Re HONEY-BEE INDUSTRIAL LTD.

IN THE SUPREME COURT OF HONG KONG

COMPANIES (WINDING UP)

No. 515 OF 1993

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REASONS FOR DECISION

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1. Since the hearing of this petition was concluded well into the time allotted for the hearing of the ordinary list of the day I made a winding-up order and at the request of Mr. Tse Kwok Hong who was the manager of the company and whom I permitted to address the Court on its behalf, I said I would give my reasons for my decision in writing which I now do.

2. The Company was incorporated in 1987 and the petition on behalf of Chin Tsui Limited, whom I shall refer to as the 1st Plaintiff, and Ospinter Limited, whom I shall refer to as the 3rd Plaintiff, was presented on the 23rd December 1993. The petition was based on the non-payment of a judgment debt of HK$573,742.65, with interest thereon at the rate of 9.5% from the 10th February 1993 to the 4th September 1993 and thereafter at judgment rate of 9.5% until payment together with costs of the action. The judgment was obtained in H.C. Action A1122 of 1993 as a result of an O.14 application. On the 13th August 1993, the Master had given conditional leave to the Defendant to defend the action brought by the 1st and 3rd Plaintiffs, conditional upon the payment into Court of HK$573,742.65 by 4 p.m. on the 3rd September 1993. Para. 1 of the Master's order provided that in default the 1st and 3rd Plaintiffs might then enter judgment against the Defendant for the amount indorsed on the writ. There was no payment into Court and on the 4th September 1993 judgment was entered against the Defendant in favour of the 1st and 3rd Plaintiffs for the sum of HK$573,742.65. I am not clear as to why the 1st Plaintiff did not enter a judgment for the sum of HK$822,921.02 as that is one, at any rate, of the sums which is indorsed upon the writ. Be that as it may there is a judgment debt for the sum entered in favour of the 1st and 3rd Plaintiffs.

3. In those proceedings, No. A1122 of 1993, the Defendant. counterclaims against the 3rd Plaintiff in respect of alleged breaches of contract by the 3rd Plaintiff in failing to accept and wrongfully repudiating contracts to supply finished textile goods. It is the Plaintiffs' case that the contracts for the supply of such goods were made with the 2nd Plaintiff whereas it is the Defendant's case that they were made with the 3rd Plaintiff.

4. As Mr. Reyes pointed out in his submission, whatever the strength of the Defendant's case against the 3rd Plaintiff, any amount due to the Defendant from the 3rd Plaintiff could not be set off against the joint debt owed to the 1st and 3rd Plaintiffs. It seems to me that the proposition is clearly set out in Halsbury's Laws Vol. 42 pare. 437 and in the case of Piercy v. Fynney (1871) LR 12 EQ 69.

5. The petition to wind up was opposed by one creditor, a Miss Jackie Fu Choi Sum who had not been paid salary from 1992 until the cessation of business of the company, she did not however appear before me and I do not regard her opposition as taking the matter any further than that of Mr. Tse Kwok Hong, who although filing a notice of opposition as a creditor, appeared to argue the case on behalf of the company.

6. In my view the Court should not in the present circumstances refuse a winding-up order. In the first place, there is a clear judgment debt owing to the 1st and 3rd Plaintiffs jointly and severally they are entitled to payment. In default of payment, the 1st Plaintiff alone, must be entitled to a winding-up order irrespective of any claim which can be made against the3rd Plaintiff alone.

7. In so far as I have a discretion not to make a winding-up order I consider I should not exercise it. I refuse to do so on the footing of the law as I have outlined it above.

8. I do not consider it necessary to exercise any discretion along the lines referred to in L.H.F. Wools Limited (1971) Ch. 27 since that relates to a discretion where there is a disputed claim against the petitioning creditor. In view of the approach which I have taken on the matter of law, I do not consider it appropriate to express my view on the matter of discretion on the basis that my view of the law may be wrong since any such exercise of discretion would be tainted.