CHENG KWOK KEUNG v. THE REGISTRAR OF COMPANIES

HCMP 1291/2018

[2019] HKCFI 984

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1291 OF 2018

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REASONS FOR DECISION

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Introduction

1.  I have before me an originating summons dated 20 August 2018(“the OS”) by which Cheng Kwok Keung (“the Applicant”) seeks restoration of the name of Super Honour International Limited (“the Company”) to the Companies Register pursuant to section 765(2) of the Companies Ordinance (Cap 622) (“the CO”).

2.  The OS is supported by the Applicant’s affirmations dated 15 August 2018 and 24 February 2019.

3.  The Registrar of Companies takes a neutral stance to the application, on the basis that certain terms are included in the order.  This is set out in a letter dated 22 March 2019.

4.  The Company was deregistered and dissolved pursuant to section 291AA(7) of the previous Companies Ordinance (Cap 32).  This deregistration was initiated by the Applicant, the sole shareholder.

5.  The Applicant wishes to restore the Company in order to enablethe Company to bring a claim against a Ms Chan Tung Ngai (“Ms Chan”) for recovery of a property at Workshop No 8, 6/F, Fullagar Industrial Building, 234 Aberdeen Main Road (“the Property”) which it is alleged she holds on trust for the Company.

Material facts as set out in the Applicant’s evidence

6.  On 16 September 1992, the Applicant entered into an agreement to purchase the Property from Sansonic Company Limited for HK$1.45 million (“Sansonic”).

7.  On 2 November 1992, the Applicant executed a nomination confirming that the Property should be assigned to the Company as the true purchaser.

8.  On 25 November 1992, the Property was conveyed from Sansonic to the Company.

9.  In about 2008, the Applicant entered into an oral agreement with Ms Chan (the younger sister of the Applicant’s then girlfriend) that theProperty would be transferred to Ms Chan who would hold the same on trust for the Company, and would transfer the Property back to the Company on demand.

10.  On 9 May 2008, the Company as vendor entered into an agreement with Ms Chan as purchaser for sale and purchase of the Property with a stated consideration of HK$1.3 million.

11.  The Property was assigned by the Company to Ms Chan on 11 June 2008.  The assignment states that Ms Chan had paid the consideration of HK$1.3 million.  The Applicant states that in fact no consideration was paid by Ms Chan to the Company or to him; and that the Applicant has at all material times been in possession of the original title deeds and documents for the Property.

12.  The Applicant’s relationship with his girlfriend ended in 2018.  The Applicant unsuccessfully requested that Ms Chan return the Property.

Legal principles

13.  So far as material:

(a)   An application to the Court for the restoration of a company to the Companies Register may be made by a person who feels aggrieved by the deregistration: section 765(2) of the CO.

(b)   An application under section 765(2) must be made within 20 years of the deregistration: section 766(1) of the CO.

(c)   The Court may grant an application made under section 765(2) if satisfied that it is just that the company be restored to the Companies Register: section 767(2) of the CO.

(d)   Any factual disputes are to be resolved in the appropriate forum.  The applicable test on an application to restore a company for the purposes of pursuing a claim is whether the company has more than a shadowy prospect of establishing anything of value.  See Re Cretec Electronics (HK) LtdHCMP 653/2014 (unreported,12 September 2014 per Ng J at paras 12, 16; Easewin PropertiesLtd v Registrar of Companies (No 2) [2004] 4 HKC 547 at 552G.

Disposition

14.  In my opinion:

(a)   The Applicant as sole shareholder of the Company is aggrieved by the deregistration of the Company.

(b)   The OS was issued within 20 years of deregistration;

(c)   It is not appropriate for me to attempt to determine the merits of the Company’s claim against Ms Chan, in particular as to whether Ms Chan did in fact pay consideration for the Property.  On the evidence available as to the oral agreement of a trust arrangement, there seems to be a claim having more than a shadowy prospect of establishing anything of value.

(d)   It is just to restore the Company to the Register to enable the Company to pursue its claim to the Property.

15.  I will grant the order in terms of the draft provided to me.  I note that at the request of the Registrar of Companies, terms are included with reference to sections 770 and 771 of the CO to address the fact that there is another company on the register with a similar name.