RE CHINAPLUS WINES LTD

HCCW 220/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO 220 OF 2016

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D E C I S I O N

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1.  On 11 July 2016 the petitioner issued a petition to wind up the Company on the grounds of insolvency. On 6 June 2016 the petitioner served a statutory demand claiming a total debt of HK$20,324,516, this consisted of a principal sum of HK$15,000,000 and the balance interest which has accrued as a consequence of non-payment of the principal.

2.  The petition was served on 30 July 2016 and therefore the evidence in opposition should, pursuant to Rule 32 of the Winding Up Rules, have been served by 18 July 2016 as a verifying affirmation was served with the petition.  

3.  It is clear that the Company was aware of the petition.  On the 12 July 2016 it had issued a misconceived application to set aside the statutory demand (there is no procedure for applying to set aside a statutory demand served on the company unlike in the case of personal bankruptcy) and on 2 November 2016, that application was heard by Anthony Chan J and withdrawn on that date.

4.  When the petition came on before me there was no evidence filed in opposition by the Company.  The Company had been reminded by the Master on the previous Wednesday of the necessity of filing evidence in opposition before the petition came on before the Companies Judge.  As I have already mentioned it is quite clear that the Company was aware of the petition as far back as July and had compiled some evidence for the purposes of the misconceived application to set aside the statutory demand.  There has been no adequate explanation for the failure in these circumstances to ensure that there was evidence before the Companies Court Judge on the first hearing of the petition.

5.  As I have explained in earlier authorities in particular Re Grand China Shipping (Hong Kong) Company Limited[1], it is necessary for companies to comply with Rule 32 and in my view given the significance of a winding up petition, there will generally be no credible excuse for a company failing to deal promptly with a petition of which it is aware.  If a company chooses not to file evidence in opposition before the petition comes on in open court before the Companies Court Judge, the natural consequence is a winding-up order.  The hearing of a petition before the Companies Judge in open court is an opportunity for the court to determine straightforward petitions.  If a petition is not opposed by evidence, unless very good reason is shown the matter will be dealt with forthwith. 

6.  As I have explained in earlier decisions, if a company wishes to file evidence in opposition after a petition comes on, it will normally have to provide security for the debt relied on by the petitioner.  In the present case the Company is unable to do so, I will therefore make the normal winding-up order.