Re Goldstone Investment Group Ltd (Formerly Known As Radford Capital Investment Ltd and Eagle Ride Investment Holdings Ltd)

HCCW 64/2022

[2025] HKCFI 5179

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 64 OF 2022

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DECISION

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1.Before me is a summons dated 22 September 2025 issued by the Joint and Several Liquidators of the Company to apply for retrospective sanction to commence HCA 1552/2025 (“Action”). It is led by the 1^st and 2^nd Affirmations of Chan Leung Lee, one of the two Joint and Several Liquidators.

2.The Action, commenced on 20 August 2025, seeks to recover HK$103 million in damages and/or equitable compensation for the Company’s failed investments in 2021 as a result of alleged breaches of duties by its former directors, former solicitors, and an asset management company.

3.On behalf of the Company, Mr Douglas Lam SC leading Mr Charlie Liu accept that prior sanction should have been sought from the Court under section 199(2) and Part 2 of Schedule 25 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32). That was not done due to what is said to be “an unfortunate and inadvertent oversight” on the part of the Joint and Several Liquidators. Mr Lam seeks retrospective sanction invoking section 200(3) of that Ordinance and the Court’s inherent jurisdiction.

4.There is no doubt the Court has the jurisdiction: Re Newsweb International Limited (unreported, HCCW 388/1997, 20 April 2007) §§23-24, Barma J (as he then was); Re Curruthers Ltd (unreported, HCCW 709/2001, 23 February 2005) §§11-13, Kwan J (as she then was). The Court of Appeal has summarized the relevant considerations that the Court should take into account in deciding whether to grant retrospective sanction: Allied Ever Holdings Ltd v Li Shu Chung [2021] HKCA 577 at §5.2(5) (Cheung JA).

5.In brief, a decision by a Court appointed liquidator whether to commence proceedings in the name of the insolvent company is essentially a commercial decision for the liquidator, and guided by his view of what is in the best interest of that company, and all those who have an interest in its estate. Generally, the Court should not become involved in giving directions to the liquidator, or interfere unless the decision is taken in bad faith or that decision is one that no reasonable liquidator could have taken.

6.The present Joint and Several Liquidators were appointed by the Court’s order dated 11 October 2025. After their appointment, the evidence shows they carried out investigations. They tried to contact the potential defendants to obtain information and to recover the assets without success. The Company’s creditors were updated from time to time. By late 2024 / early 2025, it became clear to the Joint and Several Liquidators that formal legal proceedings would be necessary to protect the interests of the Company’s creditors. The Company’s creditors were consulted and none of them (save for one) commented on or objected to the commencement of legal action. The only objections came from the potential defendants one of whom is also a creditor. The objections did not alter the Joint and Several Liquidators’ views. On 25 March 2025, junior counsel (not Mr Liu) advised the Joint and Several Liquidators in conference that there are sufficient merits justifying the commencement, and the pursuit, of the Action against the various defendants. That junior, who was around 10-11 years’ call at the time, was then instructed to prepare the statement of claim.

7.The Joint and Several Liquidators stressed the commencement of the Action was a commercial decision in the best interests of the Company and all those who have an interest in its estate. They pointed out that as of 31 August 2025, they had identified and realised only around HK$7 million worth of the Company’s assets whereas the total claims against it stood at approximately HK$186.19 million. The Action seeks to recover HK$103 million and the current estimated legal costs for pursuing the Action are said to be roughly HK$1.5 million to 2.8 million.

8.I also note the Official Receiver takes a neutral stance subject to the query whether the Joint and Several Liquidators have sought counsel’s advice on the merits, and if so, what is the merits of the claim. I consider that query has been sufficiently answered in the 2^nd Affirmation of Chan Leung Lee.

9.On the basis of the materials before me, I am satisfied that the decision to commence the Action was a good faith commercial decision made in the best interest of the Company and all those who have an interest in its estate. Further, I do not believe that the inadvertent oversight, regrettable though it may be, should militate against granting retrospective sanction on the facts of this case. Therefore, I make an order in terms of paragraphs 1-3 of the summons.

10.In terms of costs, while I am grateful for Mr Lam’s assistance, it is an unnecessary luxury to involve leading counsel in this straightforward and simple application. Further, as I have noted, the Joint and Several Liquidators considered it adequate to retain the services of junior counsel of 10-11 years’ call to advise on, and draft the pleadings of, the Action. Mr Lam informs me he is standing in for another junior counsel who is sitting at the moment so is unable to attend court. He assures me he is not charging his usual fees. He further informs me he is only seeking certificate for one counsel. By that, I take it to mean he accepts a competent junior should be able to handle the present application. Therefore, the costs order I make is that the Joint and Several Liquidators are not entitled to recover the costs of and occasioned by instructing leading counsel for the summons dated 22 September 2025 (including the hearing on 28 October 2025) out of the assets of the Company. Save as aforesaid, costs of this application (including the costs of one junior counsel), subject to taxation, be paid out of the assets of the Company.

Mr. Douglas Lam, SC leading Mr. Charlie Liu, instructed by LCS LEGAL, for the Liquidators

The attendance of the Official Receiver was excused