Re Like Grand Holdings Ltd

HCCW000603/2001

HCCW 603/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 603 OF 2001

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Coram: Hon Kwan J in Chambers

Date of Hearing: 11 July 2003

Date of Decision: 11 July 2003

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D E C I S I O N

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1.I have before me a summons issued on 26 May 2003 by the 1st and 2nd respondents, seeking an order that security for costs is to be provided by the petitioners in the sum of HK$620,000.00 or such sum as the court thinks fit, under the provisions of O. 23 r. 1(c) and (d) of the Rules of the High Court.

2.The litigation in which the parties are involved is a petition to wind up China International Business Development (Hong Kong) Limited, the 2nd respondent herein, on the just and equitable ground, alternatively for relief under section 168A of the Companies Ordinance, Cap. 32.

3.It would be convenient if I first set out the relevant provisions in O. 23 r. 1:

"(1) Where on the application of a defendant to an action or other proceeding in the Court of First Instance, it appears to the Court -

...

(c) subject to paragraph (2) that the plaintiff's address is not stated in the writ or other originating process or is incorrectly stated therein, or

(d) that the plaintiff has changed his address during the course of the proceedings with a view to evading the consequences of the litigation,

then if, having regard to all the circumstances of the case, the Court thinks it just to do so, it may order the plaintiff to give such security for the defendant's costs of the action or other proceeding as it thinks just.

(2) The Court shall not require a plaintiff to give security by reason only of paragraph (1)(c) if he satisfies the Court that the failure to state his address or the mis-statement thereof was made innocently and without intention to deceive."

4.The respondents' case in this application is that the petitioners have never provided "their genuine address" or "have changed their addresses during the course of the proceedings of this action with a view to evading the consequences of this action".

5.It is important to bear in mind what are the procedural requirements regarding the provision of the address of a plaintiff or a petitioner in the originating process, as these requirements do not seem to have been appreciated by the solicitors on both sides.

6.Under O. 9 r. 2(3) of the Rules of the High Court, it is provided that O. 6 r. 5 shall, with the necessary modifications, apply in relation to a petition as it applies in relation to a writ. O. 6 r. 5(1) reads as follows:

"Before a writ is issued, it must be indorsed -

(a) where the plaintiff sues by a solicitor, with the plaintiff's address and the solicitor's name or firm and a business address of his within the jurisdiction and also (if the solicitor is the agent of another) the name or firm and business address of his principal;

(b) where the plaintiff sues in person, with the address of his place of residence and if his place of residence is not within the jurisdiction or if he has no place of residence, the address of a place within the jurisdiction at or to which documents for him may be delivered or sent."

7.O. 6 r. 5(2) deals with the address for service of a plaintiff. I do not propose to set out this provision except to draw the attention of the parties to this. In the commentary in Hong Kong Civil Procedure 2002 Vol. 1 paragraph 6/5/5 under the heading of "Address of the plaintiff", the relevant extract reads as follows:

"Where a plaintiff sues by a solicitor, his address need not be his 'place of residence', but where he sues in person, it must be his place of residence, i.e. the place which he occupies as his home, where he lives."

8.I pause here to remark that this would be appear to be a reference to the address for service which is dealt with in O. 6 r. 5(2). The relevant extract in this commentary continues as follows:

"If a plaintiff in person has no place of residence within the jurisdiction, or he has no place of residence, this fact must be stated in the indorsement of the writ, and the address of a place within the jurisdiction must be indorsed on the writ. In any case, the address must be a genuine address (cf O. 12, r. 3(4) in the case of an acknowledgment of service and see Pittsburg, etc., Co. v Marx [1897] WN 36). If the address is not truly or correctly stated, the plaintiff may be ordered to amend by stating the correct address, or the proceedings may be stayed, or he may be ordered to give security for costs. (see O. 23 r. 1(1)(c))."

9.It is important that the requirements as to the provision of the address of a petitioner must be observed. The purpose of requiring a plaintiff or a petitioner to state his address as well as his solicitor's address, which is the address for service, is to inform the other party whether the plaintiff or petitioner is ordinarily resident within or outside the jurisdiction; if it is the latter, the other party may wish to apply for security for costs. Thus, the address of the petitioner that should be stated in the petition must be his place of residence.

10.In this instance, the addresses of the petitioners provided in the petition are care of a commercial address being Room 1705, Carnival Commercial Building, 18 Java Road, North Point. This is simply not in compliance with the requirement in the Rules of the High Court. As the addresses of the petitioners are incorrectly stated, the requirement in O. 23 r. 1(c) would appear to be satisfied, so unless the petitioners satisfy the court that the failure to state their addresses correctly was an innocent mistake and there was no intention to deceive, I would have a discretion to order security for costs.

11.In the various affirmations filed by the petitioners in these proceedings, they have given two other addresses as their addresses, being Room 3810-11, 38/F, West Tower, Shun Tak Centre, No. 168-200 Connaught Road Central and 35/F, China Merchant Tower, Shun Tak Centre, No. 168-200 Connaught Road Central. The respondents asserted that from their enquiry made in February 2003, the petitioners have no connection with any of the three addresses they have provided in various documents filed in court. It was submitted that there was misdescription or concealment of their addresses with the view to evading the consequences of litigation.

12.An explanation was given by the petitioners in their affirmations made on 8 July 2003 why they have not provided their residential addresses and how it had come about that various business addresses were used instead. All three addresses provided by the petitioners in the documents filed in court are business addresses of their relative or friend and they had procured the agreement of the relative or friend to use such address at various times.

13.According to one of the petitioners, Mr Chong Chi Yeung, he and the other petitioner, Mr Hui Ming Yeung, had decided not to use their residential addresses because Mr Hui is elderly and he cannot read English whereas Mr Chong's job would require him to travel overseas sometimes. Mr Chong was given to understand there would be correspondence sent from his solicitors and some might be quite urgent. To avoid the risk of delay, the petitioners decided to use a business address so that someone could inform them if there was any urgent matter to attend to.

14.This thinking is just wrong. The petitioners should have given their residential addresses, and their solicitors at the time should have advised them that if they were concerned that documents sent from their solicitors might not have received their prompt attention if sent to their residential addresses, then an additional address could be provided to their solicitors purely to facilitate the communication between solicitor and client.

15.I am not, however, prepared to draw the inference that the mis-statement of the petitioners' addresses was deliberate concealment or done with the view to evade the consequences of litigation or there was any intention to deceive in view of the following matters:

(1) I am satisfied on the evidence that both the petitioners do have a permanent residential address in Hong Kong. In the case of Mr Chong, he has been residing at his address since 1999 at the latest. In the case of Mr Hui, he has been residing at his address which is a property owned by his son since 1995.

(2) The residential addresses of the petitioners have been known to the respondents for some time, before these proceedings were issued, as the notices of the annual general meetings of the 2nd respondent had been served on the petitioners' residential addresses.

(3) The respondents have no apparent reason to believe that the petitioners might no longer have resided at their addresses. As late as March 2003, one Willie Lo had visited the petitioners' residential addresses to check if the petitioners were still living there. According to the supporting affirmation filed by a legal executive of the respondents' solicitor, Willie Lo was asked by the respondents to investigate if the addresses provided by the petitioners were indeed their addresses. The legal executive has deposed at length as to the result of Willie Lo's visit to the three business addresses but made no mention at all of any visit to the residential addresses, which is less than frank with the court. I have no reason to disbelieve the petitioners in their affirmations that Willie Lo had called at their residential addresses in March 2003.

(4) I cannot rule out the possibility that the petitioners have not been properly advised by their former solicitors when asked to provide their addresses.

16.The respondents have not satisfied me that the requirements in O. 23 r. 1(c) or (d) are made out. This application for security for costs should be dismissed.

17.It is not necessary for me to deal with the lack of merits of the petition as submitted by the respondents, or the lateness in which the application was made as submitted by the petitioners.

18.As for costs, it seems to me that both parties are at fault. The petitioners are at fault in mis-stating their addresses and not giving a proper explanation to the respondents when requested by the respondents' solicitors to do so in correspondence in March and April 2003, before the summons was issued by the respondents in May 2003. The respondents are equally at fault. Although there was mis-statement of the petitioners' addresses, as I have found, the respondents have no apparent reason to believe that the petitioners might have moved from the residential addresses which are known to the respondents for quite some time. The ordinary rule is to award costs in favour of the party who succeeds in an application. In the exercise of my discretion, I propose to depart from the ordinary rule in this manner. I order that the petitioners are to have half of their costs in this application in any event, to be taxed if not agreed.

Representation:

Ms Lorinda Lau, instructed by Messrs C Y Chan & Co., for the Petitioners

Mr Simon Lam, instructed by Messrs William Sin & Co., for the 1st and 2nd Respondents