Re CHIEF DRAGON LTD.

HCCW345/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP NO.345 OF 1999

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J U D G M E N T

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1. This is a winding-up petition presented by Chartkar Fong Yuen Limited ("the Petitioner") for the winding-up of Chief Dragon Limited ("the Company"). The petition is based on a judgment debt. The judgment was a default judgment dated 1 March 1999 in respect of the sums of $223,935.68 and $559,937.09. The statutory demand was served in respect of the amounts payable under this judgment as no payment had been received.

2. The petition first came on for hearing on 8 June 1999. Although the Company had instructed solicitors to represent it to oppose the petition, counsel had not been instructed. The petition was adjourned in order to give the Company the opportunity of instructing counsel and putting forward any defence that it had.

3. On 9 June 1999, the Company took out a summons to set aside the judgment. It was adjourned by the master to the court for determination. At the hearing, counsel for the Company sought to set aside the judgment in so far as it related to the second amount, namely the sum of $559,937.09. Counsel for the Company conceded that he is not in a position to challenge the judgment in so far as it related to the first amount, but his position was that if he were to succeed in setting aside the second amount, the statutory demand would be bad as it related to both sums of money. He had no instructions to say whether or not the Company would, in any event, be in a position to meet the first amount.

4. Be that as it may, and I pause here to observe that the attitude of the Company appears to be totally lacking in merit, I proceeded to hear the Company's submissions relating to the validity of the second amount awarded in the judgment. Leave was sought and granted to amend the summons issued on 9 June. As amended it seeks to set aside the judgment on the ground that it was an irregular judgment in that the Plaintiff was not entitled to enter judgment for that amount. The basis for that submission is as follows.

5. In paragraph 17 of the Amended Statement of Claim, the Petitioner, being the Plaintiff in the High Court action, asserted a contractual claim. It claimed to have delivered a certain quantity of goods on the basis that the Defendant Company would issue a post-dated cheque to the Plaintiff in the sum of $559,937.09 for the price of the goods. Notwithstanding repeated requests, it alleged that the Defendant had failed to make payment. Accordingly, the Plaintiff claimed that sum as damages under paragraph 17 of the Amended Statement of Claim.

6. An alternative claim was put forward in paragraph 18 of the Amended Statement of Claim asserting a claim for damages for conversion. The argument that is being put forward is that the two claims are mutually exclusive and that it is no longer open to the Plaintiff, after asserting a claim for damages for conversion, to proceed with the contractual claim. No authority was cited to the court to support the proposition that you cannot maintain a claim for breach of contract and an alternative claim in respect of the goods for damages for conversion.

7. I have the distinct impression from the way matters have progressed that there is no real, substantial or bona fide defence to the debt. I do not accept that the judgment is irregular. There being no defence, the debt not being one in respect of which there is any bona fide dispute, there is no answer to the Petitioner's claim. Accordingly, I make the usual winding-up order and I also order that the costs of the Petitioner be a liquidation expense.