THE JOINT AND SEVERAL LIQUIDATORS OF SANFORD DEVELOPMENT CHINA LTD (In Liquidation) v. AU CHUNG WING t/a TREASURE TRADING CO

HCCW 385/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO. 385 OF 2010

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D E C I S I O N

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1.  This is an application by the liquidators for leave to dispose of some 8,000 packs of tealeaves which were kept at the premises of the company in an industrial building in Kwai Chung, the New Territories.

2.  The company was incorporated in Hong Kong on 20 March 1990 and wound up on 21 February 2011.  The liquidators were appointed on 21 September 2011.  The liquidators took possession of the premises of the company in early 2012.  They discovered the tealeaves in the premises.  A former director of the company, one Ms Shar, advised the liquidators that the tealeaves did not belong to the company but to the respondent and were stored at the premises by the company for the respondent. 

3.  The liquidators contacted the respondent and asked for documentary evidence to prove ownership of the tealeaves.  The respondent only asserted ownership of the same but could not provide any documentary evidence.  He, in turn, asked the liquidators to check through the company’s accounts which would show that the company had not incurred expenses to purchase the tealeaves.  The liquidators, however, faced the difficulty of not having been provided with a complete set of the accounts of the company.  They proposed to the respondent to sell the goods by tender first and keep the proceeds pending resolution of the dispute of ownership between the company and the respondent.  They also proposed to the respondent that the respondent could take part in the tender.  However, the respondent opposed the proposal and threatened to pursue the liquidators if they should proceed to sell the goods.

4.  The goods are now being kept in a godown and godown charges of HK$1,291.50 per month are being incurred for this purpose. The liquidators therefore ask for leave to sell the goods.

5.  The respondent has not appeared at the hearing. He has made an affirmation on 9 November 2012 to oppose this application.  He said in the affirmation that he bought these tealeaves as an investment in 2006.  He used to keep them in the mainland in the warehouse of his knitting factory.  Since it was merely his personal investment, he had not kept the documents of purchase properly. 

6.  He wound up his business in June 2009 in the mainland.  At that time, he had a potential buyer for the tealeaves.  The buyer imposed a pre-condition that he should arrange for the tealeaves to be sent to Hong Kong before the purchase could be clinched.  Nevertheless, after he had sent the tealeaves across the border to Hong Kong, the deal did not bear fruit.  He therefore kept the tealeaves in the company’s premises.  After this dispute had arisen, he inquired with his friends with a view to locate some documents, but was unable to obtain any. 

7.  Since the respondent has not appeared at the hearing, I do not propose to give weight to his affirmation.  However, even if I should take his affirmation into consideration, it is still just his words as against the fact of possession by the company. 

8.  In the premises, I would accept the liquidators’ application and grant leave for the liquidators to sell these tealeaves by tender and the proceeds be credited to the company.  I also order the respondent to pay the costs of the application to the company.