FITWELL CORPORATION AND OTHERS v. LUK WING HAY

HCMP 1066/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1066 OF 2006

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D E C I S I O N

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1.  This is an originating summons issued by the shareholders of a company in members’ voluntary liquidation, seeking an order that all further proceedings in the winding up of the company be stayed permanently under sections 209 and 255 of the Companies Ordinance, Cap. 32.  The respondent is the liquidator.

2.  The company, Ataro Electronics Manufacturing Limited, was incorporated in Hong Kong on 1 December 1987.  At an extraordinary general meeting of the company held on 23 June 2005, a special resolution was passed for the company to be wound up voluntarily and the respondent be appointed liquidator.  An ordinary resolution was passed that the audit of the liquidator’s statement of account would not be required.  The company was solvent.

3.  After the company was put into liquidation, it has come to the attention of the shareholders that in 1991 the company had entered into a contract for transfer of certain land use right regarding land in Ping Hu Town, Shenzhen, China (“the Property”) as trustee for 6 beneficiaries.  After signing the contract, possession of the Property was given to the company and the company erected factory premises on it.  The company should dispose of the Property in accordance with the instructions of the beneficiaries.  As the Property is situated in China, disposition of the Property would be made difficult or become complicated, if the company is dissolved.  For the purpose of a smooth disposition of the Property, the shareholders are of the view that the company should not be wound up in the meantime.

4.  The company has no substantial debts except a small amount due to a bank by way of bank charges and an amount to be returned to some associates of the company.  It still retains $1.6 million odd in its bank accounts and it would have more than sufficient funds to meet outstanding payment in the total of $500 as shown in the statement of assets and liabilities as at 15 June 2006.  The company has no other creditor apart from those shown in the realisation account.  The expenses of the liquidation including the liquidator’s remuneration have been paid or provided for.

5.  The liquidator has confirmed that there is no irregular matter or transaction of the company which ought to be investigated and he supports this application.

6.  I understand from the solicitors for the applicants that it is the intention of the members of the company, after the disposition of the Property is dealt with, to pass a new special resolution that the company be wound up voluntarily.

7.  It would be appropriate in the circumstances to grant relief.  I order that all further proceedings in the winding up of the company are to be stayed permanently.