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Re Emsworth Ltd

Judgment Cited authorities 5 Cited in Precedent Map Related
Vincent
Judgment Date09 March 1979
Year1979
Judgement NumberHCCW26/1978
Subject MatterCompanies Winding-up Proceedings
CourtHigh Court (Hong Kong)
HCCW000026/1978 RE EMSWORTH LTD

HCCW000026/1978
IN THE HIGH COURT OF JUSTICE COMPANIES (WINDING UP)
NO. 26 OF 1978

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IN THE MATTER of Emsworth Limited

and

IN THE MATTER of The Companies Ordinance Cap. 32

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Coram: Li, J. in Chambers

Date of Judgment: 9 March 1979

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JUDGMENT

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1. In this summons Emsworth Ltd., (hereinafter referred to as the Company) applies for an order that:-

(1) The Petition is sued on the 2nd day of May, 1978 be dismissed;
(2) The Official Receiver be discharged as the Provisional Liquidator of the said Emsworth Ltd;
(3) That the Petitioner do pay the costs incurred by the Official Receiver whilst acting as Provisional Liquidator herein; and
(4) That costs be provided for.

2. This summons was heard on 10th November last year when I made an order in terms of paras. (1) and (2) of the summons but adjourned the matter asked for in para. (3) of the summons until I have heard full arguments from counsel for both the Company and for the Petitioner. The facts giving rise to this application may be summarised as follows:-

One Theodore Norman (hereinafter referred to as the Petitioner) is a creditor of one Cape Yachts Ltd., for a substantial sum of money. The Cape Yachts Ltd., went into receivership and the receiver sold the assets and business of Cape Yachts Ltd., to the Company in the middle of 1977. On 10th February 1978 the Petitioner served a notice to demand payment of the debt owing by the Cape Yachts Ltd., alleging that the Company is responsible for the payment of such debt owing by the Cape Yachts Ltd., by virtue of Section 3 of the Fraudulent Transfers of Business Ordinance. At that time one Mr. Burdett had a pending action in the High Court against the Company for a debt owing to him by the Cape Yachts Ltd., and also relied on the same point under the provisions of Section 3 of the Fraudulent Transfers of Business Ordinance Mr. Burdett's action was tried by my brother McMullin who decided in favour of Mr. Burdett holding that the Company was liable under the Fraudulent Transfers of Business Ordinance. The judgment was delivered on 29th April, 1978. On 5th May, 1978 the petitioner filed his petition to have the Company wound up on the ground that the Company was unable to pay its debt for failing to pay up after demand was made after three weeks. There was an affidavit in support of this petition. Nothing was done by the Company. On 26th May, 1978 the Company lodged an appeal against the decision of my brother McMullin. The hearing of the petition was set down on 1st June, 1978. There was, up to then, no affidavit by the Company to oppose the petition but it was adjourned to 16th June, 1978 for some reason which is not known to me. There is no record in the file containing papers of the Petition and no reason given for the adjournment. There is only one document in the said file which was a notice to the Official Receiver saying that the hearing would be adjourned to 16th June. On 13th June, 1978 a director of the Company applied to the Court for sanction to pay out some money for future expenses and that indicated an intention to oppose the petition on the part of Company. On 14th June, 1978 the Petitioner took the precaution of making an ex parte application to appoint a Provisional Liquidator in order to protect the assets of the Company. The petition came before my brother Leonard and in the course of the hearing of the petition Mr. Mills-Owens, learned counsel for the Petitioner suggested the appointment of a Provisional Liquidator. No one raised any objection to such suggestion and without further argument the Official Receiver was appointed the Provisional Liquidator. For this reason the Petitioner did not have to proceed with his ex parte application. Since then work had been done by the Provisional Liquidator. On 20th October, 1978 the appeal was heard and determined by the Court of Appeal which set aside the judgment of my brother McMullin. Thus from that time onwards there appeared no debt owing by the Company to the Petitioner. As such there was no basis for the Petition to go on. Hence this application dated 27th October, 1978. The Order to dismiss the Petition and to discharge the Provisional Liquidator was not opposed in anyway. However the application that the Petitioner should pay the costs incurred by the Official Receiver while acting as Provisional Liquidator is strongly contested by the Petitioner.

Mr. Donnelly, learned counsel for the Company contends that the petition presented was an...

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