Re Progetto Jewellery Co Ltd

HCCW 247/2020

[2022] HKCFI 364

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 247 OF 2020

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REASONS FOR JUDGMENT

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1.This is an application to rescind the winding up order made against Progetto Jewellery Company Limited (“Company”) on 11 August 2021 (“WU Order”). The application was brought by Ms Fung Pui Wa (“Applicant”), who is the sole director and a shareholder of the Company, and was opposed by the petitioner, Ms Lau Chiu Ying (“Petitioner”), who is also a shareholder of the Company. After considering the parties’ submissions and evidence, I rescinded the WU Order. These are the reasons for my judgment.

Background

2.The Company was incorporated under the former Companies Ordinance (Cap. 32) on 29 July 2009 and carried on jewellery business. Its registered office was (and still is) at Room 1, Unit A2, 6/F, Kaiser Estate, Phase 1, 41 Man Yue Street, Hung Hom (“Address”).

3.The Company has 3 shareholders namely, the Petitioner, the Applicant and Mr Chan Kwong You, Jimmy (“Jimmy”) and each of them holds 50 shares.

4.Until 7 July 2014 when she resigned from the position, the Petitioner was a director of the Company.

5.On 16 December 2014, the Company commenced HCA 2548/2014 against the Petitioner and Joy Design Company Ltd (“Joy Design”), a company in which the Petitioner was a shareholder. In the action, the Company claimed damages and account of monies received by the Petitioner on the grounds that she had acted in breach of her duties owed to the Company.

6.The trial of HCA 2548/2014 was heard before DHCJ MK Liu in November 2019 and concluded on 10 January 2020. By judgment dated 22 January 2020, the learned Judge ordered (1) the Petitioner to pay damages in excess of HK$5 million to the Company; (2) the Petitioner and Joy Design to account for HK$8,155,733.98 to the Company; and (3) the Petitioner and Joy Design to pay 98% of the costs of the action to the Company, to be taxed if not agreed (“Judgment”).

7.There is no dispute that the amount payable by the Petitioner under the Judgment is HK$13,426,626.67 and EUR8,892.7 and the interest accrued up to the date of the Judgment is HK$4,837,167.98 and EUR 3,230.85 (together “Judgment Debt”). The Petitioner did not pay the Judgment Debt or any part thereof to the Company.

8.On 12 June 2020, DHCJ MK Liu dismissed the Petitioner’s application for leave to appeal against the Judgment out of time.

9.By a statutory demand dated 11 July 2020 (“SD”), the Petitioner demanded the Company to pay HK$300,000, being the amount due and payable under the loan advanced by the Petitioner on 17 July 2009 (“Debt”). In the SD, there was no reference to the fact that the Petitioner was liable to pay the Judgment Debt to the Company.

10.The Applicant claims that the SD has never been served on the Company at the Address. This is disputed by the Petitioner.

11.On 13 July 2020, Messrs. Deacons, the solicitors acting for the Company in HCA 2584/2014, provided a copy of the SD to the Applicant. The Applicant decided to adopt a “wait-and-see approach” in relation to any potential winding up petition having regard to the fact that (1) the Company had already incurred significant costs in obtaining the Judgment and dealing with the subsequent applications made by the Petitioner for leave to appeal against the Judgment; and (2) the Judgment Debt well exceeded the Debt, such that the Company has a strong case to oppose any winding up petition which might be presented by the Petitioner.

12.On 4 August 2020, the Petitioner presented the Petition based on the failure on the part of the Company to comply with the SD (“Petition”).

13.The Petitioner claims that the Petition was served on the Company on 28 August 2020 by leaving it at the gap underneath the main door at the Address. This is disputed by the Applicant who says that the Company has never been served with the Petition.

14.By a summons issued on 12 April 2021, the Petitioner applied for leave to amend the Petition. The Petitioner claims that the summons was sent by ordinary mail to the Address on the same day.

15.On 28 April 2021, leave was granted by a Master to amend the Petition. The amended petition was filed on 27 May 2021 (“Amended Petition”).

16.There is no dispute that the Amended Petition was not served on the Company by leaving the same at the Address. The Petitioner says that she was aware of the requirement to serve the Amended Petition, but did not do so in view of the Master’s order made on 14 May 2021 requiring her to serve the Amended Petition by post to all the shareholders and directors of the Company. However, the “order” relied on by the Petitioner was in fact one of the requisitions raised by the Master on the Amended Petition. Those requisitions required inter alia the Petitioner (1) to file an affidavit of service verifying service of the Amended Petition on the Company (as well as the Official Receiver and the Bailiff), and (2) to serve the Amended Petition on all directors and shareholders of the Company by pre-paid ordinary post to their last known addresses stated in the latest Annual Return.

17.Despite the requirements imposed by the Master, the Petitioner did not serve the Amended Petition on the director and shareholders of the Company. On 16 July 2021, another Master granted “retrospective leave” to the Petitioner to serve the Amended Petition on all the shareholders and director of the Company. There is no evidence to show that the Petitioner in fact served the Amended Petition on the Applicant or Jimmy. This notwithstanding, the Petitioner relies on the Registrar Certificate issued on 5 August 2021 and submits that the Master must have been satisfied with service of the Amended Petition.

18.At the hearing of the Amended Petition on 11 August 2021, the Company did not appear whereupon the Master made the WU Order.

19.By letter dated 11 August 2021 to the Applicant (sent to her last known address), the provisional liquidators of the Company (as appointed by the Official Receiver) (“PLs”) referred to the WU Order and required her to hand over the books and records of the Company.

20.On 16 August 2021, Messrs Deacons on behalf of the Company wrote to the Master to point out the fact that the Company had never been served with the SD, the Petition or the Amended Petition and the Petitioner still owed the Judgment Debt to the Company and, as such, the WU Order had been improperly obtained. The Court was requested not to seal and perfect the WU Order.

21.By summons dated 17 August 2021, the Applicant applied for an order to rescind the WU Order (“Rescission Summons”). At the hearing on 1 September 2021, Harris J adjourned the Rescission Summons for substantive arguments and directed the WU Order not to be sealed and perfected pending determination of the same.

22.On 3 November 2021, the Company issued a statutory demand against the Petitioner for HK$18,919,644.82 and EUR 13,390.34, being the Judgment Debt and various costs adjudged to be payable by the Petitioner to the Company together with interest thereon less the estimated value of the charging order absolute (being HK$1,500,000).

(1)  In response, the Petitioner on 22 November 2021 applied for an order to set aside the statutory demand in HCSD 59/2021 on the grounds that (a) the Company is a secured creditor in that it holds a charging order absolute over her shares in the Company; (b) she has a substantial cross-claim against the Company for unliquidated damages which exceeds the Judgment Debt; and (c) the Company has already been wound up by the Court.

(2)  At the hearing on 22 December 2021, this Court dismissed the application on the basis that the Petitioner had failed to demonstrate that there is a bona fide dispute on substantial ground in respect of the Judgment Debt or that she has a bona fide cross-claim against the Company.

(3)  At the same hearing, this Court observed that the Company was entitled to set-off the Debt against the Judgment Debt, such that the Petitioner was not a creditor of the Company and did not have locus to present the Petition against the Company. The Petitioner was urged to re-consider whether she has any valid ground to oppose the Rescission Summons and, if not, she should inform the Company in good time so as to obviate the need for the Company to incur further costs in preparing for a substantive hearing in respect of the rescission of the WU Order.

Discussion

23.The basis on which the Applicant seeks rescission is twofold: first, the Company was not liable to pay the Debt as the same was set-off by Judgment Debt; second, neither the Petition nor the Amended Petition was served on the Company. The Company was not aware of the winding up proceedings and therefore did not take step to oppose the Petition or the Amended Petition.

24.The Petitioner objects the application primarily on the basis that she has effected service of the Petition and Amended Petition on the Company and, in any event, the other shareholders of the Company could and should have been aware of the winding up proceedings. The Petitioner accepts that she owes the Judgment Debt to the Company but contends that there was no obligation on her part to set-off the Debt against the Judgment Debt, as this was a matter for the Company to raise as a ground in opposition to the Amended Petition.

Applicable principles

25.The Court has inherent jurisdiction to rescind a winding up order before it is sealed and perfected: Re Asean Interests Ltd, HCCW 1233/2000, 1 June 2001, §§9-12, per Yuen J (as she then was); Re SY Engineering Company Ltd [2000] 4 HKC 464, 467, per Chu J (as she then was); Re Highfit Development Co Ltd [2009] 5 HKLRD 134, 139-140, per Barma J (as he then was).

26.Mr Brian Fan, counsel for the Applicant, refers to the above authorities. He does not seek to rely on the modern English authorities on rescission of winding up order on the basis that those cases were decided under rule 12.59(1) of the Insolvency Rules 2016, which has no equivalent provision in Hong Kong. In my view, while the source of the Court’s power to rescind a winding up may be different, the English authorities are instructive on the Court’s approach in dealing with the application and the considerations relevant to deciding whether the winding up order should be rescinded.

27.Rule 12.59(1) of the Insolvency Rules 2016[1] provides that every court with jurisdiction for the purposes of the relevant parts of the Insolvency Act and the corresponding rules “may review, rescind or vary any order made by it in the exercise of that jurisdiction” within the stipulated time limit.

28.The principles governing an application to rescind a winding up order have been summarised in Credit Lucky Ltd v National Crime Agency [2014] EWHC 83 (Ch), §31, per Barling J and French, Applications to Wind Up Companies, 4^th ed.,§6.34 and may be stated as follows:

(1)  The power to rescind is discretionary and is to be exercised with caution;

(2)  The onus is on the applicant to satisfy the Court that it is an appropriate case to rescind the winding up order;

(3)  It will be an appropriate case where the circumstances are exceptional, and the circumstances relied on must involve a material difference from those before the Court that made the original order;

(4)  There is no limit to the factors that the Court can take into account, and may include changes since the making of the original order and significant facts which, although in existence at the time of the original order, were not brought to the Court’s attention at that time. Where the new circumstances relied on consist of or include new evidence which could have been made available at the original hearing, any explanation the applicant gives for the failure to produce it then or the lack of such explanation, are factors to be taken into account;

(5)  Generally, where the rescission application involves dismissal of the winding up petition, so that the company is free to resume trading, the Court will wish to be satisfied that:

(a)  the petition debt and the sums owed to all supporting creditors have been paid or will be paid, and the costs of the Official Receiver or any liquidator can be paid, and the company is solvent at least on the basis that it can pay its debts as they fall due;

(b)  the application has not been presented in a misleading way and the Court is in possession of all the material facts and has not been left in doubt; and

(c)  the trading operations of the company have been fair and above board, and there is nothing that requires investigation of the affairs of the company.

29.In Re Dollar Land (Feltham) Ltd [1995] BCC 740, Blackburne J held (at 748) that where the purpose of the rescission application is to secure the dismissal of the winding up petition, so that the company is free to resume trading, the 3 requirements (described in §28(5) above) will ordinarily and invariably have to be satisfied. However, the jurisdiction to rescind is not so confined where the purpose of the application is to see whether proposal for voluntary arrangements can be implemented.

30.The above approach is in line with the position before the Insolvency Rules 1986 came into place, as reflected in Practice Note (Winding Up Order: Rescission) [1971] 1 WLR 4 dated 30 November 1970 which stated as follows:

“The making of the [winding up] order however, affects all creditors of the company and gives the Official Receiver authority to act forthwith, and in the circumstances the inherent power of the court to revoke or vary an order at any time before it is perfected is one that ought to be exercised with great caution.”

31.The approach taken by the Hong Kong courts is very similar to that of the English court and may be summarised as follows:

(1)  The central issue is whether the party seeking rescission has shown clearly sufficient grounds (Re Asean Interests, §12).

(2)  New evidence not before the Court on the making of the winding up order is a relevant factor (Re SY Engineering Company Ltd, 467B).

(3)  The applicant needs to satisfy 3 conditions (Re SY Engineering Company Ltd, at 467C-D; Re Highfit Development Co Ltd at 140) namely:

(a)  The petitioning debt and the debts owed to other supporting creditors have been paid in full or provided for;

(b)  The Court is satisfied as to the solvency of the company; and

(c)  The Official Receiver does not consider that the affairs of the company require investigation and her costs are paid.

32.Mr Fan submits that it is unclear on the authorities whether the 3 conditions must be satisfied before the Court would rescind a winding up order which was obtained on an improper basis, as in the present case.

33.I note that the applications in Re Asean Interests, Re SY Engineering and Re Highfit Development were dealt with on the basis that the 3 conditions were prerequisites for rescission of a winding up order. This accords with the conventional approach of the Court in dealing with an application for a permanent stay of the winding up proceedings under s.209 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) (“Ordinance”) where the winding up order in question was obtained by the petitioner regularly. Consistent with this:

(1)  The 3 conditions were expressed as prerequisites where the petition debt is not disputed (Re SY Engineering Co Ltd, 467C-D, citing Boyle & Marshall, Practice and Procedure of the Companies Court, 1997 ed., §9.151).

(2)  In Re Highfit Development at §15, there was no suggestion that the winding up order had been made on some mistaken or erroneous basis.

34.On the other hand, where it is clear from the materials before the Court that the winding up order was “misconceived”, for instance because it was obtained on an irregular basis, such as where the service of the petition was defective or that the petitioner was not a creditor of the company, the Court may rescind the order without requiring the applicant to satisfy the 3 conditions (Boyle & Marshall, Practice and Procedure of the Companies Court, 1997 ed., §9.151).

35.In my view, the Court would in general decline to rescind a winding up order obtained by the petitioner where there was no irregularity or impropriety involved in the process. This includes the situation where the company, having been served with the petition, took no step to contest the petition or to file evidence in opposition to the petition. It is only where it can be demonstrated by the applicant that the winding up order was obtained by the petitioner in an irregular or improper manner that the Court would be prepared to consider rescission. The reason for this is obvious. If the company had valid grounds to oppose the petition but did not put forward such grounds or failed to file evidence as required by the rule at the time the Court heard the petition, the Court was entitled to treat the petition as unopposed and ordered the company to be wound up. The remedy lies in s.209 of the Ordinance which allows the persons stipulated therein to apply for a permanent stay of the winding up proceedings.

36.I turn to the 2 main grounds relied on by the Applicant.

Whether the Petitioner was a creditor

37.Mr Fan’s submissions may be summarised as follows:

(1)  The Judgment Debt is 60 times the Debt, which means the Company has a genuine and serious cross-claim or a right to set-off the Debt against the Petitioner. Hence, the Petitioner had no locus to present the petition as a creditor of the Company (Re Phoenix Telecommunication Limited, HCMP 514/2002, 2 September 2002, §§37-40, per Yuen J (as she then was)).

(2)  The Petitioner had not drawn the Master’s attention to the existence of the Judgment Debt. If she had done so, the WU Order would not have been made, thus the WU Order was made on an erroneous basis. The position is analogous to an unopposed trial, where the plaintiff had an obligation to present his case fairly (Moulin Global Eyecare Holdings Ltd v Lee Sin Mei Olivia [2019] 3 HKLRD 833, 838, per Ng J), including by bringing to the Court’s attention points that might be to the benefit of the Company (CMOC Sales & Marketing Ltd v Persons Unknown [2008] EWHC 2230 (Comm), §14, per HHJ Waksman QC).

38.The Petitioner does not dispute that she owes the Judgment Debt but contends that she had no duty to disclose this to the Court as it was a matter for the Company to raise which it never did. The Petitioner submits that in any event, the value of her one-third interest in the Company exceeds the Judgment Debt, and she remained a creditor of the Company in respect of the Debt regardless of set-off.

39.In my judgment, the Petitioner was not a creditor of the Company at the time the SD was issued and up to the date of the WU Order.

40.It is well established that where a petitioner asserts that the company is insolvent, secured creditors stand apart from the collective process of liquidation and do not have any real interest in the company’s assets except those on which they have security. It is only the unsecured creditors who have any real interest in the company. This is because a secured creditor has the right to realise the security provided by the company for the purpose of repaying the debt owed to it[2] (Fletcher, The Law of Insolvency, 5^th ed., §24-018; Company Law in Hong Kong: Insolvency, 2021 ed., §7.035). The same principle must apply to a creditor who owes a debt to the company which remains unpaid, as he is entitled to rely on his right of set-off in withholding payment up to the amount of the debt he owed to the company.

41.As the Petitioner was aware, at the time she issued the SD and presented the Petition, the Judgment Debt had not been paid. The Company was entitled to set-off the Judgment Debt against the Debt as of right, given that both debts are mutual, liquidated, due and payable (Goode and Gullifer on Legal Problems of Credit and Security, 6^th ed., §§7.04; Stein v Blake [1996] AC 243, 251, per Lord Hoffmann). While I note that legal set-off takes effect only on the judgment given on both claims, the right to set-off has no doubt arisen (Glencore Grain Ltd v Agros Trading Co [1999] 2 Lloyd’s Rep 410, Clarke LJ, §17). For this reason alone, the SD was defective, and the Petitioner was not entitled to rely on the SD to prove that the Company was insolvent and to seek a winding up order on that basis.

42.The standard form of statutory demand (as prescribed in Form 1A of the Companies (Winding-up) Rules (Cap 32H)) specifically provided that a company can satisfy a statutory demand by paying, securing or compounding for the debt in question. Even if the Petitioner had any basis to ignore the Company’s right of set-off (none has been identified), prior to issuing the SD, the Petitioner had in effect obtained full payment or the benefit of a full security in respect of the Debt by withholding payment of the Judgment Debt to the Company.

43.There are 2 further reasons why the Petitioner was not a creditor of the Company at the time the Petition was presented[3]:

(1)  A valid set-off extinguishes the petitioning creditor’s debt with the result that the petitioner has no standing as a creditor (Butterworths, Company Law (Winding Up and Miscellaneous Provisions) Handbook, 4^th ed., §178.07).

(2)  After the Company is wound up, s.264 of the Ordinance applies[4] which, in turn, incorporates the bankruptcy provisions governing the rights of secured and unsecured creditors. One such provision is s.35 of the Bankruptcy Ordinance (Cap. 6) which provides a statutory right of set-off between the bankrupt/company and the creditors in this way:

“Where there have been mutual credits, mutual debts or other mutual dealings between a bankrupt against whom a bankruptcy order is made under this Ordinance and any other person proving or claiming to prove a debt under the bankruptcy order, an account shall be taken of what is due from the one party to the other in respect of such mutual dealings and the sum due from the one party shall be set off against any sum due from the other party and the balance of the account, and no more, shall be claimed or paid on either side respectively; but a person shall not be entitled under this section to claim the benefit of any set-off against the property of a bankrupt in any case where he had, at the time of giving credit to the bankrupt, notice that the petition had been presented.”

(3)  For statutory set-off under s.35 of the Bankruptcy Ordinance in the winding up of an insolvent company, the relevant date is the date of the commencement of winding up (Re First Bangkok City Finance Ltd (in liquidation) [1993] 2 HKLR 408; Young Hong Yui William v Bank of Credit and Commerce Hong Kong Ltd (in liquidation) [1994] 2 HKC 89).

(4)  Pursuant to s.35 of the Bankruptcy Ordinance, the Debt must be set-off against the Judgment Debt on the date of the Petition, and the Petitioner would not have any interest in the winding up of the Company.

44.Further, for the same reasons discussed in §§39-43 above, I consider that the following statements in the Amended Petition (as verified by the Petitioner on oath) to be incorrect:

“6. 呈請人曾要求公司償付欠呈請人的債項，但公司既未有且忽略償付該筆債項或其任何部分。

7. …但公司沒有在此法定要求償債書送達公司後的3個星期內，償付法定要求償債書所列的債項。

8. 公司無償債能力，亦無能力償付其債項。

9. 在此情況下，公司清盤乃屬公平公正。” (underlined added)

45.For the above reasons, I consider that the Petitioner was not a creditor of the Company, the SD was defective and the material statements contained in the Amended Petition were incorrect. On either one of these grounds the WU Order was obtained by the Petitioner on an irregular or erroneous basis and should be rescinded.

Whether there was proper service of the Amended Petition

46.The issue as to whether the Petition and Amended Petition have been served on the Company is hotly disputed.

47.The Petitioner’s case is that she has personally served the Petition at the Address by slipping an addressed envelope containing the Petition under the gap of the main entrance to a group of sub-partitioned units, one of which was occupied by the Company. As for the Amended Petition, the Petitioner asserts that she sent it by ordinary post to the Address and to the Applicant and Jimmy at their addresses stated in the Annual Return filed at the Companies Registry. The Petitioner submits that her modes of service of the Amended Petition were pursuant to and approved by the Master, as reflected by the issuance of the Registrar’s Certificate prior to the making of the WU Order and the grant of “retrospective leave” to serve the Amended Petition on the directors and shareholders of the Company by the Master on 16 July 2021.

48.Mr Fan in his skeleton made much criticism on the Petitioner’s acts of service and contends that it is incredulous that the Petitioner has served the Petition on the Company in the manner alleged.

49.The starting point is that unless dispensed with by the Court, it is a mandatory requirement that a winding up petition (and any amended petition) must be served by leaving the same at the registered office of the company. Rule 25 of the Companies (Winding-up) Rules provides:

“Every petition shall, unless presented by the company, be served upon the company at the registered office, if any, of the company, and if there is no registered office, then at the principal or last known principal place of business of the company, if any such can be found, by leaving a copy with any member, officer, or servant of the company there, or in case no such member, officer, or servant can be found there, then by leaving a copy at such registered office or principal place of business, or by serving it on such member, officer, or servant of the company as the Court may direct.”

50.There is no dispute that the Amended Petition was never served upon the Company by leaving the same at its registered office. It is not open to the Petitioner to rely on posting the Amended Petition to the Applicant and Jimmy (even assuming that she has done so) as such mode of service only applies where “no such member, officer, or servant can be found” at the registered office. There is no evidence to suggest that no member or officer of the Company could be found at the Address.

51.Further, there is no proper basis to suggest that the “retrospective leave” granted by the Master somehow displaced or dispensed with the requirement under rule 25. As stated above, the grant of “retrospective leave” to serve the Amended Petition on the directors and shareholders of the Company was an additional requirement imposed by the Master. This was the general requirement where no one accepted service of the petition on behalf of the company at its registered address (Company Law in Hong Kong: Insolvency, 2021 ed., §4.034). The Master did not make any order to dispense with the requirement to serve the Amended Petition by leaving it at the registered office.

52.In any event, I am not satisfied from the evidence adduced by the parties that the Petitioner has sent the Amended Petition by post to the Company, the Applicant and Jimmy. The only evidence she produced is a receipt dated 27 May 2021 for 3 postage stamps totalling HK$6. It is inherently unlikely that all 3 letters would have failed to reach their respective recipients (there is no suggestion that any of the letters were returned to her due to non-delivery) had she sent them by post at their last known addresses, having regard to the fact that the PLs’ letter to the Applicant sent to her address stated in the Annual Return was received by the Applicant.

53.As to whether the Petition was served as alleged by the Petitioner, I do not consider it necessary to resolve the matter in light of my conclusion on the lack of proper service in respect of the Amended Petition. Likewise, the dispute as to whether the Company and the Applicant did or should have knowledge of the winding up proceedings is not something that can or should be determined in these proceedings. It must be borne in mind that a petition to wind up a company and likewise, a rescission application, is a summary proceeding. It is neither appropriate nor necessary for the Companies Court to resolve any substantial factual dispute.

54.As the Amended Petition had not been served on the Company as required by rule 25, the WU Order was not obtained by the Petitioner regularly, and should be rescinded on this additional ground.

55.Even if (contrary to my view), it is necessary for the Applicant to satisfy the 3 conditions, I consider that such conditions are satisfied:

(1)  In light of the Judgment Debt and the Company’s right to set-off the same against the Debt, the Debt has effectively been paid in full.

(2)  The Company is solvent. In the Applicant’s 2^nd Affirmation dated 30 December 2021, she confirms the Company has net assets based on, inter alia, the following: (a) a stock list showing that the Company has jewellery with an estimated market value of around HK$557,739; (b) the Judgment Debt, the taxed costs stated in the statutory demand issued against the Petitioner, as well as other untaxed costs awarded to the Company in other proceedings between the Petitioner and the Company; (c) the Applicant is the only creditor of the Company to whom the sum of HK$2.5-2.7 million is owed, and the Company has no trade creditors due to the temporary suspension of its business. On the Petitioner’s own case, the Company is solvent with substantial net assets such that her 1/3 interest in the Company exceeds the Judgment Debt.

(3)  The Official Receiver is neutral to the application. The PLs do not take any issue with the Company and are neutral to the application. While the Petitioner raises various allegations against the Applicant and Jimmy, including improper management and misappropriation of the Company’s assets, these allegations are not supported by any evidence.

Disposition and costs

56.For the above reasons, I made an order that the WU Order be rescinded and the Amended Petition be dismissed.

57.As for costs, I ordered that the costs of and occasioned by the Rescission Summons including all costs reserved, the costs of the Official Receiver and the costs and remuneration of the PLs be paid by the Petitioner. I assessed the costs payable by the Petitioner to the Applicant (exclusive of the costs of the Official Receiver and PLs) at HK$280,000. The costs of the Official Receiver be paid out of the deposit, and the costs and remuneration of the PLs be paid out of the balance of the deposit and the shortfall be paid by the Company in the first instance, such amount to be assessed summarily.

Mr Brian Fan, instructed by Deacons, for the Applicant

The Petitioner appears in person

The Provisional Liquidators’ attendance are excused