RE SUN SANG KONG YUEN SHOES FACTORY CO LTD

HCCW 130/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 130 of 2015

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DECISION
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1.  As this court has explained in a number of recent decisions, it is incumbent upon any company on which is served a petition seeking its winding up on the grounds of insolvency, to deal with the petition seriously and with expedition.

2.  The winding up rules require evidence in opposition to be filed within 5 days of service of the affirmation or affidavit deposing to the truth of the contents of a petition.  One would also expect, as I have observed in earlier decisions, the directors of any company to appreciate that there could be little more serious for them to have to deal with than a petition seeking to wind their company up.

3.  It is wholly unsatisfactory for directors of companies to ignore statutory demands, to ignore petitions and then to turn up at the hearing of the petition before the Companies Court Judge in open court, and only at that stage seek leave to file evidence in opposition.

4.  The hearing before the Companies Judge on a Monday in open court is an opportunity for the court to determine petitions, if the circumstances allow it to do so.  Sometimes evidence in opposition has been filed and it is apparent that substantial time needs to be made available in order for the petition to be determined.  However, as should be quite clear to practitioners, one should not proceed on the basis that the Monday hearings are simply callovers.

5.  The practice of the Companies Court has become quite clear in this regard.  If no evidence at all has been filed by a company when a petition comes on for the first time before the Companies Court Judge, then in order for a company to have leave to file evidence in opposition, it must pay into court the amount of the debts relying on in the petition, or at least a substantial proportion of it.

6.  If it does not do so, the court will proceed to determine the petition on the basis that no evidence has been filed opposing it, and therefore the petition should be granted.  This is the current position. No evidence at all has been filed, and it would appear that the company and its shareholders are not in a position to make a substantial payment into court in respect of the debt relied on by the Petitioner.  I will therefore make the normal winding-up order.