AXA CHINA REGION INSURANCE CO. LTD. v. MARATZ (HK) LTD. (Dissolved) AND OTHERS

HCMP 2166 /2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2166 OF 2001

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J U D G M E N T

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1. This is an application by way of Originating Summons under Section 290 of the Companies Ordinance for a declaration that the dissolution of a company called Maratz (HK) Limited be declared void.

2. Section 290 of the Companies Ordinance provides that the court may, at any time within 2 years of the date of dissolution, on an application being made for the purpose by the liquidator of the company or by any other person who appears to the court to be interested, make an order upon such terms as the court thinks fit declaring the dissolution has been void and thereupon such proceedings may be taken as might have been taken if the company had not been dissolved.

3. On 20 April 2001, an ex parte originating summons was filed with the court for an order that the dissolution of the Company be declared to be void. It is clear that that was the incorrect procedure and as was pointed out to solicitors for the Plaintiff, it was not appropriate for the application to be made ex parte.

4. Consequently, by a fresh Originating Summons issued on 26 April 2001, the Company was made "1st Defendant", the Joint & Several Liquidators of the Company were made "2nd Defendant", with the Official Receiver made the " 3rd Defendant".

5. The grounds of the application are that the "Plaintiff" ("the Applicant") is an insurance company which had issued a policy of insurance to the Company in relation to certain goods which were to be transported from Bremen to Moscow. During the carriage, the cargo was stolen.

6. By virtue of the insurance policy, the insurance company paid to the Company a sum of $800,000.00 odd in satisfaction of the claim under the insurance policy, and the Company signed a letter of subrogation confirming that the insurance company would be subrogated to the Company's rights or remedies in law. It was also confirmed that the insurance company had the authority of the Company to use its name to exercise any rights or remedies in relation to any court proceedings to be taken out in the Company's name. The insurance company duly issued court proceedings in Germany against a freight forwarding company.

7. However, prior to the filing of those proceedings in Germany in September 1999, the Company had been wound up by virtue of a creditor's voluntary winding-up. The Company was formally dissolved on 27 July 1999. The proceedings in Germany were therefore complicated by the dissolution of the Company and the proceedings were withdrawn.

8. The insurance company wishes to reissue proceedings against the freight forwarding company and therefore has to first revive the Company under Section 290 of the Companies Ordinance, which has sometimes been called a "Lazarus" order. By virtue of certain time bars in Germany, the insurance company has up until 10 May 2001 in which to reissue the court proceedings in Germany.

9. In my view, the insurance company has made out a ground that it would be interested in the revival of the Company, because clearly it would be entitled to the rights of subrogation and to issue proceedings in the name of the Company in Germany.

10. Before me today, there was an earlier complication in which the liquidator has put forward various issues by way of correspondence which was only handed up to the court a few minutes before the hearing was due to start. However, that complication has since been clarified in that the Petitioner has undertaken to bear the costs of the liquidator upon the revival of the Company as a result of any order to be made by the court.

11. I should also add that if any property of the Company had become bona vacantia by reason of dissolution, then it would have been necessary for the insurance company here to have joined the Government by way of binding the Government and seeking the return possibly of any assets to the liquidator. However, I am informed by counsel for the insurance company that no property of the Company had become bona vacantia and in that respect therefore, that does not arise. The Petitioner's solicitors have undertaken to file an affirmation today deposing to that.

12. Accordingly, I would grant an order in terms of paragraphs 1 and 2 of the Originating Summons filed on 27 April 2001 and in relation to the costs of the application, the Petitioner has agreed to bear the costs of the 2nd and 3rd Defendants.