RICCO (INTERNATIONAL) CO LTD v. UNI-HARVEST INTERNATIONAL LTD

HCCW 229/2018

[2020] HKCFI 201

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO 229 OF 2018

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D E C I S I O N

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A. THE APPLICATIONS

1.  These applications emerge from a somewhat tangled web of personal, corporate, and litigious relationships, but the primary lines are clear.

2.  By its Summons dated 29 October 2018, Uni-Harvest International Ltd (“the Company”) seeks to either strike-out or stay the creditor’s winding-up petition presented by the Petitioner (“Ricco”) on 21 August 2018 (“the Petition”).

3.  As detailed in the Petition[1], the petitioning debt (“the Debt”) is essentially what is due to Ricco under a costs order (“Costs Order”) made against the Company in April 2017 in HCMP 1808/2016 (“the HCMP Proceedings”).

4.  The Company has not appealed against the Costs Order or the underlying judgment for Ricco. Nor has it sought to vary or stay the Costs Order, which was granted at a time when separate proceedings (HCA 1856/2016 and HCA 1858/2016, together “the HCA Proceedings”) variously involving Ricco, the Company and related parties were underway.

5.  While not denying the unpaid Debt, the Company seeks to strike-out the Petition on abuse of process grounds. It contends that:

(1) Service of the statutory demand (“the Demand”) was defective and presentation of the Petition was premature.

(2) Ricco is misusing the winding-up procedure to serve as an advantage in the HCA Proceedings.

6.  The Company alternatively seeks a case management stay of the Petition pending the resolution of issues on Ricco’s constitution in the HCA Proceedings.

B.      THE BACKGROUND

B1.    The parties and the HCMP Proceedings

7.  Ricco is a Hong Kong company in the jewelry trade. Since its 2002 incorporation, Lui Fung Yee (“Madam Lui”) has been a director and a registered holder of 1,500,000 shares.

8.  Madam Lui was in a longtime intimate relationship with Chan Kwok Hung (“Jimmy”) until his death from cancer in April 2015. In that time, Madam Lui apparently believed – incorrectly – that Jimmy had earlier divorced his wife, Liu Siu Foon (“Ms Liu”). 

9.  The Company is an unregistered BVI company. Before Jimmy died, it served as his corporate vehicle. It was used, inter alia, to hold shares in Ricco on trust for Madam Lui during Jimmy’s lifetime.

10.  Between 2002 and July 2007, Madam Lui’s registered shares constituted 50% of the total shareholding in Ricco.  The other 50% (1,500,000 shares) were owned by her Malaysian business partner.

11.  Around July 2007, Madam Lui financed the Company’s acquisition of those 50% shares from her business partner in order for Jimmy, whose bankruptcy was just discharged, to take part in Ricco’s business.

12.  Around August 2007, the Company was further allotted 7,000,000 shares in Ricco (“the Allotment”). This was financed by a HK$7million loan from Ricco itself, contrary to section 47A of the then Companies Ordinance (Cap 32).  The Allotment was recorded as fully paid up, but Ricco never actually received any payment for the shares.  

13.  In 2016, Ricco brought the HCMP Proceedings against the Company to set aside the Allotment. On 26 April 2017, Anthony Chan J handed down Judgment declaring the Allotment null and void and made the Costs Order in favour of Ricco.

14.  As earlier noted, by the time of the Costs Order, the HCA Proceedings were also underway. I will address the nature and significance of those proceedings further below, where I assess the Company’s claim that Ricco is pursuing some improper purpose in those proceedings by bringing the Petition.

B2.    Service of Demand and Petition

15.  The Allocatur confirming the amount of Ricco’s taxed costs in the HCMP Proceedings was handed down on 8 June 2018. 

16.  On 30 July 2018, Ricco’s BVI lawyers sought to personally serve on the Company the Demand[2] for repayment of the sum of HK$350,103.17 by attending its registered office in the BVI.

17.  On 31 July 2018, Ricco through its Hong Kong solicitors further wrote to Gary Tam & Co, the Company’s solicitors in the HCMP Proceedings, notifying them that the Demand and other documents had been served at the Company’s registered BVI office, and enclosing the documents served in the BVI.

18.  Ricco filed the Petition on 21 August 2018. The Demand was then (as it now remains) wholly unpaid. The Petition refers to the deeming provision as to inability to pay debts under s.327(4)(a) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap. 32 (“the Ordinance”). However, the Petition does not solely rest on the deeming ground. It relies also on the underlying factual position as to the actual non-payment of the Demand. As will be seen, this affects the Company’s challenge to the validity of the Petition. 

19.  On 23 August 2018, Ricco further applied for leave to serve the Petition out of jurisdiction in the BVI at the Company’s registered office. Leave was granted on 16 October 2018 and the order was sealed on 22 October 2018.

20.  However, on 24 October 2018, when Ricco was still arranging for service in the BVI, Gary Tam & Co filed a Notice to Act and a Notice of Intention to appear on Petition for the Company.

C.      ABUSE OF PROCESS?

C1.    Two Aspects of Alleged Abuse

21.  The Company’s inter partes summons to strike-out (or alternatively stay) the Petition was filed on 29 October 2018. The main ground is abuse of process by Ricco.

22.  As elaborated in the Company’s affirmation evidence and in the submissions of Mr Dan Leung for the Company, there are two distinct aspects to the abuse claim. 

23.  The first aspect is narrow. It is also – as Mr Leung candidly accepted at the hearing – entirely technical. The Company’s case here is simply that:

(1) The Demand was not properly served through any of the methods provided under s.327(4)(a)(i) of the Ordinance, these being (the Company submits) the only ones available to the Petitioner.

(2) The Petition was in any event prematurely presented. The Company contends that, even assuming a proper mode of service, the Demand was only effectively served on 31 July 2019 and not 30 July 2019 as required for the deeming mechanism under s.327(4)(a)(ii).

24.  At the hearing, Mr Leung resiled from suggesting that these alleged failures were deliberate attempts to disadvantage the Company. That was sensible. On the facts before me, I do not see how such defects, even if found, could prejudice the Company or benefit Ricco.

25.  The second aspect of the Company’s case on abuse does however involve stark accusations of “misuse” by the Petitioner of the statutory winding-up scheme “to obtain some collateral advantage in the related proceedings”.[3]

26.  The Company’s essential case here is that, although it “does not presently have a direct crystallised claim against the Petitioner”,[4] there is a bona fide dispute as to Ricco’s ownership. The Company essentially points to this dispute, and the ongoing litigation involving inter alia Ricco in the HCA Proceedings, to contend that Ricco is seeking to gain some kind of “collateral advantage” in the instant proceedings.[5]

C2.    General Principles on Striking-Out

27.  The following general principles on striking-out apply here:

(1) The strike-out power under O.18, r.19 of the Rules of the High Court must be sparingly exercised and confined to clear and obvious cases: Hong Kong Civil Procedure 2020 at §18/19/4; Re Unibo Trading Ltd, HCCW 733/2005, unreported, 27 January 2006, at §13, Barma J (as he then was).

(2) Where abuse of process is invoked as a strike-out ground, the applicant must show that the court’s process is not being used bona fide or is being used vexatiously or oppressively: Hong Kong Civil Procedure 2020 at §18/19/9.

(3) Where a company does not or cannot dispute the petitioning debt, but puts forward a counterclaim which is disputed, the petition cannot be treated for striking-out purposes as an abuse of the process even though the cross-claim may be relevant to the exercise of the court's discretion on the hearing of the petition: Re Hong Kong Construction (Works) Ltd HCCW 670/2002, unreported, 7 January 2003, at §6(6), Kwan J (as she then was).

C3.    The Section 327(4)(a) Ground

The Company’s stance

28.  The Company claims that “there has never been good service of the statutory demand, and in any case the petition was issued before the expiry of 21 days after the purported or deemed service of the statutory demand”.[6]

29.  The Company notes that the Petition was issued on the basis that it is insolvent within the meaning of s.327(4)(a) of the Ordinance.

30.  Section 327(4)(a) materially provides that:

“An unregistered company shall, for the purposes of this Ordinance, be deemed to be unable to pay its debts–

(a) if -

(i) a creditor, by assignment or otherwise, to whom the company is indebted in a sum then due that equals or exceeds the specified amount, has served on the company a written demand in the prescribed form requiring the company to pay the sum so due-

(A) by leaving the demand at the principal place of business of the company;

(B) by delivering the demand to any officer of the company; or

(C) by otherwise serving the demand in any manner that the court may approve or direct; and

(ii) the company has for 3 weeks after the service of the demand neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor...”.

31.  The Company’s stance is that the requirements of s.327(4)(a) have not been met and that it is an abuse of process for the Petition to proceed in these circumstances.

Position on s.327(4)(a) Not Dispositive

32.  In my judgment, any non-compliance by the Petitioner with s.327(4)(a) of the Ordinance, even if made out, is insufficient to strike-out the Petition.

33.  Section 327(4)(a) operates as a deeming provision. Where the service requirements of s.327(4)(a)(i) are satisfied, the unregistered company is deemed unable to pay its debts upon expiry of the 3-week post‑service period under s.327(4)(a)(ii).

34.  However, as Ms Jacqueline Law for the Petitioner points out, the s.327(4) mechanism is just one way of proving insolvency for the purposes of s.327(1) and (3)(b) of the Ordinance, which provide for the winding-up under the Ordinance of an unregistered company on the ground that it is “unable to pay its debts”. 

35.  As Rogers J (as he then was) explained in Bozell Asia (Holding) Ltd v Cal International Ltd [1997] HKLRD 1 at 7B-C in relation to the deeming mechanism under s.178 of the Ordinance:

“A company is insolvent if it is unable to pay its debts as they become due. A statutory demand under s.178 is merely a means of proof of insolvency but is not a sine qua non for the success of a petition on the grounds of insolvency”.

36.  Presently, even without the s.327(4) deeming mechanism, Ricco may still ask the court to infer that the Company is insolvent on the basis that the Debt remains unpaid and there is no bona fide substantial dispute against it: Re Hawkins Development Ltd,HCCW 215/2007, unreported, 21 August 2009, at §§3-4, Kwan J; Re Simpson Devp Investment (HK) Co Ltd [1999] 1 HKLRD 202 at 204G-J (Le Pichon J as she then was).

37.  While referring in part to s.327(4)(a) of the Ordinance, the Petition in its present form is in my view sufficiently broad to support this alternative line as to the Company’s insolvency, and can anyway be readily amended to put the position beyond doubt (c.f. Hong Kong Civil Procedure 2020 §18/19/4).[7]

38.  Accordingly, the question of whether the Petitioner has complied with s.327(4)(a) is moot: any non-compliance is of itself insufficient to strike-out the Petition as an abuse of process. The winding‑up process is properly engaged on the footing that the Debt remains unpaid and the Company has not disputed its repayment obligation.

Valid Service of the Demand under s.178(1)(a)

39.  While strictly unnecessary in light of the above, I shall for completeness set out my view on whether there has been valid service of the Demand and presentation of the Petition.

40.  As noted, the Demand was personally served at the Company’s registered BVI office on 30 July 2018. Ricco accepts that service at a company’s registered address is not among the options listed at s.327(4)(a)(i)(A)-(C) of the Ordinance. However, Ricco relies on s.178(1)(a) of the Ordinance as an available means of service.

41.  Section 178(1)(a) materially provides that:

“(1) A company shall be deemed to be unable to pay its debts–

(a) if -

(i) a creditor, by assignment or otherwise, to whom the company is indebted in a sum then due that equals or exceeds the specified amount, has served on the company a written demand–

  (A) in the prescribed form requiring the company to pay the sum so due; and

  (B) by leaving it at the registered office of the company; and

(ii) the company has, for 3 weeks after the service of the demand, neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor”.

42.  Given that s.327(4)(a) refers specifically to an “unregistered company”, the question is whether this provision is meant (as the Company contends) to limit the means of serving statutory demands on unregistered companies to the ones it lists.

43.  In my judgment, the answer is no. Properly construed, s.327(4)(a) provides for additional – not exclusive – means of service on unregistered companies for winding-up proceedings under the Ordinance. To start with:

(1) Section 327(1) states that “all the provisions of this Ordinance with respect to winding up shall apply to an unregistered company, with the exceptions and additions mentioned in this section” (my emphasis).

(2) Section 331 further provides that the provisions of Part X of the Ordinance are cumulative:

“The provisions of this Part with respect to unregistered companies shall be in addition to and not in restriction of any provisions hereinbefore in this Ordinance contained with respect to winding up companies by the court, and the court or liquidator may exercise any powers or do any act in the case of unregistered companies which might be exercised or done by it or him in winding up companies formed and registered under the Companies Ordinance (Cap. 622): (Amended 28 of 2012 ss. 912 & 920)

Provided that an unregistered company shall not, except in the event of its being wound up, be deemed to be a company under this Ordinance, and then only to the extent provided by this Part.” (my emphasis)

44.  By these lights, an example of an “exception” mentioned within s.327 is s.327(2), which specifically prohibits the voluntary winding-up of an unregistered company.

45.  In contrast, s.327(4) should in my view be read as providing within the meaning of s.327(1) (and s.331) “additions” to earlier provisions in the Ordinance as to service of statutory demands:

(1) Nothing in s.327(4)’s wording indicates that the listed methods of service are exclusive or restrictive of any elsewhere provided for in the Ordinance.

(2) Considered purposively and contextually, treating the s.327(4) service methods as additional rather than exclusive better accords with the wide meaning of “unregistered company” in this statutory context and the lack of discernible reasons for limiting the means of serving statutory demands on such entities to those provided under s.327(4)(a)(i).

(3 In a similar vein, I note that Le Pichon J (as she then was) in her judgment in Re Greater Beijing Region Expressways Ltd [2000] 2 HKLRD 776 at 786A-F, held that s.328(1) (specifying contributories in the winding-up of unregistered companies) “merely supplements” s.170 in view of inter alia s.327(1), s.331 and the “wide meaning” of “unregistered company” within the Ordinance.

46.  The judgment of Kwan J in Re KTH Recovery Fund II Ltd [2007] 2 HKLRD 288 further supports this conclusion:

(1) The applicants there sought court directions under s.327(4)(a)(i)(C) allowing service of a demand to several companies at their last known place of business in Hong Kong.

(2) While acceding to the directions sought, Kwan J noted that the application under s.327(4)(a) was not strictly necessary, the reason being that the service modes specified under s.338(2) (now repealed) were available, including service at a place of business in Hong Kong within the previous three years. 

(3) In this connection, Kwan J observed (at §12):

“The fact that other modes of service are provided in s.327(4)(a) does not, in my view, mean that s.338(2) may not be relied on in addition”.

(4) While in KTH the provisions identified as “in addition” to those of s.327(4)(a) were under s.388(2), the judgment supports the essential view that s.327(4)(a) is not intended as an exclusive and exhaustive list of service options in the case of unregistered companies.

(5) I see no reason why the modes of service under s.327(4)(a) are not likewise “in addition” to those under s.178(1)(a), which did not arise for consideration in KTH.

47.  At the hearing, the Company sensibly did not dispute that, if relevant in law, the requirements of s.178(1)(a)(i) have been met on the facts of this case. In my view, they plainly have been.

Timing of the Petition  

48.  The Company’s timing challenge remains. The Company’s case here is that, even assuming valid service of the Demand, the Petition was prematurely presented on 21 August 2018.

49.  The Company’s position is that s.327(4)(a)(ii) (and similarly s.178(1)(a)(ii)) requires the company served with a demand to be given 3 weeks to pay the sum before it can be deemed insolvent, and in calculating the 3-week period, “fractions of a day should be ignored”: In re Lympne Investments Ltd [1972] 1 WLR 523 at 525F-H (Megarry J as he then was, referring to s.223 of the Companies Act 1948).

50.  Applying these principles, the Company contends that 21 days did not pass between service of the Demand and presentation of the Petition. In particular:

(1) The Demand was delivered to the Company’s BVI office on 30 July 2018 at 11:30 am BVI time, which was 11:30 pm Hong Kong time the same day.

(2) As service “was after 4 p.m.”, the demand “would be deemed to have been served on 31 July 2018”.[8]

(3) As fractions of a day should be ignored, time did not start to run (according to the Company) until 1 August 2018, leaving fewer than 21 days until the presentation of the Petition on 21 August 2018.  

51.  In my judgment, the Company’s argument is unsound:

(1) While it is unclear to me why the relevant time of service of the Demand in the BVI should be Hong Kong rather than BVI time, I will assume for present discussion that the Company’s premise is correct such that the material time of service was after 4 pm on 30 July 2018. 

(2) The Company has not identified any provision within the Ordinance that imposes a 4 pm cut-off time for service on a company within a particular day.

(3) While a cut-off time of 4 pm for service is prescribed under O.65, r.7 of the Rules of the High Court for documents served under r.2 or r.5(1)(a), there is no suggestion that the Demand was served pursuant to O.65, r.2. In the context of O.65, it is r.3 that deals with service of documents on bodies corporate. But r.3 clearly relates to documents in respect of court proceedings, rather than statutory demands; and r.3(1) is in any event expressly restricted in its operation to service of documents “for which provision is not otherwise made by any written law” (c.f. s.178(1)(a)(i) of the Ordinance).

(4) In any case, even if a 4 pm cut-off time as under O.65, r.7 or an equivalent provision applies, and assuming that fractions of the day should be ignored, there is no basis for starting the next day from the time of the previous day’s “end” at 4 pm instead of from the next day’s chronological outset, i.e. immediately after midnight. Put simply, the post-service period starts when the next day starts.

(5) It follows that the period following service of the Demand began from the start of 31 July 2018 at the latest, which means that a full 21 days had passed (31 July 2018 to 20 August 2018 inclusive) by the time the Petition was presented on 21 August 2018.

52.  It follows that, contrary to the Company’s case, the Demand and the Petition have been properly served and presented.

C4.    The Collateral Purpose Ground

53.  The second aspect of the Company’s case on abuse of process is its claim that the Petition is being “misused by the Petitioner to obtain some collateral advantage in [the HCA Proceedings]”.[9]

The HCA Proceedings

54.  Ricco commenced HCA 1856/2016 the same day as the HCMP Proceedings, claiming against Jimmy’s estate as 1^st defendant and the Company as 2^nd defendant for debts due and owing to Ricco.

55.  Ricco’s case is that the debts essentially consist of (1) interest-free loans of over HK$3m made by Ricco (then controlled by Madam Lui and Jimmy) for Jimmy’s medical expenses following his cancer diagnosis in 2012; and (2) another loan account maintained with Ricco in favour of the Company when it was owned by Jimmy totalling about HK$7.1m. Of the latter amount, HK$7m represented the loan for the Allotment, for which Ricco gave credit after the Allotment was set aside in the HCMP Proceedings. 

56.  While both Jimmy’s estate and the Company deny their indebtedness, neither have brought any counterclaim in the action.

57.  HCA 1858/2016 is a third-party action instituted on 15 July 2016 by Madam Lui personally (not Ricco) against Jimmy’s estate as 1^st defendant and the Company as 2^nd defendant.

58.  Madam Lui’s essential case is that:

(1) The Company’s 1,500,000 shares in Ricco (i.e. shares other than the 7,000,000 shares in the Allotment) were acquired with her financial resources and held on trust for her as absolute owner.

(2) The Company’s 50% shares in another company, First Top International Limited (“First Top”), are also held on trust for her. 

(3) Madam Lui personally granted loans of more than HK$1.5m to Jimmy to pay for his medical expenses which remained unpaid at the time of his death.

59.  Madam Lui claims against Jimmy’s estate for the repayment of the HK$1.5m loan and against the Company for declarations that the Company’s shares in Ricco and First Top are held on trust for her absolutely.

60.  Jimmy’s estate denies the claimed indebtedness to Madam Lui and her beneficial ownership of the relevant First Top shares.  By counterclaim it alleges that Jimmy (now his estate) and Madam Lui should beneficially own 85% and 15% of the issued share capital of Ricco such that, after the Allotment was cancelled in the HCMP Proceedings, 85% of the 1,500,000 shares in Ricco registered in Madam Lui’s name is held on trust for Jimmy’s estate.[10]

61.  In October 2018, Madam Lui filed a security for costs application against the Company in HCA 1858/2016 on the basis that the Company was counterclaiming against her in respect of her shares in Ricco. In response, the Company claimed in correspondence that it was not making any counterclaim in the proceedings. The Defence and Counterclaim was then further amended to drop the counterclaim against Madam Lui. Leave was later granted to Madam Lui to withdraw her security for costs application.

Absence of abuse

62.  On the facts and evidence before me, I find no bad faith or improper purposes amounting to abuse of process by Ricco.

63.  In particular, I do not accept the claim that Ricco has brought the Petition to gain some improper advantage in the HCA Proceedings:

(1) A party alleging abuse of process must properly substantiate its claim. The Company’s repeated assertions to the effect that the Petition was presented to put pressure on it and to obtain some collateral purpose in the HCA Proceedings is unsupported by any meaningful particulars.

(2) Having obtained judgment and the Costs Order in the HCMP Proceedings, which are final and conclusive, and with the Company unable to pay the debt, Ricco is entitled to a winding-up order ex debito justitiae. 

(3) The mere fact that Ricco presented the Petition when the HCA Proceedings were still afoot cannot be regarded as an abuse. Ricco’s right cannot be displaced merely because the Company may have a claim against it that is disputed in litigation: Re United Strength Ltd [1992] 1 HKC 386 at 387H‑I (Jones J). In any event, the Company does not have any counterclaim against Ricco in the HCA Proceedings, be it for a liquidated or unliquidated sum, and is not even a party to HCA 1858/2018. The Company accepts that it presently has no“direct crystallised claim against the Petitioner”[11]

64.  The Company contends that the HCA Proceedings are related to and determinative of Ricco’s composition. However, as Ms Law for Ricco points out, irrespective of who the ultimate beneficial owners of Ricco are, and regardless of the proportion of any such ownership, the debt due and owing to Ricco under the Costs Order remains indisputable.

65.  In the circumstances, there is no proper basis for striking-out or staying the Petition on abuse of process grounds. 

D.      CASE MANAGEMENT STAY?

D1.    Principles

66.  The Court has the inherent jurisdiction to regulate its own procedure, including a wide discretion to stay or adjourn proceedings: High Court Ordinance (Cap. 4), s.16(3); Rules of the High Court, O.1B, r.1(2)(e).

67.  In discharging its case management function, the Court will have regard to the underlying objectives set out at O.1A, r.1 of the Rules of the High Court, which include cost-effectiveness of procedure, reasonable proportion and procedural economy in the conduct of proceedings, and fairness between the parties.

68.  In Linfield Ltd v Taoho Design Architects Ltd[2002] 2 HKC 204 at §§12-14, Ma J (as he then was) noted that where a stay is sought in view of concurrent proceedings involving the same or a similar subject matter and identical parties, the key principles approximate those in lis alibi pendens situations. In particular:

(1) The court must consider what would serve the ends of justice between the parties and the administration of justice generally.

(2) A stay should not cause an injustice to the claimant in the proceedings.

(3) The applicant for stay must satisfy the court that continuing the proceedings would be oppressive or vexatious to him or an abuse of process and unjust.

(4) Where a plaintiff commences proceedings as of right, he should not be deprived of the right to continue those proceedings in the absence of “very good reasons to the contrary”.

69.  Ma J (as he then was) further noted at §16 of Linfield that for multiple proceedings involving the same or similar issues, but different parties, it is neither desirable nor possible to stay any proceeding pending resolution of others. That is so despite the risk of inconsistent findings because the determination of issues in proceedings between different parties would not bind other parties in separate proceedings.

D2.    Stay unjustified

70.  At the hearing, the Company’s case for a general case management stay was only faintly pressed.

71.  In my assessment, staying the Petition on such grounds is plainly unjustified, particularly given:

(1) The fact that the HCA Proceedings do not involve entirely identical parties or indeed identical or similar issues, and the absence of any crystallised cross-claim against Ricco for monetary relief greater than the petitioning debt.

(2) The absence of abuse on Ricco’s part (Section C above) and the failure of the Company to demonstrate any significant oppression or injustice to it in the absence of a stay.

72.  For its part, Ricco emphasises that:

(1) Over a year has passed since the Allocatur in June 2018 for the costs due and owing under the Costs Order made in April 2017.

(2) In the circumstances of this case, the Company’s refusal to comply with the Costs Order to date gives rise to an inference of inability to pay.

(3) If the Company is not insolvent, it should pay the awarded costs and interest and continue with its defence in the HCA Proceedings. 

(4) If however the Company is insolvent, it should be wound-up in the face of the Debt to which it has no defence or counterclaim of an equal or greater amount. 

(5) If Ms Liu genuinely believes that the Company has a bona fide defence in the HCA Proceedings, she can persuade the liquidator to pursue the defence.

(6) It is unfair for the Company to refuse to comply with the Costs Order and then derail the Petition, allowing it to incur further costs in the HCA Proceedings and causing more legal costs for Ricco for what might well then end up as an empty judgment in its favour. 

73.  I think there is force in Ricco’s points. Taking these together with the other highlighted aspects of this case, I dismiss the Company’s application for a case management stay. 

E.      CONCLUSION AND DIRECTIONS

74.  The Company’s Summons is dismissed with costs payable forthwith (before the substantive hearing of the Petition) with certificate for counsel.

75.  Moving forward, as proposed by Ms Law for Ricco and uncontested by Mr Leung for the Company, I direct that:

(1) The Company be barred from filing without further order any additional evidence to oppose the Petition (the Company having confirmed that the evidence filed thus far is in support of its Summons and in opposition to the Petition in any event).

(2) The Petition be restored for substantive argument on a day to be fixed in consultation with Counsels’ diaries, with 3 hours reserved. 

76.  I thank Mr Leung and Ms Law for their able assistance.