RE CMT SOURCING GROUP LTD (IN CREDITORS’ VOLUNTARY LIQUIDATION)

HCMP 938/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 938 OF 2016

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D E C I S I O N

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1.  I have before me an originating summons seeking orders that:

(i)   that subject to the availability of funds HK$330,000 may be drawn from the Company’s estate in partial settlement of the Liquidators’ fees and disbursements at the amount of HK$2,006,986 and HK$19,544.50 respectively, for the period from 16 January 2014 to 31 December 2015;

(ii)   that pursuant to section 255A of Companies (Winding Up and Miscellaneous Provisions) Ordinance, an audit of the Liquidators’ receipts and payments accounts shall not be required;

(iii)   that pursuant to section 283 of Companies (Winding Up and Miscellaneous Provisions) Ordinance, the books and records of the Company and those of the Liquidators shall be retained for one month commencing from the date of the dissolution of the Company and that thereafter they may be disposed of in such manner as the Liquidators think fit; and

(iv)   that the costs of this application be paid out of the estate of the Company.

2.  The Company is in voluntary liquidation.  The Liquidators, as can be been from paragraph 1 of the orders that they seek, have incurred considerably more in fees and disbursements than the amount that has been recovered and after payment of the 1^st tranche of their fees remains available for distribution.  Probably because there is nothing available for creditors or contributories, the Committee of Inspection has failed to respond to the Liquidators’ attempts to get it to agree the payment of their outstanding fees and the other two matters in respect of which orders are sought in the originating summons.  As a consequence, an application has been made to the court pursuant to section 255 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap 32, which applies to companies in voluntary liquidation for the court to make an order addressing these outstanding issues. 

3.  It seems to me quite clear that section 255 can be utilised in a situation where it is impossible for a liquidator to deal with outstanding issues necessary to bring a liquidation to a close because of the inactivity of the Committee of Inspection.  I am satisfied that it is appropriate to make the order for costs that the Liquidators seek as there is no sensible reason for thinking that they are not entitled to be paid at least the amount that is available for distribution by way of a contribution towards their fees and costs, most of which will remain unpaid.  I will also order that an audit of the Liquidators’ receipts and other accounts are dispensed with.  So far as the retention of books and records are concerned I agree that it is appropriate to limit the period which they need to be retained for.  I will order that they be retained for 6 months and after that they can be disposed of.