RE THE GRAND HOTEL LTD

RE THE GRAND HOTEL LTD

The presumption under section 30 of the Bills of Exchange Ordinance that the company was party to the cheques and that the payee gave consideration applied in the winding-up; the Official Receiver produced no evidence to rebut that presumption, and forbearance to sue constituted valid consideration, therefore the claimant's proof of debt must be accepted and the liquidator's rejection of the claim was reversed while his limited allowance was upheld where applicable.

Citation
RE THE GRAND HOTEL LTD
Parties
Applicant/creditor: Chen Ching Tak; Respondent/liquidator: Official Receiver (liquidator of The Grand Hotel Limited); Company in Liquidation: The Grand Hotel Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
23 April 1970
Case Number
HCCW3/1966
Procedural Posture
Companies Winding Up (companies Ordinance) / Summons Hearing Under Companies (winding Up) Rules R.95 and R.96
Outcome
Applicant's summons allowed; Official Receiver's summons dismissed; decision of liquidator rejecting proof of debt of $142,928 reversed; liquidator's earlier allowance of $20,532 upheld.
Legal Topics
Proof of Debt, Bills of Exchange Presumption (s.30), Liquidator's Powers and Onus, Consideration (forbearance to Sue)
Source Language
EN
Company Law Insolvency Law Negotiable Instruments Law Proof of Debt Bills of Exchange Presumption (s.30) Liquidator's Powers and Onus Consideration (forbearance to Sue)

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Parties

Chen Ching Tak

Applicant/creditor

Official Receiver (liquidator of The Grand Hotel Limited)

Respondent/liquidator

The Grand Hotel Limited

Company in Liquidation

Procedural Posture

Companies Winding Up (companies Ordinance) / Summons Hearing Under Companies (winding Up) Rules R.95 and R.96

Legal Issues

  1. 1 Whether The Grand Hotel Limited was liable on cheques drawn by its managing director in favour of the claimant
  2. 2 Whether the presumption under section 30 of the Bills of Exchange Ordinance applied and who bore the onus to rebut it in a winding-up
  3. 3 Whether acceptance of post-dated cheques with forbearance to sue constituted valid consideration

Ratio Decidendi

The presumption under section 30 of the Bills of Exchange Ordinance that the company was party to the cheques and that the payee gave consideration applied in the winding-up; the Official Receiver produced no evidence to rebut that presumption, and forbearance to sue constituted valid consideration, therefore the claimant's proof of debt must be accepted and the liquidator's rejection of the claim was reversed while his limited allowance was upheld where applicable.

Court Disposition

Applicant's summons allowed; Official Receiver's summons dismissed; decision of liquidator rejecting proof of debt of $142,928 reversed; liquidator's earlier allowance of $20,532 upheld.

Orders

  • Decision rejecting proof of debt of $142,928 reversed
  • Summons of Official Receiver dismissed