RE THE GRANDE HOLDINGS LTD (“PROVISIONAL LIQUIDATORS APPOINTED”)

HCCW 177/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP NO. 177 OF 2011

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J U D G M E N T

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1. This was the adjourned hearing of a petition to wind up The Grande Holdings Ltd (“the Company” or “Grande”). This petition was presented on 30 May2011 by Sino Bright Enterprises Co Ltd (“Sino Bright”) but by an order dated 20 May 2013, Sino Bright was replaced by the Kayne Creditors who were substituted as petitioner. At the conclusion of the hearing, judgment was reserved which I now give.

2. The Company was incorporated in the Cayman Islands in September 1990, discontinued there and continued in Bermuda.  It has been registered in Hong Kong under Part XI of the Companies Ordinance.  

History of the proceedings

3. On 31 May2011, on the urgent application of Sino Bright, the court appointed Fok Hei Yu and Roderick John Sutton provisional liquidators of the Company.  They were authorized, inter alia, to consider and report on the prospect of restructuring the Company, its subsidiaries and associated companies (“the Group”).

4. The petition (first heard by the companies judge on 5 December 2011) has been adjourned on a number of occasions so that the provisional liquidators could pursue a restructuring proposal.

5. A resumption proposal was eventually submitted to the Listing Division of the Stock Exchange of Hong Kong (“SEHK”) on 5 March 2012 but it was rejected on 5 July 2012.  As a result, the Company was placed in the second stage of delisting. 

6. Despite an application made on 13 July 2012 to the Listing (Review) Committee for a review and a hearing, on 27 September 2012, the Listing Committee upheld the decision of the Listing Division.  However, it suggested that the Company re-submit a resumption proposal in 2013.

7. Up to that point in time, all the creditors who had appeared on the winding up had consented to the adjournments.  By the time of the further adjourned hearing of the petition on 8 October 2012, the Kayne Creditors who were opposed to further adjournments took out a summons to be substituted as petitioner.  Directions were then given for the hearing of the substitution application and the petition was further adjourned.

8. The substitution application came before me on 20 March 2013.  A week earlier, on 13 March 2013, the provisional liquidators submitted an updated restructuring proposal to SEHK pursuant to the suggestion of the Listing Committee.

9. Surprisingly, when it came on for hearing, the substitution application was not opposed.  Accordingly, a substitution order was made on 20 March 2013and an amended petition filed the following day.

10. The Kayne Creditors’ debt is based on a judgment of the Superior Court of California dated 13 June 2011 awarding the Kayne Creditors the sum of US$47,598,589.60 and interest at 10% per annum from 13 June 2011 until payment (“the 2011 judgment”). As at the date of the amended petition, the amount owing stood at US$47,414,369.48.

11. About a month after the filing of the amended petition, Gain Alpha Finance Ltd (“Gain Alpha”) filed a notice of intention to appear on and oppose the petition. A directions hearing took place on 29 April 2013 and the petition set down for hearing.

12. Despite further information being submitted by the provisional liquidators being submitted to SEHK on 21 June 2013, the updated proposal was rejected on 28 June 2013.  The third delisting stage commenced on 11 July 2013 and expires on 10 January 2014.  The practical effect is that unless a viable resumption proposal is provided at least 10 business days before 10 January 2014, the Company’s listing would be cancelled.

The creditors’ current position

13. It appears to be common ground that the Company is hopelessly insolvent.  Apart from the Kayne Creditors, the only other creditors who have appeared on the petition are Sino Bright and Gain Alpha.

14. On 27 August 2013, Sino Bright and Gain Alpha filed summonses respectively for substitution as petitioner (in the case of Sino Bright) and replacement petitioner (in the case of Gain Alpha) in the event of the court finding that the Kayne Creditors are not entitled to present the amended petition.  At issue was the locus of the Kayne Creditors, it being said that the Protection of Trading Interests Ordinance, Cap 471 prevents the 2011 judgment from being enforced and/or recognised in Hong Kong.

15. Sino Bright claims that the Company is indebted to it to the tune of HK$1.8 billion.  The provisional liquidators’ provisional view is that its value is anywhere between zero and HK$323.66 million.

16. Gain Alpha claims to be a creditor in the sum of US$5.778 million plus interest of US$1.58 million.  Although the provisional liquidators sought information and documents in early July 2013, there has been no substantive response from Gain Alpha.  As a result, the provisional liquidators consider that the evidence at present is insufficient to establish Gain Alpha's claim.

17. The Kayne Creditors seek a winding up order and are opposed to any adjournment.  Gain Alpha and Sino Bright oppose the winding up order and seek a three-month adjournment on the basis that the Company still has three months to present a further restructuring proposal to SEHK before delisting bites.

18. Both Gain Alpha and Sino Bright challenge the Kayne Creditors' locus standi as petitioner.  This raises a jurisdictional issue.

19. In the event that the challenge succeeds, either Gain Alpha or Sino Bright would become the petitioner and the adjournment would have their support.  None of the other creditors has appeared.  But before turning to the jurisdictional issue, it would be convenient to set out the relevant provisions of Cap 471.

The Protection of Trading Interests Ordinance, Cap 471(“the PTIO”)

20. In pertinent part, the PTIO provides as follows:

“7 (1) A judgment to which this section applies shall not be registered under the Foreign Judgment (Reciprocal Enforcement) Ordinance (Cap. 319) and no court in Hong Kong shall entertain proceedings at common law for the recovery of any sum payable under such a judgment.

(2) This section applies to any judgment given by a court of a place outside Hong Kong, being a judgment --
(a) for multiple damages within the meaning of subsection (3)…

(3) In subsection (2) (a) a judgment for multiple damages means a judgment for an amount arrived at by doubling, trebling or otherwise multiplying a sum assessed as compensation for the loss or damage sustained by the party in whose favour the judgment is given.”

21. At the heart of Gain Alpha and Sino Bright’s contention is that the 2011 judgment, by reason of which the debtor-creditor relationship between the Company and the Kayne Creditors is said to exist, falls foul of section 7 of the PTIO.  It is also said that such a judgment is impeachable because its enforcement or, as the case may be, recognition, would be contrary to public policy.

22. Resolution of the jurisdiction issue calls for a consideration of the essential nature and real foundation of the cause of action that gave rise to the 2011 judgment.

The 2011 judgment

23. As earlier noted, this is a judgment of the Superior Court for the State of California dated 13 June 2011 awarding the Kayne Creditors US$47,598,589.60 and post-judgment interest at 10% per annum from 13 June 2011 against the Company.

24. The following account of the circumstances giving rise to the 2011 judgment is derived from the Statement of Decision of Judge Mary Ann Murphy rendered final on 31 May 2011 (“the Decision”).

25. In January 1995, several weeks after the Company had taken control of the management of MTC Electronics Technologies Ltd (“MTC”) and its board, the Kayne Creditors (who had invested in MTC) brought an action in the Federal Courts of California against MTC a company whose shares, at all material times, were publicly traded on the NASDAQ (“the MTC Action”).  The Kayne Creditors alleged, inter alia, that MTC and others had violated federal and state laws by, amongst other things, misrepresenting and failing to disclose material facts in connection with the Kayne Creditors’ purchase of MTC securities and the proxy contest for control of MTC.

26. In May 1995, the Kayne Creditors unsuccessfully opposed the application of the Company to transfer the MTC Action to the US District Court of the Eastern District of New York for coordinated pre-trial proceedings in class actions against MTC.

27. Although MTC and the Company settled the class actions in July 1998, they opposed the Kayne Creditor’s attempt in April 2000 to remand the MTC Action for trial in California.

28. MTC’s motion for summary judgment was denied in July 2002 and a year later MTC went out of business.

29. The Company notified MTC’s counsel in August 2003 to cease defense of the MTC Action.  Although the court granted MTC’s counsel’s motion to withdraw as counsel in October 2003, the Kayne Creditors were not served with the order.  When the Kayne Creditors learned of the order, they sought to enter MTC’s default and, in April 2005, they applied for judgment.

30. MTC which was a Canadian corporation was dissolved in November 2005 by the Canadian authorities.  

31. The Kayne Creditors obtained Partial Final Judgment from Judge Gleeson of the US District Court of the Eastern District of New York on 19 December 2005, that being a default judgment.  The Kayne Creditors were awarded treble damages in the sum of US$46,467,549.99, costs in the amount of US$2,383,717.85 and reasonable attorneys fees in the amount of $12,035,855.25. In the aggregate, the judgment was for the sum of $60,887,122.09 which after offset of partial third party settlements became a net judgment against MTC of US$37,562,122.09 as at 19 December 2005 (“the 2005 judgment”).

32. When the MTC action was commenced against MTC in 1995, MTC had total assets of US$67 million.  However, by 2002 it had no more than $2 million left. Judge Murphy found that by 2005, as a result of the Company’s conduct, MTC had become a judgment-proof shell (p 32-33of the Decision).  So, notwithstanding the 2005 judgment, the Kayne Creditors were unable to obtain payment of the US$37 million odd being the net amount outstanding as at 19 December 2005 under the 2005 judgment. In other words, they had but an empty judgment in their favour.

33. In December 2006, the Kayne Creditors filed an action against the Company for alter ego relief (“the Grande Action”), culminating in the 2011 judgment. After a non-jury trial lasting some 17 days, Judge Murphy reached the following conclusions (at p 43-44 of the Decision):

“The [Kayne Creditors] have proven by a preponderance of evidence that MTC was, from January 31, 1995 to November, 2005, the alter ego of Grande.

[The Kayne Creditors] have proven by a preponderance of evidence that Grande controlled MTC's defense in [the MTC action]...

[The Kayne Creditors] have proven by a preponderance of evidence that Grande was virtually represented by MTC [in the MTC action]. The equitable doctrine of virtual representation ‘rests upon considerations of necessity and paramount convenience, and was adopted to prevent a failure of justice.’...

 [The Kayne Creditors] have proven by a preponderance of evidence that Grande, through MTC, fully litigated all aspects of [the MTC action] for eight and one-half years, and caused MTC to default only after it had lost a motion for summary judgment, the case was ready for trial, and Grande had disposed of MTC's assets. The same firm represented Grande and MTC in the coordinated cases. Grande in house counsel controlled MTC’s outside counsel. MTC and its counsel virtually represented in [the MTC action].”

34. In a meticulous judgment, Judge Murphy gave a detailed account of the complaints made against Grande andthe evidence, and made findings regarding Grande’s conduct and involvement with regard to MTC and its assets(see pages 10-32 of the Decision), leading to the conclusions set out above.

35. The Kayne Creditors’ inability to obtain satisfaction was caused by Grande’s conduct which, at a minimum was tortious. She found (at pages 32-33 of her Decision) that in just two years Grande had stripped MTC of approximately CND$54 million without taking into account MTC's revenue during this period and the cash that Grande had drained prior to 31 January, 1995. Further, “under Grande’s control, MTC went from having a net worth of almost $26 million to having a deficit of over $23 million, a swing of almost $50 million. During the same period, Grande’s own business grew steadily.”

36. There is no dispute and it is common ground that the 2005 judgment was based on the federal RICO statute andtreble damages were awarded.  Further, under US law, multiple damages may be awarded for violations of certain laws. There is no question but that under US law the 2005 judgment is valid and unimpeachable.  

37. In considering the res judicata effect of the 2005 judgment under federal law, Judge Murphy held (at page 46 of the Decision) that:

“Because MTC is Grande’s alter ego, under controlling federal law, Grande is liable for the default judgment against MTC.”

38. While enforcement of the 2005 judgment itself would fall foul of section 7 of the PTIO, it does not necessarily follow that the 2011 judgment is similarly infected.

39. As appears from page 36 of the Decision, the Kayne Creditors relied on two separate grounds to support a judgment in their favour to make them whole.  First, that the Company is liable on the alter ego basis and, second, that termination sanctions should be awarded against the Company for discovery abuses.  They succeeded on both those grounds.

40. In relation to the second ground, Judge Murphy held (at pages 61-62) that:

“[the Kayne Creditors] have proved by a preponderance of evidence that terminating sanctions are appropriate here and are imposed against Grande given Grande’s persistent refusal to comply with the court’s January 10, 2010 order and failure to provide a satisfactory explanation for its failure to produce relevant documents, explained what happened to them or even provide a witness who had attempted to find them.”

Then at page 63, after applying certain offsets, she held as follows:

“The principal amount of the judgment in favor of [the Kayne Creditors] and against [the Company] on the alter ego theory or, in the alternative, as a terminating sanction for discovery abuse against [the Company] is $34,306,292.48.”

41. What is critical is the true or essential nature of the judgment in question.  Upon analysis, I consider that the 2011 judgment is not a judgment for multiple damages. It was, in essence, wholly compensatory in nature. In reality, the Kayne Creditors brought the Grande action to seek compensation for what they were unable to recover under the 2005 judgment brought about by Grande’s conduct.  Alter ego relief compensates the successful claimant for what it cannot recover under a judgment provided the claimant is able to show by a preponderance of evidence that the defendant is the alter ego of the original defendant.  Whether the claimant is able to do so in a particular case is wholly fact-sensitive and it would appear that it matters not whether the earlier judgment was for multiple or compensatory damages.

42. Further, in the present case there was a separate and independent ground that warranted the award tocompensate the Kayne Creditors. That is apparent from what I have endeavoured to set out from the Decision of Judge Murphy.  She was highly critical of the Company’s conduct (which, on any view, was reprehensible), both in relation to the affairs of MTC and to its discovery abuses. The second or alternative reason for the 2011 judgment serves to reinforce the compensatory nature of the judgment.

43. For those reasons, the contentions of Gain Alpha and Sino Bright that section 7 of the PTIO applies to the 2011 judgment such that it should neither be recognised nor enforced by the Hong Kong courts are wholly untenable.  I have no hesitation in concluding that the Kayne Creditors unquestionably have locus standi as petitioners and that they are creditors for the purposes of the Companies Ordinance.

44. In view of my conclusion on the essential nature of the 2011 judgment, it becomes unnecessary to consider the subsidiary arguments at any length. I will deal with them briefly.

Whether presentation of a petition constitutes ‘enforcement’

45. Mr Manzoni SC who appeared before the Kayne Creditors submitted that section 7 only applies to attempts to enforce judgments awarding multiple damages.  As winding up proceedings are not enforcement proceedings, section 7 does not prevent a creditor from presenting a petition since the creditor is merely exercising a class right in a representative capacity.

46. Looking at the wording of subsection (1), it is clear that it is focused on and directed at ‘enforcement’. Mr Manzoni cited Re a Company (No. 0022 of 1915) [1915] 1 Ch 520 for the proposition that the presentation of a winding up petition is not ‘enforcement’ of a judgment.

47. In that case the appellant had recovered judgment against two companies in an action for libel and without levying execution presented creditors’ petitions for winding up those companies. The Courts (Emergency Powers) Act 1914 prohibited proceeding to execution on or enforcement of any judgment or order of any Court for the payment of or recovery of a sum of money without making an application to the Court by which the judgment had been given.  Phillimore LJ (at p 527) considered that the words “execution” and “enforcement of the judgment” used in the statute were terms of art but that presenting a petition as a creditor rather than as a judgment creditor did not fall within the statute. He noted (at p 528) that in some general loose sense an unsatisfied creditor might be said to be enforcing his judgment.  He pointed out that except that his judgment is evidence of his debt, a judgment creditor is in no better position for a winding up than any other creditor.  But an execution creditor is. He later explained in relation to the petitioner in that case that:

“In the particular case she is a creditor because her damages have been liquidated by a judgment. But it would be the same if she were a simple contract creditor whose debt was merged in a judgment. She is not therefore seeking to enforce her judgment. She is proceeding to a new alternative mode of recovering her debt, a mode by which she no longer seeks to recover for herself alone but for the benefit of all the creditors”.

48. More recently in In re International Tin Council [1989] 1 Ch 309, the English Court of Appeal considered Re a Company  to be binding and held that the presentation of the petition based upon an arbitration award was not enforcement of the award.

49. Mr Sussex SC and Mr Barlow SC who appeared for Gain Alpha and Sino Bright respectively sought to distinguish those authorities on the ground that they were based on different statutory provisions involving different wording. However, they have not shown why the analysis of Phillimore LJ is not applicable. I do not consider those authorities distinguishable.

50. So even on the hypothesis that my analysis and conclusion concerning the 2011 judgment were incorrect, and that (contrary to my view) the 2011 judgment does contain an element of multiple damages, the Kayne Creditors are nevertheless creditors and entitled to present a winding up petition.

Severance

51. As noted in § 31 above, the total award of $60.88 million in the 2005 judgment was made up of the following components:

(a) treble damages	$46.45 million
(b) costs	$2.38 million
(c) reasonable attorneys fees	$12.035 million

One third of the treble damages was compensatory. That is clear from the Partial Final Judgment of Judge Gleeson.

52. The Kayne Creditors accept that they have received approximately $23.88 million from thirdparty settlements. It is also accepted that their trading losses on MTC securities (excluding interest, costs and attorneys fees) totalled $15.5 million in round terms.

53. On the hypothesis that the 2011 judgment falls foul of section 7 of the PTIO, the question would then arise whether any, and if so what, part of the 2011 judgment that remains outstanding (i.e. the $47 million odd) is enforceable, being in respect of the compensatory element of the award, interest, costs and attorneys fees.

54. In Lewis v. Eliades and others [2004] 1 WLR 692 the English Court of Appeal had to consider section 5 of the Protection of Trading Interests Act 1980 on which section 7 of PTIO was modelled. Potter LJ considered that judgments which contained elements of multiple damages and elements of compensatory damages could be split so as to allow enforcement of the compensatory part:

“53 In my view the robust and sensible approach to section 5 of the 1980 Act in relation to a composite judgement ... is not to treat the multiple damages element of the judgement as definitive of, or "infecting", its character as a whole, but to read section 5 (one) as precluding proceedings for recovery at common law only to the extent that the judgment sought to be enforced is for an amount arrived at by multiplying a sum assessed as compensation for the loss or damage sustained by the person in whose favour the judgment was given.”

55. That purposive approach was adopted in Lucasfilm Ltd v Ainsworth [2009] FSR 103. In his judgment, Mann J stated as follows:

“229 ... disregard for the pure form meant that the wrapping up of the sums did not prevent separating out ... equally importantly, the Court considered that there was no reason in policy why the untainted compensatory elements should be rendered irrecoverable, and good reasons in policy why they should be recoverable.

230  I would respectfully agree with that, and would go further. I think that the same purposive reasoning leads to the conclusion that the genuinely compensatory elements of an award subject to multiplication should be equally recoverable. I struggle to find a reason why they should not be ... Take a case like the present, where the claimant chooses to claim the benefits of multiplication. Why should that fact now deprive him of enforcing the genuinely compensatory element? The only reason for doing so would be to express disapproval, to the extent of removing what was otherwise a plain entitlement. That would in my view smack of a penalty, and would require clearer words than appear in the statute to justify its imposition. I do not think that the wording is sufficiently clear. The purpose of the Act is plainly to prevent something in the nature of the penalty (the multiple damages); it is not at all plain that that should be at the expense of imposing another one. I hold that it does not do so...”

For my part, I agree with the approach and reasoning of Potter LJ and Mann J.

56. In their “Statement of Genuine Issues of Fact in Opposition to Accolade Defendants' Motion for Summary Judgement” filed on 1 July 2013 (“the Statement”) in an action in the US District Court of the Central District of California brought by the Kayne Creditors against Christopher Ho and others in 2009, the Kayne Creditors accepted that their trading losses on MTC securities totalled US$15,488,983.33 and that that amount (but not interest, costs and attorneys' fees) had been recovered in settlements with parties other than MTC.

57. Mr Barlow relied on that document in support of his submission that given the Kayne Creditors’ own case, the amount received by them from thirdparty settlements must be appropriated to satisfy their investment losses of approximately $15.5 million and (as I understand it) one third of the costs awarded of $12 million. (I take it that Mr Barlow meant to refer to reasonable attorneys fees rather than costs as such.) His reasoning for taking into account only one third of the costs is that the $12 million were the RICO costs and as only one third of the award represented the compensatory element, the Kayne creditors should only be entitled to one third of the costs. On that basis, it was said that severance does not arise because the payment received exceed their investment losses plus costs.

58. Mr Manzoni submitted that the Statement was but an evidential step in the proceedings against Mr Ho. How the amount of $23 million received from the earlier settlements with third parties should be allocated was a matter of law.

59. In my view, an obvious candidate for allocation would be on a pro rata basis. The question would then arise as to what proportion of the $12 million worth of attorneys fees should be attributed to recovering the compensatory element. Taking one third as Mr Barlow suggests oversimplifies the matter since the trebling element is no more than a simple multiplication exercise. Quite why that should attract two thirds of the costs is not apparent.

60. Moreover, included in the 2011 judgment was the not insignificant amount of prejudgment interest exceeding $13 million through 16 May 2011 as well as interest at the rate of $6579.29 per day from 17 May 2011 to 13 June 2011 (being the date the 2011 judgment was filed) and interest at 10% per annum from that date until payment. To the extent that such interest is attributable to any compensatory element remaining outstanding from the 2005 judgment carried through to the 2011 judgment, allocation and quantification will be required. I therefore do not accept the submission that the $23 million odd already received necessarily covers all the compensatory elements of the 2005 and 2011 judgments.

61. In any event, there is a short answer. Leaving aside the question of severance, the 2011 judgment is sustainable as a judgment awarding damages in respect of gross discovery abuses. Plainly that award did not include multiple damages.

62. For those reasons, I would dismiss the summonses of Gain Alpha and Sino Bright dated 26 August 2013.

63. I now turn to consider whether or not any further adjournment should be granted.

Whether a winding up order should be made

64. Currently, there is no resumption proposal that could be submitted to the SEHK. In this regard, the provisional liquidators’ considered view as at 27 August 2013 is that “in light of the current status of our attempts to restructure [the Company], the benefit of further deferring the making of a winding-up order …is limited” and that “it would be appropriate for a winding-up order to be made”. See §§5 and 7 of the 7^thaffirmation of Mr Fok dated 27 August 2013.

65. Mr Fok explained that while the provisional liquidators are continuing to seek proposals from potential investors and discussions are on-going, there is no certainty whether or not they will culminate in a further proposal for submission to the SEHK.  Although the prospects of approval are improved if the applicant company has not been ordered to be woundup, the provisional liquidators no longer consider that that reason should delay the Company being woundup, it not being inconceivable that the SEHK might approve a restructure of a company in winding-up.

66. Given the history of the present case (when various resumption proposals have already been submitted to and rejected by the Listing Division), the fact that negotiations have not ceased altogether but are continuing means very little.  That the negotiations would culminate in a viable proposal would appear to be wishful thinking given the absence of any evidence as to whether the objections of the Listing Division to the proposals so far submitted could be overcome and the prospects of such proposals materialising in the limited time-frame.

67. Sino Bright has filed evidence in the shape of an affidavit dated 2 September 2013 from Ian Grant Robinson to the effect that a bare shelf company with a listing status is “worth about HK$200 million plus”; that the value of the Company (which has listing status) should be up to or in excess of HK$300 million; and that it may be “impossible” and is “inconceivable” to restructure the company to realise value from its listing status after a winding up order has been made.  Mr Robinson criticised Mr Fok for not giving examples where a listing has been achieved despite a winding-up order having been made.  He asserted (at §10) that to his knowledge “it has never been done and I believe it cannot be done”.

68. Mr Fok has filed an 8^th affirmation and disagreed with those propositions. In Mr Fok’s experience, the “value” ascribed to a listed shell as part of any restructuring is generally not more than HK$100 million. Mr Fok states at §§9.2 and 9.3 of his 8^th affirmation as follows:

“9.2 It is also inappropriate to consider the value of a company's listing status as if the listing status were a readily saleable asset. SEHK approval is required to realise the value of a company's listing ... the potential value of a listing can only be realized in the context of a larger restructure of a company because the SEHK will not approve the resumption of trading in shares of an insolvent company unless the restructured company will have a sufficient viable business. This requires an investor in a restructuring to be willing to either acquire all or part of the operating assets of the company and/or also inject further assets into the company from business in a similar industry as part of a restructuring.

9.3 These variables mean that the ultimate value that may be ascribed to a listing as part of any restructure will necessarily vary from case to case. The need for SEHK approval of any restructure proposal means that it will not be possible in all cases to realise any value from a company's listing status, if no restructure proposal is able to be put forward that is acceptable to the SEHK.”

69. Mr Fok then went on to provide four examples of what Mr Robinson had considered “impossible" and "inconceivable”, namely of companies which have been relisted following the making of a winding-up order.  These were Creative Energy Solutions Holdings Limited, Asia Telemedia Limited, Acclaim Group Holdings Limited and Dickson Group Holdings Limited. Mr Fok explained that his fellow joint provisional liquidator Mr Sutton and one of Mr Fok’s former colleagues were the liquidators in one of the examples given.  The relevant documentation for the first two of the companies mentioned was exhibited. Suffice it to say that I find Mr Fok’s evidence persuasive and convincing.

70. The fact that there remains a window of opportunity for the submission of a viable proposal to the Listing Division 10 business days prior to 10 January 2014 before the listing status of the Company is cancelled does not, of itself, constitute good reason for postponing a winding up order. The timetable for delisting is no reason for postponing a winding up order that, prima facie, should be made. Each case would depend on its own particular circumstances and it would be a futile exercise to attempt to state general principles.  All the court can do is to evaluate the prospects of such an eventuality based on the evidence before it.

71. In my view, on the facts of the present case, there is no sound basis for deferring yet again the making of a winding-up order.  Sufficient time and opportunity (over 27 months) have been provided for developing and bringing about a viable resumption proposal and no further adjournment is justified on the evidence before the court.

Order

72. Accordingly, there is to be an order that the Company be wound up by the court under the provisions of the Companies Ordinance and that the summonses dated 26 August 2013 filed by Gain Alpha and Sino Bright be dismissed.

73. Costs are reserved.  The parties are directed to file written submissions on the question of costs by 23 September 2013.