HON SHU PING v. THE REGISTRAR OF COMPANIES

HCMP 739/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 739 OF 2012

____________

____________

____________

AND

HCMP 740/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 740 OF 2012

____________

____________

BETWEEN

_____________________

D E C I S I O N

_____________________

1.  These 2 originating summonses are heard together because they involve related companies and common issues.

2.  The plaintiff (Mr Hon) issued the originating summonses pursuant to section 291AB(2) of the Companies Ordinance, Cap 32 as an aggrieved party.

3.  The Registrar of Companies did not oppose the applications and was excused from attendance.

4.  The 2^nd defendant (Mr Lai) was the last and only shareholder of the 2 companies in question before their de-registration. Substituted service had been duly effected by advertisement on 28 April 2012 and by leaving at 2 specified addresses.  Mr Lai did not appear at the hearing.  I consider it appropriate to proceed in his absence.

The facts

5.  Mr Hon is the plaintiff in HCA 847 of 2001 (“the Action”).  He sues Mr Lau Yuen Ching (Mr Lau) and his sister-in-law who used to be shareholders and directors of the 2 companies to be reinstated – Fu Guang and Wellmax.  Fu Guang and Wellmax were the 3^rd and 4^th defendants in the Action.  Mr Hon claims that Mr Lau and his sister-in-law were holding the shares of those 2 companies on trust for him.  He claims that it was he who put up all the capital to acquire the underlying properties and to run the businesses of those 2 companies.  The pleaded case of the Action alleges breach of fiduciary duties against Mr Lau and his sister-in-law in making unauthorized sale of the properties and removal of the funds of the 2 companies. 

6.  Some years after the Action was instituted, Mr Lau transferred the shares to Mr Lai on 20 September 2007 whilst remaining as director.  Then, as director of the 2 companies and without consent of Mr Hon, Mr Lau applied for de-registration of Fu Guang and Wellmax on 10 October 2008.  (How he was able to declare that the companies had no outstanding liabilities in the applications for de-registration despite being defendants in the Action was not apparent.) Anyway, deregistration was obtained and that move had the effect of defeating a significant part of the plaintiff’s claims in the Action. 

7.  After the de-registration became known to Mr Hon and his lawyers, it was considered that the most costs-saving measure was to change the reference of Fu Guang and Wellmax as defendants in the Action to just corporations involved in the factual matrix of Mr Hon’s claims. The reason for saving the costs was that Mr Lau and his sister-in-law had long appeared to be disinterested in defending the claims and they were not regarded as being good for the judgment.  By re-amendment on 15 July 2010, Fu Guang and Wellmax ceased to be parties in the Action.  However, after the pre-trial review of the Action on 29 March 2012, Mr Hon and his lawyers took a different view and decided that Fu Guang and Wellmax should be reinstated.

8.  Since reinstatement of Fu Guang and Wellmax could not be done in time, the Action has been tried without Fu Guang and Wellmax added as parties.  (Judgment is pending.)  However, Mr Hon still pursues the application for reinstatement.

9.  The facts set out above are uncontested and well supported by documents.  I accept them as true.

The application

10.  Section 291AB(2) of the Companies Ordinance provides as follows:

“(2) The court may order that the Registrar reinstate the registration of a company that was deregistered under section 291AA if –

(a) an application for reinstatement is made to the court within 20 years of the deregistration by a person who feels aggrieved by the deregistration; and

(b) the court is satisfied that it is just that the registration of the company be reinstated.”

11.  Usually an application under section 291AB (2) is made by creditors or contributories (Butterworths, Hong Kong Company Law Handbook, 13 ed, page 905).

12.  There may be further actions to be taken against the 2 companies, eg for recovery of money advanced by Mr Hon to the companies for acquisition of the properties.  It is also important for Mr Hon to see that any declaration that he is the beneficial owner of the shares of the companies may bring forth further benefits in future, eg to take actions in the name of the companies against Mr Lau and his sister-in-law.  Mr Hon falls within the meaning of “creditor” and hence an aggrieved party in the context of that section.  I am satisfied that it is just that the registration of the company be reinstated.

Order

13.  I grant an order for reinstatement of the registration of Fu Guang and Wellmax respectively.  There will also be consequential directions in terms of paragraphs 2 to 8 of the consent summons dated 19 April 2012 signed between the plaintiff and the Registrar of Companies.

14.  I direct that a copy of this judgment and order be sent to Mr Lai c/o Mr Lau Yuen Ching at the latter’s addresses at On Mei House and Golden Villa and that shall be deemed to be good notice and service on Mr Lai.

15.  I thank Mr Lin for his assistance.