RE DAWKINS COMPANY LIMITED

IN THE SUPREME COURT OF HONG KONG

COMPANIES (WINDING UP)

NO. CWU 74 OF 1989

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J U D G M E N T

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1. A petition was presented on the 15th May 1989 to wind up Dawkins Company Limited (the company) on the just and equitable ground. It appears that the petition was not based upon the grounds of insolvency as the company claimed that whilst admitting that the debt can due it was unable to make payment as its bank account had been frozen presumably due to the fact that a contributory's petition against the company had been presented.

2. The present petition was based upon unpaid costs of $61,260.50 taxed by Master Jennings on the 25th August 1988. On the 9th January 1989 a demand for payment of the costs was made, but despite that demand no payment has been made. As I have said the debt is not disputed.

3. On behalf of the company, Mr Wong applied by motion for a stay until the conclusion of the hearing of the contributory's petition under sections 168A and 177(1) (f) of the Companies Ordinance that is due to be heard in November. At the outset Mr Li, for the petitioner, agreed to this course but when I pointed out to him that as the debt was not disputed and the company was either not prepared or unable to pay the amount due, the petitioner was entitled ex debito justitiae to an immediate winding-up order. I drew counsel's attention to Cornhill Insurance Plc v. Improvement Services Ltd. [1986] 1 MLR 114 which held that where a company was under an undisputed obligation to pay a specific sum and failed to do so, it could be inferred that it was unable to do so, so that a petitioner is entitled to swear to the belief that the company is insolvent and to present a petition for a winding-up order. Mr Li then withdrew his agreement for a stay which, in any event, would have been inappropriate for either the petitioner should proceed up obtain a winding up order or the petition should be dismissed. There were no valid grounds for granting a stay. Accordingly, I made the usual compulsory winding-up order with costs and dismissed the motion filed on behalf of the company.