RE MF GLOBAL HONG KONG LTD

HCCW 356/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 356 OF 2011

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HCCW 357/2011

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R U L I N G

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1.  On 2 November 2011 I appointed provisional liquidators over MF Global Holdings HK Limited and MF Global Hong Kong Limited on the application of the boards of directors of their respective companies. On 9 November 2011 I confirmed the provisional liquidators’ appointment until further order. The applications were not opposed. The grounds of the applications were, in short, that although solvent on a balance sheet test, as a result of the much publicised collapse of the MF Global Group the Hong Kong companies were unable to pay their debts as they fell due.

2.  In this ruling I address one technical point that arose in relation to the application on 2 November 2011.  The application was heard by me at 8.00 am. This was before the court registry opened and as a result before the petitions had been issued.

3.  Section 193(1) of the Companies Ordinance, Cap. 32, provides that the court may appoint a liquidator provisionally at any time after the presentation of a winding-up petition.  Companies (Winding-up) Rules, Cap. 32H, (“Rules”) rule 23 provides that a petition shall be presented at the office of the Registrar, who shall appoint the time and place at which the petition is to be heard.  As a consequence of rule 23 it is generally understood that an application for the appointment of a provisional liquidator can only be made after a petition has been filed at the High Court Registry.

4.  On 2 November I took the view that there was no impediment to me treating presentation to me of the petition as satisfying section 193(1) as the Rules give the court an overriding power to tailor the Rules to the needs of a particular case.  Rule 1(1) provides that the Rules are “subject to any general or special order of the court”.  Rule 209(1) provides that any proceedings shall not be invalidated by reason of any formal defect or irregularity unless the court is of the view that substantial injustice has been caused by it.

5.  I asked, however, for the petitioners and the Official Receiver, who did not object to this approach, to consider this issue further and address me on it at the hearing of the inter partes summons and, in particular, bring to my attention any relevant authorities.

6.  At the hearing of the inter partes summons on 9 November I was told that neither the petitioners nor the Official Receiver had found any relevant authorities.

7.  I am aware of one previous occasion on which Suffiad J appointed provisional liquidators before the petition had been issued in circumstances in which the application was urgent, but written reasons were not provided.

8.  In summary my view is this.  Where it is reasonably possible for a petition to be issued before an application to appoint provisional liquidators is made rule 23 should be complied with.  If this is not possible and the court is satisfied that the case is sufficiently urgent the court may treat presentation of the petition to the judge hearing the application, along with an undertaking to file the petition as soon as the Registry is open, as satisfying section 193.