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深圳巿均翔房地產經紀有限公司 v Hongkong Zhongxing Group Co Ltd

Judgment Cited authorities 2 Cited in Precedent Map Related
Vincent
Judgment Date08 March 2012
Year2012
Judgement NumberHCCW256/2011
Subject MatterCompanies Winding-up Proceedings
CourtHigh Court (Hong Kong)
HCCW256/2011 深圳巿均翔房地產經紀有限公司 v. HONGKONG ZHONGXING GROUP CO LTD

HCCW 256/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING UP) NO 256 OF 2011

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IN THE MATTER of Hongkong Zhongxing Group Co Ltd (香港中興集團有限公司)
and
IN THE MATTER of Section 177(1)(d) of the Companies Ordinance (Cap 32) of the Laws of Hong Kong

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BETWEEN

深圳巿均翔房地產經紀有限公司 Petitioner
and
HONGKONG ZHONGXING GROUP CO LTD Respondent
(香港中興集團有限公司)

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Before : Hon Barma J in Chambers

Date of Hearing : 8 November 2011

Date of Judgment : 8 March 2012

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J U D G M E N T

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1. This was the hearing of three applications in relation to a winding up petition presented by深圳巿均翔房地產經紀有限公司 (“the Petitioner”) against Hongkong Zhongxing Group Co Ltd (“the Company”) on 2 August 2011. The first was an application by the Company, by summons dated 24 August 2011, to strike out the petition on the grounds that the Company had not been properly served with either the statutory demand referred to in the petition, or with the petition itself. The second was an application by the Petitioner, by summons dated 21 September 2011, seeking leave to amend the petition. The third was an application by the Company, by summons dated 31 October 2011, just over a week before the hearing, seeking leave to make an amendment to its striking out summons.

2. The last mentioned of these summonses was not opposed by the Petitioner, subject to the Petitioner being awarded its costs of the application, as all that was sought was an additional direction that if the petition were struck out, it should be listed for formal dismissal without the need for the parties’ attendance as soon as possible thereafter. At the beginning of the hearing, Mr Lau, who appeared for the Company, indicated that his clients were prepared to pay the Petitioner the costs of that application, and I therefore gave leave to the Company to amend its summons for striking out, with the costs of that application to be to the Petitioner. Such costs are to be taxed on the party and party basis if not agreed.

3. This leaves the other two applications for determination. The background in relation to them can be summarised as follows:-

(1) The registered office of the Company is situated at Unit 102, 1st Floor, Hong Kong Trade Centre, 161-167 Des Voeux Road Central, Hong Kong. It is common ground that this was at all material times the registered office of the Company according to the records maintained by the Company Registry.

(2) On 11 July 2011, a process server employed by the Petitioner’s solicitors attempted to serve a statutory demand, demanding payment of the sum of RMB 2,000,000 or its Hong Kong dollar equivalent on the Company at its registered office. For this purpose, she went to the building in which the Company’s registered office was situated.

(3) The Company’s name did not appear on the list of occupants displayed in the lobby of the building. Nor did it appear outside the door for Unit 102 on the first floor. The door to Unit 102 was closed and locked, and no one from Unit 102 answered when the bell for that unit was rung by the process server.

(4) Instead, according to the Petitioner, someone came out from Unit 101 next door (which happened to be the offices of the solicitors now representing the Company). When asked by the process server if the Company was to be found on that floor, this person went back into Unit 101 to make a phone call, accompanied by the process server. Thereafter, a man came out to the reception area of Unit 101, identified himself as an employee of the Company, and took delivery of the statutory demand. However, he declined to acknowledge receipt of the statutory demand by affixing the Company’s chop on the process server’s delivery record, saying that he did not have one.

(5) This version of events is denied by the Company. The solicitor acting for the Company has affirmed that on 11 July 2011, a woman entered his firm’s offices and handed an envelope addressed to the Company at Unit 102 to the receptionist. On being told by the receptionist that Unit 102 was next door, the process server said that there was no answer there, and left the envelope with the receptionist, notwithstanding the receptionist’s protestations that she had no authority to accept service of it. The Company’s solicitor also stated that no-one employed by the Company was working at his office at that time.

(6) Thereafter, on 27 July 2011, the Company took out proceedings seeking an injunction to prevent the Petitioner from presenting a winding up petition against it based on an amount of HK$2,000,000 (sic) “claimed in the statutory demand dated [11 July 2011] served on the Company on [11 July 2011]”. It is not clear whether the originating summons was served on the Petitioner – at any rate, there is no evidence of any further steps having been taken in relation to it.

(7) On 2 August 2011, the petition was issued. A process server employed by the Petitioner’s solicitors (not the same one who had attempted service of the statutory demand) tried to serve it on the Company at its registered address. According to his evidence, he, too, found that the door to Unit 102 was closed, and went into Unit 101 to make enquiries as to whether or not the Company was to be found on the first floor. Again, the receptionist made a telephone call, after which a man came out to the reception area and identified himself as an employee of the Company. The process server then left the petition with him.

(8) Again, this version of events is disputed by the Company, and the Company’s solicitor reiterated that at this date also, no one employed by the Company was stationed at his office. The Company has also made an affirmation to the effect that it does not maintain any business in Hong Kong or employ or deploy any of its staff there.

4. The petition alleged that the registered office of the Company was at Unit 101 of the Hong Kong Trade Centre (not Unit 102, as recorded at the Companies Registry), that the Company was indebted to the Petitioner in the amount of RMB 2,000,000 or its equivalent in Hong Kong dollars, that the Petitioner had served the Company with a statutory demand on 11 July 2011 by leaving it at the Company’s registered office at Unit 101, and that despite three weeks having elapsed since the date of service of the statutory demand, no payment in respect of the debt had been forthcoming from the Company. It is further alleged that the debt remains unsatisfied and due to the Petitioner, and that the Company is insolvent, so that it would be appropriate to wind it up.

5. Mr Lau, for the Company, submits that the petition should be struck out, because it is bound to fail. He says that this is because the only matter relied upon by the Petitioner to justify the allegation that the Company is insolvent are the matters stated in relation to the statutory demand, from which it is (he says) clear that the Petitioner is relying on the statutory deeming of insolvency under section 178(1)(a) of the Companies Ordinance as the basis for the assertion of insolvency on the part of the Company. However, because the statutory demand was, on the Petitioner’s own case, purportedly served at Unit 101 of the Hong Kong Trade Centre, and not Unit 102, it was not in fact served on the Company at its registered office, so that the Petitioner could not rely on section 178(1)(a) to deem the Company insolvent.

6. In case this was not right, Mr Lau further submitted that the petition should be struck out because the petition itself had not been served on the Company at its registered office, which was at Unit 102 and not Unit 101.

7. Mr Chai, who appeared for the Petitioner disputed this. He submitted that the petition was not bound to fail. He contended:-

(1) The Company could not deny that the statutory demand had been properly served, having itself asserted in its Originating Summons seeking to restrain the Petitioner from presenting the petition that the statutory demand had been served on it on 11 July 2011.

(2) In any event, it was at least arguable that the service of the statutory demand at Unit 101 was good service, as it could be inferred that Unit 101 was the proper location for service on the Company at its registered office.

(3) Alternatively, he suggested that it was arguable that whatever might have been stated in the records at the Companies Registry, Unit 101 was the actual registered office of the Company at the time of service of the statutory demand and the petition.

(4) Even if none of those submissions were accepted, the petition relied simply on an allegation of insolvency to seek a winding up under section 177(1)(d) of the Companies Ordinance. Although the deemed insolvency arising under section 178(1)(a) was relied upon, this was not the only basis on which it might be shown that the Company was insolvent,...

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