RE NEW SHINE GROUP LTD (Company Number 2806482)

HCCW 321/2021

[2024] HKCFI 1104

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMI NISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO 321 OF 2021

________________________

________________________

________________________

DECISION

________________________

1.  In this Summons the Applicant seeks to challenge the treatment of the Provisional Liquidators that its debt of over HK$20 million is to be counted as a nominal debt of HK$1 for the purposes of voting.

2.  Secondly, the Applicant seeks a declaration that it was entitled to vote at the meeting of creditors held on 2^nd December 2022 and is so entitled at all future meetings of creditors.

3.  Thirdly, the Applicant challenges the resolution passed at the said meeting of creditors to nominate two persons as the Joint and Several Liquidators of the New Shine Group Ltd (in liquidation)  (“the Company”). 

4.  This morning, Mr Kwan, who appears on behalf of the Applicant pursuant to the leave given to it by Master Ho, submitted that these matters should be adjourned to allow the Applicant an opportunity to employ a new team of lawyers, in particular to instruct counsel to argue this application.  Mr Kwan, at the invitation of this Court, has made eloquent submissions concerning whether the debt owed to the Applicant is or is not a liquidated damage claim, because that is an issue which underpins the entire application.  Unless there are merits in the contention on the part of the Applicant that the debt owed to it is a liquidated debt, and hence the treatment by the Provisional Liquidators and the action taken subsequently were entirely wrong, there is no leg on which this application can stand. 

5.  I am afraid that despite Mr Kwan’s submissions I cannot agree with the Applicant.  I think it is clear where the Applicant’s claim is based upon a breach of contract, normally such a claim sounds in damages.  Indeed, from the papers which Mr Kwan has highlighted to the Court, it is apparent that the factory in which the Applicant had invested has been partially built, and therefore there is a question whether the investment has been reduced to nothing as contended by Mr Kwan. 

6.  Given the Court’s view that there is no arguable basis on which to contend that the debt in question is a liquidated debt, the basis of the Summons must fail, and it must follow that it would be wrong to grant an adjournment of these matters to further delay the liquidation process.

7.  I have to say also that I disagree with Mr Kwan that the delay of this application would not cause any prejudice to the other creditors, in particular New Winning Finance Ltd and Lamtex Holdings Ltd (both of which are in liquidation). 

8.  Delay in the liquidation process is self-evidently highly prejudicial to the other creditors because they are entitled to see to it that the liquidation of the Company is concluded swiftly, and their entitlement (if any)  to the distribution of the assets of the Company would be dealt with without undue delay. 

9.  For these reasons, I shall dismiss the application for adjournment.  It must also follow from my analysis of the basis of the Summons and the rejection of the adjournment that the Summons should be dismissed. 

10.  I shall hear the parties on costs.