently made against the Wing Hong companies so that the Company is in a position to pay all its creditors, an application could be made to stay the winding-up order permanently.

10.  I agree with counsel for Lik Shun that no useful purpose would be served by adjourning the petition.

11.  I make an order to wind up the Company.  The petitioner's costs and the costs of Lik Shun are to be paid out of the Company's assets.