WILLIAM WAI LAU v. D.J.H. CONSULTANTS (CHINA) LTD

Company law - principles on which Court should allow

petition to be amended

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Company law - section 180(1) Companies Ordinance

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                The Court's discretion to allow a demurrable petition to be amended is to be exercised in accordance with the principles and practice which relate to ordinary pleadings, and to other originating process. No rule of practice requires, in every case, an affidavit explaining the change of belief which enabled the petitioner to make his application to amend. It had not been shown that the judge had exercised his discretion wrongly in granting leave to amend.

                The Court of Appeal would approach the appeal on the basis that the law was as had been accepted by Counsel for all the parties: that a fully paid-up shareholder had no locus standi to present a petition to wind up his company unless he alleged and proved that there was a probability of a surplus in the winding-up in which he would have a tangible share (In re Rica Gold Washing Co. (1879) 11 Ch.D. 36, followed consistently in England - e.g. in In re Chesterfield Catering Co. Ltd. [1977] 1 Ch. 373). However the Court did not wish to be understood to have accepted that the English practice should be followed in Hong Kong in view of section 180(1) of the Companies Ordinance which appeared, in seemingly unambiguous and peremptory language, to prohibit a Court from refusing to grant a petition solely on the grounds that the company has no assets.

                The judge was justified in concluding that the three petitions before him would not inevitably fail and his refusal to strike them out would be affirmed.

IN THE COURT OF APPEAL

IN THE MATTER OF D.J.H. CONSULTANTS LIMITED

and

IN THE MATTER OF THE COMPANIES ORDINANCE (CAP. 32)

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REASONS FOR JUDGMENT

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Fuad, J. A.:

1. We dismissed these appeals at the conclusion of the hearing, and now give our reasons.

2. By consent we heard the three appeals together, and they arise out of a decision reached by Mayo, J. on the 7th November this year. On that day the learned judge dismissed applications made by three closely connected companies to strike out in limine petitions to have them wound up which had been filed by Mr. William Wai Lau.

3. The petitions gave the following information about the companies:

        (1)     D.J.H. Consultants (China) Ltd.

 

Incorporated in February 1980 with a nominal capital of $10,000, divided into 1,000 shares of $10 each.

 

Amount of the capital paid up or credited as paid up - $10,000.

 

500 shares are registered in the name of Mr. William Wai Lau and 500 in the name of Mr. David James Hutcheson.

 

The sole directors were Mr. Lau and Mr. Hutcheson.

        (2)    D.J.H. Consultants Ltd.

 

Incorporated in November 1976 with a capital of $10,000, divided into 5,000 shares of $2 each.

 

Two shares were then issued and stood credited as fully paid up, one in the name of Mr. Hutcheson and the other in the name of Mrs. Mitchelle Hutcheson.

 

In May 1979 two shares were issued and stood credited as fully paid up, one in the name of Mr. Lau and the other in the name of Mr. Hutcheson.

 

In June 1981 one further share was issued (credited as fully paid up) in the name of Mr. Lau.

 

The two shareholders were the sole directors.

        (3)    D.J.H. Consultants (Philippines) Limited

 

Incorporated in December 1980 with a nominal capital of $10,000, divided into 1,000 shares of $10 each.

 

Amount of capital paid up or credited or paid up - $10,000.

 

Shares registered as follows:

 

    500    in the name of Mr. Hutcheson;

    350    in the name of Mr. Lau;

    100    in the name of Miss Rosa Malabanan (Mr. Lau claims the beneficial ownership of these shares);

    50    in the name of Mr. Efren Malabanan.

4. The directors were the four registered shareholders.

5. The petitions each refer to an agreement between Mr. Lau and Mr. Hutcheson. They say that apart from the objects for which the companies were established as stated in their Memoranda of Association, after the first issue of shares to Mr. Lau in the case of D.J.H. Consultants Ltd., and right from the inception of the two other companies, there was the additional object of pursuing an agreement between Mr. Lau and Mr. Hutcheson.

6. Each of the petitions describes the alleged agreement in this way:

"At or about the beginning of 1979 your Petitioner was the Chairman and director together with his sister of the Hong Kong incorporated company Direct Line Company Limited. The shares of such company were held equally between your Petitioner and his sister. At or about the middle of 1979, your Petitioner agreed with the said David James Hutcheson to enter into a joint venture combining your Petitioner's business contacts in and knowledge of China and its trade and the said David James Hutcheson's expertise in consultancy. The said agreement was to be implemented and so far as your Petitioner is aware was implemented by your Petitioner and the said David James Hutcheson by:-

 

7. The petitions go on to say that it was in furtherance of this agreement that D.J.H. Consultants (China) Ltd. and D.J.H. Consultants (Philippines) Ltd. [and a third company - D.J.H. Consultants (International) Ltd. - which is not the subject of a winding-up petition] were incorporated. It will be recalled that the third company with which we are concerned had already been incorporated in 1976.

8. Each of the petitions then contains the following averments, in identical terms:

"At all material times (i) it was the intention of your Petitioner and the said David James Hutcheson that notwithstanding the Articles of Association in each of the respective companies the subject of the agreement between them that the management of the companies should be conducted jointly between them and/or that any casting vote attaching to the office of Chairman in any of the companies should not be used by your Petitioner or the said David James Hutcheson being the occupant of such office to breach the agreement and intention between them; (ii) your Petitioner and the said David James Hutcheson enjoyed equal signing rights over the bank accounts of the several companies. "

9. The Petitioner's complaints in each of his petitions are very much the same. In each petition it is first said that:

"In or about 1984 to-date differences have arisen between your Petitioner and the said David James Hutcheson as to the mode of conducting the business of the company and the other companies the subject of the agreement between them. Inter alia your Petitioner complains that:-

10. In the case of D.J.H. Consultants Ltd. there is a further complaint, couched in these words:

11. After setting out the complaints, the petitions say "In the premises the agreement between them has been irretrievably broken", and pray that the company should be wound up as being just and equitable in the circumstances.

12. When filed, each of the petitions contained a further prayer in the alternative, asking for certain relief (obviously under section 168A of the Companies Ordinance) on the grounds that the affairs of the companies were being conducted in a manner unfairly prejudicial to the Petitioner. What happened about this prayer is explained by Mayo, J. in his judgment in the following passage:

"The petitions are based on section 177, that is that it is just and equitable the company should be would up, and also on section 168A, that is that the company is being run in a manner which is unfair and prejudicial to the petitioner. At a fairly late time in the hearing Mr. Smith informed me that he was no longer seeking to place reliance upon section 168A and therefore did not pursue the matters referred to in paragraph 11 of the petitions. I understood that this meant that the petitioner is no longer of the opinion that the companies can continue to perform the functions they were intended to as a result of the events which had occurred. To an extent it simplifies matters that the petition is only being proceeded with under section 177."

13. Before taking leave of the contents of the three petitions, there is another matter to which reference must be made for it forms an important issue in these appeals. The petitions were filed on the 13^th October 1984. Five days later each of the companies involved took out a summons to strike out or dismiss the petition which concerned it, pursuant to R.S.C. 0.18 r.19 and the inherent jurisdiction. The judge's refusal to accede to these applications, as we have seen, brings the parties to this Court.

14. The applications (as amended) prayed the Court to strike out or dismiss the relevant petition on the grounds that the petition disclosed no cause of action "and/or" was vexatious "and/or" was an abuse of the process of the Court.

15. An additional ground was also put forward in each case: that the petition did not "allege that there were assets of the company of such an amount that in the event of a winding up [the Petitioner] will receive a tangible share of the surplus and therefore the Petitioner as a contributory lacks locus standi to petition for the winding up of the company. "

16. At the hearing the judge allowed the petitions to be amended in this respect. We set out the relevant paragraphs, with an indication of the amendments. In each petition they were numbered 8:

D.J.H. Consultants (China) Ltd.

"Until recently the company has been successful and in a winding up but subject to the taking of proper accounts and repayment of all debts due to it the Petitioner believes there will be a substantial surplus for the shareholders. Your Petitioner has been denied access to the 1984 accounts of the Company."

D.J.H. Consultants Ltd.

"Although the Company has been dormant for a considerable period in a winding up your Petitioner believes there would be a surplus, of 91,500 for the shareholders."

D.J.H. Consultants (Philippines) Ltd.

"In the event of a winding up your Petitioner believes that there for eventual distribution to the shareholders."

17. The judge begins his judgment by referring to this matter:

"        At the commencement of this application to strike out these petitions, Mr. Smith, who is representing the petitioners, sought to amend the petitions by amending paragraph 8 so as to enable him to obtain a locus standi. After some argument I granted leave for the amendments to be made. I have no doubt that if I had not granted this leave this application would have succeeded. "

18. The Appellants each complain about the judge's decision to allow the amendments by their Notice of Appeal in the following terms:

"1.         The learned Judge erred in law in allowing the Petition to be amended in the way described above because the amendment is inconsistent with the original Petition which had been verified by an affirmation of the Petitioner dated the 13th October, 1984 in the statutory form (form 7 of the Companies (Winding Up) Rules, Cap. 32) and no new affirmation was tendered to suggest any change in the Petitioner's belief. Moreover, the application was made orally during the hearing of the Respondent company's aforesaid Motion and was coupled with a concession that without the amendment the Petition was demurrable and yet no notice whatsoever was given to the Respondent company that the amendment would be sought and no evidence was tendered in support of the application. "

19. Mr. Kaplan who appeared before us for the Appellants (but not before the judge) submitted that by this ground of appeal it was not suggested that it was never possible to amend a winding-up petition, but rather that an amendment should not be permitted during the hearing of an application to strike out a demurrable petition. He argued that the judge went wrong by treating the application to amend the petition in the same way as an application to amend a demurrable statement of claim. Different considerations, he contended, applied where a demurrable winding-up petition was involved. The important differences were these:

20. Mr. Kaplan submitted that if Petitioners who presented demurrable petitions were to be allowed to amend them in the way permitted by the judge, to save them from being struck out, there was no real opportunity afforded to a company facing a demurrable petition to challenge the petition in limine. All the company could do in practice was to suffer the advertisement of the petition and then defend it at the hearing proper. The judge's approach, he submitted, contradicted established principles demonstrated in cases of which Charles Forte Investments Ltd. v. Amanda⁽¹⁾ and Bryanston Finance Ltd. v. DeVries (No. 2)⁽²⁾ were examples.

21. Mr. Kaplan further urged that in the light of the manner in which the applications were made to amend the petitions, the judge should not in any event have exercised his discretion to allow them. He drew attention to the following:

22. Mr. Kaplan pointed out that Counsel then appearing for the companies had objected to the informal way the applications to amend had been brought before the Court and had drawn attention, too, to the fact that the Petitioner had not filed new affirmations to explain the inconsistencies or contradictions between the facts and beliefs verified by his original statutory affirmations and the amendments proposed to be made to his petitions. Instead, his Counsel had been permitted to state from the Bar how it was that the Petitioner felt able to reconcile these differences, reading out passages from the Petitioner's affidavits to support his explanations.

23. Mr. Kaplan contended that paragraph 8 of each petition in its original form contained in effect an admission against the Petitioner's interest and that in the absence of an affidavit explaining his change of front, the admissions should not have been permitted to be withdrawn. He relied on Hollis v. Burton⁽³⁾ and Rickmers Rhederai A-G v. The Bank of Taiwan Ltd.⁽⁴⁾.

24. It is necessary here to interpolate that just as Counsel representing the Petitioner had conceded in the lower Court, so before us, Mr. Ching conceded that the petitions, in the form that they were presented, were demurrable. He accepted that on the present state of the law a petitioner seeking a winding-up order must both allege in his petition, and show by evidence, that the company had sufficient assets so that if the order were made he would have a share of the surplus or other tangible benefit to receive. We will have something more to say about this concession later, but we approach these appeals on the basis that the view of both Counsel as to the law is right.

25. We would say at once that we accept that there is indeed a difference between a petition to wind-up a company and an ordinary pleading, particularly in view of the requirement of a statutory affidavit to verify its contents. Having said that, we entertain no doubt that the principles and practice which relate to amendments to pleadings, with leave, apply in every respect to all forms of originating process. The power to amend, of course, is there to ensure that the real issues between the parties can be determined, and to correct defects or mistakes. Before the hearing, leave is readily granted, provided the other said suffers no injury that cannot be compensated by the solace of costs.

26. The judge was exercising a discretion with which a Court of Appeal will only interfere on well settled principles. All the points made by Mr. Kaplan were, we are told, urged before him. Having been repeated before us, we are of the opinion that most of the complaints suggesting that the Appellants had been prejudiced by the procedure adopted are met by the answer that they could have applied for an adjournment (which surely would have been granted, perhaps on stringent terms) to consider their position in the new situation that faced them, and to file any further evidence that was thought necessary. No adjournment was sought. Moreover, as it happened, the Petitioner was present, as the result of an Order previously made, and he could have been cross-examined on his apparent volte-face if it were suggested that the amendments were sought other than bona fide. And we are told that the petitions have in fact not yet been advertised.

27. The Petitioner will, of course, still be liable to cross-examination at the hearing of the petition, and if the Appellants wish to pursue the matter further to show that there would be no surplus, they will have an opportunity of so doing, and this might result (if the law is as accepted by Counsel) in the petitions being dismissed specifically on the grounds of lack of locus standi.

28. We do not wish to be understood to minimize the importance of the statutory affidavit, but if it was otherwise proper to allow the amendments, we do not think that they should have been refused solely because new statutory affidavits had not been filed. We were told from the Bar that such affidavits were sworn and filed after Mayo, J. gave leave to amend.

29. Nor do we think that it was in any way improper for Counsel to have been permitted to go through the Petitioner's affirmation of the 3rd November, which had been made in the light of the application to strike out, in an attempt to satisfy the judge that it contained sufficient material to show, prima facie, that there would be surplus on each winding-up in which the Petitioner would share. The judge must have been satisfied on this point for otherwise he would not have made the orders appealed against, on the state of the law as it was presented to him. We are not persuaded that it has been shown that he was wrong.

30. In reaching our conclusions on the first ground of appeal, we did not consider that anything said in Hollis v. Burton⁽³⁾ stood in the way. That was a most unusual case and very much depended on its own facts; indeed Kay, L.J. at page 240 of the report described it as "an extremely peculiar one" and Lindley L.J. at page 235 as "a very curious case. " There had been an admission by the Defendant in his defence, and also upon sworn interrogatories, as a result of which an order to pay money claimed by the writ into Court was made. He then applied to the Court to set aside the order for payment into Court and for leave to amend his defence, on the grounds that he had made a mistake, and that the admission should never have been made. The judge granted the relief sought. The Court of Appeal upheld the judge's decision but imposed terms that the Defendant should pay the costs of the application and should bring the money claimed into Court. It is clear that leave to amend the defence would not have been permitted to stand if the Court of Appeal had not been satisfied that there was evidence to support the application. At page 235, Lindley, L.J. said:

"....... but in considering what is fair and just between the parties when a person comes to set aside a valid order against him, we must see what the evidence is which he adduces, and the grounds upon which he alleges that he ought to have the relief which he asks. Now, when we look at the evidence, I do not say that we find a case of liability established against him, for to say that would be deciding the action, and perhaps other evidence may be forthcoming; but we find that a very strong case is made against him; and is it right under those circumstances to give him leave to reopen the whole matter and defend unconditionally? It appears to my Brothers and to myself that the discharge of the order made against him, and which was perfectly just, and the permission which he seeks to obtain, and which he is only entitled to upon terms, ought not to be granted except on the terms of his bringing the money into Court. "

31. The Rickmers Rhedeval case⁽⁴⁾ followed Hollis v. Burton⁽³⁾ and in referring to that case, MacGregor, C.J. said:

"An examination of the report of that case shows that before leave will be granted to withdraw an admission the Court must be satisfied that the admission is a mistake. The reason for making that mistake must also be explained to the satisfaction of the Court. "

As we have already intimated, in our view the judge had before him sufficient material to be so satisfied. We do not think that there is any rule of practice that requires an affidavit expressly explaining the Petitioner's altered belief, where this can be gathered from other evidence before the Court.

32. Each Notice of Appeal states that the judge erred in law in deciding that the company had not established a prima facie case that the petition would fail so that it would be an abuse of process to allow the proceedings to continue because the Petitioner was praying in aid the equitable jurisdiction of the Court under section 177(f) of the Companies Ordinance and the petition was based on involuntary exclusion from the management and control of the company under the principles explained in Ebrahimi v. Westbourne Galleries⁽⁵⁾, whereas (and we now quote from D.J.H. Consultants (China) Ltd. Notice of Appeal - the others are in identical terms except that D.J.H. Consultants' Notice of Appeal refers to the additional sub-paragraph (v) of paragraph 9 of the petition):

33. In his judgment Mayo, J. accepted on the authorities cited to him that the Court was bound to confine itself to the contents of the petitions and look at the supporting affidavits only to verify the complaints made in the petitions. He also accepted, relying on Bryanston Finance Ltd. v. DeVries⁽²⁾, that it was for the companies to establish that the petitions would fail and therefore constituted an abuse of the process of the Court.

34. The judge went on to consider the submission that, taken singly or together, the complaints fell far short of justifying the destruction of the companies, and the contention, based on Charles Forte Investments Ltd. v. Amanda⁽¹⁾ that a company should not be would up if there were alternative measures that could achieve the results desired by the Petitioner; and that the petition for winding up should not be allowed to be used as an instrument for oppression to enable a party to blackmail the company into submitting to his demands.

35. In the opinion of the judge it was necessary to consider the matter as a whole and as broadly as possible. It was evident to him from the material contained in the petitions that the companies were providing a vehicle for Mr. Hutcheson and Mr. Lau to conduct what was in reality a partnership agreement. He referred to the general statement in each petition that: "n the premises the agreement between them has been irretrievably broken."

36. The judge concluded by saying that some time had been spent in speculating whether it was possible for any alternative measures to be taken by the Petitioner to achieve the objectives he required. One possibility canvassed had been seeking a declaration that Mr. Doroja's appointment as a director was invalid. The judge expressed the view that even if such declarations were obtained they would not provide a satisfactory solution to the problems referred to in the petitions. He particularly bore in mind the fact that the main burden in the applications lay upon the companies, and he was by no means satisfied that this has been discharged. It was not clear to him that hat the petitions would inevitably fail. That being the case, he would dismiss the motions.

37. Before we turn to consider the second ground of appeal, it is necessary to review some of the evidence, which is either common ground or undisputed:

38. Mr. Kaplan submitted that in approaching the question whether or not the companies had made out a case to strike out the petitions, the Court would consider all aspects of its equitable jurisdiction including the established bars to relief, and in particular whether a Petitioner who is a contributory has available to him other remedies which do not require the drastic step of destroying his company. He relied on Charles Forte Investments Ltd. v. Amanda⁽¹⁾, where a petition to wind up a private company was restrained by injunction (the Court acting in its inherent jurisdiction to stay proceedings which are vexatious or an abuse of the process of the Court) because (a) the shareholder could bring an action to obtain his real remedy, without the risk of possibly irreparable damage to other innocent shareholders - and as he was very much a minority shareholder the facts did not reveal a deadlock in a quasi-partnership (b) the Court's jurisdiction had the object of restraining the assertion of doubtful rights in a manner productive of irreparable damage, which might ensue as a result of the necessity for advertising of the petition, whereas the Petitioner had no chance of succeeding on his petition since the power of the directors to refuse to register the transfer of some of his shares (he had threatened the directors to present a petition if they did not undertake to register the transfer and they had refused) allowed them to decline, without impropriety, to register a transfer to prevent shares falling into the hands of strangers. We would say here that the facts are very different in the cases we have to consider.

39. The salutary and important jurisdiction exemplified by that case is regularly used to prevent the presentation of, to stay or to strike out a petition to wind up, but it is a jurisdiction not to be used except in plain and obvious cases. A party praying in aid this jurisdiction has a heavy onus cast upon him for it is a serious matter to close the doors of the Court upon a petitioner before his petition can be determined on its merits. Unless a petition is doomed to failure for one reason or another, it will be for the Court to decide, at the conclusion of the hearing when all the evidence is in and has been tested by any necessary cross-examination, whether or not the petition should be granted.

40. It will normally only be then, assuming the petition is held to be otherwise well-founded, that the Court will give effect to the provisions of section 180(1A) of the Companies Ordinance, which are in these terms:

"    (1A)     Where the petition is presented by members of the company as contributories on the ground that it is just and equitable that the company should be wound up, the court shall not refuse to make a winding-up order on the ground only that some other remedy is available to the petitioners unless it is also of opinion that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy. "

41. In this context Mr. Kaplan contends that if the Petitioner's complaints are found to be valid they could be remedied in another way that did not involve the destruction of the company, for example by an action for a declaration that the resolutions are invalid. We do not agree that the companies have established this at the stage the proceedings have now reached. Mr. Lau's allegations are very serious. He has sworn that he was given no notice of, and was therefore not present at, the 3rd September meetings when Mr. Doroja was said to have been appointed an additional director of the companies. Therefore there was no quorum and no valid resolutions have been passed. He says the same about the 21st September meetings. If he can establish what he says is the truth, the fact of the resolutions and what they were designed to achieve would tell its own story. He would have shown that he was effectively excluded from the management of the companies in defiance of the Articles of the Association, and in breach of the basic understanding set out in the petition. It must not be forgotten that in his affidavit sworn on the 30th November 1984 Mr. Hutcheson says (in paragraph 53) "I do not want to continue to work with him..." We do not see how it can successfully be maintained that the judge was wrong in allowing the petitions to proceed to a hearing, or that, if Mr. Lau is ultimately believed, a case could not be made out for winding-up orders on the just and equitable grounds explained in Westbouorne Galleries⁽⁵⁾. If Mr. Hutcheson is finally proved to have acquired virtually complete control of the companies by means of irregularities, thereby excluding Mr. Lau from their management, the Court will clearly have power, in its discretion, to grant the reliefs bought by the Petitioners.

42. On the material before us, we do not consider there is any justification for differentiating between any of the petitions.

43. Nor do we consider that it is right to say, as was submitted to us, that Mayo, J. placed independent weight on the statement which followed each set of complaints: to the effect that the agreement between Mr. Lau and Mr. Hutcheson had irretrievably broken down. We discern no indication that the judge did what is suggested.

44. Mr. Kaplan argued that Mr. Lau had been shown to be pursuing ulterior motives by the fact that he had not also sought to have Direct Line Company Ltd. also wound up. This, no doubt, will be something he will be asked about at the hearing and the judge will be able to weigh any explanations he offers in the scales. But we do not think that this matter, or any other that has been urged upon us, supports the allegation, at this interlocutory stage, that Mr. Lau was acting male fide in presenting his petitions.

45. It was for these reasons that we dismissed the three appeals.

46. Before taking leave of the appeals we return to a matter that has caused us some concern. As we have previously noted both Counsel accepted as good law the proposition established by In re Rica Gold Washing Co.⁽⁶⁾, and followed in England by judges for almost a century, that a fully paid-up shareholder has no standing to present a petition to wind up the company unless he alleges and proves that there is a probability that there will be a surplus available for distribution in the event of his petition succeeding. One of the latest cases on this point in England is the decision of Oliver, J. (as he then was) in In re Chesterfield Catering Co. Ltd.⁽⁷⁾. At pages 377 to 381 he gives an exhaustive, and if we may say so, helpful, review of these authorities. Oliver, J. acknowledged that there was nothing in the relevant sections of the Companies Act of the U.K. that stated in terms that a contributory can present a petition only if there is likely to be surplus assets available for distribution to shareholders, and that section 255(1) [our section 180(l) is in similar terms] directs the Court not to refuse a petition on the ground only that the company has no assets, but he rejected the argument (as had Buckley, J. in In re Othery Construction Ltd.⁽⁸⁾) that the doctrine enunciated in In re Rica Gold⁽⁶⁾ had been swept away by statutory intervention - first introduced in 1908. He said:

"But I think it is now too late in the day for a contributory petitioner to urge me to depart from a principle which has been established and followed for close on 100 years. "

47. Oliver, J. referred to In re Kaslo-Slocan Mining and Financial Corporation Ltd.⁽⁹⁾ saying that in that case Neville, J. had held, in effect, that the statutory provisions had not altered the position as regards a fully paid shareholder's petition. There Counsel for the company facing a petition, took a preliminary objection based on In re Rica Gold⁽⁶⁾ submitting that the 1908 Act had not altered the practice. Counsel for Petitioner argued that all the cases up till then had been before the Act and the new provisions applied to every winding-up petition. Want of assets was not now a sufficient objection to an order. Neville, J.'s judgment, as reported, was no more than this:

"I think the petition ought to be dismissed. It is a petition by a fully paid-up shareholder and he alleged that the company has no assets and is insolvent. Under those circumstances the petition would be dismissed with costs."

48. In the event we did not formally invite argument on this point because it would not have affected the result of the appeals before us, but we would say that had we reached the conclusion that Mayo, J. should not have allowed the petitions to be amended, we would have been obliged to consider the matter, with such assistance as Counsel were able to give us, despite their concessions on the state of the law. We would have wished to hear argument as to whether the well settled practice in England should be followed in Hong Kong (and some of the cases indicate that the judges considered it a rule of practice) since no authority on the point binds us and since our preliminary view is that the provisions of section 180 (1) of the Companies Ordinance might present a formidable hurdle to adherence to the doctrine in In re Rica Gold ⁽⁶⁾. This is what the subsection says:

"    180.     (1) On hearing a winding-up petition the court may dismiss it, or adjourn the hearing conditionally or unconditionally, or make any interim order, or any other order that it thinks fit, but the court shall not refuse to make a winding-up order on the ground only that the assets of the company have been mortgaged to an amount equal to or in excess of those assets, or that the company has no assets. "

The language seems unambiguous and peremptory.

49. We can imagine cases in which small "quasi-partnership" type companies are involved where the Court might feel that a winding-up order is appropriate even if there will be no surplus for distribution - a situation apparently envisaged by the Legislature. We say all this because, with the greatest of respect to the judges who have taken a different view, we do not wish to be understood to have accepted that the law in Hong Kong is as re-stated by Oliver, J. in In re Chesterfield Catering Co. Ltd.⁽⁷⁾.

(1)    [1964] 1 Ch. 240

(2)    [1976] 1 Ch. 64

(3)    [1892] 3 Ch. 226

(4)    [1934] H.K.L.R. 27

(5)    [1973] A.C. 360

(6)    (1879) 11 Ch.D. 36

(7)    [1977] 1 Ch. 373

(8)    [1966] 1 W.L.R. 69

(9)    [1910] W.N. 13