TOM MING CHOU v. PAN PING-HU ANTONY AND OTHERS

HCCW 375/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 375 OF 2008

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BETWEEN

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DECISION

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1.  I have before me two summonses. The first summons was issued on 8 December 2009 by the petitioner for an extension of time to comply with an order made by me on 28 October 2009 to pay into court within 28 days $1.2 million as security for costs of the 1^st, 2^nd, 4^th and 5^th respondents (“the individual respondents”) and $150,000 as security for costs of the 7^th respondent, Tanyuen Investments Limited, the company being the subject of the petition (“the Company”). I understand from Mr Yee that the petitioner seeks an extension of time of 56 days from today to comply with the order. The second summons was issued on 14 December 2009 by the individual respondents seeking dismissal of the petition on the ground that the petitioner has failed to comply with the order for security for costs.

2.  I refer to the decision I gave on 28 October 2009 setting out the reasons why the order was made, in particular paras. 33, 36, 37 to 41.

3.  I was told by the counsel who appeared for the Company at the hearing on 28 October that the amount of RMB 1.5 million odd being the petitioner’s share of an arbitration award would be transferred by its director, Madam Chou Li Ling, from her bank account in Shanghai to the petitioner’s bank account “within a short time.” The petitioner had indicated that he would use this amount to pay the security for costs to be ordered.

4.  It now transpired that Madam Chou had visited a hospital in Taiwan and was diagnosed to have ear problems. She was advised she is unfit to travel by air to Shanghai to deal with the procedure for transferring the money to the petitioner. The court was not informed about this at the time the order was made. The Company’s solicitors stated that they were unaware of this at the hearing. The petitioner’s solicitors were informed about this by letter of the Company’s solicitors dated 3 November 2009, enclosing a medical certificate issued on 27 October 2009.

5.  At the hearing on 28 October, counsel for the petitioner had proposed to give time to the petitioner to pay the security for costs within a specified number of days upon his receipt of funds from Madam Chou. It was rejected by the court.

6.  Given the information from the Company’s counsel at the hearing that the money would be paid within a short time, I saw no need at the time to provide for payment of security only upon the receipt of the funds transferred by the Company. The solicitors for the individual respondents and the Company tried to make an issue out of this that the court had taken the view the receipt of funds from Madam Chou is irrelevant to the petitioner’s obligation to provide security. This is misconceived.

7.  On 6 November 2009, the Company’s solicitors informed the petitioner’s solicitors Madam Chou was in the course of liaising with her bank in Shanghai as to any alternative way by which money could be remitted to the petitioner’s account in Shanghai. The bank had suggested to Madam Chou to pass her original identity document to an agent but she is not agreeable to this suggestion.

8.  The solicitors for the individual respondents wrote to the petitioner’s solicitors on 17 November 2009 stating that they are prepared to agree to an extension of time in principle and asked the petitioner to indicate how long he would require. The petitioner’s solicitors eventually responded on 25 November 2009, stating that they would require 56 days on the assumption Madam Chou was to effect the transfer to the petitioner’s account in Shanghai within 28 days and he was to have a further 28 days to pay the money into court in Hong Kong. This was turned down by the solicitors for the individual respondents.

9.  By letter dated 25 November 2009, the Company’s solicitors agreed to give an extension of time of 7 days to comply with the order to provide security.

10.  The time for complying with the order expired on 25 November 2009. The petitioner’s application was taken out on 8 December.

11.  Mr Yee submitted for the petitioner in this unusual situation, where the Company and the individual respondents already have in their possession the funds belonging to the petitioner and held by Madam Chou on the Company’s behalf, no prejudice is occasioned to them. But for Madam Chou’s health problem, the money should have been transferred to the petitioner. It would be unjust to the petitioner if the individual respondents and the Company could rely on their own failure to transfer funds to the petitioner to refuse an extension of time or to dismiss the petition.

12.  I think these are valid submissions.

13.  As for the present condition of Madam Chou, the Company’s solicitors wrote to the petitioner’s solicitors on 16 December 2009 stating that her condition has not improved and she is still advised not to take any flight.

14.  The petitioner’s solicitors have suggested by letter dated 20 November 2009 for Madam Chou to execute a power of attorney to effect the transfer of funds to the petitioner. The Company’s solicitors replied on 16 December stating that the bank has insisted the attorney must produce the original of Madam Chou’s identity document when seeking to effect the transfer, and Madam Chou has declined to comply with this request.

15.  Mr Yee also suggested the Company could have used alternative source of funds to pay the petitioner his share of the arbitration award. There is no indication the Company is financially unable to do so.

16.  The application of the individual respondents to dismiss the petition is entirely opportunistic. I dismiss this application without hesitation.

17.  I grant an extension of time of 56 days from today to the petitioner to comply with the order to provide security. As I have mentioned, the circumstances of this case are unusual. I decline to make an unless order. It does not appear to this court the Company or Madam Chou has exercised best endeavours to transfer the funds to the petitioner, nor does it appear to me the Company has taken a neutral position in this application as it has claimed.

18.  I award costs of the time summons to the petitioner. The petitioner’s costs are to be paid by the individual respondents and by the Company in any event. Costs of the summons to dismiss the petition would also be awarded to the petitioner against the individual respondents, to be paid in any event.