RE CHINA LAW INTERNATIONAL CONSULTING CENTRE CO LTD (TRANSLITERATION)

[English Translation – 英譯本]
CACV 274/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 274 OF 1998

(ON APPEAL FROM COMPANIES WINDING-UP PROCEEDINGS
 NO. 705 OF 1998)

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REASONS FOR JUDGMENT

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Hon Woo JA (delivering the judgment of the Court):

1. On 6 July 2000, at the conclusion of this appeal, we made the following order:

We allow the appeal and set aside the winding-up order.  This case is to be remitted to the judge in charge of company cases for directions on the continuation of the hearing of this case.  Written reasons for this Court’s decision will be handed down later.  This Court makes no order as to costs.

2. We now set out our reasons for the above decision.

3. This appeal is brought by China Law International Consulting Centre Co Ltd (transliteration) (the “Company”) against a winding-up order with costs made against the Company by Master Chung (as he then was) on 4 November 1998.

4. The petition to wind up the Company was presented by Mak Siu Tong.  The ground for winding up the Company, as stated in the petition, was that Mr Mak obtained a costs order against the Company in another action A3758/1998.  On 1 June 1998, costs were assessed at over $490,000.  Despite Mr Mak’s requests, the Company had, by the time of the petition, still not paid those costs.

5. The petition was heard before Master Chung on 4 November 1998.  Mr Yu Kwok Ying (“Mr Yu”), Chairman of the Company, attended the hearing and provided three reasons for opposing the making of a winding-up order.  Having heard those reasons, Master Chung did not consider any of them valid and therefore proceeded to make a winding-up order.

6. Section 176 of the Companies Ordinance (Cap. 32) provides as follows:

The Court of First Instance shall have jurisdiction to wind up any company.

7. Section 180A of that Ordinance provides as follows:

(1)        Subject to general rules limiting the power conferred by this section, the jurisdiction of the court under this Part may, in the case of an unopposed petition for winding-up by the court, be exercised by the Registrar of the High Court.

(2)        Any hearing of a petition in pursuance of the jurisdiction conferred on the Registrar of the High Court by this section shall be in open court.

8. It is clear from the above provisions that the jurisdiction to wind up any company rests with the Court of First Instance, but where a winding-up petition is unopposed, that jurisdiction can be exercised by the Registrar of the High Court (including a Master).

9. At the hearing of the petition to wind up the Company before Master Chung on 4 November 1998, Mr Yu was present and opposed the petition.  Having considered the grounds of opposition put forward by Mr Yu, Master Chung saw no valid reason for not making a winding-up order and therefore proceeded to make the order.  This shows that Master Chung was aware that someone was against winding up the Company.  Mr Au Hing Cheung, Counsel for the petitioner, argued that, although Mr Au appeared at the hearing and opposed the petition, he had not been granted leave by the Registrar, pursuant to O. 5 r. 6 of the Rules of the High Court (Cap. 4), to represent the Company in conducting the winding-up proceedings.  Therefore, Mr Au said, although Master Chung was aware of Mr Yu’s opposition and the reasons therefor, the Master in fact did not and did not have to consider the same.  Mr Au submitted that the sealed winding-up order contained the words “no one appearing for the Respondent Company”, which shows that Master Chung did not take into account Mr Yu’s opposition and the reasons therefor in making the winding-up order.  In our view, this argument is contrary to the facts because Mr Yu’s opposition and the reasons therefor have been expressly noted in the record of the hearing on 4 November 1998, which was made in Master Chung’s own handwriting, as well as the record of proceedings of the hearing provided by the Official Receiver.  And Master Chung did consider Mr Yu’s opposition and the reasons therefor before concluding that those reasons were not valid and then making the winding-up order.

10. Mrs Christine Francis Sit, who appeared for the Official Receiver, pointed out that, according to the record of the hearing of the petition, Master Chung had in fact heard Mr Yu’s opposition and made the winding-up order only after he considered that the opposition had no substance.  Mrs Sit also said that, where there is a representative of a company who objects to winding up the company, it is the current practice of the Master hearing the winding-up petition to adjourn the case and refer it to the judge in charge of company cases to deal with the matter.  Where it is alleged that the person who purports to represent the company has not obtained leave by the Registrar, pursuant to O. 5 r. 6 of the Rules of the High Court, to represent the company, the Master may remind that person of the need to obtain such leave and will also adjourn the case and refer it to the judge in charge of company cases to deal with the matter.

11. For the above reasons, we are satisfied that, at the hearing on 4 November 1998, Master Chung did not have jurisdiction to make a winding-up order, he being aware that someone was opposing the winding-up petition.  Therefore, we made the order set out in paragraph 1 of this judgment.  The costs order made by Master Chung at the hearing is also set aside.