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HCCW 297/2014

[2019] HKCFI 1062

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 297 OF 2014

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HCCW 298/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING‑UP) PROCEEDINGS NO 298 OF 2014

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HCCW 299/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING‑UP) PROCEEDINGS NO 299 OF 2014

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HCCW 300/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING‑UP) PROCEEDINGS NO 300 OF 2014

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HCCW 301/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING‑UP) PROCEEDINGS NO 301 OF 2014

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(Heard together)

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D E C I S I O N

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1.  I am going to grant the order in the summonses and since the matter has not been contested, I am not going to give detailed reasons. Suffice it to say that these 5 companies are related companies within what may be loosely called the KCK Group. There have been contributories’ meetings and creditors’ meetings on the choice of liquidators. The contributories’ meetings apparently voted in favour of the appointment of the two gentlemen from Ernst & Young who were the trustees of Woo Koo‑ping, but there is a question raised with regard to the validity of the vote because it was cast by authority from an ordinary resolution of Mastery Gain which was signed solely by Mr David Yen as trustee or one of the trustees in bankruptcy of Woo Koo‑ping at a time when Woo Koo‑ping was apparently no longer a shareholder of Mastery Gain.

2.  The creditors’ meetings were, according to the final results, generally in favour of the present applicants who are the joint and several provisional liquidators of the companies in question although it has been pointed out that the provisional liquidators have used the votes of companies in their control to vote against the Ernst & Young candidates while they did not use those votes to support the motions for their own appointment.  There seemed to be votes of independent creditors, broadly speaking, on both sides, especially in the case of K.C.K. Garment Factory Limited.

3.  I am, however, broadly in agreement with the submissions placed before me by Ms Cheung on behalf of the provisional liquidators in that there would be at least a perceived conflict of interests on the part of the Ernst & Young candidates if they were to be appointed liquidators because they are also the trustees in the bankruptcy of Woo Koo‑ping and there are likely to be rival interests and duties associated with the two capacities respectively, including the fact that the companies here are likely to wish to enforce their judgments against nine associated companies which appear to be assets in the bankruptcy estate of Woo Koo‑ping.  There are also disputed debts between Woo Koo‑ping and the companies, and a person who is both the liquidator of the companies and a trustee in the bankruptcy of Woo Koo‑ping would find himself in an invidious position in relation to the adjudication of those proofs.

4.  It is of course important for liquidators, who are officers of the court, to act impartially and to be free and to be seen to be free from any duties or interests that may conflict with the best interests of the winding‑up of the company; see, for example, Re Orient Power Holdings Ltd [2008] 2 HKLRD 494.

5.  It seems to me also that it would be cost‑effective for the provisional liquidators to carry on as liquidators, having already been in office for almost four and a half years.   

6.  No creditor or contributory has appeared before me to oppose the applications nor have the trustees of Woo Koo‑ping opposed the appointment of the provisional liquidators as liquidators.  The trustees in the bankruptcy of Eric Woo, who had previously written letters indicating certain concerns, have expressly declined to be joined to the summons and have not appeared as a party or made any representations in opposition.  The Official Receiver, who has also been given all the materials, has taken a neutral stance and has not appeared in the hearing. 

7.  In the circumstances, it would, in my opinion, be in the best interests of the winding‑up to accede to the present applications.

8.  I will therefore make an order in terms of the summonses.