Re Gw Electronics Co Ltd

HCCW 81/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO. 81 OF 2016

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D E C I S I O N

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Leave to appeal

1.This leave application concerns the dismissal of the Company’s application to strike out the Petition on the ground that there was a bona fide dispute on substantial grounds over the debt (Debt) on which the Petition was based: see Decision dated 30 December 2016 (Decision).  With respect, I am unable to find any merit in the grounds contained in the draft revised notice of appeal.  Apart from taking a fresh point (ground 1(3)) which was not ventilated at the hearing on 9 December 2016, the vast majority of the arguments advanced by the Company in support of the grounds are repetitions of those made at the said hearing. 

2.However, there is force in the Company’s submission that there is “some other reason” in the interest of justice why the appeal in question should be heard: see s.14AA(4)(b) of the High Court Ordinance, Cap 4.

3.To briefly explain, an order to wind up the Company was made on 9 January 2017 (Order).  It can be seen from the decision of Mr Justice Harris that the Order was premised upon the Decision because once the strike out was declined, a winding up order normally follows.  On 2 February 2017, the Company filed an appeal against the Order. 

4.An appeal against the Order is one as of right. I agree with the Company that an appeal against the Order will necessarily consider the merits of the underlying Decision, although it should be said that the existing Notice of Appeal has not properly set out the challenge to the merits of the Decision.  I am told that an amendment will be made in that regard.

5.On behalf of the Petitioner, Mr Bleach SC (appearing with Mr Chan) submitted that this “some other reason” argument is one for the Court of Appeal, and it is ultimately an issue of case management over the 2 appeals in question.

6.Whilst I can see some merits in Mr Bleach’s submission, it appears inevitable that the Court of Appeal will have to examination the merits of the challenge to the Decision.  Further, this court is seized of the argument and it cannot simply defer the matter to the Court of Appeal.

7.I am satisfied that leave to appeal against the Decision should be granted pursuant to s14AA (4)(b), and I do so. 

Stay of execution

8.One of the Company’s creditors has taken out an application to stay the winding up of the Company until the determination of the Company’s appeal against the Order. 

9.Given the decision of this court to accede to the leave application, the Petitioner is not opposing the stay because a substantial part of its debt has been secured in the custody of the Official Receiver acting as the Provisional Liquidator (PL) of the Company.  

10.There is before the court a draft rider (Rider) to be added to any stay order to provide for the receipt of further sums of money, which are anticipated, by the PL.  Given the Rider, the PL no longer maintains any opposition to the stay application.

11.In the premises, I grant the application subject to the Rider and upon the undertaking by Company to prosecute both its appeals with due diligence.

12.I shall hear the parties on costs.

Mr John Bleach SC and Mr Samuel Chan, instructed by Fred Kan & Co, for the Petitioner

Mr Russell Coleman SC and Ms Andrea Yu, instructed by Fung, Wong, Ng & Lam LLP Solicitors, for the Company and Lo Chi Tak Lewis, a Creditor of the Company

Mr Wilson Lee of the Official Receiver’s Office, for Official Receiver