Aggressive Construction Company Ltd v. Skk (H.K.) Co Ltd

Read the full judgment text of HCMP 322/2025 on BabelCite. This High Court CFI judgment was delivered on 26 September 2025.

1. I have before me the Plaintiff’s summons dated 28 February 2025 (the Summons )  in which the Plaintiff seeks (in [1(b)] of the Summons)  an injunction (the Injunction )  restraining the Defendant from presenting a winding up petition based on the alleged debt which the Defendant claims to be due and owing by the Plaintiff and which is the subject of the Defendant’s second statutory demand ( SD2 )  dated 18 February 2025.

Cites 4 cases

Case No.HCMP 322/2025[2025] HKCFI 4536
Court
High Court CFI
Date26 Sep 2025
Judge
Case Document
100%Judiciary

HCMP 322/2025

[2025] HKCFI 4536

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO322 OF 2025

________________________

  IN THE MATTER of AGGRESSIVE CONSTRUCTION COMPANY LIMITED
  and
  IN THE MATTER of the Companies (Winding Up and Miscellaneous Provisions)  Ordinance (Cap32)  and the Inherent Jurisdiction of the High Court
  and
  IN THE MATTER of statutory demands dated 18 February 2025

________________________

BETWEEN

AGGRESSIVE CONSTRUCTION COMPANY LIMITED Plaintiff
and  
SKK (H.K.)  CO LIMITED Defendant

________________________

Before:  Deputy High Court Judge Segal in Chambers (Open to Public)
Date of Hearing:  19 September 2025
Date of Reasons for Decision:  26 September 2025

________________________

REASONS FOR DECISION

________________________


1.I have before me the Plaintiff’s summons dated 28 February 2025 (the Summons)  in which the Plaintiff seeks (in [1(b)] of the Summons)  an injunction (the Injunction)  restraining the Defendant from presenting a winding up petition based on the alleged debt which the Defendant claims to be due and owing by the Plaintiff and which is the subject of the Defendant’s second statutory demand (SD2)  dated 18 February 2025.

2.The Summons was heard on 19 September 2025. Mr Victor Dawes SC with Mr Alvin Cheung appeared for the Plaintiff and Mr Paul Yuk Pui Lee appeared for the Defendant.  At the conclusion of the hearing I informed the parties that I had decided that the Injunction should be granted and that I would subsequently set out my brief reasons for that decision together with my decision on the issue of costs.

3.The Defendant had previously issued two other statutory demands (SD1 and SD2)  on 18 February 2025 but both of these were subsequently withdrawn (SD1 was withdrawn before and SD2 was withdrawn after the issue of the Summons).  As a result, the Plaintiff did not seek injunctive relief in relation to SD1 and SD2 but did seek a costs order against the Defendant in respect of the related costs it had incurred in relation to the Summons.

The debts claimed by the Defendant in SD2

4.SD2 relates to two different debt claims:

(a)  first, the Defendant asserted that the Plaintiff is liable to pay it HK $184,657.45 in respect of a progress payment, claimed in progress payment application 31 (the Progress Payment), due and payable under a building subcontract under which the Defendant is the sub-contractor and the Plaintiff is the main contractor.  The Hong Kong Housing Authority is the employer.  The written subcontract sets out the procedure and mechanism pursuant to which claims for progress payments are to be made by the Defendant. The Defendant in its evidence filed in support of its opposition to the Summons claimed that the Progress Payment was due and payable in accordance with the (proper interpretation of the terms of)  the subcontract or alternatively that it was entitled to be paid because it had complied with a variation of the contractual procedure which had been successfully used and accepted by the Plaintiff for all previous progress payment applications.  The Defendant asserted that the Plaintiff had waived reliance on the contractual procedure and represented and accepted that it would make progress payments upon use of and compliance with the varied procedure.  The parties’ (and in particular the Plaintiff’s)  had engaged in a course of conduct which evidenced and established a different procedure for the making of claims for progress payments by which the Plaintiff was bound or which it was estopped from denying.

(b)  secondly, the Defendant claimed that it was entitled to be paid the first half of retention monies (the Retention Monies)  held by the Plaintiff under the sub-contract.  The Defendant asserted that the contractual conditions triggering the Plaintiff’s payment obligation had been triggered and that a debt is due and owing in the sum of HK773,523.64.

The Plaintiff’s position

5.As regards the Defendant’s claim to the Progress Payment, the Plaintiff in its evidence adduced in support of the Summons denied that it was liable and asserted that there was a genuine dispute on substantial grounds on this issue.  It relied on the Defendant’s acknowledged failure to comply with the proper and binding contractual procedure set out in the written subcontract for claiming progress payments and denied that this had been waived or amended or that anyone with authority had made representations on behalf of the Plaintiff that the Plaintiff would become liable and make progress payments in cases where the contractual procedure had not been followed.

6.As regards the Defendant’s claim in respect of Retention Monies the Plaintiff’s evidence was that the release of and obligation to pay the first part of the retention monies had not yet become due. The Plaintiff asserted that the written contract provided that it only became liable to pay the Retention Monies when it had completed its works under the Main Contract and a certificate of practical completion had been issued, and that on the proper construction of the contract this meant that it was only liable when the Defendant had completed the works it was required to undertake pursuant to the subcontract which the evidence showed it had not done (the Plaintiff as main contractor was required under the main contract to deliver the development and to do so it needed the work to be done by the Defendant as sub-contractor to be done).

7.The Plaintiff also claimed that it had a valid cross-claim in the sum of HK$310,540 in respect of the costs of employing workers to undertake work to remedy the Defendant’s defective works (together with an administrative charge), which remedial costs it was entitled to reclaim from the Plaintiff under the subcontract.  The Plaintiff in its evidence asserted that the work had been done and referred to documents (in particular a Contra Charges Schedule)  which showed the work done.

8.The Plaintiff accepted that there were both factual and legal disputes in respect of both the claim for the Progress Payment and for the Retention Monies but submitted that the evidence demonstrated that there were factual disputes on key issues and disputes as to the interpretation of the written sub-contract which required a trial to resolve such that the Plaintiff was able to show that the debts claimed in SD2 were all bona fide disputed on substantial grounds.

The applicable law in outline

9.The applicable law was not in dispute.  In order to justify the grant of an injunction to restrain presentation of a winding up petition the Plaintiff has to demonstrate, and the burden of proof is on the Plaintiff to show, that the presentation of a petition would be an abuse of process.

10.The position was summarised in the judgment of Mr Justice Harris in Hung Yip (HK)  Engineering Co Ltd v Kinli Civil Engineering Ltd [2021] HKLRD 860 (Hung Yip).  Mr Justice Harris said that in order to establish that presentation of a petition would be an abuse it was necessary for the company to adduce evidence addressing the following matters: (a)  the debt and how it was alleged by the creditor to arise; (b)  when and how the debt had been disputed prior to the presentation of the statutory demand and any application to the court for an injunction; (c)  what was said to be the bona fide defence on substantial grounds; (d)  the solvency of the company; (e)  the prejudice that would be caused by the presentation of the petition and (f)  whether or not it was asserted that the creditor was consciously using the threat of presentation of the petition improperly.  The company must show that as at the date on which the application for an injunction is heard (see [18] and [19] of the judgment)  it would be an abuse for the creditor to present a petition because it had been demonstrated and the creditor was aware that (or was aware of facts from which he should have appreciated)  that there was a bona fide and substantial defence to the debt claimed.

11.Mr Justice Harris said that (my underlining):

“14. …….. In my view, it is implicit in the test applied by the court that for presentation of a petition to be an abuse, a creditor must either have been told enough to understand that the debt is disputed on substantial grounds or must be assumed to have known this from facts of which he was aware. As the authorities make clear a putative petitioner should not lightly be prevented from exercising his statutory right to present a petition. I would have thought it self-evident that the procedure that permits a company to apply to court to restrain the presentation of a petition is not intended to provide a mechanism by which a dispute that would normally be determined on the hearing of a petition is determined at the instigation of a company by a preliminary summary process.

……..

16.  …….. What constitutes an abuse of process in this context has been considered by me in cases in which a petition has been dismissed and a company suggests that the petitioner knew at the time the petition was presented, or should have appreciated, that the Company had a bona fide defence on substantial grounds and that in such circumstances, presentation of a petition was an abuse of process and justified ordering costs on an indemnity basis.”

12.Mr Justice Harris explained that the issue on the hearing of an originating summons for an injunction to restrain presentation of a petition was not identical to the issue arising on the hearing of the petition. This was because although a petition would be dismissed if it was established that the petition debt was bona fide disputed on substantial grounds there was nothing objectionable in principle to a creditor who was owed a debt that he believed could not be disputed issuing a petition to wind up a company he suspected was insolvent.  But Mr Justice Harris noted that on occasions there would be little material difference between the issues arising on the hearing of an originating summons for an injunction to restrain presentation of the petition and those arising on the hearing of the petition.  This will be the case where at the date of the hearing of the originating summons the petition debt is clearly bona fide disputed on substantial grounds and the grounds are and have previously been known to the party threatening to present the petition.   Proceeding to present a petition in such circumstances would be an abuse of process and an injunction to restrain presentation of the petition would be justified.

13.The authorities make it clear that great circumspection must be exercised when considering whether to grant a quia timet injunction to prevent the presentation of a petition (see Re Sinom (Hong Kong)  Limited [2009] 5 HKLRD 487 at [10], per Kwan J and Madison Lab Limited v Pu Yan and others [2020] HKCFI 382 at [14] - [16] per Deputy High Court Judge Mr Abraham Chan SC).  But, as Mr Chan DHCJ noted at [17] in Madison Lab, “… for the purposes of the Court’s power to grant an injunction to prevent abuses of the winding up procedure, the presentation of a petition where there is triable defence is generally s clear case of abuse.”

14.The fact that there is conflicting factual evidence (credible evidence)  which needs to be tried is normally enough to justify the presentation of the petition being restrained.  But the court must be satisfied that the debt is disputed on some substantial ground and not just some ground which is frivolous or without substance and which the court should therefore ignore.  The party seeking injunctive relief must provide a positive statement of the grounds of dispute with supporting relevant details to demonstrate that those grounds are substantial.

15.When considering an allegation that the petition debt is disputed the court is not normally concerned to decide the dispute. The court will therefore not normally seek to resolve conflicts of evidence but just ascertain whether there are such conflicts and the nature and extent of the factual disputes.

16.The court should not conduct a long and elaborate hearing examining in minute detail the case made on each side.  There should not be a mini-trial  

The reasons for my decision to grant the Injunction

17.In my view, the Plaintiff has satisfied the requirements set out by Mr Justice Harris in Hung Yip and has shown that there are material disputes of fact and law that raise triable issues (to be resolved at trial)  in relation both the Defendant’s claim for the Progress Payment and for the Retention Monies, and that the Defendant has, by the date of the hearing of the Plaintiff’s application, been sufficiently made aware of the Plaintiff’s defences.  It is clear that the presentation of a petition based on SD 2 would be an abuse of process.

18.The Plaintiff and the Defendant are parties to a written Subcontractor Agreement.  The Defendant’s entitlement to progress payments and the procedure for claiming progress payments are set out in clause 4 (my underlining):

“4.1 Unless otherwise stated to the contrary, payment shall be made monthly. In principle, payment shall be made within 30 working days from the date the sub-contractor submits its payment application to the Commercial Department as designated by the contractor.

4.2 Prior to subcontractor’s payment application, all subcontractors shall first complete the Sub-Contractor Project Progress Record Form clearly stating the progress of the work done completed by the sub-contractor. Such record shall be submitted to the contractor’s site foreman for processing or general foreman for review and approval and then be submitted to the contractor’s project manager for review and endorsement and returned to the sub-contractor once it is duly signed. Sub-contractors shall when making payment [applications] also attach the said approved Sub-Contractor Project Progress Record Form. Failure to do so will affect the progress of approval and payment amount. The final approved amount shall be determined by the contractor’s commercial department.

4.3  In addition to the requirements outlined in 4.2 above, the Subcontractor shall bear in mind that the payment application must be accompanied by all supporting documents compliant with the Main Contractor’s specified requirements such as certificates of completion signed by the Main Contractor’ site-officer in charge……”

19.The Defendant accepts that it did not submit or obtain a Progress Record Form signed by the Plaintiff’s Project Manager. It accepts that it did not comply with this requirement of clause 4.2. Instead, as set out in its evidence, it adopted a different process and procedure which involved Progress Record Forms being submitted to and approved by the Plaintiff’s Quantity Surveyor, Ms Wong. The Defendant’s evidence is that it followed this revised process for all prior progress payment applications which had then been paid by the Plaintiff.  It argues that the Plaintiff is not entitled to rely on the strict provisions of clause 4.2 because the Plaintiff is to be treated as having made a representation that it would not do so and that compliance with the different practice and process would be sufficient so that it was estopped from denying its liability to pay the Progress Payment or was to be treated as having waived its right to do so.  The Defendant also argues that Ms Wong’s approval of the Progress Record Form for payment application 31 was sufficient and bound the Plaintiff since she had the requisite authority to act for and bind the Plaintiff in relation to this task (and that her approval should be treated as an approval by the Plaintiff’s commercial department).  The Defendant claimed that Ms Wong had implied actual authority or apparent authority for this purpose.

20.The Plaintiff in its evidence denied that the representation asserted by the Defendant had been made, that its conduct was intended to waive or amend, or was directed towards waiving or amending, the written contractual terms or that the Defendant had relied to its detriment on any such representation or conduct.  It also submitted that the requirement for project manager approval was an important and substantive requirement and that the relevant factual matrix would support this and show that the purpose of clause 4.2 was to establish protections for the Plaintiff which should not be waived or amended otherwise than in the clearest terms. The Plaintiff said that on 17 December 2024 it had written to all subcontractors including the Defendant to give them notice that the approval of its project manager (and finance department)  was required before any progress payment was due and this notice was inconsistent with the representation alleged by the Defendant.

21.The Plaintiff argued that these factual assertions and defences gave rise to fact-sensitive and triable issues.  I agree. The Plaintiff has raised factual disputes that go to the heart of the Defendant’s claim and case.  The Defendant is seeking to show that the parties’ (in particular the Plaintiff’s)  conduct has amended and superseded the carefully drafted and detailed terms of their written contract and that an employee of the Plaintiff (Ms Wong)  was held out as having or given sufficient authority to approve a permanent amendment to the payment terms relating to progress payments.  The assessment of this claim will require further detailed evidence and the cross-examination of witnesses.  As I said at the hearing, I can see that the Defendant can claim to have a persuasive case based on a consistent history of following a revised process for submitting and the approval of progress payments but it remains subject to serious and substantial factual disputes, raised in the Plaintiff’s evidence, that require a separate determination independent of the winding up jurisdiction.

22.As regards the Retention Monies, the relevant provision (“Release of the Retention Monies”)  in the Subcontractor Agreement (the Retention Monies Clause)  provides as follows (my underlining):

First half of the retention monies shall be released after [the Plaintiff] has completed the main project and received the certificate of completion from the employer, architect and other relevant parties, while the remaining half shall be released after architect has issued a maintenance certificate. However, payment may only be made after [the Defendant] has submitted all relevant certificates and documents … to [the Plaintiff].”

23.The Defendant in its evidence stated that the certificate of practical completion had been issued by the architect and that it was undisputed that it had submitted all relevant certificates and documents. The Defendant accepted that it still had some further work to do but asserted that all this further work, which was discussed in its evidence, was work required to remedy defects in the work it had done and the fact that such further work to make good defects was outstanding could and did not affect the Plaintiff’s obligation to pay the Retention Monies once the certificate of practical completion had been issued.  The Defendant argued that the Plaintiff’s claim that its obligation did not accrue until the Defendant had completed work to make good defects was inconsistent with the drafting of the relevant clause as it ignored the two-stage process for the payment of the retention monies.  Issues arising in relation to defects were to be dealt with by the second part of the retention monies which was only to be released and paid once a maintenance certificate had been issued.  The maintenance certificate would only be issued at the end of the maintenance period when all defects had been made good.

24.The Plaintiff accepted that the certificate of practical completion had been issued but asserted that on the proper construction of the Retention Monies Clause it was not under an obligation to pay the first part of the retention monies while the Defendant had failed to complete the work required of it under the subcontract and asserted that the work that was still to be done was “outstanding and incomplete” works and not merely the making good of work that had been done defectively (see Mr Poon’s Affirmation at [43]).

25.The Plaintiff asserted that on the proper construction of the Retention Monies Clause the delivery of the certificate of practical completion was insufficient of itself.  The clause required both that “[the Plaintiff] [had] completed the main project and received the certificate of completion from the employer.”

26.Both parties referred to leading construction law textbooks to support their preferred construction of the Retention Monies Clause in light of the relevant building contract jurisprudence and practice.

27.I must say that I find the Defendant’s submission, that the Retention Monies Clause is intended to operate and the obligation to pay retention monies is designed to be triggered upon the issue of the documents referred to in the clause so that the issue of the certificate of practical completion would be sufficient to entitle the Defendant to payment of the first part of the retention monies, to make a good deal of sense.  However, and having said that, it seems to me that the Plaintiff’s case as to the proper interpretation of the Retention Monies Clause is at least arguable. The resolution of the dispute as to the construction of the Retention Monies Clause will require further factual matrix evidence and in my view the Plaintiff has raised a triable issue on this point.  It also appears as though there are disputes as to how the work which the Defendant has still not completed is to be characterised and whether they are to be treated as works to make good defects or a failure to perform the Defendant’s contractual obligations and do the work required.

28.The Plaintiff also asserts, as I have noted, that it has a substantial cross-claim.  The Defendant challenged the basis on which this was asserted but it is clear that the Plaintiff’s evidence is that it has been required to arrange for the rectification of certain defective work done by the Defendant.  The evidence of precisely what was done and by whom is somewhat thin but in my view is sufficient to constitute evidence that the Plaintiff has arranged for workers to undertake remedial work and paid the costs of such remedial work (see the Contra Charge Summary dated 31 August 2024 exhibited to Mr Poon’s Affirmation and the particulars provided therein).  It is clear that the Plaintiff has the right to reclaim the cost of such remedial work from the Defendant under the subcontract (see clause 13).  In these circumstances, it seems to me that the Plaintiff has established that it also has an arguable cross-claim which if upheld at trial will substantially reduce albeit not eliminate the Defendant’s claims.

29.The Plaintiff’s evidence also shows that the Defendant is aware and has been aware for some time of the grounds on which the Plaintiff disputes its liability to the Defendant.  The Defendant, as I have noted, agreed not to proceed with and not to present a petition in respect of its two other statutory demands but decided to maintain its right to present a petition in respect of the SD2.  While it appears that the Plaintiff had not fully set out its position before the service of SD2, it has done so subsequently and its position and the grounds and evidence in support of its defences have been clearly explained to the Defendant.

30.The Plaintiff’s evidence is that it is a substantial and solvent company and that the presentation of a winding up petition against it and the publication of such a petition was likely to cause it serious commercial damage and prejudice.  The Plaintiff’s evidence initially only dealt with the amount of its assets and cash at bank and the Defendant challenged this as being incomplete and insufficient and also asserted in its evidence that the Plaintiff, and its parent company, were experiencing financial difficulties and that the Plaintiff had been slow in making payments to it.  But in its reply evidence the Plaintiff adduced a copy of its unaudited management accounts as at 31 October 2024 and its most recent audited financial statements for the year ending 31 March 2024. Both showed that the Plaintiff had substantial net assets at the relevant date.  I am satisfied that the Plaintiff has shown that presentation of a petition would in the circumstances cause it material commercial damage.

31.For these reasons I was satisfied that the Plaintiff had discharged the burden of proof imposed on it and established that all the Defendants claims on which SD2 were based were bona fide disputed on substantial grounds and that the presentation of a petition in the circumstances existing at the date of the hearing meant the presentation of a petition at that date would be an abuse and that it would be appropriate to grant the Injunction.

Costs

32.The Plaintiff seeks an order that the Defendant pays the Plaintiff’s costs of and occasioned by the Summons on an indemnity basis, including the costs relating to SD1 and SD3.  The Defendant asks the Court to make no order as to costs as regards those costs which relate to SD1 and SD3 - but the Defendant must, I think, accept that it is at least required to pay the costs of the Summons on the standard basis, as they relate to SD2 in view of my decision to grant the Injunction.

33.The Plaintiff relied on the decision of Godfrey Lam J (as he then was)  in Zhang Qiandong [2020] HKCFI 394 and of Recorder Suen SC in Alis Academic Ltd v Ares Academic [2024] HKCFI 270.

34.In Zhang Qiandong a statutory demand served by the respondent was withdrawn so that the applicant’s application to set aside the statutory demand did not need to be determined on the merits. The applicant had denied that he owed the debt claimed and on an arbitration agreement in the relevant agreement.  After the service of the statutory demand the applicant had issued a notice of arbitration and served it on the respondent on 22 July 2019.  This is what caused the respondent to withdraw the statutory demand on 19 August 2019. The applicant submitted that the respondent should pay the costs of the proceedings.  The respondent argued that it should only pay the costs of the proceedings up to 22 July 2019 and that there should be no order as to costs thereafter.  Godfrey Lam J held that, after citing the leading authorities on how the court should exercise its discretion on costs where the substantive matter has been settled, the principal consideration was that the applicant had obtained substantially what he had sought in the application and that it followed that he should be entitled to his costs. This conclusion was fortified by an assessment of the underlying merits. Had the application needed to be determined the applicant was likely to have been successful both because of the arbitration agreement and because he had raised substantial triable issues.

35.In Alis Academic Mr Recorder Jenkin Suen SC dealt with an application by originating summons for an injunction to restrain the presentation of a winding-up petition based on a statutory demand (dated 22 August 2024)  where the statutory demand was withdrawn after the originating summons had been issued and served.  The plaintiff sought an order for indemnity costs.  The learned Recorder held that the proper course for the plaintiff was to discontinue the originating summons (and he gave permission for him to do so)  and that because he had been successful in attempting to obtain what he sought by the issue of the originating summons, he was entitled to his costs.  Further, since the defendant should have appreciated that there was a bona fide dispute on substantial grounds an order for indemnity costs was appropriate. Recorder Suen SC held (at [6(f)])  that “if an alleged creditor knew or should have appreciated that there was a bona fide dispute in respect of the debt before the petition (or statutory demand)  was issued it is appropriate for the court to make an order for indemnity costs as it amounted to an abuse of process.” He said that “in order to avoid litigants abusing the winding-up, process, indemnity costs orders would be made in appropriate cases, i.e. where the creditor knew or should have appreciated that there was a bona fide dispute in respect before the statutory demand or the winding up petition was issued.”  The defendant was relying on an oral agreement which was by its nature susceptible to dispute which had been set out with only few particulars in the statutory demand and should have appreciated after it had received a letter on 2 September 2024 from the plaintiff’s solicitors giving notice that the plaintiff strenuously denied the claim on which the statutory demand was based.  The originating summons had been reasonably issued on 9 September 2024 in circumstances where the time limit of the statutory demand would lapse on 12 September and the statutory demand was only withdrawn on 11 September.

36.In my view, the Defendant should pay 95% of the Plaintiff’s costs of and occasioned by the Summons on an indemnity basis.

37.It seems to me to be clear that the Defendant knew or should have appreciated that its claim for the Progress Payment and for the Retention Monies (covered by SD2)  raised disputed issues of fact and disputes concerning the interpretation of the written sub-contract whose resolution would require findings to be made by the court after a trial, such that the winding up jurisdiction should not be used.  It became clear when Mr. Wing’s First Affirmation was served on 3 March 2025 (and it appears that it was likely to have been clear by virtue of the Plaintiff’s letter dated 25 February 2025)  that the Plaintiff strenuously disputed the claims made in SD2.  While, as regards the Progress Payments, the Defendant relied on the documents previously issued by it and treated as sufficient to justify payment being made by the Plaintiff, rather than a purely oral variation of the sub-contract, waiver or representation, the Defendant should have appreciated that in order to rely on these documents and the parties’ practice (and the representations said to have been made by the Plaintiff)  to override or establish the waiver of the contractual requirement for project manager approval, detailed witness evidence and cross-examination would be needed.

38.The question arises as to whether the order for costs should exclude costs related to SD1 and SD3.  In my view, a small discount is appropriate to reflect the fact that the Defendant behaved reasonably in relation to SD1 by agreeing not to rely on it shortly after SD1 had been issued and before the Summons was issued and to reflect the fact that there was some genuine confusion and uncertainty in relation to SD3 concerning whether a maintenance certificate had been issued to the Plaintiff, where the Plaintiff had made an error and not informed the Defendant of the true position.  However, most of the costs associated with the Summons related to the dispute relating to SD2 and it seems to me that the adjustment to reflect the Plaintiff’s reasonable conduct in relation to these aspects should remain small.  5% seems to me to be a fair and appropriate discount.

39.All three statutory demands were dated and served on the Plaintiff on 18 February 2025.  The Summons was issued on 28 February. The Defendant only formally undertook not to present a winding up petition based on SD1 on 6 March but it had previously agreed by letter not to do so on 21 February, before the Summons was issued.  It seems to me that some small discount should be applied to reflect the fact that the Defendant had confirmed shortly after the service of the statutory demand and in advance of the filing of the Summons that it would not rely on or present a petition based on SD1.  Having received the Defendant’s written confirmation that it would not proceed further in relation to SD1 there was no proper basis for including it in the Summons (although I can see since the written confirmation was given near to the date on which the Summons needed to be issued it was probably already drafted with SD1 included).

40.As regards SD3, the Defendant only formally undertook not to present a winding up petition based on SD3 on 3 September but it had previously agreed by letter not to do so on 25 April 2025.  SD3 concerns a claim for the second half of the retention monies about which there appears to have been some confusion caused by a genuine mistake by the Plaintiff as to whether the maintenance certificate had been issued. In March 2025 the Plaintiff had mistakenly told the Defendant that the maintenance certificate had been issued when in fact it had not been. This error was corrected rapidly but the Defendant went ahead and issued SD3 anyway.

(Nick Segal)
Deputy High Court Judge

Mr Victor Dawes, SC leading Mr Alvin Cheung, instructed by M/s LCP, for the Plaintiff

Mr Lee Yuk Pui Paul, instructed by M/s Wong & Lawyers, for the Defendant