Re Minwah Textile Ltd

HCMP000218/1973

IN THE SUPREME COURT OF HONG KONG

APPELLATE JURISDICTION

MISCELLANEOUS PROCEEDINGS NO. 217 OF 1973

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MISCELLANEOUS PROCEEDING NO. 218 OF 1973

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Coram: Full Court (Li and Cons, JJ.)

Date of Judgment: 27 July 1973

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JUDGMENT

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1. These are two separate applications for an extension of time within which to appeal against an order made by the Registrar and leave to appeal against an order of the Registrar dismissing the claim of the two applicants.

2. The facts in this case are not in dispute. It appears that on the 11th of July 1970 one Mr. Tsang Chung Hing who was then the proprietor of partner of a firm by the name of Minwah Weaving Factory mortgaged a lot of machines listed in the agreement to Madam Chiu, the first applicant, for a sum of $75,000. On the 1st of October 1970 the mortgage was converted into a sale by a bill of sale of the same machines. There was no delivery of physical possession to Madam Chiu. The machine was left with the Minwah Factory.

3. On the 10th of November 1970 Minwah Weaving Factory dropped out of the picture and a new limited company was formed in the name of Minwah Textile Limited. By an agreement Madam Chiu let the machines comprised in the bill of sale to the Minwah Textile Limited at the monthly rental. That continued until 1973. By an agreement between Madam Chiu and Mr. Cheung, the second applicant, dated the 6th of January 1973 six of these machines were sold to Mr. Cheung. Mr. Cheung then made arrangement with the Minwah Textile Limited to sell these six sets of machines to the latter in a form of a hire purchase agreement. The Wayfoong Finance Co. put up the purchase price. A separate finance agreement was signed between Mr. Cheung and Wayfoong Finance Company that in the event of Minwah Textile Limited failing to pay any instalment of hire purchase or that if it is wound up Mr. Cheung would have to repay the whole sum to Wayfoong Finance Company.

4. In February 1973 there was a petition for the winding up against the Minwah Textile Limited. An order was made and the Official Receiver was appointed a provisional liquidator. As a result, the machines were seized by the bailiff as part of the assets of the Minwah Textile Limited. The provisional liquidator obtained an order for sale from this Court. After that the two applicants Madam Chiu and Mr. Cheung lodged their claims for the machines on the basis that they were the owners of the machinery. The Official Receiver issued an interpleader summons and the matter was put before Registrar Jones.

5. I have read the decision of the learned Registrar. Apparently his decision was based on the fact that the bill of sale originally signed between Madam Chiu, the first applicant, and Mr. Tsang Chung Hing was not registered within 7 days. As such it is void against anyone by virtue of section 7(b) of the Bill of Sale Ordinance. The parties did not immediately appeal against that decision. Instead they went to their own solicitors and other firms of solicitors dealing with the matter and required compensation. It took them sometime to realize that as the Minwah Textile Limited was never a party to the bill of sale, certainly the validity of the bill of sale has nothing to do with their claim.

6. Indeed, Minwah Textile Limited was not formed until after the bill of sale was signed and executed. In so far as the Minwah Textile Limited was concerned is nothing more or less than one of the hirers. The ownership of the machines at all times remained with Madam Chiu and the six sets of machines became the property of Mr. Cheung who derived a title from Madam Chiu after he paid off the Wayfoong Finance Company.

7. Mr. Patel in his affidavit very fairly put the facts before us clearly. Under the circumstances he cannot conscientiously oppose the appeal on the ground namely that the Minwah Textile Limited was never a party to the bill of sale. However, at all times up to now the Official Receiver has acted in a proper and a reasonable manner. Reading from the decision of the learned Registrar there has been a confusion as to the two names of Minwah Weaving Factory and Minwah Textile Limited. It appears that he thought the Minwah Textile Limited was a party to the bill of sale. Had that been so, obviously the claimants would have no claim at all. Since the Minwah Textile Limited is not a party to the bill of sale it put the case in a completely different picture.

8. Although these are two separate applications for extension of time and for leave to appeal against the Registrar's decision we have, for convenience, treated the two applications as one in these proceedings. Also, at the invitation of Mr. Patel we deal with the merit of the appeal as well because we understand we have power to do so under Order 59 rule 10(iv) of the Rules of the Supreme Court.

9. Accordingly, we feel that we should deal with the merit of the appeal as well. In the circumstances, we grant leave for an extension of time and leave to appeal against the Registrar's decision and treat this as the appeal proper and allow the appeal. Accordingly, the Registrar's decision is set aside and that the claimant should succeed in their claim. The order of sale is therefore rescinded.

10. The next thing we have to do is to consider the matter of costs. We feel that the question of delay has nothing to do with the Official Receiver whatever and this application is necessary only because of the delay on the part of the claimants and that the facts were not clearly and precisely presented to the Registrar at the time of the hearing. Despite the success of the applications in this case, we are of the opinion that the applicants should pay for the watchmen's fees and the cost occasioned by having to put watchmen over the machine.

Representation:

Applicants in person.

Mr. Patel for Official Receiver.

Oral judgment reduced into writing.