Integrated Marketing Communications Ltd and Another v. Registrar of Companies

HCMP 1962/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1962 OF 2015

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DECISION
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1.This is an application to the court for the restoration of a company to the Companies Register pursuant to section 765 of the Companies Ordinance (Cap 622). Although there is a consent summons for disposing of the proceedings and restoring the company to the Companies Register, a point has arisen as to the proper parties to an application of this kind, in particular as to whether the company that has been struck off, deregistered or dissolved can or should be made a party to the application. Since the issue has arisen in a number of cases recently and because there seems to be some confusion among practitioners over what the correct practice is, I have decided to publish my reasons in this case in the hope that they will provide some guidance to the profession.

2.Section 765 of the Companies Ordinance (Cap 622) provides for a single streamlined procedure for the restoration of a company to the Companies Register.  It replaces the procedure for restoring a struck off company under section 291 of the previous Companies Ordinance (Cap 32) and the procedure for reinstatement of a deregistered company under section 291AB of the same Ordinance.

3.Section 291(7) of the previous Companies Ordinance (Cap 32) provided as follows:

“(7) If a company or any member or creditor thereof feels aggrieved by the company having been struck off the register, the court on an application made by the company or member or creditor before the expiration of 20 years from the publication in the Gazette of the notice aforesaid may, if satisfied that the company was at the time of the striking off carrying on business or in operation, or otherwise that it is just that the company be restored to the register, order the name of the company to be restored to the register, and upon an office copy of the order being delivered to the Registrar for registration the company shall be deemed to have continued in existence as if its name had not been struck off; and the court may by the order give such directions and make such provisions as seem just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off.” (underlining added)

4.It can be seen that this sub-section expressly provided that notwithstanding a company had been struck off (and consequently dissolved under section 291(3), (5) or (6)), the application for restoration could be made by the company itself as well as by a member or creditor of the company.  Section 291 was derived from section 295 of the (UK) Companies Act 1929 which later became section 353 of the (UK) Companies Act 1948.  Section 291(7) of the previous Companies Ordinance was in terms similar to section 353(6) of the Companies Act 1948.  It is stated in Buckley on the Companies Acts (14^th ed), vol 1, p 807 in relation to that provision that:

“It is a curiosity of the sub-section that the company, although dissolved and no longer in existence, may apply to have its name restored.”

See also In re Test Holdings (Clifton) Ltd [1970] Ch 285, 289E.  In Re New Timbiqui Gold Mines Ltd [1961] Ch 319, 325, Buckley J also said in relation to this provision that it was

“one of the anomalies of company law that a company which has been dissolved can petition the court under this section to have its name restored to the register”.

Likewise, in Tyman Ld v Craven [1952] 2 QB 100, 112, Evershed MR expressed the view:

“It may be said that on any view the subsection is not very happily drafted; it contemplates, for example, that the application for an order for restoration may be made by the company at a time when the company had been dissolved and is non-existent …”

It was nevertheless the practice under the English section, where a company had been struck off for failure to make annual returns, for the company to be joined as applicant to give undertakings to bring the returns up to date: Re Walter Wright Ltd [1923] WN 128.

5.Section 291AB(2) of the previous Companies Ordinance (Cap 32) was, however, differently worded in this respect.  It provided:

“(2) The court may order that the Registrar reinstate the registration of a company that was deregistered under section 291AA if-

(a) an application for reinstatement is made to the court within 20 years of the deregistration by a person who feels aggrieved by the deregistration; and

(b) the court is satisfied that it is just that the registration of the company be reinstated.”

This sub-section did not provide that a company which had been deregistered under section 291AA (and consequently dissolved upon deregistration pursuant to section 291AA(11)) could itself make an application for reinstatement. 

6.In Re Skychain Investment Ltd (unreported HCMP 6506/2000, 1 February 2001), Chung J declined to make an order for reinstatement under section 291AB(2) where the deregistered company was the applicant, doubting that a company which had already been deregistered and therefore dissolved could properly be the applicant in such an application. 

7.With respect, I think that must be right.  As a matter of general principle, a company that is dissolved has ceased to exist as a legal entity.  In the absence of express statutory provision such as found in section 291(7) of Cap 32 before its repeal, a dissolved company is not normally in a position either to sue or be sued or indeed to do any other legal act. 

8.Both of the above procedures have, as I have already stated, been replaced now by section 765 of the Companies Ordinance (Cap 622).  That section provides as follows:

“(1) Where a company’s name or a company has been struck off the register under section 291 or 291A of the predecessor Ordinance, and the company is dissolved under that section, an application to the Court for the restoration of the company to the Companies Register may be made by a person who—

(a) was a director or member or creditor of the company; and

(b) feels aggrieved by the striking off.

(2) Where a company has been deregistered, and is dissolved, under section 291AA of the predecessor Ordinance, an application to the Court for the restoration of the company to the Companies Register may be made by a person who feels aggrieved by the deregistration.

(3) Subsection (4) applies if—

(a) a company’s name has been struck off the Companies Register under section 746, 747 or 748, and the company is dissolved under that section; or

(b) a company has been deregistered, and is dissolved, under section 751.

(4) An application to the Court for the restoration of the company to the Companies Register may be made—

(a) by a person who was a director or member or creditor of the company; or

(b) by any other person, including the Government, who appears to the Court to have an interest in the matter.”

9.As can be seen, the section is divided into 3 parts.

(1) Section 765(1) provides for the restoration of a company struck off and dissolved under section 291 or 291A of the previous Companies Ordinance (Cap 32).  The application may be made by “a person who (a) was a director or member or creditor of the company; and (b) feels aggrieved by the striking off”.

(2) Section 765(2) provides for the restoration of a company deregistered and dissolved under section 291AA of the previous Companies Ordinance (Cap 32). The application may be made by “a person who feels aggrieved by the deregistration”.

(3) Section 765(3) and (4) provide for the restoration of a company whose name has been struck off under section 746, 747 or 748, or a company that has been deregistered and dissolved under section 751 of the Companies Ordinance (Cap 622). The application may be made “(a) by a person who was a director or member or creditor of the company; or (b) by any other person, including the Government, who appears to the Court to have an interest in the matter”.

10.It can be seen that in this uniform procedure for restoration, none of the provisions specify that a dissolved company, irrespective of whether the dissolution was a result of being struck off or deregistered under the previous Companies Ordinance or the new Companies Ordinance, may make the application.  The anomaly found in section 291(7) of Cap 32 has not been reproduced in Cap 622.  As a matter of general principle, such a company cannot, in my view, be a party to the application.  In this respect, I agree with the statement in Butterworths Hong Kong Company Law Handbook (16^th edition), page 1247 concerning section 765 that:

“The application cannot be made by the company itself since it no longer exists.”

11.In the present case, notwithstanding that the company in question had been deregistered and dissolved upon deregistration pursuant to section 751 of the Companies Ordinance (Cap 622), it has been named the 1^st applicant in these proceedings.  In this regard, the solicitors for the applicants may have been misled by the commentary in Hong Kong Civil Procedure 2015, para 102/2/58, which appears to suggest that in an application under section 765 of the Companies Ordinance (Cap 622), the company should be joined as a co-applicant or be made a respondent.  In my view, that suggestion is contrary to principle and should not be followed. 

12.In the present case, subject to striking out the company in question as the 1^st applicant in these proceedings, I am prepared to make an order on the basis of the consent summons and there will be an order accordingly.

Messrs Bennett Chan & Co, for the applicants

The respondent is not represented