RE GRAND PEACE GROUP HOLDINGS LTD

HCCW 21/2021

[2021] HKCFI 1142

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO 21 OF 2021

________________

________________

________________

D E C I S I O N

________________

1.  On 12 January 2021 the Petitioner issued a petition to wind up the Company on the grounds of insolvency, the Company is incorporated in Bermuda. The Company was already subject to another winding up petition HCCW 410/2019, that petition first came on before me on 25 January 2021. I understand that the Petitioner’s solicitors were present in court on that occasion although the Petitioner was not represented as a supporting creditor.

2.  In my decision in Re China Greenfresh Group Co Ltd [1], which was handed down on 21 December 2020.  I explained that a creditor should not issue a petition if a petition has already been issued against the relevant debtor company.  I will not repeat the reasons which can be found in that decision.  As will be apparent from the date of the petition in these proceedings, that decision had been handed down before this petition was issued.  Mr Lai who appeared for the Petitioner today told me that his solicitors were aware of the decision, however, they thought that the facts of these particular case fell within the exceptional circumstances to which I refer in [5] of China Greenfresh Group Co Ltd.  In [5] I refer to [9.2] of the English Practice Direction (Insolvency Proceedings)[2], which states that a second petition should only be issued in exceptional circumstances.

3.  Apparently the reason why the Petitioner’s solicitors thought that this case was exceptional and justified a further petition being issued largely turn on the following matters.  First, that the petition in HCCW 410/2019 did not set out facts or matters capable of satisfy the three core requirements, which needed to be met before the court will exercise its discretion to wind up a company incorporated in a foreign jurisdiction. Secondly, that the progress of the first petition was dilatory.  In my view, in this they were wrong.  The correct course was to appear on the first petition as a supporting creditor and apply for substitution.

4.  The issue which requires some further consideration is precisely what approach the court should take procedurally in these circumstances.  The court has two options.  The first is to dismiss the later petition.  The second is to order that the second petition be removed from the court file.

5.  In England, the practice is to order improperly issued petitions or other applications for insolvency proceedings to be removed from the court file.  Some examples are:

(1)  Gamlestaden plc v Brackland Magazines Ltd [3]: “the third petition was removed from the file”;

(2)  Re A Company [4]: “I would, therefore, accede to the application restraining further advertisement and direct that the petition be removed from the file”;

(3)  JCAM Commercial Real Estate Property XV Ltd v Davis Haulage Ltd [5]: “I would allow the appeal and order that the copy of the notice of intention to appoint [an administrator] filed with the court on 4 March 2016 be removed from the court file”; and

(4)  Security Trustee Services Ltd v Seabrook Road Ltd [6]: “it is appropriate to order that the copy of the [notices of intention to appoint an administrator] be removed from the court file”.

6.  The practice of removing illegitimate documents from the Court file also exists in Hong Kong. An example is LYAG v YSG (YX) [7]:

“The Judge concluded that Dr Hung’s Report should be removed from the court file as ‘[i]t went outside the confines of the express court direction and is singularly unhelpful as a result’…

The intended appeal against the Judge’s decision to remove Dr Hung’s Report from the court file has no prospect of success.”

7.  Alternatively, improper subsequent winding-up petitions may be dismissed.  An illustration is Re Master Glory Group Limited [8]:

“I have before me three Petitions to wind up Master Glory Group Limited ...

[T]he court will … make the normal winding-up order, which I will make in HCCW 363/2019... The other two petitions I shall dismiss …”

8.  In my view as the Petitioner in these proceedings was aware of the petition in HCCW 410/2019, as opposed to issuing a subsequent petition ignorant of the first one, the appropriate course is to order dismissal.  Generally, I put it no more precisely than that, I would expect to order that a petition be removed from the court file if it came to be issued as a result of the Petitioner being unaware of an earlier petition.

9.  I will also order that the costs of the petition are paid by the Petitioner to the Company.  I assess the Official Receiver’s costs at $5,300, which will be paid out of the Petitioner’s deposit.