Yeung Siu Yung v. The Registrar of Companies and Others

HCMP 528/2020

[2021] HKCFI 73

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 528 OF 2020

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BETWEEN

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Before: Deputy High Court Judge William Wong, SC in Chambers

Date of Hearing: 23 December 2020

Date of Decision: 23 December 2020

Date of Reasons for Decision: 8 January 2021

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REASONS FOR DECISION

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APPLICATION

1.By an originating summons dated 11 May 2020, the Applicant, pursuant to sections 765(3) and 765(4) of the Companies Ordinance (Cap 622) (the “Ordinance”), applies to restore Clever Brilliant Limited (Company No 1463161) (the “Company”), to the Companies Register.

2.The 1^st Respondent, the Registrar of Companies, originally filed an intention to contest these proceedings on 13 May 2020 but subsequently indicated her neutral stance and informed the Court that she does not intend to contest these proceedings on 3 September 2020.  The 3^rd Respondent indicated his intention not to contest the proceedings on 22 May 2020.

3.The 2^nd Respondent filed an intention to contest these proceedings on 5 October 2020 and upon her application, leave was granted to her to file evidence in opposition.  Court papers in relation to the substantive hearing were served on the 2^nd Respondent.  However, the 2^nd Respondent chose not to appear for the substantive hearing.

4.At the substantive hearing on 23 December 2020, I made an order to restore the Company to the Companies Register.  I now give my reasons.

MATERIAL FACTS

5.It is the Applicant’s case that she met the 2^nd Respondent through a mutual acquaintance in around May 2014 and in reliance of the 2^nd Respondent’s misrepresentations made a number of investments and payments to the Company.

6.In November 2017, the Applicant realized that she has been deceived by the 2^nd Respondent all along and reported the matter to the Police.

7.In May 2018, the Applicant commenced High Court Action No. 1211 of 2018 against the 2^nd Respondent and the Company (including certain other defendants) for recovery of, inter alia, the Applicant’s money that was deposited into the Company’s accounts.

8.A Mareva injunction was obtained against the Company as well as other defendants on 23 May 2018, which was amended on 1 June 2018 (the “Injunction Order”).

9.Pursuant to section 746 of the Ordinance, the Company was struck off the Companies Register on 31 January 2020 and dissolved on the publication of the relevant notice.

10.In around March 2020, the Applicant first discovered that the Company had been struck off the Companies Register after the general discovery of documents in the High Court Action No. 1211 of 2018.

11.This Court is informed by the Applicant that the 2^nd Respondent is presently facing some criminal charges arising from the same fraudulent actions.

12.In the circumstances, the Applicant makes the present application to restore the Company so as to continue the High Court Action No. 1211 of 2018 against, inter alia, the Company.

LEGAL PRINCIPLES

13.Sections 765(3) and (4), 766(1) and 767(3) of the Ordinance are relevant to the present application.

14.I am persuaded that the Applicant is an interested person under Section 765(4)(b) of the Ordinance and the application is made within 20 years after the date of the dissolution.  The issue is whether discretion should be exercised in favour of restoration.

15.In Re Active System Trading Limited, HCMP 5173 of 2003, unreported, 17 May 2004, Tang J (as he then was) at §§11 and 12 said:

“11. As is clear from the evidence filed so far on behalf of the parties, whether or not the District Court action had been settled depends on credibility of witnesses. I cannot say that there is not a bona fide dispute, and that being the case, I should proceed on the basis that the applicant has a bona fide claim against the Company for goods sold and delivered. That is sufficient for the purpose of section 291AB(2).

12. Mr Cheung has submitted that I must consider whether it is just to do so in all the circumstances. In my opinion, it would be just to do so. If there is a genuine claim against a deregistered company and the claimant wishes to bring action against the company, the circumstances would have to be very unusual indeed if the court were to refuse to reinstate the company. The fact that a company may be insolvent is not in my opinion decisive. The bona fide creditor should be allowed to pursue his claim in the usual way.” (Emphasis added.)

16.In Re Cretec Electronics (HK) Ltd, HCMP 2647 of 2014, unreported, 30 January 2015, Lam VP at §9 said:

“ … In that regard, the judge had correctly applied the principles set out in Re Active System Trading Ltd HCMP 5173 of 2003, 17 May 2004. In that case, it was held by Tang J (as Tang PJ then was) that for the purposes of reinstatement of a company under section 291AB (the relevant section of the predecessor ordinance to the current Companies Ordinance), it was sufficient that the applicant had a bona fide dispute against the company. If there was a genuine claim against a de-registered company, the circumstances would have to be very unusual for the court to refuse to reinstate the company. His Lordship also held that in an application for reinstatement, the court should leave the parties to resolve their substantive differences in the appropriate forum and in the appropriate way.”

ANALYSIS

17.Applying the above legal principles to the facts of the present case, I am of the view that the Applicant has a bona fide claim against the Company for receiving her money as a result of the pleaded   misrepresentation. She should be allowed to pursue her claim against the Company.  (See also Re Marcel Network Ltd, HCMP 1921 of 2016, unreported, 17 May 2018, per Au-Yeung J at §9)

18.I agree that High Court Action No. 1211 of 2018 is still ongoing and it would not be just for the proceedings in that action to be disrupted by the Company being struck off the Companies Register.

19.There is no suggestion of any prejudice to the 2^nd Respondent if the Company were to be restored.  The bank statements of the Company reveal that it still has money in its accounts in mid-2018 when the Injunction Order was granted.  As such, if the Company is not restored to the Companies Register, the Applicant would not be able to continue her claim against the Company in the High Court Action No. 1211 of 2018 to recover her money.

20.The 2^nd Respondent argued that restoring the Company serves no good purpose and is totally unnecessary because the Applicant has already got the bank statements of the accounts of the Company and that as the 2^nd and 3^rd Respondents are defendants in High Court Action No. 1211 of 2018, any further documents can be obtained through the process of discovery in the usual manner.  I disagree.  The Applicant is entitled to continue her claim against the Company and if she were able to prove her case, to obtain a judgment against the Company.  The Applicant is also entitled to trace her monies through the Company’s accounts.

DISPOSITION

21.For all the reasons stated above, I make an order in terms of the draft orders as submitted by the Applicant.  

22.Finally, it remains for me to thank Mr Kan for the Applicant for his helpful assistance.

Mr Johnny Kan of Chan Ching Man & Co, for the Applicant

Attendance of the 1^st Respondent was excused

The 2^nd Respondent, in person, absent

Attendance of the 3^rd Respondent was excused