TONG KIN MING AND ANOTHER v. THE REGISTRAR OF COMPANIES

HCMP 348/2023

[2023] HKCFI 1789

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 348 OF 2023

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REASONS FOR JUDGMENT

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1.  By the Originating Summons (“OS”) issued on 6 March 2023, the Plaintiffs, husband and wife and joint tenants of the property known as Flat 2, 2/F, Block G, No. 21 Ngan Sing Street, Yue Tin Court, Shatin, New Territories (“Property”), seek (i) a declaration that document described as “Lease Agreement Guarantee and Indemnity” dated 25 January 1995 (“Guarantee”) purportedly signed by them, whereby they purportedly charged the Property as security for certain obligations of a company known as New Century Industrial Ltd (“New Century”) to Pro Finance (Asia) Ltd (“Pro Finance”), was null and void on the basis that they never executed the same and the signatures on the face of the Guarantee were not theirs, and (ii) an order to vacate the registration of the Guarantee against the Property at the Land Registry.

2.  Before going to the substance of the application, it is relevant to note that Pro Finance had in fact been dissolved a long time ago, on 8 March 2004.  Because of this:-

(1)  The Registrar of Companies (“Registrar”) has been named as Defendant, on basis that (i) under section 752(1) of the Companies Ordinance (Cap. 622), upon dissolution of a company every property and right vested in the company immediately before the dissolution is vested in the Government as bona vacantia; and (ii) in such a case the Registrar would act on behalf of the Government and should be named as defendant: Yang Zhenghong v Registrar of Companies, HCMP 3115/2013 (unrep.) 23 November 2015 (G Lam J).

(2)  As an alternative to the 2 reliefs sought above, the Plaintiffs seek an order to restore Pro Finance. This alternative is not seriously pursued by the Plaintiffs, and I have heard no submissions on the same. I should point out that, as mentioned by the Registrar in her letter of 31 March 2023, there appear to be a number of difficulties pertaining to such application which the Plaintiffs have not attempted to address.

3.  In any event, it is not necessary to go down this alternative route, as I am satisfied that any right Pro Finance might have had relating to the Guarantee now vests in the Government.  Such right – whether one characterizes it as a contractual right or a chose in action to enforce the Guarantee – clearly falls within “property and right” under section 752(1), for while Cap.622 does not contain any definition of “property”, the definition of “property” in section 3 of the Interpretation and General Clauses Ordinance (Cap. 1) includes “money goods choses in action and land”.

4.  These proceedings are commenced by originating summons and Order 28 of the Rules of the High Court applies.  Under Order 28, rule 4(1) the proceedings may be disposed of summarily if the court is satisfied that there are no triable issues.

(1)  Here, the Registrar informed the Court by letters dated 28 April 2023 and 29 June 2023 that she maintains a neutral stance regarding the Plaintiffs’ application for declaratory relief, and her attendance at hearing today has been excused.

(2)  I am satisfied, having regard to the evidence filed, that it is appropriate to dispose of the OS summarily.

5.  Turning to the substance of the application, I am satisfied that on materials available, the Plaintiffs did not execute the Guarantee and it was essentially a forged document for the following reasons:-

(1)  A near contemporaneous document (letter dated 1 May 1997 to Pro Finance) from the 1^st Plaintiff clearly stated the 1^st Plaintiff’s stance was that the Plaintiffs never signed the Guarantee and it was described as “fraudulent”.

(2)  The signatures of the 1^st Plaintiff on face of the Guarantee are visibly different from those appended to the court documents filed in the OS.

(3)  Pro Finance’s conduct in HCA 1084/1996 (the proceedings it commenced against inter alios the Plaintiffs to enforce the Guarantee) – namely (i) took no further step against the Plaintiffs after 1997 correspondence described above, and (ii) after Pro Finance was placed in liquidation, there was no attempt by its liquidators to continue to pursue those proceedings – is inconsistent with Pro Finance having a genuine claim on the Guarantee.

6.  I do not consider the Plaintiffs’ inaction over the years to have undermined the above conclusion.  

(1)  The documents the Plaintiffs provided to the Police and land searches show that around the time of the Guarantee, the 1^st Plaintiff was said to have executed a number of other guarantees in favour of other finance companies to secure New Century’s debts and obligations, the genuineness of which were all disputed by 1^st Plaintiff. I also note that for those other guarantees that are in evidence, the signatures purporting to be the 1^st Plaintiff’s thereon bear similarity to the one appended to the Guarantee, but are quite different from that the 1^st Plaintiff appended to the court documents in this case.

(2)  Whilst these finance companies had all commenced proceedings against P1 to enforce those guarantees, just like the 1996 action commenced by Pro Finance, none of them proceeded any further.  In such circumstances, it was not unreasonable for the 1^st Plaintiff to believe that there was no further issue relating to these guarantees (including the Guarantee), until he discovered in 2022 that the registration of the Guarantee against the Property has not been vacated.

(3)  Once he made that discovery, he immediately proceeded to report the matter to the Police and make this application.

7.  In the circumstances I will make a declaration as per §1 of the OS.

8.  As to OS §2 (order to vacate registration of the Guarantee):-

(1)  I am satisfied that the court has inherent jurisdiction to vacate registration or purported registration of any instrument in the Land Registry which does not affect or no longer affects land: Thian’s Plastics Industrial Co Ltd v Tin’s Chemical Industrial Co Ltd [1971] HKLR 249, 256; Wong Kum Chi v Lee Tit Ying [2003] 1 HKLRD 594, §16.

(2)  Given I have found that the Plaintiffs never executed the Guarantee and it is a void document, it could not have affected land (ie the Property) and it is appropriate that its registration should be vacated.

(3)  Accordingly I make an order in term of §2 of the OS.

9.  I also order that the Plaintiffs do pay the Registrar’s costs of $5,000 within 7 days hereof.