Wai Lung Hong Agribusiness Ltd. v. American Home Products Corporation and Others

HCCW001310/2001

HCCW 1310/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING UP NO. 1310 OF 2001

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Coram: Hon Yuen J in Chambers

Date of Hearing: 26 February 2002

Date of Decision: 26 February 2002

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DECISION

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1.This is an application to vacate the hearing date scheduled on 28 February 2002 of a Summons for an injunction (which I will refer to later) and for that hearing to be adjourned to a date to be fixed.

2.The Petitioner who had issued that Summons has not objected to the application save that Miss Chan has indicated that that agreement is conditional upon the court granting an interim stay of the liquidation which has commenced with a s.228A resolution purportedly passed on 13 December 2001.

3.The Summons for the injunction against the implementation of that resolution was issued on 28 January 2002 and was due to be heard this Thursday, save that all parties are agreed that the evidence is not yet ready and Mr Harris has indicated that he would need 21 days to file evidence in opposition.

4.In my view it would not be in the interests of the Company as a whole to grant any interim stay. One has to consider the realities of the situation. The realities are that since the year 2000, the Petitioner's nominated directors have not been involved in the management of the Company, and the person who has been actively involved in the management of the Company, Mr Steven Chew (who had been nominated by the 1st and 2nd Respondents) has been incarcerated on the Mainland. It is not known, apparently, when he will be released. The other two directors (who had also been nominated by the 1st and 2nd Respondents) have apparently not been significantly involved in the management of the Company.

5.Since the liquidators were purportedly appointed on 13 December 2001, they have been taking active steps towards the winding-up of the Company. The lease of the Hong Kong office premises is due to expire this Thursday and arrangements have been made by the liquidators for the extension of that lease for a very short period thereafter. Steps have to be put in place for the termination of the employment of employees and this Company also has a stock of perishable assets, namely, vaccines, which have to be relocated and/or disposed of. Further, there are trade debts which have to be collected. I dare say there would also have to be investigations made for the collection of debts bona fide due to the Company from whomsoever it may be.

6.Miss Chan has recognised that it would be difficult to argue the case of a complete stay pending the determination of the injunction summons. However, in my view, it is impracticable and unrealistic to grant a partial, interim stay given the realities of the situation that I have set out above.

7.Although it has been said that the Petitioner is concerned about the independence of the liquidators given the circumstances in which they have been appointed, the only prejudice that has been asserted by the Petitioner is the question of costs.

8.In my view, given that we are talking about a period of slightly over two months between today and the adjourned hearing of the injunction summons, the issue of costs (whilst no doubt important) has only a minor role as opposed to the obvious prejudice that would be suffered by all shareholders if the affairs of the Company are left in limbo during this period.

9.Accordingly, I would vacate the hearing on Thursday and adjourn the hearing for the injunction summons to a date to be fixed. I would estimate the length of hearing of two days and I am given to understand that two days in May will be available. I will give the Respondents leave to file and serve their evidence in opposition within 21 days from today and the Petitioner will have leave to serve and file any affidavits in reply within 14 days thereafter.

Representation:

Miss Linda Chan, instructed by King & Co., for Petitioner

Mr Jonathan Harris, instructed by CMS Cameron Mckenna, for 1st and 2nd Respondent

Mr Ivan Ng, of Dibb Lupton Alsop, for Liquidators

Official Receiver, absent