RE EUROPOINT WATCH & JEWELLERY LTD

HCMP 2143/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2143 OF 2007

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D E C I S I O N

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1.  This is an application made by the joint and several liquidators of Europoint Watch & Jewellery Limited (“the Company”), which is in creditors’ voluntary liquidation, under sections 251(1) and 255 of the Companies Ordinance, Cap. 32, seeking the court’s sanction in respect of the resolutions passed at a general meeting of the creditors of the Company held on 29 May 2007.

2.  The matters for which sanction is sought may be grouped under three heads. 

3.  The first relates to a direction that vacancies in the committee of inspection would not be required to be filled.  What happened was that the committee was made up of four members.  Two members were removed by the resolutions passed at the general meeting of creditors on 29 May 2007 and the remaining two creditors decided to resign.  The liquidators had made enquiries of the other creditors present at the meeting, and none of them indicated that they were interested to fill the positions in the committee.  Hence, the liquidators seek sanction of the resolutions passed to the effect that two of the members be removed from the committee and the resignation of the other two be accepted and that replacement of members on the committee would not be necessary.

4.  The second head of relief relates to an intended settlement with a creditor in Germany.  This was approved by the creditors who voted in favour of the intended settlement at the general meeting on 29 May 2007.  The liquidators have power to enter into this settlement with the sanction of the court or the committee of inspection or if there is no such committee with the sanction of a meeting of the creditors, under the provisions of sections 251(1)(a) and 199(1)(e) of Cap. 32.

5.  The last head of relief relates to the remuneration of the liquidators being their costs incurred from the commencement of liquidation on 26 July 2003 to 29 June 2006 and their estimated costs from 30 June 2006 to the final conclusion of the winding up.  The liquidators’ costs had been approved by the resolutions passed at the said general meeting of creditors.  Under section 244 of Cap. 32, the liquidators’ remuneration may be decided by the committee of inspection or if there is no such committee, by the creditors.

6.  At the general meeting on 29 May 2007, the creditors had resolved that they should apply to court for directions regarding the resolutions passed at that meeting.  The reason why this was necessitated was because of the difficulties the liquidators had in securing the sanction of members of the committee of inspection.  There was a deadlock among the members of the committee and the two members who had voted against the resolutions proposed by the liquidators to finalise outstanding matters in the liquidation had absented themselves from the meeting of the committee convened by the liquidators on 24 October 2006 to endorse the resolutions passed in the general meeting of creditors on 28 August 2006.

7.  I am satisfied that the general meeting of creditors on 29 May 2007 was properly convened.  There is nothing to indicate to the court that the views of the general body of creditors were not properly reflected when they passed the resolutions proposed at that meeting. 

8.  I have considered the affirmation of the liquidators in support of this application and in particular the two interim reports made by the liquidators setting out their views as to why it was not worthwhile or justifiable to conduct further realisation work in respect of four outstanding items.

9.  I have given directions on 2 November 2007 that notice of today’s hearing be given to all creditors at least 21 days before the hearing and that the creditors may obtain the summons and supporting affirmation from the liquidators and attend the hearing to make submissions if they see fit.  I further directed that if any creditor should wish to adduce evidence, he should file and serve an affirmation not less than 7 days before the hearing.

10.  I am satisfied that due notice of this application has been given to all creditors.  Notwithstanding that three of the creditors have indicated that they would oppose the application, they have not filed any affirmation as to their stance nor have they informed the liquidators what are their grounds of opposition.  No creditor has appeared at the hearing today to make submissions.

11.  In the circumstances, it seems to me that in the best interest of the Company, protracted arguments among the creditors should be put to an end so as to enable the liquidators to conclude the liquidation and proceed with distributing dividends to the creditors as soon as possible.

12.  I therefore make an order in terms of the summons issued by the liquidators and confirm the resolutions passed in the general meeting of creditors on 29 May 2007 as set out in paragraph 1 of the summons. 

13.  I make no order as to the costs of this application.