Compulsory winding-up – petition – application to amend petition by substituting original debt for post-petition debt – jurisdiction to do so – test less stringent than that for plaintiff seeking leave to amend writ
P commenced winding-up proceedings against C, a company, based on an unsatisfied costs order which was subsequently discharged. P sought leave to re-amend the petition by substituting for the original debt a number of outstanding debts arising from judgments and orders which accrued after the date of the petition (the “Subsequent Debts”). The Judge held that the Eshelby rule did not apply to a creditor’s winding-up petition and so the Court had jurisdiction to amend the petition, citing differences between a creditor’s petition and a writ action. Under the Eshelby rule, a court may not amend a writ without the consent of the parties, so as to bring a cause of action which was non-existent at the time the writ was originally issued. C appealed.
Held, dismissing the appeal, that:
- The Court had jurisdiction to allow amendments to include post-petition debts. The test to be satisfied by a petitioner was less stringent than that for a plaintiff seeking leave to amend a writ to add a post-writ cause of action. The Eshelby rule did not apply to a creditor’s winding-up petition as, inter alia, it asserted a class remedy on behalf of all the company’s creditors and it was in the public interest that an insolvent company not be allowed to continue to trade. Further, the threshold for other creditors of a company to participate in a creditor’s winding-up petition was much lower. There was nothing in r.33 of the Companies (Winding-up) Rules (Cap.32H, Sub. Leg.) or O. 20 of the Rules of the High Court (Cap.4A, Sub. Leg.) which precluded the court’s discretion to allow a creditor’s winding-up petition to be amended to include post-petition debts.
- Insofar as a possible application of the Eshelby rule to a petition under s. 168A of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) and a winding-up petition was concerned, these proceedings could be distinguished from a creditor’s winding-up petition as the public interest was seldom engaged; and adding facts which arose after the petition to update an existing complaint was clearly permissible and did not contravene the Eshelby rule.
- It was not appropriate in this instance to determine whether the Eshelby rule should continue to apply in writ actions, s. 168A petitions and shareholder’s winding-up petitions on the just and equitable ground, where the public interest might be absent.
- There was no error in principle in the Judge’s exercise of his discretion. C had not demonstrated that it was readily apparent that the proposed amendments were bound to fail.