WELL TECH ENGINEERING & CONSTRUCTION CO LTD v. U-TECH ENGINEERING CO LTD

HCMP 959/2026

[2026] HKCFI 3710

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 959 OF 2026

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BETWEEN

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REASONS FOR JUDGMENT

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1.  At the hearing on 25 June 2026, I dismissed the Plaintiff’s originating summons filed on 15 June 2026 with costs to the Defendant, summarily assessed at $170,000. I now give my reasons.

2.  The Plaintiff commenced these proceedings on 15 June 2026 by way of originating summons to restrain the Defendant from presenting a winding-up petition against it based on the debt in the statutory demand served on 26 May 2026. Under s.178(1)(a)(ii) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) (“Cap 32”), the Plaintiff had 3 weeks to respond to the statutory demand, failing which it shall be deemed to be unable to pay its debts. That expired on 16 June 2026.

3.  The originating summons, issued in Form 10 (expedited form), was filed the day before the 3-week period expired. It was listed before me on 25 June 2026 with 30 minutes reserved.

4.  Ms Ingrid Yip, who appeared at the hearing for the Plaintiff (with the skeleton argument prepared with Mr Chase Pun, who asked to be excused from the hearing to save costs in light of the development detailed below), contends that it was not unreasonable for the Plaintiff to issue the originating summons shortly before the expiry of the 3-week period, when it needed time to investigate the debt and it has been corresponding with the Defendant prior to commencing this action.

5.  It is of course up to the Plaintiff to decide when to commence proceedings. What is extraordinary is that the Plaintiff did not apply for an interlocutory injunction to restrain the Defendant from presenting a winding-up petition prior to the hearing of the originating summons. There is therefore nothing to stop the Defendant from doing so in the meantime, which it did on 22 June 2026. As a result, the originating summons was rendered academic.

6.  On the day before the hearing, the parties filed a consent summons to vacate the hearing and adjourn the originating summons with liberty to restore after the determination of the winding-up petition. I refused the application. I see no reason to wait for the outcome of the winding-up petition before disposing of the originating summons which, regrettably, was wrongly constituted.

7.  As this application shows, it may be useful to remind litigants how injunctions to restrain a winding up should normally be issued:

(1) Unlike in the bankruptcy context where there is a statutory provision to set aside a statutory demand (s.6A of the Bankruptcy Ordinance, Cap 6), legislation has not provided an equivalent mechanism to set aside statutory demands served on companies.

(2) As such, companies which do not wish to be subject to winding-up proceedings would issue injunction applications to restrain the presentation of a winding-up petition when they are served with a statutory demand.

(3) Since the application is not based on any legislative provisions, the company is invoking the court’s general powers to grant injunctive relief. Any such proceedings commenced must be in Form 8 in Appendix A of the Rules of the High Court, i.e. the general form originating summons, given no other form is prescribed under a written law: Order 7, rule 2(1A).

(4) Where a general form originating summons is issued, there is no immediate hearing date. Under Order 28, rule 1A(4), a defendant who has acknowledged service has 28 days to file evidence in opposition after being served with the plaintiff’s affidavit evidence. Order 28, rule 2(1) provides that the plaintiff must then apply to fix a hearing date for the originating summons, taking into the account the timetable for filing evidence under Order 28, rule 1A.

(5) In the context of an injunction to restraining a winding-up petition, that timeline is too long for the company, which only has 21 days to respond to the statutory demand. As such, the usual practice is for the company to issue a summons seeking an interlocutory injunction to restrain the presentation of the winding-up petition pending the substantive determination of the originating summons.

(6) Such an application is an urgent application which shall be made to the Companies Judge under Practice Direction 3.7, §2.1(a). It should usually be made on an inter partes basis, notwithstanding any urgency. A recipient of a statutory demand has 21 days to put its house together and to prepare an application. I do not see, in the usual case, why the intended petitioner cannot be given the minimum 2 clear days’ notice to answer the application. If the company leaves it to the last minute to take out the application, any urgency to have the matter heard is necessarily self-induced.

(7) The company will issue the originating summons and the summons for the interlocutory injunction without fixing the hearing date. The originating summons and the summons, together with the documents required to be filed under Practice Directions 3.8 and 11.1 (including full written submissions with supporting authorities), should be lodged with the Companies Judge, preferably under a cover letter to set out the brief background and explain the urgency.

(8) The court will then give directions on the further conduct of the case. Given the determination of the interlocutory injunction application will have the effect of disposing the substantive relief sought in the originating summons or at least render the originating summons unnecessary, they are often heard and disposed of together: Emperor UA Cinemas Limited v Lark China Cinema Investments Limited [2022] HKCFI 2316 at [2].

(9) The defendant (intended petitioner) can choose to contest the interlocutory injunction application, or give an undertaking not to present a winding-up petition pending the substantive determination of the interlocutory injunction application or the originating summons.

8.  A company can choose to wait until the winding-up petition is issued and contest it in the Companies Court. Usually, companies seek to restrain winding-up petitions before their presentation for a number of reasons:

(1) First, there may be concerns that such a petition would affect their commercial reputation.

(2) Second, to prevent the freezing of its banking facilities. Under s.182 of Cap 32, if a winding-up petition is allowed, any disposition of the property of the company after the commencement of the winding-up proceedings shall be void unless validated by the court. It is common for banks to freeze the bank accounts of any companies subject to winding-up petitions.

(3) Third, loan documentation by banks or other financial institutions may contain clauses to the effect that the presentation of a winding-up petition constitutes an event of default, and may either terminate the facility or accelerate the loan.

9.  In the context of seeking an interlocutory injunction to restrain the presentation of a winding-up petition, it will be for the company to identify the prejudice it would suffer if the petition should go ahead. At the same time, the court will not be oblivious to the well-known effects of the presentation of a winding-up petition set out above.

10.  For the reasons set out below, the Plaintiff’s application is wrong on almost all levels as a matter of procedure.

11.  First, the originating summons is in the wrong form. The Plaintiff should have issued the general form (Form 8), not the expedited form (Form 10). That is material, because it deprives the Defendant the opportunity to avail itself of the timetable for filing evidence under Order 28, rule 1A before the first hearing of the originating summons. The use of an incorrect form originating summons is a material irregularity, not a mere matter of formality, because when the expedited form is used, the time for the defendant to file evidence is cut down: Hong Kong Ping Jeng Lau Co v Incorporated Owners of United Centre (HCMP 2971/1989, 4 December 1989). See also Talent Hope Ltd v Magnificent Estates Ltd [1995] 3 HKC 593 (at 596H-I) where Waung J remarked that the use of the correct form of an originating summons carries significant procedural consequences, given that the hearing of an originating summons in the expedited form will take place at a “much accelerated pace”.

12.  Whilst the material irregularity may be cured under Order 2, rule 1 (Leung Yiu Ting v MTR Corp Ltd [2019] 5 HKLRD 14 at [15]), the defaulting party must not take it as a matter of course that the court will always be prepared to remedy the defect. In the present case, the Plaintiff’s legal representatives were well aware that the general form should be used by sending a draft originating summons in the general form to the Defendant on 10 June 2026 prior to commencing this action. The expedited form was eventually used to get an earlier hearing date. This is plainly abusive. The proper way for the Plaintiff to get urgent relief is to apply for an interlocutory injunction to restrain the presentation of a winding-up petition. I fail to see why the court would exercise its power under Order 2, rule 1 in the Plaintiff’s favour.

13.  Second, in view of the above procedural defect, it is wholly unfair for the Plaintiff to ask the court to grant substantive relief at the first hearing, as the Plaintiff did in the skeleton argument prepared by Mr Pun and Ms Yip. The Defendant should have been given the fair chance to prepare and file its affidavit evidence in opposition.

14.  Third, the originating summons is now moot. A winding-up petition was issued on 22 June 2026. It is futile for the court to restrain the Plaintiff from issuing or presenting a winding-up petition. Such an outcome is self-induced by the Plaintiff which did not adopt the proper procedure to safeguard its interest and obtain any interim protection. It is also not possible to grant an injunction to require the Plaintiff to withdraw the petition. Once the petition has been issued and advertised, it is no longer a matter that is just between the parties:

(1) Winding up is a collective remedy. Supporting or opposing creditors are entitled to appear at hearings of winding-up petitions. They can invite the court to wind up a company even if the petitioner and company both agree to dismiss the petition.

(2) More importantly, supporting creditors are entitled to ask for a substitution order if the petition is dismissed or otherwise not pursued: rule 33 of the Companies (Winding-up) Rules (Cap 32H). This ensures that the date of the commencement of winding-up proceedings stays the same if the petitioner is substituted. That in turn has ramifications in particular under s.182 of Cap 32.

15.  In some cases, it may be possible to restrain the advertising of a winding-up petition even after it has been presented provided that it has not been advertised. That is something envisaged in Practice Direction 3.7, §2.1(a). But there is no such application before me.

16.  Fourth, once the winding-up petition has been presented, the potential commercial impact on the Plaintiff would have taken place. The Plaintiff of course only has itself to blame. If it had followed the proper procedures set out above, it may well have prevented the presentation of the petition.

17.  In dismissing the originating summons, I make clear that I make no findings as to the Plaintiff’s underlying dispute to the debt under the statutory demand. The Plaintiff is fully entitled to argue the matter when the winding-up petition is heard. This judgment is not intended to prejudice its right to do so.

18.  Costs should follow the event. I therefore ordered the Plaintiff to pay the costs of the Defendant in this action, summarily assessed at the hearing.