Max Share Ltd And Another v Ng Yat Chi

CourtCourt of Final Appeal (Hong Kong)
Judgment Date16 October 1997
Citation(1997-1998) 1 HKCFAR 34; [1997] HKLRD 1255
Subject MatterMiscellaneous Proceedings (Civil)
Judgement NumberFAMV1/1997





Application for Leave to Appeal
FAMV No. 1 of 1997

NG YAT CHI Respondent


Appeal Committee: Chief Justice Li, Mr Justice Bokhary PJ and Mr Justice Nazareth NPJ

Date of Hearing: 8 October 1997

Date of Decision: 16 October 1997




Chief Justice Li:

1. This is the determination of the Appeal Committee.

The Petition and the striking out

2. On 10 June 1996, the petitioners Mr Ng Yat Chi ("Mr Ng") and Mr Choy Bing-wing ("Mr Choy") presented a petition for the winding-up of Max Share Ltd ("the Company") on the just and equitable ground alternatively for an order under s 168A of the Companies Ordinance, Cap. 32, requiring the majority shareholder, China Resources (Holdings) Ltd ("China Resources") to purchase their shares in the Company.

3. The Company and China Resources applied to strike out the petition on the ground that neither petitioner had the necessary standing to present the petition. On 3 December 1996, Mr Justice Rogers acceded to the application, accepting that neither petitioner had standing, and struck out the petition in its entirety.

4. The petitioners then appealed to the Court of Appeal. That Court took the view that although Mr Choy did not have standing to petition, Mr Ng did. Accordingly, by its judgment handed down on 28 May 1997, the Court of Appeal, while dismissing Mr Choy's appeal, allowed Mr Ng's appeal.

5. Following that, the Company and China Resources applied to the Court of Appeal for leave to appeal to appeal to the Privy Council in order to challenge the Court of Appeal's decision that Mr Ng had standing to petition. On 24 June 1997, the Court of Appeal refused such leave.

The applications

6. There are two application before us. First, by motion filed on 22 July 1997, the Company and China Resources ("the applicants") have applied to us for leave to appeal to the Court of Final Appeal against the Court of Appeal decision that Mr Ng had standing to petition. Secondly, by summons filed on 22 September 1997, Mr Ng applied for an Order that the motion for leave to appeal be dismissed.

The Background

7. Mr Ng is an undischarged bankrupt. On 3 February 1997 a creditor not concerned in the proceedings before us obtained a money judgment against him. He failed to satisfy it. The judgment creditor issued a bankruptcy notice. He still failed to pay. On 19 June 1992 a bankruptcy petition was issued against him followed by a receiving order on 29 July 1992. On 17 August 1992 his creditors resolved that he should be adjudication bankrupt. On 28 August 1992 an adjudication order was made. The Official Receiver was the receiver and is the trustee in bankruptcy.

8. Mr Ng was at all material times and still is on the register as the holder of 98,000 shares in the Company ("the shares"). He became indebted to Mr Choy and Charged the shares to him at a time before the creditor obtained his judgment against Mr Ng.

9. Mr Choy obtained (i) on 9 April 1992 a charging order absolute over the shares and (ii) on 28 July 1992 an order that the shares should be sold by public auction. At the auction on 10 August 1992, Mr Choy acquired the share. The bought and sold notes and the transfer form were executed by the Official Receiver as "Official Receiver and Trustee" and bear the date 25 August 1992.

10. On 21 August 1992 Mr Choy had instituted proceedings against the Company to have the shares registered in his own name. But he was unsuccessful. On 9 December 1992, the Official Receiver applied to the Company to have the shares registered in his own name. But this application was refused.

11. On 28 January 1993, the Official Receiver wrote a letter ("the letter of 28 January 1993") which reads:

"Thank you for your letter of 27 January.

I do not consider that I am the legal owner of the shares. I hereby disclaim any interest that I may have in them in accordance with Section 59 of the Bankruptcy Ordinance.

The only person entitled to vote the shares is the bankrupt..."

12. According to the judgment of the Court of Appeal, that letter was written to solicitors of the Company. At the hearing before us, this letter was not before us. But subsequently, Mr Choy sent in a bundle of correspondence which ended with the letter. (Copies were sent to the other parties.) We have considered this bundle in reaching our determination. The letter was addressed to Messrs Iu Lai Li. From our reading of the bundle, it appears that firm were solicitors for Mr Choy.

The Court of Appeal's judgment

The Court of Appeal held that:

(a) Prior to the letter of 28 January 1993, Mr Ng as the registered shareholder was entitled to petition notwithstanding his bankruptcy. This is not challenged by Mr Winston Poon SC appearing for the applicants before us.

(b) At the time of the letter of 28 January 1993, there was nothing to disclaim and the letter was ineffective. As a result of the sale, Mr Choy as purchaser was given the fullest right that Mr Ng, the bankrupt, and the trustee could give and the trustee had divested himself of the legal interest in the shares. So by the time of the letter, there was nothing to disclaim. The Court of Appeal regarded the registration on the register of members as no more than evidence of legal ownership but not as conferring legal ownership.

(c) Having regard to (b), the Court of Appeal found it unnecessary to address the issue of the effect upon Mr Ng's right to present the petition if the letter of 28 January 1993 was a disclaimer.

Section 22(1)(b)

13. The judgment of the Court of Appeal was interlocutory. Section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance ("the Ordinance") provides that an appeal shall lie to the Court:

"at the discretion of the Court of Appeal or the Court, ... if, in the opinion of the Court of Appeal or the Court, as the case may be, the question involved in the appeal is one which, by reason of its great general or public importance, or otherwise, ought to be submitted to the Court for decision."

Mr Ng's summons

14. We should first deal with Mr Ng's summons filed on 22 September 1997 seeking dismissal of the motion for leave to appeal. It in effect attempts a pre-emptive strike. The grounds relied on are want of jurisdiction of the Court or that the motion discloses no reasonable grounds for leave to appeal, is frivolous or fails to...

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