Re Han Xuan International Development Ltd.

HCCW 114/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO. 114 OF 2002

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J U D G M E N T

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1. This is an application by Super Winner Development Limited ("Super Winner"), a contributory of Han Xuan International Development Limited (which I will refer to as "the Company"), to strike out a petition presented against the Company for its winding-up.

2. The ground of the application for a strike-out of the petition is that the Petitioner has no locus standi to petition for the winding-up of the Company.

3. Section 179 (1) of the Companies Ordinance makes it quite clear that an application to the court for the winding-up of a company shall be by petition which may be presented by any contributory, but a contributory shall not be entitled to present a winding-up petition unless the share, in respect of which he is a contributory, was either originally allotted to him or has been held by him and registered in his name for at least 6 months during the 18 months before the commencement of the winding-up or has devolved on him on the death of a former holder.

4. The petition, on its face, states that the Petitioner is Mr Ho Pak Chuen also known as Peter Ho. In the preamble of the petition, he says that he is a shareholder of the Company. However, it is clear from the body of the petition itself that Mr Ho claims to hold shares in the Company through, first, a Company called Cha Xian Fang Holdings Corporation and then (he says) on 21 December 1999, he changed his nominee to Qing Lang International Corporation.

5. It appears from the materials put before me that in the register of members of the Company kept by the Company, Cha Xian Fang remains the registered shareholder, but in the annual returns submitted by the Company, the name of Cha Xian Fang no longer appears and shares are said to be held by Qing Lang International Corporation. But whether it be Cha Xian Fang or Qing Lang, it is incontestably clear that Mr Ho himself is not a registered shareholder of the Company and therefore, he does not fall within the list of persons entitled to present a petition under Section 179 (1).

6. This matter was drawn to the Petitioner's solicitors' attention by a letter dated 14 March 2002. The reply given on 15 March 2002 was simply that the Petitioner did not agree to the dismissal of the petition and that the Applicant could make whatever application it deemed necessary.

7. Before me today, Mr Wu appearing for the Petitioner accepts that the Petitioner has no locus standi to present a petition. That is clearly a correct concession to make because of the clear wording of Section 179(1) of the Companies Ordinance. I am also bound by the decision of the Court of Appeal in Ng Yat Chi v Max Share Limited [1997] 3 HKC 394, the relevant part of which was accepted as correct by the Court of Final Appeal when that case went to the Court of Final Appeal in Max Share Limited v Ng Yat Chi [1998] 2 HKC 251.

8. Mr Wu has, however, asked to substitute the Petitioner's name with, first of all, he says by Cha Xian Fang and then he says by Qing Lang. Both Cha Xian Fang and Qing Lang are BVI companies. There are no materials put before this court to show who, at the moment, is the shareholder of those companies, nor have I been shown any materials indicating the constitution of the board of directors of either of those companies and whether the board authorises the application to be substituted as a petitioner.

9. Furthermore, it would appear that the final position taken by Mr Wu is that the application would be to name Qing Lang, as the substitute petitioner. However, if that were the case then Section 179 (1) would bite again, as it would appear Qing Lang has not been on the register of members at all, let alone for 6 months prior to the commencement of the winding-up.

10. Accordingly, I am clear that the correct route to take now would not be to adjourn the motion as Mr Wu has suggested. There is no reason why this Company should have a petition hanging over its head, especially when the matter had been drawn to the attention of the Petitioner's solicitors more than a month ago and nothing has been done in any attempt to cure this defect, if that may be regarded as such, for one month prior to today.

11. Accordingly, I would strike out the petition for the winding-up of the Company presented by Ho Pak Chuen on 30 January 2002 and I would now hear the parties as to costs.