The hearing in Wing Sze Tiffany Wong v Wong Sai Chung [2023] HKCFI 2346 before recorder William Wong SC, concerned an application by the liquidators (liquidators) of China Properties Group Limited (company) for urgent interim relief against an ex-director of the company (the respondent).

The liquidators sought an order that the respondent should ratify the appointment of the liquidators' nominee as director of the company's four subsidiaries incorporated in the British Virgin Islands (BVI), which in turn held various Hong Kong and mainland subsidiaries which owned the substantive assets and operations of the group (summons).

A winding-up order (based on a judgment debt) was made against the company on 28 February 2022. The respondent issued proceedings in the BVI on 30 August 2023, seeking an order that the respondent should remain the sole director of the BVI subsidiaries, and to restrain the liquidators from contravening his rights to continue to manage the companies.

The liquidators had been prevented by the companies' former officers from accessing the companies' books and records and had refused to provide information despite the liquidators' written requests to do so.

Jurisdiction of the Hong Kong courts

William Wong SC had no hesitation in finding that the company, which was incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, had its centre of main interest (COMI) in Hong Kong, and thus that the winding-up order against the company had properly been made by the Hong Kong courts.

The default position was that set out in Kam Leung Sui Kwan v Kam Kwan Lai [2015] 18 HKCFAR 501, that the court can "make whatever orders are necessary to give effect to its own judgments".

The court drew on the decision in Re Victor River [2021] HKCFI 886, that where a company has representatives and officers who (1) reside in Hong Kong and (2) are subject to the jurisdiction of the Hong Kong courts, "a Hong Kong liquidator will be able to apply for court orders to facilitate the exercise of its powers".

William Wong SC noted that the common use of offshore jurisdictions for company incorporation by Hong Kong companies meant that there was nothing in principle preventing recognition of liquidators appointed in a company's COMI.

He said it was reasonable to expect the BVI courts would not disturb the orders made by the Hong Kong court and that it was not right that the liquidators should be ordered to apply for fresh winding up orders in the BVI courts as this would not be "cost effective".

Willingness to enforce

The willingness of the Hong Kong courts to issue a winding up order in respect of a foreign incorporated company where the three core requirements for winding-up a foreign company under section 327(1) of the Companies (winding up and Miscellaneous Provisions) Ordinance (Cap. 32) are satisfied has been demonstrated in several recent decisions (see Hogan Lovells client alerts Deja vu? Hong Kong court orders winding-up of Bermuda-based listco despite PL’s objections and Foreign exchange – Hong Kong court orders winding up of listco already wound up in Cayman islands).

The decision in Wing Sze Tiffany Wong shows that, where they have sufficient jurisdiction, the Hong Kong courts will be ready to make the orders necessary to ensure the effective administration of a liquidation taking place in Hong Kong, even while the liquidation is subject to ongoing proceedings in the company's country of incorporation.

Authored by Jonathan Leitch, Nigel Sharman, and Eleanor Winn.