The Grande Holdings Ltd v. Joint and Several Scheme Administrators of the Schemes of Arrangement between the Scheme Creditors and The Grande Holdings Ltd (in Liquidation in Hong Kong)

HCMP 2369/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2369 OF 2017

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D E C I S I O N

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1.By the plaintiff’s originating summons issued on 24 October 2017 (“the Originating Summons”), the plaintiff seeks an injunction to restrain the defendant from presenting any petition for the winding of the plaintiff based on a Statutory Demand dated 11 October 2017 in respect of a sum of approximately HK$5.34 million said to represent the Scheme Administration Costs of the defendant arising from a Scheme of Arrangement of the plaintiff sanctioned by the court on 15 April 2016.

2.The Originating Summons has been fixed for substantive hearing today (18 December 2017).

3.On 14 December 2017 (last Thursday), the defendant issued a further originating summons (“the Supplementary Originating Summons”) seeking the court’s substantive determination on two issues, namely, (i) the proper interpretation of the terms of an Engagement Letter signed by the plaintiff and the defendant on 11 May 2016 relating to the defendant’s engagement as the Scheme Administrators (“the interpretation issue”); and (ii) the liability of the plaintiff to pay a sum of at least HK$4.5 million to the defendant in respect of professional services rendered under the Engagement Letter (“the liability issue”).

4.Both issues arise for consideration under the Originating Summons although, as accepted by Mr Chain for the defendant, for the purpose of disposing of the Originating Summons, the court does not necessarily have to finally determine the two issues, because the relevant question for that purpose is simply whether the debt under the Statutory Demand is bona fide disputed on substantial grounds.

5.On 14 December 2017, the defendant took out a further summons (“the Summons”) seeking an order that the Supplementary Originating Summons be heard together with the Originating Summons today, with an abridgment of time for service of the Summons.

6.It is not necessary for me to decide whether paragraph 2 of the Supplementary Originating Summons relating to the liability issue should be heard today, because one of the matters to be considered in respect of that issue is whether the plaintiff has waived certain contractual requirement to be met for the defendant to be paid their fees, and Mr Chain accepts that the question of waiver entails a consideration of the plaintiff’s state of knowledge which requires evidence to be adduced but no evidence has yet been filed by the parties for the purpose of the Supplementary Originating Summons.

7.In so far as paragraph 1 of the Supplementary Originating Summons relating to the interpretation issue is concerned, I am not minded to split the Supplementary Originating Summons into two parts and dispose of paragraph 1 thereof only at this stage.  The defendant could have issued the Supplementary Originating Summons shortly after the plaintiff issued its Originating Summons, but did not do so until 14 December 2017.  No good explanation for the delay in issuing the Supplementary Originating Summons has been given.  There is also not shown any urgency for a final determination of the interpretation issue[1] at this stage.  In such circumstances, I am unable to exercise my discretion to compress the usual procedural time table and allow the Supplementary Originating Summons, or a part of it, to be heard today.

8.Accordingly, the defendant’s summons dated 14 December 2017 is dismissed.  I shall deal with the question of costs separately.

Mr Bernard Man, SC and Mr Jason Lee, instructed by Johnnie Yam, Jacky Lee & Co, for the plaintiff

Mr Christopher Chain, instructed by Joseph S C Chan & Co, for the defendant