The Building and Loan Agency (Asia) Ltd v. Joy Rich Development Ltd

HCMP 1887/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1887 OF 2012

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Before: Deputy High Court Judge Le Pichon in Chambers

Date of Hearing: 26 August 2014

Date of Decision: 11 September 2014

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1.This is an appeal out of time by Joy Rich Development Limited (now in liquidation) (“the defendant”) from an order of Master de Sousa dated 24 September 2012 (“the Order”) whereby he allowed an extension of time of 28 days for The Building and Loan Agency (Asia) Limited (“the plaintiff”) to register a floating charge dated 26 January 2011 given by the defendant to the plaintiff subject to the usual proviso. At the conclusion of the hearing judgment was reserved which I now give.

CHRONOLOGY OF EVENTS

2.The principal asset covered by a floating charge (“the charge”) created on 26 January 2011 is a valuable house on Middle Gap Road (“the property”) estimated to be worth $370 million as at 18 August 2014.

3.The present dispute is a consequence of the parting of ways between Chen Muhua (“Ms Chen”) and Liu Yi Dong also known as Lau Kwok Wah Benjamin or Ben Lau (“Mr Lau”) who previously had been living together at the property.  The falling out apparently occurred in late 2011. 

4.On 26 January 2011 the plaintiff entered into a Loan Agreement (“the Loan Agreement”) with Greatstep International Ltd (“Greatstep”) as borrower and the defendant as guarantor.  The loan advanced was $200,712,328.77, the repayment being 24 months from the date of the loan or when called upon to repay by the plaintiff whichever was the earlier.

5.As security for the loan, the defendant created a floating charge over all its assets.  The charge provided that upon an event of default stipulated in the Loan Agreement, the floating charge would operate as a fixed charge.  As earlier noted, the principal asset was the property although, as will become apparent, there were other assets.

6.The sole shareholder of the defendant since 3 March 2009 (which was well before the 2011 transaction) was and continues to be Ms Chen’s sister, Chan Yuen Wa (“YW Chan”).

7.YW Chan was also the sole director for the period from 3 March 2009 to about 1 September 2012 when she was replaced by one Lu Bo Huai (“Mr Lu”).   Nevertheless, it is not suggested that she is no longer the sole shareholder.

8.Despite being the defendant’s sole shareholder and for a time its sole director, YW Chan has filed an affirmation to the effect that the defendant’s operations were primarily handled by Ms Chen and Mr Lau and that she was not personally involved.

9.The loan was drawn down on 26 January 2011.

10.Under section 80 of the old Companies Ordinance (Cap 32) if a charge created by a company is not registered within five weeks of its creation, then unless an extension under section 86 is granted, the charge is not enforceable against any liquidator.  The primary obligation to register the charge lies on the chargor (the defendant) but any interested party may also make the application.

11.The defendant did not register the charge within the five week period which expired on 2 March 2011 despite reminders by letter respectively dated 2 January 2011 and 22 February 2011 from the plaintiff.

12.On 15 November 2011, upon realizing that the charge remained unregistered, the plaintiff took out an ex parte summons to register the charge out of time.

13.On 17 November 2011, Master Lai made requisitions and remarks to the effect that the application had to be made inter partes, supported by an affidavit from an officer of the company setting out in detail the sequence of events and showing, inter alia, that the company was continuing to carry on business and that no winding up petition was pending.

14.The plaintiff called in the loan on 19 December 2011 and required repayment of the amount outstanding by 28 December 2011.

15.No repayment having been made, the charge crystallized on 28 December 2011.

16.On 5 January 2012, Kennedys (the plaintiff’s former solicitors) wrote to the defendant referring to the defendant’s and Greatstep’s failure to register the charge, requesting that the defendant execute a legal assignment of the charged property including the property pursuant to clause 2.02 of the deed of charge and, for that purpose, to provide a draft deed of assignment by 12 January 2012.

17.There was a ‘holding response’ on 12 January from Greatstep to the effect that negotiations were under way with the plaintiff.  The defendant did not reply.

18.On 12 January 2012, the plaintiff discontinued its ex parte summons to register the charge out of time.

19.Nothing came of the negotiations and by 2 February 2012, Kennedys demanded repayment of the loan and the provision of a draft deed of assignment by 8 February 2012.  It received another holding response from Greatstep on that day but still nothing from the defendant.   This caused the plaintiff to serve a statutory demand on the defendant on 20 February 2012.

20.The plaintiff then issued a certificate of crystallization on 24 February 2012 and registered the same at the Land Registry on 29 February 2012.

21.On 14 March 2012, the plaintiff presented a winding up petition (HCCW 80/2012).  The defendant maintained its silence.  It did not attend the hearing.

22.Three months or so later, on 27 June 2012, the plaintiff applied for the appointment of provisional liquidators supported by the 3^rd affirmation (“So 3”) of So Yuen Leung (“Mr So”) one of its directors.

23.By that time, for reasons that will become apparent, the plaintiff decided not to proceed with the petition and the summons.  As a result, both were dismissed on 9 July 2012.

24.The plaintiff issued an inter partes summons on 4 September 2012 to register the charge out of time.  The summons was duly served on the defendant on 5 September 2012 at its registered office but the defendant did not appear at the hearing.

25.On 24 September 2012 Master de Sousa made the Order granting a 28 day extension to register the deed of charge subject to the usual proviso that preserved the rights of creditors acquired between 1 March 2011 and the date of registration.

26.The Order was also duly served on the defendant on 8 October 2012 and the charge duly registered with the Companies Registry on 19 October 2012 after the 14 day period for appealing the master’s order had expired. 

27.As part of an internal restructuring, the plaintiff assigned its legal and beneficial rights in the loan agreement and charge to its wholly owned subsidiary Revelry Gains Ltd (“Revelry”) on 1 March 2013.  A notice of assignment was sent to Greatstep and the defendant on 5 March 2013.

28.Seven months or more later, on 5 June 2013, Chan Yuen Wa (“Madam Chan”) presented a petition to wind up the defendant.  

29.A winding up order was made on 7 August 2012 and provisional liquidators appointed.

30.On an ex parte summons dated 5 November 2013, the provisional liquidators applied for an order that they be appointed joint and several liquidators and that there should be a committee of inspection comprising three creditors namely YW Chan, Ms Chen and Pius Consulting Ltd (“Pius”).  According to the list of creditors, Ms Chen’s claim was for approximately $132 million while that of Pius was, in the context, de minimis.

31.This was followed by a letter dated 13 November 2013 from the solicitors for the provisional liquidators applying for copies of court documents in HCCW 80/2012.

32.The provisional liquidation appointed liquidators on 6 December 2013 and the notice of appeal out of time was issued on 20 March 2014 after receiving senior counsel’s advice in February 2014.

THE APPLICATIONS

33.Before the court are the following matters:

(1) the defendant’s appeal issued on 20 March 2014 pursuant to Order 58, rule 1 of the Rules of the High Court from the Order which requires leave to appeal out of time;

(2) the defendant’s summons dated 15 August 2014 as amended seeking leave to adduce additional evidence; and

(3) Revelry’s summons for leave to be added as the 2^nd plaintiff in these proceedings.

34.Revelry’s summons is uncontroversial.  Accordingly, leave is granted.

THE APPEAL

(a) Whether time should be extended

35.When the summons leading to the 2012 order was issued on 4 September 2012, YW Chan was no longer the defendant’s director.  While Mr Lu confirmed in his affirmation dated 15 August 2014 that he has been the defendant’s sole director since 1 September 2012, he merely stated that he never received the court documents referred to in the Order until they were very recently produced to him by Ms Chen.  No information was provided as to whether he became involved in the defendant’s operations as a result of his appointment as director or what arrangements he had with Lily Tsang & Co (a secretarial services company) in relation to documents addressed to the defendant at its registered office.  Mr Lu did not even state whether or not he was in Hong Kong at the relevant time or how much time he has spent here since his appointment.

36.Ms Chen for her part sought to explain that notwithstanding the falling out with Mr Lau at the end of 2011 after which Mr Lau was no longer involved in the defendant, she not only continued to handle the defendant’s operations as before, she continued to enjoy the services of the driver Mr Shek who, for some years, had been serving both Mr Lau and Ms Chen. In fact, she continued to use Mr Shek as her driver until the end of 2012.

37.It is stated in §12 of her affirmation dated 19 March 2014 that:

“… it was not uncommon that Mr Shek would turn up at Lily Tsang & Co’s office enquiring if there were any documents for [the defendant] and if so, collecting those documents on [Ms Chen]’s behalf, when he served as [Ms Chen]’s driver. If Kennedys indeed served those court documents at Lily Tsang & Co on or about 5 September 2012 … I believe that Mr Shek could well have collected those documents at Lily Tsang & Co and given to Mr Ben Lau or Mr Daniel So, who is an executive director of Hong Kong Building and Loan Agency Ltd, i.e. the ultimate shareholder of the plaintiff without letting us know. This might well also explain why those court documents were then not drawn to my attention…”

38.During September and October 2012 when the inter partes summons and the order were served on the defendant, on Ms Chen’s own evidence, Mr Shek was still serving as her driver.  Given that fact, there is an apparent inconsistency in Ms Chen’s evidence if the first sentence quoted above is compared with the second.  Having asserted that the documents would be collected on her behalf with the necessary implication that they would be handed to her, she changed her tune and ‘speculated’ that having collected the documents, Mr Shek could well have given them to Mr Lau or Mr So. 

39.In view of the above, I consider Ms Chen’s evidence unreliable and entirely speculative, quite apart from the fact that no attempt appears to have been made to approach either Mr Shek or Lily Tsang & Co for them to give their account of what actually happened.

40.Mr Manzoni SC, senior counsel for the defendant, faced with the affidavits of service on the defendant, had to accept due service but sought to rely on the affirmations filed on the defendant’s behalf “to demonstrate” why the summons and the order did not come to the defendant’s attention and the reason why the defendant did not turn up at the hearing.  In fact, the thrust of his submission was nothing short of accusing Mr Lau of engaging in chicanery by causing Mr Shek (who was employed by one of Mr Lau’s companies) to collect the documents that had been duly served on the defendant and, instead of handing them to Ms Chen, caused Mr Shek to give them to either Mr Lau or Mr So.

41.In my view, the defendant’s evidence does not remotely support the scenario Mr Manzoni was keen to have the court believe was what actually happened.  I do not accept it.  It was nothing more than sheer conjecture.

42.As the defendant has not put forward a credible explanation for the delay in excess of 18 months or so in bringing this appeal, short of demonstrating a strong case on the merits, the court’s discretion could not properly be exercised in the defendant’s favour.  But before turning to consider the merits, it is necessary to deal with the admission of additional evidence.

(b) Admission of additional evidence

43.In her written submissions, Ms Linda Chan who appeared for the plaintiff objected to the admission of the additional evidence on the basis that the defendant could not show that the Ladd v Marshall conditions were satisfied.

44.As both parties made liberal references to the additional evidence at the oral hearing, it would appear somewhat pointless to rule on the objection at this stage.  For present purposes, I propose to proceed on the basis that the additional evidence is part of the relevant evidence.

(c) Merits of the appeal

45.The gravamen of the plaintiff’s case is that Master de Sousa was deliberately kept in the dark when the Order was made as regards two important matters, namely, that:

(1) there had been a prior ex parte application that had been discontinued; and

(2) the defendant was insolvent and unable to pay its debts at the time of the Order. 

46.It was submitted that had the master been apprised of those matters, he would never have made the 2012 order because none of the grounds in Order 86 that would have justified an extension of time for registration would have been engaged.

47.Mr Manzoni also invited attention to the fact that the hearing was a “two‑minute hearing”, and that the master had been misled into thinking that the defendant had “disappeared” when that was not the case.

(i) non‑disclosure of prior application

48.As to the prior ex parte application, I cannot see its relevance when the hearing before Master de Sousa was an inter partes one.  The defendant was duly served and that fact must be determinative particularly as I have rejected the defendant’s explanation as to why it did not know about the hearing. 

(ii) allegation that the defendant had ‘disappeared’

49.After the ex parte hearing, in fact several attempts were made to contact the defendant without success: see Yeung 1, §§14‑16 and 19.  The defendant never answered any of the letters sent to it.  It steadfastly ignored the letters sent to it by the plaintiff.  On the evidence, while Ms Chen was allegedly the one handling the defendant’s operations at all material times, surprisingly, her affirmation was wholly silent as to the subsequent correspondence and the events that occurred between the end of 2011 and the dismissal in July 2012 of the winding up petition presented in March 2012.

50.Moreover, So 3 described in some detail, inter alia, the events summarised in the preceding paragraph.  At §42, Mr So stated:

“Since issuing the Petition, staff members of the Petitioner have endeavoured to contact the Company on several occasions to enquire about various means by which the Loan might be repaid. This proved to be wholly unsuccessful on each and every occasion as we were unable to locate or speak to anybody at the Company’s office address or contact number(s). It would seem that the Company has been, for all intents and purposes, abandoned.”

51.He also commented (at §46) on the fact of the defendant had only one director, namely, YW Chan whose address was the defendant’s current registered office address but that:

“…having tried on numerous occasions to locate [YW Chan] at that address and having made enquiries, she cannot be found and her present whereabouts are unknown.”

52.In the circumstances described in the preceding paragraphs, in my view, to say that the defendant had “disappeared” was no exaggeration nor a misrepresentation of the truth.  I do not consider that the master had been “misled” at all as the defendant sought to suggest.

(iii) jurisdiction

53.In pertinent part, section 86 of the Ordinance reads:

“(1) The court, on being satisfied that the omission to register a charge within the time required by this Ordinance … was accidental, or due to inadvertence or to some other sufficient cause, or is not of a nature to prejudice the position of creditors or shareholders of the company, or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any person interested, and on such terms and conditions as seems to the court just and expedient, order that the time for registration shall be extended, or, as the case may be, that the omission or mis-statement shall be rectified.”

54.The court’s discretion may be exercised so long as one of the five distinct grounds set out is satisfied.

55.The leading authorities on the subject of the court’s discretion in extending time cited to the court are In re Resinoid & Mica Products Ltd [1983] Ch 132, In re Ashpurton Estates Ltd [1983] Ch 110 and In re Braemar Investments Ltd [1989] 1 Ch 54.  The principles that can be discerned from those authorities establish that:

(a) once winding up of the company has commenced, it is normally too late to apply for an extension of time save in very exceptional circumstances: see Resinoid at 133G‑H; and Ashpurton at 129H and 131F‑G;

(b) evidence that the company is solvent and that no winding up was impending is normally required: see Resinoid at 133H‑134A; and

(c) imminence of liquidation of the company is a relevant factor: see Ashpurton at 131F.

56.Mr Manzoni relied on the plaintiff’s statutory demand, petition, application for the appointment of provisional liquidators, the fact that the loan has never been repaid and the plaintiff's belief that the defendant had disappeared in 2012 as supporting his submission that the plaintiff knew that the plaintiff was insolvent at the time of the 2012 application to register the charge out of time or, at any rate, that liquidation was then imminent.  Reliance was also placed on the fact that the defendant was wound up in August 2013 on the basis of its insolvency.  He submitted that in those circumstances the application plainly was made with a view to prejudicing the position of creditors or shareholders of the defendant.

57.The debate between Mr Manzoni and Ms Chan largely concerned the meaning of “imminence of insolvency”.  It is obvious that the principles set out above have to be understood in the context of the facts of the case actually decided.

58.In Ashpurton, the chargee (C) only took action to register three weeks after the receipt of a notice convening an EGM to be held to consider a resolution for a voluntary winding up.  C’s application for an extension of time to register the charge (which was heard only 12 days before the scheduled date of the EGM) was unsuccessful before the registrar.  On the following day, C issued a notice of motion to vary the registrar’s order but later that same day the company went into liquidation.  C’s motion was heard on 23 June and dismissed.  C’s appeal met with the same fate.

59.It should also be noted that in Ashpurton the application was not made until after C was put on notice of an imminent EGM convened with a view to putting the company into liquidation.  Contrast Braemar where the company was put into voluntary liquidation less than one month after the registration of charge.  Hoffmann J rejected the argument that at the time of the registrar’s order, the company was no longer a going concern.  He stated (at 62C‑F):

“As a matter of strict law an application to extend time is not too late if the registration can be effected before the liquidation actually commences. The court may, as a matter of discretion, on particular facts decide that it is too late at an earlier date, but the overriding question must be whether it would be just and equitable to grant the leave … Unlike the Resinoid case … no notice of the meeting of creditors had been sent out and it certainly could not be said that it was only the prospect of forthcoming liquidation which had alerted the applicants to the necessity for an extension of time.”

60.The issue of the defendant’s solvency and the plaintiff’s awareness of its financial condition as at the date of the Order formed the focus of Mr Manzoni’s submissions.

61.As earlier mentioned, the nub of this appeal is whether at the time the Order was made, the plaintiff knew that the defendant was insolvent or that its liquidation was imminent but failed to disclose that fact to the court.  The defendant accused the plaintiff of making its application to register the charge out of time with a view to prejudicing the position of creditors or shareholders of the defendant and that on the facts, the court’s jurisdiction under section 86 was not engaged.

62.The inter partes summons was supported by an affirmation of Yeung Kwok Leung dated 4 September 2012 (“Yeung 1”).  That gave a chronological account of the defendant’s failure to register the charge despite two reminders from the plaintiff; the plaintiff’s realisation in late 2011 of the defendant’s failure to register; the calling in of the loan and conversion of the floating charge into a fixed charge in December 2011; the putting of the defendant on notice of the crystallisation of the charge in early January 2012; its subsequent registration at the Land Registry in February 2012 against the title to the property; service of a statutory demand on the defendant in late February 2012; the presentation of the petition upon non‑satisfaction in March 2012; and the plaintiff’s subsequent decision not to proceed with the petition leading to the dismissal of the petition in July 2012.

63.The defendant set great store by So 3 because, it was said, it “painted a picture of insolvency of the defendant”.

64.Mr Manzoni gave a description of the contents of So 3 at §33 of his written submissions:

“[Mr So] provided details of unsecured creditors of the Defendant and deposed that the debts owed to them remained unpaid. He agreed that the basis for the winding up of the Defendant was its insolvency. He detailed the steps which Kennedys had taken in corresponding with Greatstep in early 2012 regarding the repayment of the Loan and in registering the Charge on 29 February 2012. He also said that he was advised by Kennedys that the Defendant had filed a notification of change of address of the registered office dated 27 April 2012 with the Companies Registry. He quickly moved on with the application for provisional liquidators because the Plaintiff became aware in about early March 2012 that the Defendant might have used the charged property to obtain other loans.”

Those details were said to be crucial and were concealed from the master.

65.But the fact of the matter is that Yeung 1 had made it abundantly clear, inter alia, that the plaintiff’s demand for repayment in late 2011 had not been met, resulting in the crystallisation of the charge and registration at the Land Registry against the title to the property and the fact of the service and subsequent non‑satisfaction of a statutory demand resulting in the presentation of the petition.  The financial health of the defendant was clearly drawn to the court’s attention.  There is nothing in the point that the statutory demand and petition had not been exhibited.

66.Further, according to So 3, the defendant’s known assets consisted of (a) the property recorded by the defendant in its June 2011 draft management accounts as having a value of $430 million as at 30 June 2011 although a draft valuation report then yet to be finalised estimated the value to be $281 million in June 2012; and (b) money due and owing to the defendant by its debtors (“account receivables”) which at 30 June 2011 stood at approximately $168 million but that they were unsecured.  Based on information obtained at a meeting of creditors held on 25 May 2012, in addition to the plaintiff, there were three other creditors including one (“King Perfection Limited”) for $20 million who subsequently admitted not to be a creditor.  The defendant’s known indebtedness at that date including King Perfection’s alleged debt was approximately $347.655 million.

67.So 3 then explained that the circumstances revealed by independent investigations and enquiries justified the appointment of provisional liquidators to protect and preserve the value of the defendant’s assets and to “potentially salvage it from the fate of a full‑blown liquidation”:

(1) the defendant’s questionable conduct in participating in several other loan transactions of the nature is similar to that with the plaintiff, granting security over the property but omitting to register the same with the Companies Registry and/or the Lands Registry so as to keep the title to the property free and clear of encumbrances;

(2) the need to investigate the defendant’s affairs, assets and value in that the plaintiff had been unable to locate or speak to any responsible officer of the defendant; and

(3) the need to preserve the defendant’s property and to maximise its realisable value with a view to avoiding a forced sale that would depress the price

68.It will be seen from the evidence given of the assets of the defendant and the known creditors at the time of the application for the appointment of provisional liquidators in June 2012 that, while the defendant had cash flow difficulties, its assets exceeded its liabilities even if the lower value is taken to be the value of the property.

69.The minutes of the creditors meeting are informative.  The creditors (having noted that having the defendant wound‑up at that juncture and to proceed to realise the property through a forced sale would not be in the interest of any of the creditors) unanimously resolved, inter alia, that:

(1) a provisional liquidator be appointed to replace the sole director of the defendant and to take over the management and the conduct of the defendant’s business and affairs etc; and

(2) the petition to wind up the defendant be adjourned sine die with liberty to restore.

70.Fairly read, the evidence shows that it was never the plaintiff’s intention to seek a winding up order of the defendant.  The creditors including the plaintiff were anxious to put someone responsible in place to take charge of the defendant and its affairs given the inability of the plaintiff to locate any of the defendant’s responsible officers so that assets could be preserved and realised for the payment of outstanding debts.  It would also appear from the evidence that the creditors were under a misapprehension as to how the winding up procedure operates and the role of provisional liquidators within that framework.

71.I do not accept that the evidence establishes that the defendant was in fact insolvent whether on the date the petition was presented or at the time the application for the appointment of provisional liquidators was made or at the time the petition was dismissed. 

72.As earlier noted, on 5 June 2013, YW Chan presented a petition (HCCW 146/2013) to wind up the defendant which went unopposed.  The winding up order was made on 7 August 2013.  The Official Receiver became its provisional liquidator.  On the same day Ms Lui Chau Yuet and Mr James Wardell were appointed the joint and several provisional liquidators in place of the Official Receiver.

73.It is to be noted that the draft management accounts as at June 2011 list as one of the defendant’s assets “Director’s current account”, the amount involved being just in excess of $83 million.  At that point in time and indeed since 3 March 2009, YW Chan was the defendant’s sole director and who, during her tenure as sole director, had shown zero interest in the defendant and its operations.  But by 5 June 2013, within a two‑year period, YW Chan was able to transmogrify her status from that of debtor for $83 million to creditor for $1 million plus and present a petition to wind up the defendant based on an unpaid debt of approximately $1 million, that being the basis of the winding up order.

74.While the winding up petition presented by YW Chan was the next relevant event, it did not happen until seven months or so after the date of the Order and its due service on the defendant.  The winding up order itself was not made until August, almost 10 months after the registration of the charge.

75.Since this appeal is a rehearing, I accept that the fact of the defendant’s liquidation is to be taken into account.  Nevertheless, in the circumstances of this case, I do not consider that it could properly be said that there was any reason for the plaintiff to consider that liquidation was imminent at the time the Order was made.  I therefore reject the submission that the court had no jurisdiction to make the Order.

(iv) prejudice

76.Mr Manzoni also submitted that if the Order were allowed to stand, other creditors of the defendant would be prejudiced.  But when asked to elaborate on the identity of such creditors, Mr Manzoni’s replied that they include “any and all unsecured creditors and it would also be any creditors who are secured over the assets that would be affected by any priority caused by the registration of the charge”.

77.The Order contained the usual proviso designed to protect the relevant creditors whose interests might be prejudiced.  Paragraph 2 of the Order reads:

“The order made under paragraph 1 is without prejudice to the rights of any creditors acquired between 1 March 2011 (being 5 weeks prescribed by section 80(1) for registration of the Floating Charge) and the date of registration pursuant to this Order.”

78.Given that proviso, I confess that the class/classes of creditors Mr Manzoni was referring to that would allegedly be prejudiced remain(s) obscure.  None of the reasons raised by the defendant has merit.  The conclusion is obvious.

79.For good measure, in the event that this court were minded to set aside the Order (which it is not), Ms Chan submitted that the appeal should still be dismissed as it is of no utility or serves no useful purpose.  The contention is that the certificate of registration is conclusive evidence that the requirement as to registration had been satisfied so that the charge is not invalidated as against the liquidators and the creditors of the company: Exeter Trust Ltd v Screenways Ltd [1991] BCC 477.

80.While it is strictly unnecessary to address this point given my conclusion that no valid basis has been shown for this court to set aside the Order, in deference to counsel’s submissions, I will deal with it briefly.

81.Section 83(2) of the Ordinance (now section 344(4) of Cap 622) provides:

“The Registrar shall issue a certificate with his signature or printed signature, certifying the registration of any charge registered in pursuance of this Part, and the certificate shall be conclusive evidence that all the requirements of this Part with respect to registration have been complied with”.

82.Mr Manzoni sought to argue that as the certificate was premised on the Order, if the Order were set aside, there would be no valid basis for the certificate.  In Exeter Trust, the English Court of Appeal rejected a similar argument.  It allowed the appeal and set aside the order of the court below that had set aside the registrar’s order extending time for registration, explaining that the whole point of creating the register is to give security to people relying on the certificate.  It cited with approval Wilde v Australian Trade Equipment Co Pty Ltd (1981) 145 CLR 590, 603‑604 where the High Court of Australia held that the order extending time was beyond recall so soon as registration had been effected in reliance upon it: see also In The Matter of Top Marques Car Rental Ltd v In the Matter of the Companies Act 1985 [2006] EWHC 109.

83.In short, Mr Manzoni appeared to be resuscitating an argument that had been expressly rejected in Exeter Trust. For my part, I find the reasoning of the Court of Appeal in that case impeccable.

84.Mr Manzoni’s remaining argument was based on section 42 of Cap 622, submitting that it provides the court with jurisdiction lacking in Wilde.  Ms Chan’s answer was that Cap 622 (and thus section 42) has no application to the present case which pre‑dates that ordinance.  In any event, the power in subsection (3) arises only if there is no other power.  As section 347 of Cap 622 confers power on the court to rectify the register, section 42 is not engaged at all.

85.Ms Chan’s analysis cannot be faulted. Were the conclusiveness issue material for present purposes, I would hold that the certificate of registration is conclusive and beyond recall.

CONCLUSION

86.For all the reasons stated above, I conclude that the appeal is without merit.  It is dismissed with an order nisi of costs in favour of the plaintiff with a certificate for two counsel.

Ms Linda Chan SC & Mr Vincent Chen, instructed by Leon Lai & Co, for the plaintiff and the intervener

Mr Charles Manzoni SC & Mr Norman Nip, instructed by Stephenson Harwood, for the defendant