RE PRIMLAKS (H K) LTD

HCCW 258/2018 & HCMP 879/2018
(HEARD TOGETHER)

[2020] HKCFI 339

HCCW 258/2018

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING‑UP PROCEEDINGS NO 258 OF 2018

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 879 OF 2018

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REASONS FOR DECISION

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1.  On 25 July 2019 I heard two summonses. The first is in HCMP 879 of 2018 (in which Ramchand Hemnani seeks declarations and rectification of the 3^rd Defendant’s share register “Action”), which is a summons issued by the Defendants (in practice the 1^st and 2^nd Defendants, who are contributories, the 3^rd Defendant “Company” not being represented at the hearing) dated 21 September 2018 to stay Ramchand’s action. The second is in HCCW 258 of 2018, which is a creditor’s petition issued by Renew Limited to wind-up the 3^rd Defendant “Petition”. Ramchand issued a summons on 7 November 2018 principally for an order staying the Petition pending determination of the Action.

2.  The Company, which is the subject of the winding-up petition is owned by members of the Hemnani Family.  The Petitioner is a third party. Ramchand harbours concerns about the circumstances in which the alleged debt came to be incurred.  He cannot take any steps to intervene in the conduct of the Petition, because he has been removed as a director and the share register records shares once registered in his name as having been transferred to the 1^st Defendant, Ashok.  Ramchand says both actions were done without his consent and are unlawful.  Ramchand is concerned the Petition debt is not due and wishes to investigate the matter.  He has commenced the Action, which is contested, in order to rectify the share register.

3.  At the end of the hearing I declined to stay the winding-up petition.  It did not seem to me that there was any justification for preventing the Petitioner pursuing the Petition until after the determination of an unrelated dispute between the Company’s shareholders had been resolved.  Ramchand has been unable to file any evidence that demonstrates that there may have been collusion between the Petitioner and the Company.

4.  Mr Brown on behalf of the Petitioner told me that as a consequence no order was required on the summons in the Action.  The only issue that remained to be dealt with is costs.  In the case of Ramchand’s summons in the winding-up proceedings I will order that Ramchand pays the Petitioner’s costs with a certificate for counsel.

5.  The costs of the summons in the Action is more controversial.  Mr Chen on behalf of Ramchand argued that the summons was unnecessary.  Given that the purpose of the Action was to obtain orders that facilitated Ramchand taking steps to determine if the Petition should be defended it was unnecessary from its inception, or certainly became so once the summons in the Petition had been issued as the latter was always likely to be determinative of the matter.

6.  The position that has arisen in these proceedings is unusual.  Ramchand is asking for the Petition to be delayed until he has been put in a position to assess whether or not it should be defended.  Viewed from the Petitioner’s position this is unsatisfactory.  It is, however, difficult to see why the contributories thought it necessary to expend money certainly after issue of the summons in the Petition, which was always likely to determine whether the Company was wound-up.  I will order that the Plaintiff in the Action pays the 1^st and 2^nd Defendant’s costs up to one month after issue of the summons in the Petition, namely, 7 December 2018 to take into account the need to consider its implications for the future conduct of the Summons in the Action and no order for costs thereafter.