THE OFFICIAL RECEIVER v. TSE HAO YUE, POLLY

HCMP 388/2020

[2020] HKCFI 1355

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 388 OF 2020

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D E C I S I O N

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1.  This is an application by the Official Receiver under s 168I of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) for leave to issue proceedings out of time for a disqualification order against the respondent pursuant to s 168H. Despite having been served with the papers, the respondent has not appeared at this hearing.

2.  The disqualification proceedings are intended to be made in relation to the respondent’s conduct as a director of Chateaux Management Group Ltd, whose winding‑up is deemed to have commenced on 22 April 2016, being the date of the petition.  By virtue of s 168I(2), such disqualification proceedings have to be taken out prior to the end of the period of 4 years beginning with 22 April 2016, that is to say, on or before 21 April 2020.  In accordance with s 3 of the Companies (Disqualification of Directors) Proceedings Rules (Cap 32K), the application is to be made by way of originating summons.

3.  The Official Receiver was ready to issue proceedings in late March 2020 but was unable to do so as the High Court Registry was closed between 23 March and 5 May 2020 during the General Adjournment Period imposed for public health reasons.  In two similar cases in February 2020 the Official Receiver had sought to issue originating summonses for disqualification orders through the Duty Judge, but was directed to make a subsequent application for leave to issue proceedings out of time instead.  The present application was filed on 6 May 2020, the first day of business of the High Court Registry after the general adjournment ended. 

4.  In fact it may perhaps have been possible for the Official Receiver to issue the disqualification proceedings on 6 May within time, since the period of time limited by s 168I(2) had, at least arguably, been automatically extended to that day by operation of s 71(1A)(a) of the Interpretation and General Clauses Ordinance (Cap 1).  Out of caution, however, the Official Receiver has issued the present application on that day instead.

5.  It has been said that the court has an unfettered discretion whether to grant leave under s 168I(2), balancing the element of public interest (in that the Official Receiver is not pursuing a private right but is seeking to protect the public from the actions of those deemed unfit to act as company directors) and the legitimate interests of the respondent and the possible prejudice he or she may suffer if leave is granted.  The Official Receiver has to show a good reason for time to be extended.  Relevant factors include the length of the delay; the reasons for the delay; the strength of the case against the director; and the degree of prejudice caused to the director by the delay: see Official Receiver v Mak Wing Hung (unrep, HCMP 2808/2002, 27 September 2002); Official Receiver v Yan Kwok Kee Gay & others (unrep, HCMP 1237/2003, 14 May 2003).

6.  In the present case, the reason why the Official Receiver did not issue proceedings within time was the unprecedented general adjournment and the closure of the Registry.  The evidence suggests that the investigations could not be concluded earlier due to the non‑cooperation of the respondent.  The extension sought is for a relatively short period of time.  I am satisfied that the charges, if made out, are sufficiently serious to show a prima facie case for disqualification order.  The respondent has not come forward to assert any prejudice that has been caused by the delay or would be caused by the extension sought.

7.  I therefore grant leave for the Official Receiver to issue proceedings under s 168H within 28 days hereof.