The Joint and Several Liquidators of Saint Power Industrial Limited (in Liquidation) v. Shum Siu Han and Another

HCCW 1309/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 1309 OF 2002

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BETWEEN

Before : Hon. Kwan J. in Chambers (not open to public)

Date of Hearing : 3 May 2006

Date of Decision : 3 May 2006

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D E C I S I O N

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1.This is a summons taken out by the liquidators of Saint Power Industrial Limited (“the Company”) under section 221 of the Companies Ordinance, Cap. 32.  The 1^st respondent, Madam Shum Siu Han, is a shareholder and director of the Company.  Her husband Yang Zongxi, the 2^nd respondent herein, is the company secretary of the Company.  The liquidators seek an order for delivery up of documents specified in the summons and an order that the respondents be examined on oath on various matters relating to the Company and its subsidiaries.

2.The summons and the supporting evidence have been served on the respondents at their last known address in Hong Kong and their last known address in Shanghai.  The 1^st respondent has appeared today.  The liquidators’ solicitors have received a telephone call from the 2^nd respondent who is in Shanghai confirming that he has received the documents.  I understand from the 1^st respondent that her husband had a traffic accident, so cannot attend court today.

3.The background to the application may be stated briefly as follows.

4.The Company was set up as a holding company and had never carried on business in Hong Kong.  It had established 2 wholly foreign owned enterprises in the People’s Republic of China – Saint Power Mould (Panyu) Industrial Limited (“Saint Power Panyu”) and Saint Power Mould (Shanghai) Industrial Limited (“Saint Power Shanghai”), to carry on the business of design and production of moulds for use in industrial manufacturing.  The 2 subsidiaries were the 2 substantial assets of the Company.

5.On 28 November 2002, a winding-up petition was presented by the other shareholder and director of the Company.  Provisional liquidators were appointed for the Company on 29 August 2003.  The Company was ordered to be wound up after a trial on the just and equitable ground on 6 May 2004.  The same individuals who were the provisional liquidators were appointed liquidators by an order made on 4 January 2005.

6.Shortly after their appointment as provisional liquidators and for about 2 years thereafter, the provisional liquidators and then the liquidators had made various requests to the respondents for information and documents.  The respondents have not been co-operative.  Although some documents were provided by the 2^nd respondent on behalf of the 1^st respondent on 2 October 2003, I am satisfied that the documents provided were not complete.  I do not accept the 1^st respondent’s assertion in her oral submission today that all the documents in her possession relating to the Company and its 2 subsidiaries have been provided to the liquidators.  In summary, the response and attitude of the respondents may be stated in this way.  The 2 subsidiaries are companies established in the PRC, these companies are not subject to Hong Kong law, nor have they been wound up by any court order, so the respondents are under no obligation to comply with any requirement of the liquidators to provide them with documents and information relating to the 2 subsidiaries.  The liquidators should make an appropriate application to the courts in the PRC to obtain documents and information relating to the 2 subsidiaries.  The 1^st respondent also claims that she would contravene the laws in the PRC if she were to part with the accounts, books and records of the 2 subsidiaries to the liquidators.

7.I consider this court does have jurisdiction to order the respondents, as officers of the Company, to produce documents in their possession, custody or power relating to the Company and its subsidiaries.  The documents sought in the summons of the 2 subsidiaries in the PRC are documents relating to the affairs of the Company.

8.I think it is right I should exercise my discretion to order production of these documents.  These documents would clearly assist in the liquidators’ investigation of the affairs of the Company and its subsidiaries.

9.As for an order for oral examination, I am satisfied that the liquidators have made out a requirement to examine the respondents orally in respect of the various matters listed in the summons.  I note that the liquidators have served various questionnaires on the respondents, and I have considered the answers provided by the respondents to the questionnaires.  It seems to me it is only appropriate that there should be an oral examination to really take things forward.

10.I make an order in these terms:

(1)	The 1st and 2nd respondents shall by 4.30 pm on the 14th day from the date of service of the order made herein produce and deliver to the liquidators the following documents in their possession, power or control:
	(a)	all originals and copies of the books and records and bank statements of the Company, Saint Power Shanghai and Saint Power Panyu; and
	(b)	all originals and copies of the title deeds, certificates and all other documents of and relating to the properties and assets owned or had been owned by the Company and/or Saint Power Shanghai and/or Saint Power Panyu, including without limitation the transactions and matters referred to in paragraph (2) hereof.
(2)	The liquidators be at liberty to examine the 1st and 2nd respondents on oath in matters concerning:
	(a)	the sale of the land at Jiuting Hi-Tech Park C-2 of Shanghai Song Jiang District, Shanghai, and the whereabouts of the proceeds arising from such a sale;
	(b)	the agreements made between Saint Power Shanghai and Sun Power Mould (Shanghai) Company Limited (“Sun Power Shanghai”) during the period between March and October 2003, and the payments made pursuant or related to these agreements;
	(c)	all transactions relating to or arising from the agreements referred to in (b) above, including without limitation the transfer of plant, machinery and equipment by Saint Power Shanghai to Sun Power Shanghai;
	(d)	the tenancy agreement made by the 1st respondent purportedly on behalf of Saint Power Panyu for the leasing of a factory owned by Saint Power Panyu or any part thereof for the period from 1 February 2005 to 30 September 2009, and the whereabouts of the money paid pursuant or related to this agreement; and
	(e)	all other affairs of or relating to the Company, Saint Power Shanghai and Saint Power Panyu, including without limitation any of their respective assets.
(3)	The oral examination of the 1st and 2nd respondents be conducted before a Master of the High Court on a date to be fixed, with an estimated length of one day.
(4)	The liquidators do have leave to serve this order on the 1st and 2nd respondents out of the jurisdiction in the People’s Republic of China, by effecting service on them pursuant to such procedural requirement in accordance with the laws of the People’s Republic of China.
(5)	There be no order as to the costs of this application against the 1st and 2nd respondents.

Miss Elaine Liu, instructed by Messrs P C Woo & Co., for the Applicants

The 1^st Respondent, appearing in person

The 2^nd Respondent, absent