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The Hong Kong & Shanghai Banking Corporation Ltd. v K & R Wong Construction Co. Ltd.

Judgment Cited authorities 3 Cited in Precedent Map Related
Vincent
Judgment Date05 March 1998
Year1998
Judgement NumberHCCW594/1997
Subject MatterCompanies Winding-up Proceedings
CourtHigh Court (Hong Kong)
HCCW000594/1997 The Hong Kong & Shanghai Banking Corporation Ltd. v. K & R Wong Construction Co. Ltd.

HCCW000594/1997

1997, No.CWU 594

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP

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IN THE MATTER OF K. & R. WONG CONSTRUCTION COMPANY LIMITED
and
IN THE MATTER OF THE COMPANIES ORDINANCE, CAP. 32

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BETWEEN
The Hong Kong & Shanghai Banking Corporation Limited Petitioner
AND
K & R Wong Construction Company Ltd. Respondent

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Coram : The Hon Mrs Justice Le Pichon in Court

Date of Hearing : 5 March 1998

Date of Judgment : 5 March 1998

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J U D G M E N T

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1. This Petition was originally filed on 25 November 1997 by Yu Kang Wing trading as Wing Kee Construction Company. On 16 February 1997, The Hongkong & Shanghai Banking Corporation Limited was substituted as Petitioner.

2. The Petitioner bases this Petition on a debt of $46.35 million as at 4 February 1998. The amount arises out of banking facilities granted to the Company. The Petitioner made a demand for repayment on 15 September 1997. There has been no response to that demand and it became the substituted Petitioner upon the original petitioner's debt being satisfied.

3. When the matter first came before me on 16 February 1998, the Company indicated that it wished to oppose the Amended Petition and sought an adjournment. I granted an adjournment for seven days. At the adjourned hearing when it became apparent that the Petition was being seriously opposed, the matter was further adjourned for proper argument to be advanced to the Court. So the matter was adjourned from 23 February until today. At the hearing on 23 February, I gave leave to the Petitioner to file further evidence and directed that no further evidence be filed without the leave of this court. On 26 February, Mr Simon Richard Harris filed a 3rd affidavit on behalf of the Petitioner.

4. At today's hearing, the Company sought a 10-day adjournment in order to deal with the matters appearing in Mr Harris' 3rd affidavit. Amongst the exhibits to Mr Harris' affidavit are valuations of certain properties as at November 1997. In opposition to this Petition, the Company had filed an affidavit relying on a valuation of these properties as at August 1997. Counsel for the Company based the application on two grounds : first, that the Company is in a position to raise $16 million in a week's time, and secondly, it is still awaiting a valuation from Jones, Laing & Wootton. The application was refused.

5. The relevance of the valuations of various properties arises in the following way. The Petitioner was prepared to grant the banking facilities to the Company upon security being furnished by third parties. In total, some six or eight properties, depending on how they are identified, were charged to the Petitioner. There is in fact no discrepancy arising from the evidence of the Company and the Petitioner as to the specific properties over which the Petitioner has a legal charge.

6. The evidence of the Company in this regard contained in the affirmation of Mr Simon Wong is that these properties were valued by Wayfoong Property Limited ("Wayfoong") in August 1997 at $48.2 million. Although Mr Wong believed that another surveyor had given a much higher valuation of $62 million, there is no evidence before this court of the higher valuation. For present purposes, it must be disregarded.

7. The most recent affidavit filed on behalf of the Petitioner shows that the same valuer, i.e. Wayfoong was asked to value the properties as at November 1997. Wayfoong has given the properties a market value as at that date of $38.75 million and a value on a forced sale basis of $33.185 million. In February 1998, Wayfoong confirmed that certain of the properties had fallen in value since the earlier valuation dates, and as at 26 February 1998, the aggregate market value of these properties is put at $34.15 million and the value on a forced sale basis at $29.735 million.

8. It is common ground that the Company does owe the Petitioner some $46 million as at 4 February 1998. It is also common ground that there are other unsecured creditors of the Company to the tune of some $32 million. The Petition has the support of Kin Wing Company, who is represented by counsel at this hearing and Yu Kang Wing, the original petitioner, who is also represented by counsel although its position at this hearing was a neutral one. The value of the supporting creditors' debts come to about $2 million.

9. The Petition is opposed by the Company as well as three of its creditors. Those creditors who are owed sums in the aggregate of $3.5 million have filed affirmations which say little more than that in the deponents' belief, the Company "has the ability and capable (sic) to settle all its outstanding debts".

Grounds of opposition

Secured creditor

11. The Petition is opposed essentially on two grounds. First it is said that the Petitioner is a secured creditor because the Petitioner has legal charges over the properties. Counsel for the Company submitted that on that basis, the Petitioner has security and whilst that security may possibly not be sufficient - although he did not say so, I assume that he was praying in aid the earlier suggestion that the Company would...

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