Ocean Top Investments Ltd v. Dejin Resources Group Company Ltd
Read the full judgment text of HCMP 1307/2014 on BabelCite. This High Court CFI judgment was delivered on 9 December 2014.
1. On 29 May 2014 the Applicant issued an originating summons seeking an order that the Respondent do forthwith deliver to the Applicant a certificate for a convertible note in the principal amount of HK$55,000,000 pursuant to section 70(3) of the Companies Ordinance, cap. 32. Section 70, rather than section 324 of the new Ordinance, cap. 622, applies by virtue of section 60 of Schedule 11 of the Transitional and Saving Provisions (Companies Ordinance) cap. 622.
Cited by 2 cases
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HCMP 1307/2014 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO 1307 OF 2014 ______________________
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Date of Hearing: 9 December 2014 Date of Decision: 9 December 2014 Date of Reasons for Decision: 7 January 2015 ________________ D E C I S I O N ________________ 1.On 29 May 2014 the Applicant issued an originating summons seeking an order that the Respondent do forthwith deliver to the Applicant a certificate for a convertible note in the principal amount of HK$55,000,000 pursuant to section 70(3) of the Companies Ordinance, cap. 32. Section 70, rather than section 324 of the new Ordinance, cap. 622, applies by virtue of section 60 of Schedule 11 of the Transitional and Saving Provisions (Companies Ordinance) cap. 622. 2.The Respondent is incorporated in Bermuda and was registered at the material times under Part XI of the Companies Ordinance, cap. 32. It is listed on The Stock Exchange of Hong Kong Limited. The Respondent objects to the application for 2 reasons. First, it says that section 70 does not apply to foreign incorporated companies and, secondly, if it is wrong about that it thinks it likely that the certificate is sought in furtherance of a fraudulent scheme to defraud Mainland investors who have been lured into investing in convertible bonds to support applications under the Capital Investment Entry Scheme. 3.I shall deal with the jurisdiction issue first. Section 70(1) and (3) are in the following terms:
4.Company is defined in section 2(1) to mean “a company formed and registered under this Ordinance or an existing company”. Section 2(3) provides that “References in this Ordinance to a body corporate or to a corporation shall be construed as not including a corporation sole but as including a company incorporated outside Hong Kong.” The Ordinance in various Parts deals with companies not incorporated under the Ordinance.
5.It, therefore, appears clear that where the Ordinance refers to “company” it means a company formed and registered under the Ordinance or an existing company and that where it is intended that particular parts of the Ordinance apply to companies which do not come within the definition of “company” the Ordinance contains a section making this clear and uses appropriate descriptive terms. It would appear to follow that section 70 does not apply to a company incorporated outside Hong Kong. 6.Ms. la Fontaine Chung, who appeared for the Applicant, argued that the interpretation of “company” in section 70 was not restricted by the definition clause and should be extended to a company registered under Part XI. Ms.Chung drew my attention to a decision of Kwan J, as she then was, in Registrar of Companies v Wah Sang Gas Holdings Ltd [2007] HKCU 844 in which the judge dealt with an application by the Registrar for an order against a Bermuda incorporated company pursuant to section 306 for a failure to comply with section 336(1) of the then enactment of the Companies Ordinance. Section 336 was subsequently amended. The application proceeded on the basis that section 306 applied. Section 306, which is in Part VIII, reads as follows:
7.The Respondent in Wah Sang Gas did not argue that section 306 did not apply to a foreign incorporated company. I do not have to decide whether section 306 applies or not. Assuming it does apply to foreign incorporated companies it is the only section (excluding section 70 itself) that either counsel could find where there was room for arguing that the drafter might have intended to refer to a foreign incorporated company, but used the word “company” which if it is given the meaning in section 2(1) would exclude such a company. It does not seem to me that the fact that in one section “company” may include a foreign incorporated company means, as Ms. Chung seemed to suggest, that the court should construe the meaning of “company” in each section without regard to the definition in section 2(1). Neither can I see any reason for thinking Part II of the Ordinance, which deals with share capital and debentures, is not limited in its application to companies as defined in section 2(1). 8.In conclusion in my opinion section 70 has no application to a company incorporated outside Hong Kong and that is the case whether or not it is registered under Part XI. I would add that it seems to me that the same is also true in the case of section 323 of the new Ordinance. In the case of the new Ordinance the definition section makes this even clearer by expressly including in that section definitions of “company”, “non-Hong Kong company” and “registered non-Hong Kong company”. Section 323 refers to “company” and I can see no basis for concluding that it was intended to extend to a “registered non-Hong Kong company”. 9.So far as the second issue is concerned it seems to me from the affirmations that it is not a suitable matter for summary determination. 10.I dismiss the originating summons. The Applicant shall pay the Respondent’s costs.
Ms la Fontaine Chung, instructed by DLA Piper, for the petitioner Mr John Hui, instructed by Michael Li & Co, for the respondent | ||||||||||||||||||||||||||||
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