RE CIRTEX CO LTD

IN THE COURT OF APPEAL

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J U D G M E N T

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Silke, V.-P.:

1. There are two Notices of Motion for the consideration of the Court. The first in time, filed on 12th May 1988, brought on behalf of Tang Wing Cheung and Hung Jin Mui - the 1st and 2nd Petitioners respectively. It is for a dismissal of the appeal and for a consequential costs order.

2. The second is by the solicitors on record for the appellant China Profit Investment Limited to cease to act.

3. We heard that second Motion first and, having considered that which was said to us by Miss Eu, we granted the order.

4. Shortly, the history of the matter is this: Cirtex Company Limited - "Cirtex" - had as its sole asset a restaurant, the Golden Palace Restaurant. On 21st September 1987 Jones, J., on a petition to wind up the company on the grounds of "just as equitable", the basis being deadlock, made a winding up order. A stay was refused.

5. China Profit Limited appealed that order By an expedited application to another Division of this Court on the same day, a stay pending appeal was granted.

6. The next material matter was on 30th November, the appeal itself, having come on for hearing, was adjourned. Issues had arisen as to the authority of the solicitors who appeared for the 3rd and 4th Petitioners and for a company referred to as Million Reserve Limited to act and as to their getting themselves properly before the Court; and other matters. We continued the stay.

7. On 14th December the Court dealt with a Notice of Motion brought on behalf of the 1st and 2nd Petitioners to discharge the stay. There was a further Notice of Motion by the solicitors then representing the 3rd and 4th Petitioners to cease to act.

8. We discharged the stay and permitted the solicitors to cease to act.

9. On 18th December on a Motion by the official Receiver - present at that hearing being the Official Receiver, counsel for the 1st and 2nd Petitioners and counsel for the appellants with the 3rd Petitioner in person - we gave directions that the Official Receiver be at liberty to close down the business of the Golden Palace Restaurant and to do any act in relation to Cirtex in execution of winding up order notwithstanding the pending appeal.

10. At that hearing we had the benefit of a useful Report in support of the application for direct by the Official Receiver. This showed that the official Receiver had taken control of the assets of Cirtex but without closing down the Restaurant business. From the accounting records which had been seized, the Official Receiver was unable to say if Cirtex was insolvent. He had not wished to close the Restaurant as its fixtures and fittings were the only book value assets of Cirtex and further he wanted to ascertain the wishes of the contributories. He had attempted a settlement but that was not achieved. Cash was running out, the interests of the workers and the suppliers needed to be guarded. In those circumstances we made the order to which we have referred.

11. Costs orders of various nature were made at the several hearings.

12. Since then the appeal has not been proceeded with, hence the Notice of Motion filed on 12th May 1988, this despite a protracted exchange of correspondence to which our attention has been directed.

13. Mr. Ching has asked us today to dismiss the appeal and, should we accede to that application, this would have the effect of causing all outstanding matters, such as the motion to call fresh evidence, motions to file Respondent's Notice out of time, to fall away.

14. Miss Lim who appeared for the 3rd and 4th Petitioners - Million, of course, is not in any way before this Court - does not oppose. As we have said at an ealier stage we permitted the solicitors for China Profit to come off the record. China Profit were aware of that application and they have not sought to appear in any manner before us. We are told today that the winding up proceedings are still in progress.

15. In the circumstances, we will grant the order sought in the 1st and 2nd Petitioners' Notice of Motion and dismiss the appeal.

16. We have been addressed upon costs. We order that China Profit, the appellants, and P3 and P4 jointly and severally to pay the costs of and incidental to the appeal, including all orders reserving costs, save where any contrary order has been made.

17. Subsequent to taxation, the sum lodged in Court as security by China profit is to be paid out of Court and to be set off against the costs order that has been made.

18. Finally the Official Receiver is to have his costs.