Re HKSTC Warrington Fire Research Ltd.

HCCW 684/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO. 684 OF 2001

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R U L I N G

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1. This is an application by Warrington Fire Research Group Limited, a 50% shareholder and creditor of the Company, to appear at the Petition to oppose the Petition which has been presented by the other 50% shareholder and creditor of the Company. It is clear in the usual case that there would be no question but that such a shareholder and creditor as Warrington would be entitled to appear and to be heard at the Petition.

2. However, since July 2001 when this Petition was presented, the only opposition to the Petition has come from the Company and not from Warrington, the other 50% shareholder and creditor of the Company. It was not until two days ago that Warrington put in its Notice of Intention to Appear supported by an affirmation made by Julmie Kan as attorney of Warrington.

3. The reasons given by Warrington as to the late application to appear was firstly, that Warrington had only received the Company's papers in July 2001 and even now has not got the complete papers, and secondly, that it has recently made an offer to buy out the Petitioner's shares which offer has been rejected, and it has been submitted that the court should take this offer and its rejection into account in considering whether to wind up the Company on the present Petition, which at the moment remains a petition based only on the Company's inability to repay an amount now said to be about $400,000.00 to the Petitioner.

4. I do not accept the first ground put forward by Warrington. The Petition was presented in July and it is now 7 months since the presentation of the Petition. I cannot accept that Warrington would have taken that long to get its house in order to appear at the Petition today.

5. However, the Cooperation Agreement on which Warrington relies may be relevant to the Petitioner's demand against the Company to repay that amount. More importantly, the Petitioner has not been able to show what prejudice it may suffer if the usual position were to apply, namely that the court would hear an opposing major creditor and shareholder in an application to wind up the Company.

6. Consequently, I would give leave to Warrington to appear and be heard today and file and serve the affirmation of Julmie Kan out of time.