RONELL INTERNATIONAL LTD v. THE REGISTRAR OF COMPANIES

HCMP 1543/2023

[2023] HKCFI 2734

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1543 OF 2023

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JUDGMENT

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1.  This is the application of Ronell International Limited (“the Applicant”) by notice of originating motion for, inter alia:

(i)  an extension of time for the Applicant to seek relief pursuant to section 290 (1A) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap 32 (“the Ordinance”);

(ii)  a declaration that the dissolution of Newko Limited (龍佳有限公司) (“the Company”) is void;

(iii)  the appointment of Kwok Chi May as the new liquidator of the Company; and

(iv)  incidental orders and orders relating to costs.

2.  The Registrar of Companies who is the respondent adopts a neutral stance to this application and attendance at the hearing has been excused.

3.  This application was made necessary by the discovery of overlooked assets more than 2 years after the dissolution of the Company in the circumstances described below.

Background

4.  The Applicant is a BVI company incorporated on 21 March 2000.

5.  This application is supported by an affidavit of Poon Cheng Fai Geoffrey (“Geoffrey”) who is one of the shareholders of the Applicant since incorporation and a director since 30 December 2004.

6.  Geoffrey’s late father, Poon Cho Yiu Ronald (“the Deceased”), passed away on 13 August 2022. During his lifetime, he gave shares in certain companies to Geoffrey and his mother Poon Lee Le Wah (“Mother”) who were nominated as directors but the companies had been operated and controlled by the Deceased.

7.  The Company was incorporated in Hong Kong on 8 January 2003. Geoffrey was appointed a director of the Company on 29 August 2011 with the Deceased and Mother being the other directors.

8.  As of 8 January 2018, the shareholding of the Company was as follows:

Name	No. of shares	Shareholding(%)
the Applicant	2,052,500	64.54%
RCY International Ltd.	1,125,000	35.38%
Poon Lee Le Wah	2,500	0.08%
Total:	3,180,000	100%

9.  The shareholding structure and the board of directors remained unchanged until the Company’s dissolution on 25 June 2019.

10.  By special resolution of the shareholders of the Company dated 4 April 2018, the Company was wound up voluntarily and the Deceased was appointed liquidator.

11.  The Deceased made the Liquidator’s Final Statement of Account on 23 March 2019 and filed the same with the Companies Registry on 25 March 2019.

12.  The dissolution of the Company took place 3 months later, on 25 June 2019, pursuant to section 239 (4) of the Ordinance.

Discovery of assets

13.  Following the Deceased’s death, in sorting out his affairs, a copy of a letter dated 10 August 2016 (“the letter”) signed by the Deceased as a director of Eco Farm Ltd (“Eco Farm”) to its solicitors in Macau, Messrs Manuela Antonio (“MA”) came to light.

14.  Eco Farm was incorporated in Macau on 13 July 2011 and at the time of its incorporation, its share capital of MOP $25,000 was held as to MOP $15,000 by Ronell Holdings Limited and as to the remaining MOP $10,000 by the Company.

15.  The letter stated, inter alia, that

“… Newko Limited has sold their holding of 40% of our company [Eco Farm] to Ronell International Limited … Can you please notify the necessary registration authority of the change.”

16.  Enquiries made with MA revealed that MA changed its office address in January 2014 and never received the letter. Moreover, an online company search conducted on 29 September 2022 confirmed that Eco Farm’s shareholding structure has remained unchanged since its incorporation.

17.  As matters stand, the MOP $10,000 shares in Eco Farm remain registered in the Company’s name (which the Deceased had apparently overlooked) were not disposed of during the process of the Company’s liquidation.

18.  A search made of the Applicant’s records did not reveal information relating to the Applicant’s acquisition of shares in Eco Farm. With the demise of the Deceased, it is now impossible to ascertain whether or not the transaction mentioned in the letter ever took place.

19.  In the circumstances, Mr Vincent Wan, counsel for the Applicant submitted it is reasonable to infer that the transaction, for reasons unknown, did not take place.

20.  The Registrar has confirmed that the Eco Farm shares are not held as bona vacantia.

Applicable principles

21.  The court has power under section 290 (1) of the Ordinance to declare the dissolution of a company void. The power may be exercised if

(i)  the dissolution was under inter alia section 239 of the Ordinance and the application is made within 2 years of the dissolution; and

(ii)  the application is made by the liquidator of the company or by any person who appears to the court to be interested.

22.  The period of 2 years under section 290 (1) may be extended if the court is satisfied that there are exceptional circumstances justifying the extension: see section 290 (1A).

23.  The purpose of an order under the English equivalent of section 290 (1) is to enable the distribution of overlooked asset belonging to the company and/or to enable the liquidator to make a claim which he has not previously made: see Re Servers of the Blind League [1960] 1 WLR 564 at 565 and Stanhope Pension Trust Limited v Registrar of Companies [1994] BCC 84 at 87 D-E cited in Re Central Pacific Enterprises Limited [2021] 2 HKLRD 477 at §23.

24.  The meaning of the phrase “any other person who appears to the court to be interested” was considered by Megarry J in Re Roehampton Swimming Pool Limited [1968] 1 WLR 1693 at 1698E-G where he made the following observations:

“In relation to making an order for the revival of a defunct company, it seems to me to be more probable that the word refers to a pecuniary or proprietary interest than that it embraces all matters of curiosity or concern. After all, those who are interested in companies are nearly always interested financially or in a proprietary way; the whole field is dominated by finance.”

25.  An application that will enable the company to realise the property which belongs to it for the benefit of its members was held to be cleary justified: see Re Chan Brothers Investment Company Limited, unrep. HCMP 4053/2003, 9 October 2003, at §§10-11.

The present application

26.  The Applicant plainly is an interested person for the purposes of section 290 (1) and (1A) since it had a direct pecuniary interest in the Company as a shareholder prior to its dissolution.

27.  I am satisfied that I should grant the extension requested pursuant to section 290 (1A) given that the overlooked assets did not come to light until after the expiration of the two-year period. The extension would enable the Applicant to realise its shares in Eco Farm for the benefit of all the members of the Company.

28.  Upon revival of the Company, in the normal course, the former liquidator would resume office: see Re China Ample Development Limited, unrep., HCMP 907/2015, 7 May 2015, at §6.

29.  As the Deceased was the former liquidator, it becomes necessary for the court to appoint a new liquidator for the Company under section 252 (1) of the Ordinance.

30.  The Applicant seeks the appointment of Kwok Chi May. Having perused her curriculum vitae, I accede to that request.

Order

31.  I make an order in terms of the draft order as amended which incorporates an order that the Registrar’s costs of HK $5000 be paid by the Applicant.