Kosei Securities Co. (Asia) Ltd. v. Akira Sugiyama
Read the full judgment text of HCA 6354/1991 on BabelCite. This High Court CFI judgment.
1. This is an appeal from an Order of Master Woolley made on the 9th of this month by which he dismissed the defendant's application to strike out the Statement of Claim and have the action dismissed or stayed. The writ was issued on August 20, 1991, at a time when the plaintiff company was - to use the expression employed by Buckley L.J. in Thomson v. Henderson's Transvaal Estates [1908] 1 Ch 765 at p.776 - a "going company".
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HCA006354/1991 High Court Action No. A6354 of 1991 --------------------- H E A D N O T E ---------------------- THE LIQUIDATORS OF A COMPANY IN VOLUNTARY LIQUIDATION MAY, WITHOUT SANCTION, CONTINUE AN ACTION COMMENCED BY THE COMPANY BEFORE IT WAS PUT IN VOLUNTARY LIQUIDATION.
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--------------- Coram: Bokhary J. in Chambers Date of hearing: January 23, 1992 Date of delivery of judgment: January 23, 1992 ----------------------- J U D G M E N T ----------------------- 1. This is an appeal from an Order of Master Woolley made on the 9th of this month by which he dismissed the defendant's application to strike out the Statement of Claim and have the action dismissed or stayed. The writ was issued on August 20, 1991, at a time when the plaintiff company was - to use the expression employed by Buckley L.J. in Thomson v. Henderson's Transvaal Estates [1908] 1 Ch 765 at p.776 - a "going company". 2. On September 30, 1991, the Statement of Claim was filed; and on the 1st of the following month the defendant took out its striking out application. When launched, that application was based on grounds which no longer arise. I do not propose to say anything about those grounds - or indeed the nature of the action - because they are not relevant to what I have to decide, and anything I say thereon could possibly prejudice the position of the parties in future. 3. Eight days after the striking out summons was taken out, the plaintiff company passed a resolution putting itself in members' voluntary liquidation and appointing liquidators. The hearing, as I have indicated, came on before the learned Master on the 9th of this month. By the time it came on, there was added to the grounds on which striking out and dismissal or stay were sought the grounds which concern me on this appeal. I do not propose to rehearse the grounds advanced because in the course of the argument the way in which they were put shifted somewhat. The points at issue will of course emerge from the things which I am about to say in disposing of this appeal. 4. It seems to me that one should begin here by noting the terms of section 231 of the Company Ordinance, Cap.32 The section reads as follows:-
The plaintiff company has not been dissolved. 5. Next I turn to sections 199 and 251 which, by virtue of section 249, apply to every voluntary winding up. Reading subsection 1(b) of section 251 together with subsection 1(a) of section 199, one arrives at this position: the liquidators of a company in voluntary liquidation may, without sanction, bring or defend any action or other legal proceedings in the name and on behalf of the company. 6. It is suggested by Mrs Spruce, who appears on behalf of the defendant, that the liquidators of a company in voluntary liquidation have no power to continue an action commenced by the company before it was put in voluntary liquidation or alternatively, that they can only do so with the sanction of the court. 7. Looking at the legislation, it appears to me that either the liquidators can continue such an action without sanction or they cannot do it at all, for I see no provision suggesting that they can do such a thing but only with sanction. 8. In my judgment, reading section 251 (1) (b) together with section 199(1) (a), the liquidators of a company in voluntary liquidation may, without sanction, continue an action commenced by the company before it was put in voluntary liquidation. 9. Here the argument advanced by Mrs Spruce was that the expression "bring" in section 199(1) (a) means "commence". For the plaintiff company, Miss Yuen argues to the contrary. She points out that the power dealt with in section 199(1)(a) is to "bring or defend", so that each concept takes its colour from the other. Certainly, to "defend" an action means more than filing a defence. And, in my judgment, to "bring" an action means more than issuing a writ or taking out other originating process. I would come to that conclusion even if the expression "bring" in the context in which falls to be considered was not coupled with the concept if defending. But where the concepts are coupled like that, it seems to me that the conclusion to which I have come is all that much more obvious. 10. The liquidators here have indicated to the Court, by an affidavit made by one of them on behalf of both of them, that since their appointment the plaintiff company's solicitors have had instructions to act on behalf of the plaintiff. Such instructions would of course be from the company in liquidation under the stewardship of its liquidators - even as it had, when a going company, been under the stewardship of its directors. 11. Mrs Spruce has drawn my attention to this passage at the end of paragraph 26.11 of the 44th edition of "Gore-Browne on Companies":-
12. That statement I read as a short way of saying that a retainer from the company in liquidation is necessary. To suggest that the liquidator is to give a retainer on his own behalf rather than on behalf of company in liquidation runs counter to the requirement that - here I take the words from note 6/3/2 at page 47 of the 1991 Supreme Court Practice:-
13. That note appears of course as a note to Order 6, rule 3 which deals with the representative capacity of the plaintiff or defendant as the case may be; and the note is there to make it clear that liquidators are not to sue in a representative capacity for the simple reason that they are not to sue in their own names at all. They are not to do that any more than the company's directors were to sue in their own names when they had the stewardship of the company. 14. One might also note that if liquidators had no power to continue an action commenced before the company was put in liquidation, so that a fresh action had to be commenced, it would hardly be necessary to point out that a fresh retainer is necessary, since no one would imagine that a retainer given by a going company under the stewardship of its directors to commence an action could serve as a retainer to commence a fresh action on behalf of that company in liquidation under the stewardship of its liquidators. 15. Moving on to the matters of form of which Mrs Spruce makes complaint, the note from which I have been quoting continues thus:-
16. No such endorsement could accurately have been added to the writ in the present action since it was not issued for a company then in liquidation - the plaintiff being an going company at the time when the writ was issued. 17. One of the points of form - rather than of substance - urged by Mrs Spruce is that the name of the company as it appears in the title to this action should be although it is not - followed by some words in brackets indicating that it is a company in liquidation. The argument was that the Statement of Claim should be struck out for want of some such formula. If the absence of that formula rendered this Statement of Claim defective, then the correct course for the learned Master would, in all the circumstances, have been to give leave to amend to include it rather than to strike out the Statement of Claim, let alone stay or dismiss the action. 18. Miss Yuen's argument is simply this. The defendant has not been able to point to any section, rule, case, principle or form suggesting that such a formula is necessary even when the company was in liquidation when the writ was issued, let alone when it went into liquidation after the writ had been issued. 19. In my judgment, the Statement of Claim is not defective. 20. Nevertheless, it seems to me to be good practice to include some such formula in the title of the action at the time when the writ was issued if the company was in liquidation then, or to amend at least the writ and the Statement of Claim to add some such formula if the plaintiff company is put in liquidation after the writ had been issued. 21. It is a good practice because it makes the position abundantly clear and usefully augments the notice to the world constituted by the gazetting of the relevant resolution and matters connected therewith. Thus, something along these lines in brackets after the plaintiff company's name in the title would be suitable for addition by way of amendment in the present instance: "a company in members' voluntary liquidation pursuant to a resolution passed on October 9, 1991". 22. It is conceivable that in some instances the absence of some such formula could lead to some possible confusion resulting in some possible delay with some possible implications as to costs. And, therefore, I see it as good practice to include a formula of that sort - either from the outset or by way of amendment depending on whether the company was in liquidation when the proceedings were commenced or was put in liquidation subsequently. 23. But a failure to follow what I see as good practice does not of itself warrant a striking out, let alone a dismissal or stay. 24. Therefore, it seems to me that the result at which the learned Master arrived was the correct one. I dismiss this appeal, thank counsel on both sides for their assistance, and invite them to address me on costs and any other ancillary matters which may arise [Submissions on costs] 25. As far as costs are concerned, Miss Yuen asks for the costs of the appeal to be taxed and paid forthwith. Mrs Spruce opposes any order for costs against her client or, alternatively, at least any such order which carries with it immediate taxation and payment. 26. In my judgment, it is appropriate to award the plaintiff company the costs of the appeal, but not to order immediate taxation and payment. So what I do is to award the plaintiff company the costs, to be taxed if not agreed, of the appeal in any event.
Representation: Miss M. Yuen (instructed by Johnson, Stokes & Master) for the Plaintiff/Respondent Mrs J. Spruce (instructed by Shaw, Ng & Ma) for the Defendant/Appellant |
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