NGAI CHUN NGOR IRENE AND OTHERS v. EVERMORE CORPORATION LTD AND OTHERS

HCMP 560/2025

[2025] HKCFI 4894

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 560 OF 2025

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J U D G M E N T

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Introduction

1.  On 17 September 2025  I heard the Plaintiffs’ application as directors of the First to Fourth Defendants, made by their originating summons dated 10 April 2025 (the OS), for an order pursuant to sections 373 to 375 of the Companies Ordinance, Cap 622 (the Ordinance)  that the Fifth Defendant (D5)  and the Sixth Defendant (D6)  produce and make available for inspection “the accounting records of each of the [First to Fourth Defendants].”

2.  The application was opposed by D5 and D6.

3.  At the hearing, Mr Sanjay Sakhrani appeared for the Plaintiffs and Mr Jonathan Chan appeared for D5 and D6.

4.  At the end of the hearing I informed the parties that I considered that while the Plaintiffs had shown that they had made a proper and sufficiently particularised inspection request (D5 and D6 had failed to show by clear proof that the application had been made for an improper purpose), since D6 (on behalf of himself and D5)  had stated on oath that he and D5 had never had and did not now have possession of any of the documents covered by the request, making an order for inspection would be redundant and therefore inappropriate, subject to D5 and D6 confirming and clarifying their evidence.  This confirmation and clarification was needed because D6 had not said, although it appeared to be D5 and D6’s position, that they not only did not have possession of any of the documents (as directors or otherwise on behalf of D1-D4)  but they were unable to obtain access to any such documents on behalf of D1-D4 (so that such documents were not in their power or control).  I said that D5 and D6 6 should be required to file further affirmations to confirm the position and if they gave the required confirmation, no further relief would be needed or appropriate, save in relation to costs.  However, there would be liberty to apply so that, in particular, the Plaintiffs could apply for further orders if D5 and D6’s further evidence did not provide the required confirmations in satisfactory terms.  I declined to make the further order sought by the Plaintiffs requiring the Plaintiffs to set out in relation to documents covered by the request previously held by them where those documents were now located.  Since the Plaintiffs had said that they had never had possession of any such documents it seemed to me to be unnecessary to make such an order.

5.  This judgment now sets out my reasons for these decisions.

The parties

6.  The First to Fourth Defendants (D1-D4)  are Hong Kong companies and the three Plaintiffs are, with D5, directors of those companies.

7.  The Third Plaintiff (P3)  filed his First Affirmation (P3-1)  in support of the OS.  P3 noted that the First Plaintiff (P1), the Second Plaintiff (P2)  and D5 are his siblings and that D6 is the son of D5.  P3 has another sibling, Mr Ngai Chun Ming Tommy (Tommy).

8.  P3 also noted that the directors of the First Defendant (D1)  are P2 and D5 (P3’s Father, Ngai Lam Shing, (the Father)  was also a director); the directors of the Second Defendant (D2)  are P2, P3 and D5 (once again the Father was director); the directors of the Third Defendant (D3)  are P1, P2 and D5 (the Father was a director)  and the directors of the Fourth Defendant (D4)  are P2 and D5 (the Father was a director).  Sadly, the Father became a mentally incapacitated person on 17 March 2012 and passed away on 21 January 2022.  Accordingly, D5 is a director of each of D1-D4 while D6 is not a director of any of them.

9.  P1-P3, D5 and Tommy are all shareholders in D1-D4.

10.  It also needs to be noted that there has been a long running dispute between the Plaintiffs and D5 (and D6)  regarding the control of D1-D4.  This appears to have started from around the time when the mental health proceedings in respect of the Father started in January 2020. This dispute appears to have caused the paralysis of the management and governance of D1-D4 (D6 said that the companies, their directors and shareholders had been “in stalemate and inaction”).  It also resulted in other proceedings being commenced in which an injunction (the Injunction)  had been granted on 21 February 2020 by Mr Justice Lok, which had been subsequently extended and remained in force.  The Injunction prohibited inter alia any alteration to the composition of the boards of D1-D4 without the consent of the Plaintiffs.  P3 claimed that D5 had breached the Injunction by seeking to convene AGMs and to pass shareholder resolutions to remove and appoint directors to D1-D4.  He said that this was relevant background but that the Plaintiffs’ application was independent of and did not rely on the matters in dispute in these other proceedings.

The documents sought in the application

11.  The OS, as I have noted, seeks an order that D5 and D6 “produce and make available for inspection in respect the accounting records of each [of the First to Fourth Defendants].”

12.  In P3-1 P3 expanded and clarified the description of documents which the Plaintiffs wish to inspect.  At [4], P3 said that the Plaintiffs sought a mandatory order compelling the Defendants to provide immediate access to the following categories of documents of D1-D4 (which I refer to as the Documents): (a)  banking records, being complete bank statements (including electronic transactions), copies of all issued cheques and records of any changes to authorised signatories; (b) corporate governance documents, being minutes and resolutions of all AGMs, EGMs and board meetings; audit reports and financial statements and communications with auditors and regulatory bodies; and (d) accounting records, including general ledgers, invoices, receipts and payment vouchers, rental income records and tenancy agreements, tax filings and correspondence with the Inland Revenue Department (IRD).

13.  P3 said that the Plaintiffs require to see the Documents produced in or relating to the last seven years or the maximum retention period permitted by law.  It appears that the seven-year period has been selected because the Plaintiffs understand that banks and other financial institutions typically only retain records for seven years and therefore the directors of D1-D4 will only be able to ask for records of that age.

The legal basis of the application

14.  The OS states that the Plaintiffs seek an order under sections 373 to 375 of the Ordinance.  Sections 373 and 375 are of particular relevance and provide as follows (my underlining):

(a)  section 373 provides that:

(1)   A company must keep accounting records that comply with subsections (2)  and (3).

(2)   The accounting records must be sufficient—

(a)   to show and explain the company’s transactions;

(b)   to disclose with reasonable accuracy, at any time, the company’s financial position and financial performance; and

(c)   to enable the directors to ensure that the financial statements comply with this Ordinance.

(3)   In particular, the accounting records must contain—

(a)   daily entries of all sums of money received and expended by the company, and the matters in respect of which the receipt and expenditure takes place; and

(b)   a record of the company’s assets and liabilities.

  …..”

(b)  section 375 provides:

(1)   A company must allow a director of the company to make a copy of its accounting records in the course of inspection.

(2)   A company must provide a director of the company with a copy of its accounting records without charge if so requested by the director.

  …….

(6)   A director of a company who fails to take all reasonable steps to secure compliance with subsection (1)  or (2)  commits an offence and is liable to a fine at level 5 and, in the case of a continuing offence, to a further fine of $1,000 for each day during which the offence continues

15.  These obligations are imposed on the relevant company, including the obligations in section 375 to allow inspection and provide copies.  Insofar as an order is sought against individuals to allow inspection or for the provision of copies of the company’s accounting records, it must be sought on the basis that (a)  the defendant acts and has the authority to act for the company to enable it to perform its statutory duties and that (b)  the defendant has access to the company’s records either because he can access the company’s premises where they are kept or because he has possession of them in that capacity or because he can require the person who does have possession of them to provide access (so that he can be said to have control of such records).

The factual basis of the application

16.  The OS seeks relief against D5 and D6.

17.  In P3-1, P3 asserted (at [38])  that D5 as a director of each of D1-D4 “has unrestricted access to [D1-D4’s] financial accounts…” and that (at [5], [24] and [43])  despite repeated requests, D5 had refused to provide financial records for [D1-D4] and has withheld D1-D4’s documents from the other directors.

18.  P3 did not spell out where physical or electronic copies of the Documents were located and the basis for believing that D5 had them in his possession or has access to them.  It appears that P3 inferred and invited the Court to infer that D5 has the Documents in his possession or was able to access them (in some cases from third parties such as banks)  from D5’s actions as set out in P3-1.  P3 referred to D5’s conduct (which the P3 asserted was unlawful and in breach of the Injunction)  in seeking to obtain or consolidate his control of D1-D4 including by convening AGMs, holding board meetings and seeking to have the Plaintiffs removed as directors of D1-D4 and having D6 appointed as a director of D3.  P3 also alleged that D5 had withdrawn monies from D1-D4 and had been and remained a signatory to D1-D4’s bank accounts and has also previously provided copies of board minutes for three of the companies (see [31] of P3-1).

19.  P3 asserted that D6 had purportedly (but improperly and unlawfully)  been appointed as a director of D3 and had in 2016 also obtained online access to D1-D4’s bank accounts (P3 asserted that access had been restricted exclusively to D6 and D5).

20.  P3 noted (at [36] of P3-1)  that D3 has already incurred regulatory penalties and had summonses issued against it for failing to comply with statutory filing obligations and that without access to the documents now sought it was not possible to arrange for these defaults to be rectified.  P3 also asserted that D1, D3 and D4 had failed to file updated financial statements and complete statutory audits and that therefore there was an imminent risk that these companies would also face penalties and summonses from the IRD.

21.  P3 said (see [44] of P3-1)  that access to the relevant company records were needed to allow a proper assessment of the financial position of D1-D4, to ensure that the directors were able to comply with their statutory duties including the duty to cause D1-D4 to maintain proper accounting records and prepare annual financial statements (and understand the financial position of D1-D4)  and file tax returns.  They also needed to investigate whether there had been unathorised withdrawals of funds from the companies’ bank accounts.

22.  In his Second Affirmation, P3 confirmed (at [10])  that the purpose of the Plaintiffs’ application was “to understand the financial position of [D1-D4], fulfill their statutory duties as directors and regularize [D1-D4’s] affairs” and that the application was a standalone request independent of the wider dispute and other litigation between the parties.  P3 confirmed that based on the limited information available to the Plaintiffs it appeared that substantial amounts of rental income was unaccounted for and that it was important to obtain access to the relevant documents to ascertain whether there had been any wrongdoing.

The Plaintiffs’ standing as directors of D1-D4

23.  P3 asserted (at [34(b)] of P3-1)  that D5 had improperly sought to convene an EGM of D1-D4 and to remove P1, P2 and himself (P3)  as directors of D1, D3 and D4 and appoint himself as the sole director of these three companies.  These actions were, he alleged, taken in breach of the Injunction and P1, P2 and P3 were to be treated as remaining as directors.  P3 referred to and relied on the ruling by DHCJ MK Liu in his judgment dated 22 January 2025 in HCMP 1055 of 2022 that D5 was unable to deny (or to cause D1-D4 to deny)  that these three Plaintiffs were and remained directors of these companies and therefore they were still able “to exercise their rights as directors of all the 4 Companies, including the right to have access to the financial records of the companies” (see (4)  of that judgment).

D5 and D6’s submissions and evidence

24.  D5 and D6 opposed the Plaintiffs’ application.  D6 filed an Affirmation (D6-1)  on his own behalf and on behalf of D5 in which he confirmed that D5 and D6 did not challenge the standing of the Plaintiffs to act as, and to issue the OS, as directors of D1-D4.

25.  D6 said that the Plaintiffs’ application was abusive and designed to harass D5 and himself.  It was, he said, part of the hostile litigation tactics deployed by the Plaintiffs in the wider family dispute. D5 and D6 argued that the Plaintiffs had made the application for an ulterior motive and with ill intent, namely, to harass them. The application was nothing but a tactical move and fishing exercise to try to gain an advantage in the related proceedings.  It appeared that what the Plaintiffs were really seeking to do was compel D5 and D6 to co-operate with them and co-sign requests to third parties for multiple documents.

26.  He also said that the Plaintiffs had failed to provide sufficient particulars of the documents they wished to inspect and access. The description in the OS was too wide and the elaboration in [4] of P3-1 did not provide significant further particulars or sufficient specificity.

27.  Importantly, D6 said that in view of the paralysis in the management and governance of D1-D4 very little paperwork had been prepared or generated by and within D1-D4 since 2020 (see [30(b)] of D6-1).  Many of the Documents therefore did not exist.  The auditors had said on 18 November 2020 that after that date they would only be able and prepare documents if certified board resolutions were presented to them.  Subsequently no board resolutions were passed, and no audited financial statements had been prepared.  In [30] D6 said that D1-D4’s financial statements for the year ended 31 March 2019 were the last financial statements that had been prepared and that the Plaintiffs already had copies of these.  Records of D1-D4’s bank accounts were available at the relevant bank, and it appeared from P3-1 that the Plaintiffs had access to these.

28.  D6 said that in any event, neither he nor D5 had any of the Documents in their possession.  At [31] of D6-1, D6 said that D5 and D6 “had and have no possession of [the] various records as requested by [the Plaintiffs] in [4] of [P3-1].”

29.  D6 also said that the registered office of D2 and D3 was at P3’s residential address so that P3 and the other Plaintiffs must already have access to the documents located at the registered office.  In addition, since P3 was the company secretary of D2, P1 was the company secretary of D2 and P2 was the company secretary of D4, D5 and D6 were in no better position than the Plaintiffs to access relevant documents.

30.  D5 and D6 accepted that a director needs not explain why he/she needed to see documents sought in that capacity but submitted that when a defendant puts forward positive evidence challenging the existence of a proper purpose it was sufficient for the defendant to establish a real risk of an improper purpose.  They relied on the judgment of Mr Justice Andrew Chung in Law Leung Wai at [28]-[32].  In that case, Mr Justice Andrew Chung noted the significance of whether the relief sought was interlocutory or final and that where final relief was sought the requested order should be refused, on a summary judgment before and without a trial, where the defendant had raised a serious issue which required a trial to resolve.

Discussion and decision

The issues

31.  Three main issues arise on this application:

(a)  Should the Plaintiffs’ application be dismissed because it was brought for an improper purpose?

(b)  Was the Plaintiffs’ description of the Documents too wide and imprecise?

(c)  Has D6’s evidence sufficiently and satisfactorily responded to and answered the Plaintiffs’ application so that no inspection order should or needs to be made? What order should the Court make in the circumstances?

The law

32.  In Lau Cho Kwan, Leo v Lau Siu Fan, Elaine and Cornwall Agency Company Limited [2020] HKCFI 2779 (Cornwall)  Madam Justice Linda Chan noted (at [26])  that the principles governing an application made by a director for inspection of the company’s documents have been clearly summarised by Kwan J (as she then was)  in Ng Yee Wah v Lam Chun Wah [2012] 4 HKLRD 40 at [29] as follows (my underlining):

“(1)  The right of a company director to inspect the company’s documents is well established at common law …….

(2)  The right of inspection flows from the director’s duties to the company and a director does not have to explain why the inspection is sought or demonstrate any particular ground or ‘need to know’ as a basis (Law Wai Duen, supra at 405 and 409; Molomby, supra at 550; Wuu Khek Chiang George, supra at paragraph 27). Thus, the inaction on the part of the director after grounds for suspicion concerning the company’s affairs have arisen is irrelevant; likewise, the intention of the director to discover misfeasance with the view to seeking relief, or that the desire to find evidence is motivated by vindictiveness (Law Wai Duen, supra at 409).

(3)  It is only where it can be proved that the director intends to abuse the confidence in relation to the company’s affairs and to injure the company in a material way that the director’s right of inspection can be interfered with, and such interference can only be effected in circumstances where a restriction on a director’s right can be imposed because of misuse of confidential information leading to damage (Law Wai Duen, supra at 408).

(4)  In view of the proposition in (3), the exercise of a director’s right of inspection is, ‘generally speaking, not a matter of discretion with the Court’ (Edman v Ross, supra at 361; Berlei, supra at 163; Wuu Khek Chiang George, supra at paragraphs 32 and 33; Law Wai Duen, supra at 408).

(5)  The onus of establishing that the right of inspection will be exercised for improper purpose lies on the person who asserts it and ‘clear proof’ is required to satisfy the Court ‘affirmatively’ that the grant of the right of inspection would be detrimental to the interests of the company (Wuu Khek Chiang George, supra at paragraph 34).

(6)  The scope of inspection can potentially be very wide, covering any ‘documents belonging to the company’ (Burn v London and South Wales Coal Company, supra at 118; Edman v Ross, supra at 360), ‘corporate material’ (Molomby, supra at 550), ‘corporate records and accounts’ or ‘corporate information’ (Berlei, supra at 163), ‘accounting and other records of the company’ (Wuu Khek Chiang George, supra at paragraph 25).

……”

33.  In Cornwall Madam Justice Linda Chan said as follows (once again, my underlining):

“39.  In my view, P1 is entitled to inspect the Undisputed Documents, all of which are documents of the Company and are not voluminous.  I should say that in the ordinary course, a director in particular one who has been holding the office for a long time and has actively participated in the management of the company, should not seek a wholesale inspection of all the documents of the company without any temporal limit.  This is because during his directorship, he should have some knowledge of, if not familiar with, the affairs of the company.  In that scenario, I would expect the director to seek inspection of documents relevant to the purposes identified or the areas of which he has some basis to be concerned with. 

40.  I do not think the matters relied on by Elaine or the Company are sufficient for the Court to draw an inference that the application is made by P1 for the alleged or any improper purposes. 

41.  First, as the authorities show, P1 does not have to explain why he needs to see the documents for which inspection is sought.  Nor is there any requirement for a director to identify the documents he wishes to inspect beyond describing the categories of documents and the time period covered.  The latter requirement is to enable the Court to assess the reasonableness of the application and the corresponding burden on the company to comply with the request.  This is consistent with section 375 of the Ordinance, which makes it clear that a director’s right to obtain copies of the company’s accounting records is not subject to any restriction or condition.  If a director abuses his power qua director and uses the records obtained for a collateral or improper purpose, the remedy lies in the company seeking an injunction or compensation against him/her. 

42.  Second, as a director of the Company, P1 is under a duty to act in the best interests of the Company.  Such duty requires him to scrutinise the transactions and affairs of the Company to satisfy himself that they have been properly conducted and that no wrong has been done to the Company.

……

49.  As for §2 of the OS, Mr Wong SC submits that the Company has not made an affirmation to confirm that the 47 Bundles are all the documents within the scope of the Undisputed Documents and it is not uncommon for the Court to direct the defendant to file an affirmation to confirm the existence or non-existence of the documents sought (Ng Yee Wah, §38(1); Chieng Tsai Wan Judy v Kwok Kam Fung & anor [2018] HKCFI 603, §23).  Mr Yu confirms that the 47 Bundles are all the documents which the Company has in its possession and custody which fall within the scope of the Undisputed Documents, and the Company will make an affirmation to confirm this fact. 

…….

56.  For the above reasons, this Court accepts the Revised Undertaking given by P1 in respect of documents under Category 3.  Elaine and Rose, being the 2 directors in charge of the day-to-day management of the Company, is directed to file an affirmation to confirm that the 47 Bundles are all the documents within the possession or custody of the Company which falls within the scope of the Undisputed Documents.”  

34.  Madam Justice Linda Chan makes clear that the director applicants do not have to explain why they need to see the documents for which inspection is sought; there is no requirement for them to identify the documents they wished to inspect beyond describing the categories of documents and the time period covered and it is not uncommon for the Court to direct the defendant to file an affirmation to confirm the existence or non-existence of the documents sought (the learned judge accepted the submission to that effect made by Mr Wong SC and ordered the defendants to file an affirmation to confirm that the documents they had identified were in fact all the documents within the possession or custody of the company which fell within the scope of the documents sought (admittedly the defendants had offered to provide such an affirmation).

35.  Whether the Court should require a defendant to file an affidavit to confirm the position in relation to some or all of the documents sought by the applicant will depend on the facts of the case. As Sir William Blair, sitting as a Deputy High Court Judge in the Chieng Tsai Wan Judy case said (my underlining):

“23.  In the Ng Yee Wah case, Kwan J (as she then was)  made an order to the effect that the defendant was to file an affidavit stating which of the requested documents were in the company’s possession.  I have considered making a similar order in the present case, on the basis that if the documents are not in fact there, then an order for their inspection is redundant.  On balance, I am persuaded by the plaintiff that the circumstances in the Ng Yee Wah case are different from the present circumstances, and in particular the position as to the evidence is different.  I agree with the submission made by the 1^st defendant that it is important that an application such as the present is not used oppressively.  However, the identification of which of the requested items is not in fact in the company’s possession does not seem oppressive, and could have been done.  It is not suggested that the reasons for the absence of the documents are relevant, at least in the context of an application like the present one. ”

36.  It seems to me that where the defendant clearly and credibly states that he (and the company of which he is a director or a representative such that he has access to its records)  does not have and that he is unable to access and obtain the relevant documents, an order for inspection is redundant and should not be made.  Of course, if the defendant’s evidence is not clearly stated or is not credible, an order will need to be made.

37.  As Sir William Blair also said in Chieng Tsai Wan Judy (at [17])  “I should also add that, in my view, the court will not make an order that is so wide or imprecise that it cannot reasonably be complied with.”

The first issue – improper purpose

38.  As the authorities cited above make clear, the onus of establishing that the right of inspection will be exercised for improper purpose lies on the person who asserts it, and clear proof is required to satisfy the Court affirmatively that the grant of the right of inspection would be detrimental to the interests of the company.

39.  In my view, D5 and D6 have failed to establish by this standard that the Plaintiffs are seeking to exercise their right of inspection for an improper purpose.  The Plaintiffs and D5/D6 are clearly engaged, one might say locked, in a wide-ranging and acrimonious family dispute but the evidence shows that the Plaintiffs have a good reason as directors for wishing and needing to see and have access to the Documents.  D1-D4, and the Plaintiffs, are either already or about to be default of various filing obligations and in the performance of various statutory duties.  The Documents are needed for the purpose of regularising the position.  The existence of the wider dispute does not negate this proper purpose.  There is a genuine need for the Plaintiffs to inspect the Documents in view of the dire state of the D1-D4’s affairs and their record of non-compliance (without the need for the Plaintiffs to rely on their allegation of misappropriation or misconduct by D5 and D6 which are denied and disputed).

40.  As I said at the hearing, despite their dispute, the Plaintiffs and D5 and D6 need (and have a responsibility)  to come together and co-operate if only for the purpose of ensuring that D1-D4 comply with their filing obligations and statutory duties (if necessary by jointly instructing an independent accountant to collect and have access to the relevant documents and third parties such as banks holding relevant records for the purpose of preparing the necessary filings and financial statements).

41.  D5 and D6 relied on the decision in Law Leung Wai.  In this case the applicant was a director of the subject company (A)  but also at least closely involved with another company (B)  which was a competitor. There was evidence from third parties that the applicant had tried to entice them to transfer their business to B.  The learned judge was therefore satisfied that there was a real risk that the applicant wanted to see the documents to benefit B and for B’s purposes and not for the purpose of acting as and performing his duties as a director of A.

42.  Law Leung Wai referred to the judgment of the English Court of Appeal (Sir John Chadwick)  in Oxford Legal Group [2008] 2 BCLC 381 in which it had been held that if it was clearly shown that a director seeking to inspect the company’s books intended to use the right to inspect for an improper purpose inspection would not be permitted. The burden was on the person opposed to inspection to demonstrate that was sought for an improper purpose.  Sir John Chadwick held that the court would be astute to ensure that a director’s right to inspect was not rendered nugatory by delay and that where an order to inspect was sought by way of interim relief it was for those opposing inspection to satisfy the court that there was a serious question as to improper purpose which could not be resolved without a trial.  In this case, the applicant has presented an unfair prejudice petition under section 459 of the UK’s Companies Act 1985 and an order had been made that the respondents to the petition buy his shares at a price to be fixed by the court on the hearing of the petition.  The applicant had then applied for an order under section 222 of that Act to inspect the company’s records as the respondents had caused the company to make improper payments.  It was held that since the applicant would inevitably cease to be a director or any other position in the company once he was bought out he could not claim that he wished to inspect the company’s records in order to carry out his duties as a director.

43.  As is clear from this summary of Law Leung Wai and Oxford Legal Group the facts of the present case are far removed from the facts of either of these cases and they are clearly distinguishable.

The second issue - is the Plaintiffs’ description of the Documents too wide?

44.  It seems to me that the description of the Documents in [4] of P3 is sufficiently precise to enable D5 and D6 reasonably to comply with it and it is not so wide as to be oppressive or impose an unreasonable burden on D5 and D6.  It is clear what documents are sought – the documents can be identified - and a time period has been designated.  It is a long time period but it is linked to the facts, since it appears that the latest financial statements relate to 2019.

The third issue - has D6’s evidence sufficiently answered the Plaintiffs’ application so that no inspection order should or needs to be made?

45.  As I have noted, D6 said in unqualified terms that neither he nor D5 had ever had or currently had any of the Documents in their possession.  He also gave a good reason for this since the family dispute and the resulting corporate paralysis in D1-D4 meant that no internal corporate documents or financial statements had been prepared since early 2020.  It was also the case that the Plaintiffs had not said in their evidence that they believed that D5 and D6 had the Documents in their possession and the basis for thinking that they did.  D6 had however explained that they were not the company secretary of any of D1-D4 and that the Plaintiffs had resided at the companies’ registered offices.

46.  But D5 and D6 did not say that they were unable to obtain possession of or access to any of the Documents (in their capacity as corporate directors or corporate representatives with authority to do so). The obligation to give inspection is, as I have noted above, imposed on the companies and D5 and D6 are joined as defendants to the application for the purpose of ordering them to procure that the companies comply with their statutory duties to the extent that D5 and D6 can do so (either because they hold the Documents on behalf of the companies or in a corporate capacity or because they can exercise their powers as directors or other representatives of the companies to access and obtain the Documents).

47.  The Plaintiffs questioned whether the statement in [31] of D6-1was really an unqualified confirmation that D5 and D6 had none of the Documents in their possession because it followed and might be said to be linked to the statements made in [30].  I do not read [31] in this way. It seems to me that it represents a conclusion and general statement of D6’s evidence in light of the various matters discussed in D6-1.

48.  In my view, in the circumstances, the proper course is to require D6 and D5 to file a further affirmation clarifying and confirming their evidence so that the position is clear and so as to establish that they do not have and cannot access any of the corporate records of D1-D4 covered by the Plaintiffs’ request to inspect the Documents.

49.  My understanding at the hearing is that D5 and D6 say that either that the Documents do not exist and have not been created or that where they have been created, that D5 and D6 do not have them in their possession and that they cannot gain access to them so that they are unable to cause D1-D4 to give inspection of any of them.  If they clarify and confirm their evidence to this effect then making the inspection order sought by the Plaintiffs would be redundant.  They will both need to confirm that they have never had in their possession or held (in electronic form), and currently do not have in their possession or hold (in electronic form), any of the Documents and that they have never had and currently do not have access to and are unable to require others to give them access to any of the Documents so that they are unable to procure and cause D1-D4 to give inspection of the any of the Documents to the Plaintiffs.

50.  D5 and D6 should provide their further affirmations within 14 days of the date on which they receive a sealed copy of the order giving effect to this judgment.

51.  The order should provide for any party to have liberty to apply.  This is necessary in case the further affirmations are not in the required form (for example because the confirmations are qualified in some way).  In this eventuality, it will be open to the Plaintiffs to apply for a further order in light of the contents of the further evidence.  But if the further affirmations give the required confirmations in an unqualified form, then D5 and D6 will have done all that is required of them and no further relief will be granted, save in relation to costs.  I shall order that costs be reserved on the basis that the parties should, if they are unable to reach agreement on the issue, make submissions in writing as to the appropriate costs order after the filing of the further affirmations.  If a further application is made pursuant to the liberty to apply provision in the order, then the issue of and submissions as to costs will need to wait the determination of any such further application.

52.  The Plaintiffs invited me to include in the order a requirement that D5 and D6 state in their further affirmations what had happened to documents which they once but no longer had in their possession (or under their control)  so that the Plaintiffs would be able to establish where those documents (documents of D1-D4)  were now located.  I declined to do so.  This was because, as I have already noted, D6 had already said on oath that he and D5 had never had any of the Documents so an order requiring them to detail what they had done with Documents that were once in their possession was redundant.