LEUNG KAI HUNG AND ANOTHER V. WU SHEK CHUN WILFRED AND OTHERS

HCMP 5/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 5 OF 2014

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D E C I S I O N

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1. I have before me a notice of Originating Motion issued by the shareholders of Richfame Dynasty Limited seeking the following orders:

(1)   an extension of time for the Applicants to seek relief under Section 290(1) of the Companies Ordinance;

(2)  a declaration that the dissolution of the Company is void; 

(3)   that the 2nd Respondent and Mr Choi Tsz-Kit, Sammy, be appointed as the joint and several liquidators of the Company; and

(4)   incidental orders relating to costs.

2. The application is straightforward and I will grant it.

3. The facts are, briefly, these: the Company was the registered owner of 23 car parking spaces which were charged to another company under three mortgages executed in 1998 as part of the security for three loans advanced to another company, Chinluck Limited (“the Borrower”).  The Borrower failed to repay the debts and action was taken to enforce the mortgages and in due course a winding-up petition was presented against the Company.  The Company did not contest the petition and Master S Kwang made a winding-up order on 27 July 2005.  On 1 April 2008 the 1st and 2nd Respondents, as joint and several liquidators of the Company, delivered possession of the 23 car parking spaces to the lending company pursuant to a court order in HCMP 1074/2000.  On 13 April 2010 an order dissolving the Company was made by the Court.

4. Last year the Lender, the Borrower and other parties reached a settlement agreement in HCMP 1074/2000 and other related legal proceedings.  Upon payment in accordance with that settlement agreement, the Lender executed a Receipt on Discharge of a Charge in respect of the three mortgages.

5. In short, the application is currently being made in order that the Company can take back the 23 car parking spaces which are otherwise deemed to be bona vacantia pursuant to Section 292(1) of the Companies Ordinance.

6. Section 290 gives the Court a wide discretion to extend time for these kind of applications and to determine whether or not they are to be granted.  The Court has on previous occasions made similar orders in order that property can be restored to a company.  Examples are Ko Tak Wing v Secretary for Justice & Another HCMP 4053/2003 and Re Toland Development Ltd HCMP 30/2006.

7. The Applicants are prepared to undertake to pay such outstanding debts as were owed by the Company prior to its dissolution which are, as I understand the matter, to the Commissioner of Inland Revenue and Incorporated Owners of Fortune House in Fanling.  The Registrar of Companies does not object to the application. 

8. I therefore make an order in the terms of the draft order that the various parties have agreed.