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Easewin Properties Ltd And Another v The Registrar Of Companies And Others

Judgment Cited authorities 4 Cited in Precedent Map Related
Vincent
Judgment Date01 December 2004
Year2004
Judgement NumberHCMP92/2004
Subject MatterMiscellaneous Proceedings
CourtHigh Court (Hong Kong)
HCMP000092A/2004 EASEWIN PROPERTIES LTD AND ANOTHER v. THE REGISTRAR OF COMPANIES AND OTHERS

HCMP92/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.92 OF 2004

______________________

　 IN THE MATTER OF Section 291(7) of the Companies Ordinance, Cap.32 and Order 102 of the Rules of the High Court, Cap.4
　 and
　 IN THE MATTER OF the reinstatement of registration of EASEWIN PROPERTIES LIMITED (怡運置業有限公司)

______________________

BETWEEN

　 EASEWIN PROPERTIES LIMITED 1st Applicant
　 (怡運置業有限公司) 　
　 WANG J.C. 2nd Applicant
and
THE REGISTRAR OF COMPANIES 1st Respondent
WU YONGJIA 2nd Respondent
LIU JIA 3rd Respondent

______________________

Before : Hon Tang J in Court

Dates of Hearing : 2 and 3 November 2004

Date of Reasons for Decision : 1 December 2004

________________________________

REASONS FOR DECISION

________________________________

1. Easewin Properties Limited (“the Company”) was incorporated on 7 April 1992. The Company had an issue capital of 10,000 shares. The 2nd applicant (“A2”) was the registered owner of 2,900 shares. His wife was the registered owner of 3,100 shares. The 2nd respondent (“R2”) and 3rd respondent (“R3”) were the registered owners of 2,000 shares each. These respondents held those shares as nominees for Capital Century Company Limited (“Capital Century”). Capital Century was in turn wholly owned by China EverBright Holdings Company Limited (“China EverBright Group”).

2. On 19 January 2001, the Company was dissolved under section 291(6) of the Companies Ordinance.

3. This is A2’s application pursuant to section 291(7) for an order that the Company be restored to the Registrar of Companies. In order to succeed, A2 must show that he “feels aggrieved by the company having been struck off the register” and “that it is just that the company be restored”. Mr Chan Chi Hung, who appeared for R2 and R3, submitted that even so, I have a residual discretion to refuse relief. In my opinion, if A2 could be regarded as an aggrieved person and that it is just that the Company be restored, there is little room for the exercise of any such discretion.

4. It is A2’s case that the Company has substantial assets or claims in the Mainland.

5. Prior to R2 and R3 becoming shareholders in the Company, the Company was a family company wholly owned by A2 and his wife. In respect of R2 and R3’s shares in the Company this is what R3 said in his 4th Affirmation filed on 3 June 2004 :

“8. Further, it was the understanding and agreement between the 2nd Applicant, his wife, and Wu and myself, reached at around the same time (late 1993 early 1994), that (if the 1st Applicant, 2nd Applicant and his wife did not commit any wrong to injure the interest of Capital Century) all dividends and ultimate pecuniary return on such 4,000 shares (subject to the right of Capital Century to exercise its power through Wu and myself as the shareholder and director of the 1st Applicant for the aforesaid purpose) would still belong to the 2nd Applicant and his wife.”

6. The Company was involved in the development of a real estate project in Chengdu through a PRC company called Chengdu Sing Kong City Real Estate Company Limited (“joint venture company”).

7. According to A2, he made this application to safeguard the Company’s investment in the joint venture company. It seems to be common ground that the joint venture company is a company with substantial assets. Whether it would be just to restore the Company would depend to a large extent on whether it is arguable that the Company had any interest in the joint venture company which it was entitled to protect. The respondents’ case is that any claim by the Company is at least shadowy so that I should refuse reinstatement.

8. There was an agreement for the reorganisation of the joint venture company dated 4 January 1994. This was made between the joint venture company as party A and Capital Century as party B. This purported to be an agreement between the joint venture company and Capital Century whereby Capital Century would inject capital into the joint venture company as a result of which it would be entitled to 35% of the shares in the joint venture company and that after the reorganisation, only the Company and one 中國成都市武侯區城鄉建設房屋開發公司 (“城鄉建設”) of the original shareholders would remain as shareholders holding 55% and 10% of the shares in the reorganised company respectively.

9. There was also a joint venture agreement dated July 1994 made between 城鄉建設, the Company and Capital Century. Under chapter 3, clauses 11 to 13 of the joint venture agreement provided :

“第十一条 注册资本的出资方式：

合营各方均以人民币形式现汇支付注册资本。

第十二条 甲、乙、丙三方应按合同规定的期限缴清各自出资额，在领取营业执照之日起一个月内，三方缴各自注册资本出资额的15%，其余注册部分在领取营业执照之日起半年内，按董事会的要求，根据企业发展的实际需要调入公司帐戶内。

第十三条 甲、乙、丙三方缴付出资额后，经合作公司聘请的会计师验资，出具验资报告后，由合作公司据此发给出资证明书。出资证明书主要内容包括：合作公司名称、成立日期、合作者名称以及出资额、出资日期以及发给出资证明书之日期等。”

10. Having regard to the fact that the Company was one of the original shareholders of the joint venture company, it could not have been intended that its capital should be contributed by way of 現匯. I mention this to show that literal compliance with the joint venture agreement might not have been required.

11. It is the respondents’ case that the Company had not contributed any capital to the joint venture company. As such it was said the Company had no right or interest in the joint venture company.

12. I believe it is at least arguable that insofar as the Company was a party to the joint venture agreement, it had acquired rights and obligations under the joint venture agreement.

13. There was a registered capital paid up report in Chinese prepared by a Chinese auditing firm dated 28 April 1994 which stated that the Company, namely party B, had already invested capital of RMB25,215,856 prior to 1994. The respondents’ complaint is not that the capital was invested prior to the joint venture agreement but that there was and never had been any investment.

14. Mr Chan Chi Hung also made the point that since the joint venture agreement had to be approved by relevant Government authorities, the relevant Government authorities might have been misled. Whether that was so or not, I am not in the position to say. Certainly on the evidence before me, I am not prepared to conclude that literal compliance with the joint venture agreement was required. Nor am I prepared to accept Mr Chan’s submission that under PRC law if the capital was paid not by the Company but by a third party on its behalf, that would render the contribution either unlawful or ineffective such that the Company could be regarded as having made no contribution at all. It suffices for me to say that on the evidence before me, I do not regard that as having been sufficiently clearly established as to make the contrary unarguable.

15. Mr Chan has referred me to certain decisions concerning the joint venture or the joint venture company in the Mainland. However he accepted that there has been no decision so far by any court or tribunal in the PRC to the effect that the Company had or never had any investment or interest in the joint venture company.

16. Indeed, in one of the proceedings (1999) 經終字第438號, The Supreme People’s Court in its decision said :

“… 鉴于怡运公司非本案诉讼当事人，且合作合同签约各方在合同中约定了终局性仲裁条款，故股东的投资是否到位等有关合作合同产生的争议。不应在本案中处理。…”

That was a claim by the joint venture company against, amongst others, A2. The Company was not a party to the proceedings. According to the Supreme People’s Court the dispute relating to the Company’s investment in the joint venture agreement should not be determined in those proceedings and it referred to the joint venture agreement which provided for arbitration.

17. In a legal opinion prepared by the Gangda Law Firm dated 29 October 2004 and produced on behalf of A2, this was said :

“三、 本案出資爭議

由於成都新港城置業有限公司(下稱‘合資企業’)的股東之間就出資及股東地位所產生爭議，須經中國內地的法院或仲裁機構判定，只有前述機構才有權判定企業股東的出資是否有效及能否構成有效出資及是否繼續擁有股東資格。鑒於《合作經營成都新港城置業有限公司合同》約定了因執行該合同所發生的或與該合同有關的一切爭議，應提交給北京中國國際經濟貿易仲裁委員會，根據該會的仲裁規則進行仲裁，本律師認為，合資企業股東應將該出資及股東地位等爭議交由中國國際經濟貿易仲裁委員會進行仲裁。”

So their opinion was that this matter should go to arbitration before the China International Economic and Trade Arbitration Commission (“CIETAC”).

18. It seems that this is what Capital Century has done. The Registrar of Companies has produced a letter dated 19 October 2004 from CIETAC giving notice that Capital Century had applied for arbitration against the Company and that application would be heard on 24 November 2004. In its reply, the Companies Registrar said that the Company had already been dissolved and that it was not in a position to deal with the letter dated 19 October addressed to the Company.

19. Mr Chan told me that by these arbitration proceedings, Capital Century was seeking a decision to the effect that the Company had no share and/or investment and/or interest in the joint venture company. Even so, Mr Chan submitted that I should not make the order sought because the Company’s claim or defence is so shadowy that I should not permit it to be made.

20. But the fact that as late as in October 2004, that Capital Century felt it necessary to seek a decision to the effect that the Company had no share, investment or interest in the joint venture company indicates to me that this remains an open issue so far as PRC law is concerned.

21. Mr Chan has...

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