XCHRX PAUL EIDENS v. MALCOLM IAN GLASS AND OTHERTS

1994, No. M.P.2927

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

(MISCELLANEOUS PROCEEDINGS)

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J U D G M E N T

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1. The 1st and 2nd Defendants were the liquidators of the 3rd Defendant company. The 3rd Defendant was a trading company engaged in steel trading. It was in effect wholly owned by a Panamanian company called Lida Corporation. The 3rd Defendant was voluntarily wound up and the final meeting was held on 11 July 1994. The return of that meeting was filed with the Companies Registry on 20 July 1994. It is now dissolved and the assets of the company had been distributed.

2. The Plaintiff applied in these proceedings pursuant to s.248(4) of the Companies Ordinance with an alternative application under s.290 of the Ordinance. These two sections provided as follows :

"248. (4) The Registrar on receiving the account and in respect of each such meeting either of the returns hereinbefore mentioned shall forthwith register them, and on the expiration of 3 months from the registration thereof the company shall be dissolved:

Provided that the court may, on the application of the liquidator or of any other person who appears to the court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such time as the court thinks fit."

"290. Power of court to declare dissolution of company void

(1) In the case of a company which has been dissolved under section 226A, 227, 239 or 248, the court may at any time within 2 years of the date of the dissolution, on an application being made for the purpose by the liquidator of the company or by any other person who appears to the court to be interested, make an order, upon such terms as the court thinks fit, declaring the dissolution to have been void, and thereupon such proceedings may be taken as might have been taken if the company had not been dissolved."

Under either provision, it is necessary for the applicant to be "a person interested". This means a person with a proprietary or pecuniary interest in resuscitating a company. See In re Roehampton Swimming Pool Limited [1968]1 WLR 1693 and In re Beesley [1975]1 WLR 568.

3. The aforesaid Panamanian holding company Lida was used to hold the shares of the 3rd Defendant. Lida was acquired by the Plaintiff and one Mr Gerhard Duda ("Duda") since December 1975. In about 1982, one Mr Poelzl became an additional shareholder of Lida. The three of them were equal shareholders and the shares of Lida are in the form of bearer shares. Poelzl has been keeping one bearer share, the other two bearer share certificates have been held by KPMG (Peat Marwick). There is a dispute recently as to the ownership of the two bearer shares in the possession of Peat Marwick.

4. Lida was in turn wound up in Panama and the Plaintiff is disputing the regularity of winding up Lida in Panama.

5. The Plaintiff is neither a shareholder nor a director of the 3rd Defendant. He is not a creditor of the 3rd Defendant. He was aware of the winding up of the 3rd Defendant but lodged no proof of debt in that winding up. In High Court Action No.A6390 of 1994, the Plaintiff was seeking a declaration, inter alia, that the purported resolutions to dissolve the 3rd Defendant company and Lida were null and void. No steps had been taken to revive Lida in Panama.

6. I accept Mr Houghton's submission that in view of the circumstances of this case, the Plaintiff cannot be said to be contingently "interested" in the statutory sense of the 3rd Defendant and he has no pecuniary or proprietary interest in the 3rd Defendant. The 3rd Defendant is just a dead shell. There is no reason for seeking the restoration of the 3rd Defendant. It has no assets, no business nor any purpose of existence. In restoring the 3rd Defendant company, it cannot assist the Plaintiff at all. The only course open to the Plaintiff is to pursue his interest in Lida in Panama.

7. Accordingly, I consider that the Plaintiff has no locus standi in making this application and the application has to be dismissed with costs to the 1st and 2nd Defendants.