Re Goldco Development Ltd

HCCW 711/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 711 OF 2005

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Before: Hon Kwan J in Chambers

Date of Hearing: 7 December 2005

Date of Decision: 7 December 2005

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D E C I S I O N

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1.This is an application made by the provisional liquidators of Goldco Development Limited (“the Company”) for a validation order under section 182 of the Companies Ordinance, Cap. 32.

2.The provisional liquidators seek to validate the payments to be made by the Company for payments of salary and other compensation to eight carpark staff and five office staff for the period of 12 October to 26 October 2005.  The latter date was the date on which provisional liquidators were appointed for the Company.  They also seek to validate payments of salary and other compensation to be made to eight carpark staff and one office staff from 27 October 2005 to the date of the winding-up order to be made. 

3.The other matter for which a validation order is sought relates to a storage agreement dated 26 September 2005 made between the Company and Happy Venture Transportation Limited (“Happy Venture”).  The storage agreement is for the non-exclusive use of land, for which permission was granted by the Company to Happy Venture, at Container Port Road South, Kwai Chung, New Territories. 

4.The Company is a tenant of this land under Short Term Tenancy No. 3548, Kwai Tsing, granted by the Government to the Company on 7  November 2003.  The provisional liquidators seek an order that the storage agreement shall not be avoided by virtue of section 182. 

5.The purpose of paying the carpark staff and office staff is to enable the provisional liquidators to carry on the business of the Company until a winding-up order is to be made.  The provisional liquidators wish to ensure that the employees previously engaged by the Company and are familiar with the operations should continue to act. 

6.As for the storage agreement, this was entered into with Happy Venture before the petition was gazetted.  The company searches do not show any apparent connection between the Company and Happy Venture, which is indirectly controlled by Jardine Matheson & Company Limited. 

7.The investigation of the provisional liquidators indicate that this agreement was entered into at arms length and is in the interests of the Company.  The storage fees received under the agreement would provide useful working capital for the provisional liquidators.  The income from this source compares favourably with what is being received from the other carparks and sites currently operated by the Company.  The provisional liquidators are also satisfied that the use of the land under the agreement is consistent with the use permitted under the terms of the Short Term Tenancy.  Lastly, the Government has not asserted that the storage agreement constituted a breach of the terms of the Short Term Tenancy. 

8.The application for a validation order is not opposed by the Department of Justice for the petitioner or by the Official Receiver.  I will make an order in terms of paragraphs 1 and 2 of the summons. 

9.As for paragraph 3 of the summons, the provisional liquidators seek an order under the slip rule or the inherent jurisdiction of the court to amend the order for appointment of provisional liquidators to provide clearly that the provisional liquidators would have power to engage solicitors to assist them in the performance of their duties and to remunerate the solicitors out of the assets of the Company.  It seems to me that to avoid any possible ambiguity, clause 3(l) of the order may be amended by deleting the words “to continue” in that part of the order.  I make an order that the order for appointment of provisional liquidators on 26 October 2005 is to be amended in the way I have stated.

10.As for the costs of this application, I order that the provisional liquidators’ costs and the Official Receiver’s costs are to be paid out of the assets of the Company.

Ms L Chan, Government Counsel of the Department of Justice, for the Petitioner

Mr A Kinnison of Messrs Holman, Fenwick & Willan, for the Provisional Liquidators

Ms P Mckenna, for the Official Receiver