RE RAD SOURCE TECHNOLOGIES ASIA LTD

HCCW 253/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING‑UP PROCEEDINGS NO 253 OF 2017

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D E C I S I O N

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1.  This is the first hearing of a petition to wind up the company on the grounds of insolvency. On Friday 3 November 2017 (the Friday before the present hearing) the Company filed an affirmation in opposition to the petition. This was the first evidence in opposition that the Company had filed.

2.  Rule 32(1) of the Companies (Winding Up) Rules, Cap 32H, (“Winding Up Rules”) provides that:

“Affidavits in opposition to a petition that a company may be wound up by the court shall be filed within 7 days, or such longer time as the court may direct, of the date on which the affidavit verifying the petition is filed and notice of the filing of every affidavit in opposition to such a petition shall be given to the petitioner or his solicitor on the day on which the affidavit is filed.”

3.  Mr Leung, who appeared today on behalf of the petitioner, argued that the Company’s delay in filing evidence in opposition justifies the court imposing a condition on granting leave to file the affirmation of Mr Zhao out of time, namely, a payment into court of the debt or a proportion of the debt relied on by the petitioner in its petition: see generally Re Grand China Shipping (Hong Kong) Co Ltd [2013] 4 HKLRD 1.

4.  I think that there is force in the argument that just as it has become a common practice of the Companies Court to order a company who at the first hearing of the petition before the Companies Court seeks leave to file evidence in opposition to be required as a condition of so doing to make a payment into court, if evidence in opposition is filed only very shortly before the hearing, then it may be appropriate for the same or a similar condition to be imposed.

5.  The procedural complication in the present case is that the petition was amended on 24 August 2017 to correct some infelicitous language in para 3 of the petition which describes the capital of the Company and the affidavit verifying the amended petition was not filed until 30 October 2017. 

6.  Although the language of rule 32(1) of the Winding Up Rules does not directly apply to the situation where before evidence in opposition is filed an amended petition and further verifying affidavit is filed, it seems to me that although not entirely clear, for the purposes of rule 32(1), the relevant time is the filing of the most recent verifying affidavit. That means that although it is entirely fortuitous the Company has filed evidence in opposition within the time period specified in the Winding Up Rules and, therefore, does not require leave to rely on Mr Zhao’s affirmation, the consequence, it seems to me, of this is that it would not be appropriate to impose a condition on the Company being allowed to defend the petition even if that might have been what would have happened if the petition had not been amended. 

7.  I will therefore make the directions for the further conduct of the petition which I have already indicated to the parties.