RE FILLIP ROUTING GROUP LTD

HCCW 699/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 699 OF 2003

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J U D G M E N T

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1. This is a petition to wind up Fillip Routing Co. Ltd ("the Company") by Mr Ching Yat Hung who is a former employee. The petitioner obtained an award in the Labour Tribunal against the Company on 11 November 2002 in the amount of $148,063.00 with interest and costs.

2. In addition, it is stated in the petition that the Company is indebted to 12 former employees in the sum of $413,416.24, of which $401,416.24 are judgment debts being awards made by the Labour Tribunal. A demand was served by the petitioner on the Company for his debt on 25 March 2003 and the petition herein was presented on 27 June 2003.

3. At the first hearing of the petition on 29 September 2003, leave was given to the Company to file evidence in opposition. An affirmation was filed by the Company on 28 October 2003 in which the Company set out its grounds for challenging the awards made by the Labour Tribunal. It was alleged that the Company was not liable to pay the claims of most of the employees who had obtained awards in the Labour Tribunal and that the paying party should be a subsidiary of the Company that had entered into new employment contracts with these employees. It was further stated in that affirmation that the Company would apply for leave to appeal against the awards of the Labour Tribunal out of time.

4. An affirmation in reply was filed by the petitioner denying that he had entered into any new employment contract with the subsidiary as alleged.

5. At the adjourned hearing of the petition on 17 November 2003, I was informed by the Company that its application for leave to appeal against the awards of the Labour Tribunal out of time was refused and that the Company would no longer be relying on the ground mentioned above to dispute its liability to pay the judgment debts in favour of the former employees.

6. The Company sought an adjournment of two weeks, which I granted, to raise money to pay off its creditors.

7. At the hearing today, I understand from the Director of Legal Aid that the petitioner's debt has not been paid. Ms Lau who appeared for the Company informed the court that there was yet another memorandum of understanding entered into between the Company and Princeton Venture Partners Ltd ("Princeton") and that the latter would invest a further sum of $2.5 million into the Company, to be paid from April 2004 to October 2004.

8. I should also mention that in the evidence filed by the Company in October 2003, there was exhibited a memorandum of understanding between the Company and Princeton in which it appeared that Princeton had agreed to invest $1 million into the Company by 5 instalments and that the first instalment of $200,000.00 had been paid.

9. Ms Lau submitted that the Company has good business potential in that Princeton is prepared to invest substantial sums into the Company, albeit by instalments, and that the Company is not unable to pay its debts.

10. I am unable to see the matter that way. The outstanding claims of the former employees in the sum of over $400,000.00 have not been paid and there is no concrete plan of repayment or no proposal to repay that is acceptable to the petitioner. The petitioner is entitled ex debito justitiae to an order to wind up the Company in these circumstances. I will make an order accordingly. I further order that the petitioner's costs are to be paid out of the Company's assets.