Re Max Win Engineering Ltd.

HCMP001913/2002

HCMP 1913/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1913 OF 2002

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Coram: Hon Kwan J in Court

Dates of Hearing: 24 May 2002

Date of Judgment: 24 May 2002

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JUDGMENT

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1.I have before me an application for an order declaring the dissolution of a company to have been void under s.290(1) of the Companies Ordinance, Cap. 32. The company in question is Max Win Engineering Limited ("the Company"). The applicant Mr Ng Yuen Cheong is the former employee of the Company. The purpose of reviving the Company is for the applicant to bring an action for damages at common law against the Company in respect of his personal injuries sustained at work on 5 June 1999. His claim will become time barred in less than 2 weeks.

2.Before I deal with the merits of the application, I would like to say something about the procedure adopted. The application here was made by a Notice of Originating Motion. As I understand from Mr Timmy Yip, who appeared for the applicant, O.102, r.4(1)(f) of the Rules of the High Court is not applicable to this situation. That provision stipulates that an application must be made by originating motion where an order is sought declaring the dissolution of a company, which has not been wound up, to have been void. In the present case, from the available evidence, it would appear that the affairs of the Company have been wound up. Mr Yip has drawn my attention to r.5(1)(c) of the Companies (Winding-up) Rules which provides that applications under s.290 of Cap. 32 shall be heard before a judge in open court. And under r.7(1), it is provided that every application in court other than a petition shall be made by motion. It seems to me to be appropriate that the application was made by a Notice of Originating Motion.

3.The Notice of Originating Motion filed by the applicant here was rather curiously worded. A form of a Notice of Originating Motion is given in Form No. 13 of the Rules of the High Court. Two alternatives are given in that Form. The first alternative envisages that the application is to be heard at a specified number of days from the day of service of the Originating Motion on the parties affected. The second alternative merely specifies that the application is to be heard on a particular date, in other words, a hearing ex parte is contemplated. Under O.8, r.2(1) of the Rules of the High Court, it is provided that except where an application by motion may properly be made ex parte, no motion shall be made without previous notice to the parties affected thereby. In this instance, the second alternative was adopted in the Notice of Originating Motion. However, at the end of the Notice, it was addressed to the former liquidator, Mr Lau Yue Sum, and to a firm of solicitors acting for the insurers of the Company under a policy for employees' compensation. The applicant has filed evidence deposing that notwithstanding the Notice of Originating Motion was not addressed to the Registrar of Companies, the Notice with the supporting affirmation were in fact served on the Registrar.

4.Even if the form for an originating motion for use in the Chancery Division in England is used in which the parties are not named in the title of the proceedings, the party on whom an originating motion is served should be described as the respondent at the end of the originating motion. Strictly speaking, the former liquidator, the insurers (they were not even named anywhere in the Notice of Originating Motion) and the Registrar of Companies are not parties to these proceedings. They should have been properly named as respondents.

5.The Registrar of Companies has filed an affirmation stating that he has no objection to the application, provided that certain terms are made part of the order which I shall deal with below. The Registrar has also appeared by counsel today.

6.As for the insurers, they have received notice of these proceedings through their solicitors. They could have applied to join in these proceedings as a necessary party as in Re Workvale Limited [1991] BCLC 528 and Re Philip Powis Limited [1998] 1 BCLC 440, but they have not done so. Instead, the insurers have written through their solicitors to the court and copied their letter to the applicant's solicitors, making submissions why the application should be dismissed and what appropriate costs order should be made.

7.Notwithstanding this irregularity regarding the parties, as the former liquidator and the Registrar of Companies have been served with the necessary papers and both the former liquidator and the Registrar have appeared today, in the exercise of my discretion, I have decided to hear this application.

8.I turn to the merits. The background may be given as follows. In May 1999, the applicant was employed by the Company as a casual labourer and assigned to work on a construction site in Fanling. On 5 June 1999, he met with an accident and fell from a working platform when a big piece of concrete fell onto the platform, causing him to lose balance. The applicant sustained serious injuries. On 27 October 2000, the Company passed a resolution for voluntary winding-up with a declaration of solvency and that Mr Lau Yue Sum be appointed liquidator. The final meeting was called on 30 May 2001 to receive the liquidator's account and the return of the liquidator of the final meeting was registered with the Companies Registry the next day. On 31 May, 2001, the applicant brought proceedings for employees' compensation against the Company, its sub-contractor and principal contractor in Employees' Compensation Case No. 389 of 2001. On 1 September 2001, the Company was dissolved under s.239(4) of Cap. 32. On 9 April 2002, a settlement was reached in the employees' compensation case and compensation was agreed and paid. Having settled the claim for employees' compensation, the applicant now wishes to pursue his claim for damages at common law against the Company, its sub-contractor and the principal contractor.

9.It seems to me that the essential elements in s.290 are satisfied. Firstly, the Company has been dissolved under one of the provisions mentioned in s.290, namely s.239; secondly, this application was made within two years of the date of dissolution of the Company; and thirdly, the applicant is an interested person as a creditor of the Company. He is interested in the revival of the Company to pursue his claim against it.

10.A number of arguments have been raised by the insurers as to why relief should not be granted. I shall deal with each of them.

11.Firstly, it was submitted that this application could have been avoided if the applicant had informed the liquidator of his intention to commence the personal injuries action against the Company, and requested the liquidator not to dissolve the Company until after his action has been disposed of. The Company had passed a resolution to wind up as early as 27 October 2000. The final meeting was called before the proceedings for employees' compensation were commenced. Once the return of the final meeting was registered, the dissolution of the Company would follow three months from the date of the registration under s.239(4). If the date of dissolution is to be deferred, an application must be made to the court under s.239(4). So one way or other, there has to be an application to the court. I see no merit in this submission.

12.Secondly, it was argued that the application is not necessary because the applicant can still bring an action for damages against the sub-contractor and the principal contractor, and additional costs in litigation would be incurred in bringing an action against the Company as well as the other parties with no additional benefit. I disagree with this. The nature and extent of the duty owed by each of these proposed defendants to the applicant was not the same. The way in which they had breached their respective duties was not the same. There is a definite purpose to be served in bringing an action against the Company.

13.Lastly, reliance was placed on s.2 of the Third Parties (Rights against Insurers) Ordinance, Cap. 273. This section provides as follows:

"(1) Where under any contract of insurance, a person (hereinafter referred to as the insured) is insured against liabilities to third parties which he may incur, then __ ... (b) in the case of the insured being a company, in the event of a winding-up order being made, or a resolution for a voluntary winding-up being passed, with respect to the company, ... if, either before or after that event, any such liability as aforesaid is incurred by the insured, his rights against the insurer under the contract in respect of the liability shall, notwithstanding anything in any enactment or rule of law to the contrary, be transferred to and vest in the third party to whom the liability was so incurred."

14.It was submitted by the insurers that this section has provided adequate remedies for the applicant to claim against the insurers "once liability against the insurers is established". But how is that liability to be established? In my view, in this case, this can only be done by commencing action against the Company and obtaining judgment against the Company. Besides, as Mr Yip has submitted, the applicant does not have any idea of the contents of the relevant insurance policy and it is not certain whether the applicant can indeed rely on s.2 of Cap. 273.

15.For the above reasons, I reject each of the arguments advanced by the insurers that no relief should be granted on this application.

16.I turn to the orders sought by the Registrar of Companies. The Registrar has asked for two additional orders. The first is to order the liquidator to change the Chinese name of the Company within 30 days of the order because the existing name of the Company in Chinese is identical to the Chinese name of a new company incorporated after the dissolution of the Company. I understand from Mr Alvin Sin, who appeared for the Registrar, that it would be acceptable to the Registrar if the Company is simply to delete its Chinese name. The second order the Registrar seeks is for the liquidator to file with the Registrar all outstanding liquidator's statements within 30 days of the order pursuant to s.284 and r.181 of the Companies (Winding-up) Rules. It would be appropriate to make these additional orders and I understand from Mr Lau Yue Sum, who has no objection to be re-appointed as the liquidator, that he is willing and in a position to comply with them.

17.The orders I make on this application are as follows:-

1) the dissolution of the Company is declared to have been void;

2) Mr Lau Yue Sum is re-appointed the liquidator of the Company;

3) the applicant is to deliver a sealed copy of this order to the Registrar of Companies within 7 days from the date hereof;

4) the liquidator is to file with the Companies Registry a special resolution regarding the change of the Chinese name of the Company within 30 days from the date hereof;

5) the liquidator is to file with the Companies Registry all outstanding liquidator's statements within 30 days from the date hereof;

6) the liquidator is granted power to defend the action in the High Court to be brought by the applicant against the Company and others and to appoint a solicitor to assist him to defend the proceedings; and

7) the applicant is to pay the costs of the Registrar of Companies in this application at HK$9,000.00 as agreed, as well as the costs of the liquidator in this application. Save as aforesaid, there be no order regarding the applicant's own costs.

18.I should mention that I do not regard it as appropriate to order costs in these proceedings to be costs in the cause of the intended High Court Action, as to do so would be to make a costs order affecting those who are not parties to these proceedings. I would simply leave it to the applicant to claim his costs in these proceedings against those found liable in the High Court Action.

Representation:

Mr Timmy C Y Yip, instructed by Messrs Gallant Y T Ho & Co., for the applicant

Mr Lau Yue Sum, liquidator of the Company, present

Mr Alvin Sin, for the Registrar of Companies