RE HUAQING ORIENTAL MINING (HOLDINGS) LTD (IN LIQUIDATION)

HCCW 930/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 930 OF 2002

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J U D G M E N T

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1. I have before me a Notice of Motion issued on 9 June 2003 by Mr Chau Yin Wah, a contributory of Huaqing Oriental Mining (Holdings) Limited ("the Company"), seeking to rescind the winding-up order made in respect of the Company on 11 November 2002. The motion was stated to be made under the inherent jurisdiction of the court. This court has no inherent jurisdiction to rescind a winding-up order once this has been sealed and perfected. The winding-up order herein was sealed and perfected on 16 November 2002. In the supporting affirmation of the applicant, mention was made of an application for rescission or stay of the winding-up order. I am informed by counsel, Mr Kam Cheung, who appeared for the applicant, that he would seek a permanent stay of the winding-up order.

2. The court's power to grant a stay of proceedings in relation to the winding-up is under section 209(1) of the Companies Ordinance, Cap. 32. Under that provision, proceedings in relation to winding up may be stayed altogether or for a limited time on such terms and conditions as the court thinks fit. Where proceedings are stayed altogether, the liquidation for all practical purposes is at an end and the liquidator may be discharged. The burden is on the applicant to establish a sufficient case for a stay to be granted.

3. The factors that the court will take into consideration include the following:

(1) whether the debts and expenses of the liquidation are paid;

(2) whether the debts of the company are paid or satisfactorily provided for;

(3) whether the affairs of the company would require investigation in a winding up.

4. The petition presented against the Company was based on a judgment debt being a consent order made in High Court Action No. 1692 of 2002 on 28 June 2002. Judgment was entered against the Company in favour of the petitioner, Wonip Industries Ltd, in the sum of HK$150,578.10.

5. According to the Statement of Affairs filed on 21 February 2003, the assets of the Company amounted to HK$19,608.03 and liabilities amounted to HK$1,608,633.31. The largest creditor is the applicant himself. The debt owed to him by the Company is HK$1,415,934.30. The applicant has executed a Deed of Waiver dated 17 April 2003 waiving all the outstanding debts owed to him by the Company.

6. As for the other creditors, they have either been paid in full or have accepted payment of a lesser sum in full and final settlement of their debts pursuant to agreements reached with the applicant.

7. There is only one creditor, Mr Fong Wan Tak, who has not been paid. The reason why he has not been paid is because the applicant has not been able to contact him. The debt owed to Mr Fong according to the Statement of Affairs is HK$6,732.39. The applicant is willing to provide an undertaking to pay Mr Fong's debt if and when he could be reached.

8. The Provisional Liquidators have no objection to a permanent stay of the winding-up proceedings. The applicant has paid to the Provisional Liquidators HK$150,000.00 as costs on account at the request of the Provisional Liquidators and I have the confirmation of the latter that this amount should be sufficient to discharge all their relevant fees and expenses.

9. In addition, the applicant has put the Provisional Liquidators in funds in the sum of HK$8,773.97 for the purpose of settling the Official Receiver's fee, disbursement, ad valorem fee and court fee.

10. The Provisional Liquidators have to date realised cash at bank in the sum of HK$4,495.47. A notice to creditors to prove has been gazetted on 2 May 2003 requesting creditors to file a proof of debt. Only one proof of debt of HK$550.00 has been received from the Inland Revenue Department and this has been settled by the applicant.

11. It does not appear from the reports of the Provisional Liquidators that there are any irregular matters or transactions which would require investigation.

12. I am satisfied that it would be appropriate in these circumstances to grant a permanent stay of the winding-up proceedings. I do so on the undertaking of the applicant to pay in full the debt of Mr Fong Wan Tak in the sum of HK$6,732.39 in the event that Mr Fong should make a demand for payment of his debt.

13. The applicant is to pay the costs of this application incurred by the Provisional Liquidators. A copy of this order is to be delivered forthwith by the Company to the Registrar of Companies pursuant to section 209(3).