RE KOSOKU OFFICE SUPPLIES LTD

HCMP 2239/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2239 OF 2010

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REASONS FOR DECISION

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1.  I have before me 22 applications by DBS Bank (Hong Kong) Limited pursuant to section 86 of the Companies Ordinance for an extension of 28 days for the time to register twenty-two charges taken by way of assignment of a series of life insurance policies the beneficiaries of which are 22 companies.

2.  Each application is supported by an affirmation of Mr Ngo Tiong Seng Kimber who is a manager of the Applicant.  As Mr Ngo explains, in each case the failure to register the assignments as a charge arose as a result of a failure to appreciate the requirements of section 80(2) (a) and (f) of the Companies Ordinance.

3.  The applications were originally put before the Master who refused to grant them on the ground that each application needed to be supported by evidence filed by an officer of the relevant company deposing to the fact that no winding-up order has been made, resolution for winding-up passed, no winding-up petition is pending, no resolution has been passed for winding-up, that the company continues to carry on business and that no judgment has been obtained against the company which remains unsatisfied.  The Master did so, because of the contents of the note at paragraph 102/2/36 of Vol. 1 of the Hong Kong Civil Procedure 2011.  It also appears from correspondence between the Applicant’s solicitors and the Master, the application being dealt with on the papers, that the Master also thought that Re Ashpurton Estates Limited [1983] Ch 3 110 supported this practice.  The Applicants’ solicitor, who appeared before me, submitted that the authorities referred to in the note to the Hong Kong Civil Procedure and Re Ashpurton Estates Limited are not authority that in every case a company whose assets are to be charged must give evidence addressing the question of solvency and the possibility of a winding up.  She referred me to the decision of Lord Justice Romer at page 571 in Re M.I.G. Trust Limited [1933] 1 Ch 542, in which the judge expressly states that such a practice would appear to have sprung up although it is not necessary.

4.  It seems to me that it is not necessary in every case for evidence to be filed by an assignor company dealing with its solvency and the prospects of it being wound up, and to that extent the note in the Hong Kong Civil Procedure is incorrect.  What is required is that an applicant files evidence explaining the circumstances in which the charges failed to be registered and stating that it has no reason to believe there are presently any prospects of the assignor being put into liquidation.  This is what has happened in the present case following a direction from me that such evidence should be filed.

5.  I therefore, grant the order sought for an extension of 28 days from 2 February 2011 for filing of the assignment at the Companies Registry for registration.