Re Joint Capital Ltd.

HCCW 667/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 667 OF 2000

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J U D G M E N T

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1. This is the hearing of a petition for the winding up of a company known as Joint Capital Limited. The petitioning company WHK Holdings Company Limited is itself in Creditor's Voluntary Liquidation.

2. The Petitioner claims that the Company is indebted to it in a total sum of $1.32 million, made up of an amount of $700,000.00 by way of loan and a further amount of $600,000.00 odd on a current account due.

3. The Statutory Demand was issued in May 2000 and the petition was presented in December 2000. The Company's solicitors had ceased to act, and on the last occasion when this petition came before me on 22 February 2001, it having appeared that the Company no longer has a registered office, I gave an order for substituted service on the Company by way of advertisement because it would appear that Order 65 rule 3(1) would not be applicable because there was doubt as to the address of the directors on whom service could be effected under that rule.

4. There is now an affirmation of service in which it is quite clear that service under Order 65 rule 3(1) would not be applicable because Mr Yoshida, the only director of the Company with an address in Hong Kong, no longer resides at the address which is contained in the Companies Registry.

5. Accordingly, pursuant to my order of 22 February 2001, there has been an advertisement placed in a local English newspaper, thereby effecting substituted service on the Company. Notwithstanding that substituted service, the Company has not appeared today.

6. The evidence shown on the affirmations before me is quite clear. Although the liquidators of the Petitioner are not aware of the precise circumstances under which the debt was incurred, it is clear from a number of contemporaneous documents from the Company itself that the Company is indebted to the Petitioner.

7. The acknowledgments of indebtedness appear in a number of documents. There is a letter dated 26 July 1999 from the Company to the liquidators of the Petitioner in which an officer of the Company has informed the liquidators that WHK Holdings Company Limited, i.e. the Petitioner, was the Company's creditor in relation to trade debts of $622,640.21 and under a long-term debt of $700,000.00. This was confirmed in another letter from the Company of 28 October 1999. It is to be noted that this letter was signed by the Managing Director who was then Mr Kimitaka Mukai. In this letter, the Managing Director of the Company informed the person in charge at the liquidator's office that as at 17 December 1998, the balances of the Petitioner shown in the Company's books were as follows: current account $622,640.21; long term debt $700,000.00. There is then a proposal for a compromise. The indebtedness was referred to in yet another letter from the Company dated 30 December 1999. The breakdown of the amount due to the Petitioner is there set out in relation to current accounts at $622,640.21.

8. There had previously been affirmations filed on behalf of the Company. In an affirmation filed on 31 October 2000 by Mr Kawamura Kiyoshi who was a director of Unicorn Consultancy Limited which is the company secretary of the Company, he purported to deny the debt, although there was really no substantial bona fide dispute indicated in this affirmation.

9. What is interesting is that in paragraph 15 of that affirmation, it is said by Mr Kiyoshi that the directors of the Company have appointed an accountant to review the previous records and ledgers of the Company, and he says that that investigation is still carrying on. Subsequently in November 2000, an order was made by the Court for leave to the Company to file evidence, which would give the Company the opportunity to file any evidence that may have been uncovered by the accountant who was supposed to have been appointed to look into the Company's accounts. Notwithstanding that order made in November 2000 giving leave to the Company to file evidence, no further affirmation has been filed on behalf of the Company.

10. Accordingly, I am satisfied that no bona fide dispute has been raised by the Company and that there should be the usual winding up order in the light of its own repeated acknowledgments of indebtedness.