RE PLESSEY INVESTMENTS LIMITED

COMPANIES WINDING-UP

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JUDGMENT

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1. I have before me two summonses which have been converted into motions whereby the joint petitioners seek orders that Petro1iam Nasiona1 Berhad (P.N.B.) be added as a joint petitioner or alternatively on the part of P.N.B. that P.N.B. be substituted for the joint peitioners.

2. Bumiputra Malaysia Finance Limited (B.M.F.L.) is a finance company which is wholly owned by Bank Bumiputra Malaysia Berhad (B.B.M.B.). Large sums of money were lent by B.M.F.L. to both Perak Pioneer Limited (Perak) and to Plessey Investments Limited (Plessey). Up to the 31st December 1983 Perak is alleged to have owed over HK$31 million and Plessey over US$80 million, HK$36 million and 5,000,000. By equitable assignments in writing dated the 31st December 1983 B.M.F.L. assigned all its rights and interests in the debts to B.B.M.B.

3. A petition to wind up Perak was presented by the joint petitioners on the 24th July 1984 and a petition to wind up Plessey was presented on the 17th September 1984. B.B.M.B. joins in both petitions as an equitable assignee of the debts. Motions to strike out the petitions on the grounds that the debts are the subject matter of a genuine dispute have been issued by the companies and are due for hearing in May. On the 17th September 1984 by deeds of assignment in writing the debts were assigned by B.B.M.B. to P.N.B.

4. Mr. Ching who appeared for the joint petitioners and P.N.B. submitted that the application to add P.N.B. as a party was made pursuant to either rule 6 or 7 of Order 15 of the Rules of the Supreme Court, but Mr. Potts on behalf of the companies contended that the Rules of the Supreme Court cannot be invoked unless no other provision is made under the Companies Ordinance or the Companies (Winding Up) Rules see Rule 210. He submitted that the application can only be for substitution under Rule 33 of the Companies (Winding Up) Rules for B.M.F.L. and B.B.M.B. are no longer creditors by virtue of the assignments. I accept that if the assignments were absolute assignments the assignor effectively parted with the debit and if they were equitable assignments the assignor has parted with the real interest see Re Penta1ta Exploration Co. (1898) W.N. 55. As a result the application falls to be dealt with by way of substitution under Rule 33.

5. Mr. Potts argued that P.N.B. cannot be substituted because it is not a creditor within S. 179 of the Companies Ordinance as the claim is the subject matter of a substantial dispute see Mann v. Go1dstein (1968) 1 W.L.R. 1091, Re Lympne Investments (1972) 1 W.L.R. 523, Stonegate Securities v. Gregory (1980) 1 Ch. 576. Reliance was also placed by Mr. Potts on Re Paris Skating Rink (No. 1) (1887) 5 Ch. 959 which held that that the sale of the right to proceed with a winding up petition ought not to be allowed and the petition was therefore dismissed. However, whilst I accept that the companies court is not the appropriate forum to determine liability when a genuine dispute is put forward, nevertheless I do not consider that the issue can be decided without evidence to show that there is in fact a genuine dispute. A mere assertion that the applicant is not a creditor will not suffice. An adjudication can only be made at the hearing to consider whether the debts are disputed in good faith based on a substantial ground. If it is the petition will be dismissed, but otherwise the hearing can proceed to a winding up order. If of course the companies are successful in establishing that the petitions should not have been presented they will be protected by orders for costs.

6. Other matters were canvassed before me, but I do not propose to refer to them as they are issues that should be raised on a motion to strike out the petitions.

7. Accordingly I shall make an order on both motions substituting P.N.B. as the petitioner in place of the joint petitioners.