RE CAPITAL SINO INVESTMENTS LTD

HCMP 2939/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO2939 OF 2014

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D E C I S I O N

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1. I have an application before me for rectification of documents relating to the registration of charges under section 347 of the Companies Ordinance, Cap 622.

2. Section 347 is based on section 86 of the old Companies Ordinance, Cap 32.  Section 347 applies to the documents in this case being documents delivered to the Registrar of Companies pursuant to section 80 of the old Ordinance, Cap 32:  see section 347(1)(a)(i)(B). 

3. The documents which are said to contain a misstatement are:

(1) a mortgage executed by the company as mortgagor and by Standard Chartered Bank (Hong Kong) Limited as mortgagee, dated 24 January 2014;

(2) Form M1, containing the details of the mortgage delivered to the Registrar for registration; and

(3) the certificate of registration of the charge issued by the Registrar of Companies in respect of the mortgage on 6 February 2014.

The misstatement is said to be that instead of 24 January 2014, the date of the mortgage should be 23 January 2014.

4. It is said in the evidence that the misstatement was due to inadvertence and it appears from the affirmation filed by Mr Hung, solicitor for the applicant company in these proceedings – who also, I am told, acted for the bank in the preparation of the mortgage – that there might well have been an inadvertent mistake. 

5. Section 347 is wider than section 86 of the old Ordinance in at least one particular respect.  Section 347(1)(a)(i) refers to “any accompanying instrument” delivered for registration.  This plainly refers to the instrument creating or evidencing the charge, a certified copy of which has to be delivered to the Registrar together with the statement of particulars of the charge for registration as required by, for example, section 80(1) of Cap 32, or section 335(3) of Cap 622.  Thus this section confers a power to rectify not only the statement of particulars delivered for registration, but also the instrument creating or evidencing the charge, such as a deed of mortgage.  The power surely must be a power to rectify the instrument itself, and not just a certified copy of it, though it is only a certified copy that has to accompany the statement of particulars of a charge upon delivery for registration.

6. However, section 347(4) provides that:

“The court may make an order to rectify an omission or misstatement of any particular in any accompanying instrument mentioned in subsection (1)(a)(i) or (iii) to the extent as permitted by common law rules and equitable principles.”

This shows that section 347, so far as the original instrument itself is concerned, does not create a new cause of action or provide a new ground for rectification, but instead provides a procedure for correcting an original document delivered for registration to the extent that it does not reflect the true agreement of the parties, or, in other words, a summary procedure for rectification of an instrument creating or evidencing a charge.

7. However, as a matter of general principle, where that particular power is invoked, clearly, it seems to me, the parties to the instrument must ordinarily be joined as parties to the application.

8. In this case, the instrument is a deed of mortgage to which both the company mortgagor and the bank mortgagee are parties.  The application has, however, been made by ex parte originating summons and has not been served on the bank.  Nor is there any evidence of the bank’s consent to this application or its willingness to be bound by an order made by the court.

9. I therefore order that the hearing of the originating summons be adjourned sine die, with liberty to restore, so that this procedural defect may be rectified.