SHEE YIU KWONG v. DAILYFOND INDUSTRIAL LTD

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J U D G M E N T

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Kempster, JA:

1. This is an appeal by Shee Yiu-kwong, a petitioner with reference to the affairs of Bilateral Timepieces Co Ltd, against an order made by Jones J on 6 January 1992 purporting to dismiss his petition for winding-up based on the "just and equitable" principle [s 177(1)(f) of the Companies Ordinance (Cap 32)] and to adjourn it insofar as an order for the purchase of the petitioner's shares pursuant to s 168A(2)(c) of the Ordinance is sought. The respondents, Dailyfond Industrial Ltd, are the majority shareholders in Bilateral Timepieces Co Ltd.

2. The appellant seeks an order which will allow him again to seek a winding-up order on the adjourned hearing.

3. The grounds for inviting us to take this course, which is within our powers under O59 r10(3), are that the judge erred in that, on the hearing of the petition, he concluded that the appellant had no intention of seeking a winding-up order. In fact this was only one of the reasons given by Jones J for the order which he made.

4. The judge found that there was no evidence to show that the company was insolvent on 1 August 1990, when the petition was presented, and observed that counsel representing the appellant was not asking for a winding-up order. He also remarked that due, as he found, to the default of the appellant's solicitors the expert evidence was unsatisfactory, there had been no response to the respondents' affirmation and the bundle of documents was not completed in time to allow the remaining claim under s 168A then to be pursed.

5. Since Mr Bernacchi, for the appellant, accepts the accuracy of the contemporaneous notes taken by his instructing solicitors and their purport is in dispute it falls to us to construe them.

I can only construe these passages, as did the judge, as indicating that the appellant did not wish to maintain his prayer for a winding-up order albeit not conceding that it was wrong to have sought such relief in the petition. The appellant was maintaining his claim to relief in under s 168A and agreed that the determination of that issue should await the outcome of pending civil litigation between him and the company.

6. In the premises some such order as that impugned would seem to have been inevitable. However, the terms of the order as drawn up do not, in my view, reflect the sense of the judgment or the intention of the judge as indicated by the notes. Further and with reference to costs it appears that the judge was labouring under the erroneous impression that a petition founded on the "just and equitable" principle requires proof of insolvency; a view which coloured his approach throughout and allows us to substitute our own discretion. It being accepted that the affirmations were read I would so amend the order as to provide:

"Upon reading the affirmations of the petitioner and of Chan Chi-cheuk and upon hearing counsel for the petitioner and for the respondents it is ordered that:

(1) The petitioner have leave to amend his petition by deleting the prayer for the winding-up of Bilateral Timepieces Co Ltd. Costs of and occasioned by the amendment to be the respondents' in any event. Amended petition to be filed within 7 days from 12 June 1991.

(2) The hearing of the petition be adjourned to a date after the final determination of High Court Action No A4370 of 1990 and to be fixed in consultation with counsel. Costs thrown away to be the respondents' in any event."

7. To that extent I would allow this appeal.

Fuad, V-P:

8. I would allow the appeal to the extent indicated by my Lord. I agree with the reasons he has given and with the form of the order he proposes.

Liu, J:

9. I would allow the appeal for the reasons given by my Lord Kempster JA. I, too, agree to the proposed order that he has outlined.