RE GW ELECTRONICS CO LTD

HCCW 81/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 81 OF 2016

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D E C I S I O N

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1.  On 9 December 2016 Anthony Chan J heard the Company’s application to strike-out the Re-amended Petition presented by Toshiba Electronics Asia Limited, the Judge handed down his decision dismissing the application on 30 December 2016. Today I heard the Petition.

2.  The strike-out application required consideration of the issue which determines the success or failure of petitions of this sort presented to the court, namely, a petition for a winding-up order on the grounds of insolvency.  That test which is well established and explained more fully in Anthony Chan J’s judgment is whether or not the Company has demonstrated a bona fide defence on substantial grounds.

3.  Before me today Mr Yip on behalf of the Company sought two things: (1) that the petition should be adjourned in order for the Company to have adequate time to consider whether or not to appeal Anthony Chan J’s decision; alternatively (2) adjournment of the petition and leave to file further evidence in order to contest it.

4.  The practice of the Companies Court in circumstances of this sort is quite clear.  A strike-out application effectively determines the substantive issue in the petition.  If the strike-out issue is unsuccessful, a company will normally automatically be wound up, unless the parties agree or the Court is persuaded that the petition should be adjourned in order to allow the company the opportunity to settle the petitioner’s, and possibly other creditors’, claim.  If the petition is not going to be adjourned for reasons of this sort, the company is wound up, and it is not the practice of the Companies Court to grant a stay pending an appeal of either a decision to dismiss a strike-out application, or if the matter is determined at the trial of the petition, to challenge the Companies Court’s judgment.

5.  What, in effect, the Company is seeking is the opportunity to file further evidence which would demonstrate that Anthony Chan J’s decision was wrong.  This I am not prepared to do and would clearly be wrong in principle. 

6.  As a final fall-back position, Mr Yip sought an adjournment of one week in order to give his clients the opportunity to consider whether they should pay so much of the debt as is possible.  The Petitioner is not prepared to agree to an adjournment in order to allow the Company the opportunity to try and settle a claim which has been outstanding for some considerable period of time, I will therefore make the normal winding-up order.