RE PACIFIC DIAMONDS ORDER LTD

HCCW 72/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO 72 OF 2015

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DECISION
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1.  On 2 March 2015 the Petitioner issued a Petition for the winding‑up of the Company on the grounds of insolvency.  It relies to establish insolvency on a statutory demand dated 15 January 2015, which in turn refers to a judgment dated 30 June 2014 for US$81,248.00.  There is no dispute that the sum is due, I gave the Company leave to file evidence to address its ability to pay the debt. 

2.  Mr. Pradeep Natani made an affirmation dated 6 July 2015.  In this very short affirmation Mr Natani says very little, what he does tell the court is that the Petitioner obtained a charging order absolute on 1 August 2014 over a property owned by the Company.  He suggests that the property is worth at least HK$2,750,000.00, and even taking into account an outstanding mortgage for approximately HK$700,000.00 when that property is realised the Company would be able to pay the debt.  There is also a rather obscure suggestion that the Company anyway be given 6 months to repay the Petitioner. 

3.  The affirmation does not deal generally with the solvency of the Company, the extent which it has other creditors or any explanation for its inability to pay the debt which has been outstanding for some considerable period of time.  The clear implication is that the Company is on a cash flow basis insolvent.  It may be, given the lack of evidence it is unclear, that the Company is also insolvent on a balance sheet basis.

4.  Although I accept that the existence of the charge is a matter to be taken into account by the court in deciding how to exercise its discretion when determining the Petition, it does not seem to me that it, by itself, is sufficient to justify the court not making the normal order where an undisputed debt exists.  I will make the normal winding-up order.