CAO ZHUSHEN v. LAU KWONG KWAN AND OTHERS

HCCW 315/2018

[2019] HKCFI 527

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO. 315 OF 2018

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D E C I S I O N

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1.  I am afraid that given the acceptance by the Petitioner that the company is: (i) solvent; (ii) trading; and (iii) in the course of trade, would have incurred liabilities, I do not begin to see the basis or valid basis upon which this validation order application can be resisted.

2.  Having looked at the written submissions of Mr Fung, who appears for the Petitioner, and having heard him, I believe that erroneously the Petitioner is taking an adversarial stance in respect of this application.  That is plainly contrary to the law.  In my view, the draft consent order provides sufficient protection against whatever suspicion which the Petitioner is harbouring against the directors.  In any case, there is also the added provision of liberty to apply. In these circumstances, I shall make an order in terms of paragraphs 1, 2, 3, 4 and 7 of the draft consent order and I shall hear the parties on costs. 

[Submissions on costs of the application]

3.  I agree with the 1^st and 2^nd Respondents’ application to have the costs paid by the Petitioner on indemnity basis.  Firstly, as I have said earlier, I find no merit in the opposition to the application.  I think the approach taken by the Petitioner is quite misconceived.  Secondly, I do not believe that the Petitioner has acted reasonably in response to the request by the 1^st and 2^nd Respondents to have the payment of the Company’s debts validated.  Thirdly, I think it is, as this court had said previously, the duty of the court to discourage this kind of interlocutory satellite litigation.