ROADRUNNER APPAREL INCORPORATION v. MAJONE GARMENT FACTORY LTD.

HCCW533/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING UP PROCEEDINGS NO.533 OF 2000

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J U D G M E N T

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1. This is a creditors' petition based on a judgment obtained in Canada and registered in Hong Kong. The petition came on for hearing three weeks ago when an adjournment was granted to enable the Company to take all necessary action to appeal against the Canadian judgment and/or to set it aside.

2. There is, before this court, a letter dated 18 September 2000 from a Canadian firm which sets out in general terms Canadian law relating to revocation of judgments. In particular, it is to be noted that a party condemned by default to appear or to plead may request that the judgment be revoked "if he was prevented from filing his defence by surprise, by fraud or by any other reason considered sufficient". It is not apparent that the Canadian firm was asked to advise by reference to specific facts.

3. This is not a case where the Company has obtained legal advice to the effect that it has a good chance of setting aside the judgment and that in fact the procedure for setting aside the judgment has been invoked and is in train. What Counsel for the Company informed the court today was that those instructing her solicitors have now been put in funds and are therefore in a position to give the appropriate instructions for proceedings to be commenced in Canada to have the judgment set aside.

4. It is relevant to note that a year ago, the managing director of the Company had filed an affidavit in which he specifically referred to an effort to set aside the plaintiff's registration in the Hong Kong court, and also, in conjunction with that, to seek leave from the Canadian court so that an appeal out of time could be lodged. The Company was plainly aware of what it had to do in Canada to get the Canadian judgment set aside. Regrettably, it has not done anything since that affirmation was filed on 22 November 1999. I have to conclude that the bona fides of the Company in relation to its intention or efforts to set aside the Canadian judgment are suspect.

5. Counsel for the Company sought a week's adjournment. I cannot see that such an adjournment would serve any useful purpose save to run up unnecessary costs. In the circumstances, I will make the winding-up order sought and also order that the petitioner's costs and the Company's costs be a liquidation expense.