ZHENGTAN HOLDINGS LTD (IN LIQUIDATION) AND ANOTHER v. YU LING LING AND ANOTHER

HCMP 1993/2025

[2026] HKCFI 521

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1993 OF 2025

________________________

________________________

________________________

__________________________________

REASONS FOR DECISION

__________________________________

INTRODUCTION

1.  This is the hearing and determination of the Plaintiffs’ Originating Summons dated 31 October 2025 (the “Originating Summons”) for declarations that:

(1)  The board resolutions of Zhengtan Holdings Limited (“HK Zhengtan”) dated 23 September 2023 (“23.9.2023 Resolutions”) signed by Ms Yu Ling Ling (余玲玲) (“Ms Yu”) and Ms Ho Man Yi (何敏儀) (“Ms Ho”), which appointed Mr Wang Ming (王銘) (“Mr Wang”) and Mr Hsieh Cheng Sen (謝正森) (“Mr Hsieh”) as directors of HK Zhengtan, are null and void (“OS §1”).

(2)  As a result of the foregoing, the following are also null and void (“OS §2”):

(a)  The board resolutions of HK Zhengtan dated 11 January 2024 signed by Mr Wang and Mr Hsieh (“11.1.2024 Resolutions”). These resolutions purportedly appointed Mr Li Jianjun (黎建軍) (“Mr Li”), Mr Wang Shixiang (汪世祥) (“Mr Wang Shixiang”), Mr Yang Hu (楊虎) (“Mr Yang”) and Mr Chen Gang (陳剛) (“Mr Chen”) as directors of HK Zhengtan, collectively, the 6 Directors (“OS §2(a)”).

(b)  The board resolutions of HK Zhengtan dated 6 February 2024, signed by the 6 Directors (“6.2.2024 Resolutions”). These resolutions introduced a company called 上海研晨廣告有限公司 (“Shanghai Yanchen”) as an additional shareholder of Shanghai Zhengtian; increased the registered capital of Shanghai Zhengtian; and authorised Ms Yu to handle all related matters (“OS §2(b)”).

(c)  Ms Yu’s approval of minutes of Shanghai Zhengtian’s general meeting dated 6 February 2024, to introduce Shanghai Yanchen as a shareholder of Shanghai Zhengtian; increase the registered capital; and amend the Articles of Shanghai Zhengtian (“OS §2(c)”).

(d)  Ms Yu’s filing of an application to the Shanghai Minhang District State Administration for Market Regulation (“SAMR”) to register the above unauthorised changes to Shanghai Zhengtian (“OS §2(d)”).

(3)  Shanghai Zhengtian remained a wholly owned subsidiary of HK Zhengtan (“OS §3”).

(4)  The acts of Mr Li and Mr Wang at the EGM of HK Zhengtan on 12 January 2024 (“EGM”) were invalid, and the resolution appointing the 5 persons nominated by Top Integrated as additional directors of HK Zhengtan was validly passed (“OS §4”).

2.  At the hearing, I made an order in terms of the Originating Summons without adjourning the matter as I am of the view that the orders requested by the Plaintiffs are both necessary and essential for the orderly and efficient management of the liquidation of China Properties Group Limited (“CPG”) and its subsidiaries. Now I give my reasons.

3.  This Court has no doubt that this application is occasioned and caused by the obstructions of Mr Wong Sai Chung (“Mr Wong”) and his associates who used every trick to seek to wrongly maintain control of CPG and its subsidiaries despite its liquidation. This simply cannot be allowed.

4.  CPG was wound up on 31 May 2023 and Ms Tiffany Wong and Mr Edward Middleton (“CPG Liquidators”) were appointed liquidators of CPG on 23 June 2023.

5.  The 1^st Plaintiff is HK Zhengtan (under liquidation, with the same liquidators as the CPG liquidators). The 2^nd Plaintiff is Top Integrated Group Ltd (“Top Integrated”, a wholly owned BVI subsidiary of CPG of which Ms Tiffany Wong is the sole director, and the 99.9% shareholder of HK Zhengtan). HK Zhengtan is the 100% owner of 上海正天工程管理咨詢有限公司 (“Shanghai Zhengtian”), a PRC wholly foreign-owned enterprise (“WFOE”) which owns substantial real estate projects in Chongqing and Shanghai which are among the key valuable assets of the CPG Group.

6.  CPG Liquidators, in proper discharge of their duties as liquidators, encountered various and serious obstacles created by Mr Wong and his associates.

7.  In the PRC proceedings brought by the CPG Liquidators in the name of HK Zhengtan against Shanghai Zhengtian (“PRC Proceedings”), the PRC Court considered there was insufficient evidence before it to hold that the 23.9.2023 Resolutions, 11.1.2024 Resolutions and 6.2.2024 Resolutions were invalid, when on the paper record, they appeared to be in accordance with HK Zhengtan’s Articles of Association: see judgment of the Shanghai Minhang District People’s Court dated 22 September 2025 (“PRC Judgment”). The CPG Liquidators have appealed against the PRC Judgment (“PRC Appeal”), and the PRC Appeal judgment would likely be issued within around 3 months of the PRC Judgment. This is regrettable. I agree that there was a degree of urgency in obtaining these declarations to assist HK Zhengtan’s case in the PRC Appeal. Hence, I made the orders during the hearing.

8.  On 13 November 2025, Ms Yu and Ms Ho filed acknowledgement of service (despite being warned in earlier correspondence that they had no proper basis to oppose the application). Ms Yu and Ms Ho then issued a summons for time extension to file their affirmations in opposition by 28 days and fixed the summons to be returnable at this hearing. Linda Chan J rightly made an unless order on paper requiring Ms Yu and Ms Ho to file their evidence by 5 December 2025. On that date, Ms Ho filed a 4-page affirmation in opposition (“Ho 1^st”) on behalf of herself and Ms Yu.

9.  The Plaintiffs do not consider it necessary to file any reply evidence.

MATERIAL FACTS

10.  CPG is the ultimate parent company in the China Properties Group. It owns three BVI subsidiaries (“BVI Subsidiaries”, including Top Integrated), which in turn own 99.9% of the shareholdings in four Hong Kong subsidiaries (“HK Subsidiaries”, including HK Zhengtan), which in turn hold shareholdings in PRC companies (“PRC Subsidiaries”, including Shanghai Zhengtian), which in turn hold valuable real estate projects in the PRC.

11.  It is undisputed that CPG is massively insolvent owing billions of dollars.

12.  Prior to liquidation, CPG was under the management and control of its executive directors, including Mr Wong, his (now 93-year-old) brother Mr Wang Shih Chang George (“Mr George Wang”), and his associate Mr Xu Li Chang (“Mr Xu”) (collectively “CPG Former Directors”).

13.  CPG was wound up by an order of Anthony Chan J (as he then was) on 31 May 2023 (“WU Order”). CPG’s appeal to the CA was dismissed on 18 March 2025, and its application for leave to appeal to the CFA was subject of a Rule 7(1) Summons issued on 1 September 2025.

14.  As Linda Chan J previously held, upon the making of the WU Order, the CPG Former Directors ceased to have any power to act on behalf of CPG, other than for the limited purpose of appealing the WU Order or seeking a discharge of the appointment of liquidators. This is a cardinal legal principle in insolvency law.

15.  On 14 July 2023, the CPG Liquidators registered Tiffany Wong as the sole director of Top Integrated, replacing Mr Wong. On 16 August 2023, as director of Top Integrated, Tiffany Wong issued a letter to Ms Yu and Ms Ho, requiring them to transfer control of HK Zhengtan and Shanghai Zhengtian to the CPG Liquidators, by appointing the CPG Liquidators as directors and resigning themselves.

16.  Inexplicably, in defiance of the above request, Ms Yu and Ms Ho disputed Tiffany Wong’s authority as sole director of Top Integrated. As a result, on 15 September 2023, this Court ordered Mr Wong to execute written resolutions resigning from his position as sole director and acknowledging Tiffany Wong’s appointment as sole director of Top Integrated with effect from 14 July 2023: [2023] 4 HKLRD 811 (“Resolutions Decision”).

17.  On 17 September 2023, Mr Wong signed the written resolutions mentioned above (“17.9.2023 Resolutions”).

18.  However, on 18 September 2023, the solicitors purportedly acting for CPG disclosed for the first time that the CPG Former Directors (viz. Mr George Wang and Mr Xu) had passed resolutions of CPG to appoint Mr Wang and Mr Hsieh as additional directors of Top Integrated and remove Mr Wong as director of Top Integrated on 16 September 2023 (i.e. just one day before Mr Wong signed the written resolutions as directed by this Court).

19.  The CPG Former Directors then rapidly took steps to try and remove Tiffany Wong as director of Top Integrated (and the other BVI Subsidiaries).

20.  On 19 September 2023, Mr Wang demanded that the director of Top Integrated be changed from Tiffany Wong to himself. On 21 September 2023, the CPG Former Directors purported to pass further resolutions to remove Tiffany Wong as sole director of Top Integrated and resolve that the 17.9.2023 Resolutions were invalid. Such gamesmanship is only to be mentioned to be deplored.

21.  As Linda Chan J rightly pointed out, the CPG Former Directors had since the date of the WU Order ceased to have power to pass any resolutions in respect of CPG (except for the limited purposes of conducting an appeal which has now been dismissed).

22.  It is clear to this Court that Tiffany Wong remained the sole director of Top Integrated, and neither Mr Wang nor Mr Hsieh were properly appointed as directors or had authority to instruct solicitors to act on behalf of Top Integrated.

23.  On 23 September 2023, Ms Yu and Ms Ho purportedly passed the 23.9.2023 Resolutions to appoint Mr Wang and Mr Hsieh as additional directors of HK Zhengtan, and then to resign themselves as directors. This was only belatedly disclosed to the CPG Liquidators on 26 January 2024. This is very wrong.

24.  On 3 October 2023, Mr Wang and Mr Hsieh even applied to the BVI Court for an interim injunction to enjoin the CPG Liquidators from relying on the 17.9.2023 Resolutions to justify the appointment of Tiffany Wong as sole director of Top Integrated. This was rightly dismissed by the BVI Court on 20 November 2023.

25.  In light of the ongoing obstructions by Mr Wong and his associates, the CPG Liquidators applied to this Court for further relief.

26.  At the hearing on 6 December 2023, this Court recognised Tiffany Wong as sole director of Top Integrated since 14 July 2023, and also accepted Ms Yu’s undertaking that she would not “act or hold [herself] out as officers of [HK Zhengtan] or perform, whether de jure or de facto, the role of an officer of [HK Zhengtan] including by acting as director or secretary”. This Court made orders for book and papers to be released to the CPG Liquidators.

27.  On 11 January 2024, Mr Wang and Mr Hsieh purportedly passed the 11.1.2024 Resolutions to appoint Mr Li, Mr Wang Shixiang, Mr Yang and Mr Chen as directors of HK Zhengtan. This was only belatedly disclosed to the CPG Liquidators on 26 January 2024.

28.  On 12 January 2024, HK Zhengtan held an EGM upon the requisition of Tiffany Wong on 24 November 2023 . At this EGM, pertinently:

(1)  Mr Li purported to act as chairman of the EGM over Tiffany Wong’s objections.

(2)  Mr Wang claimed by virtue of an undisclosed “BVI legal opinion” that he was the lawful proxyholder of Top Integrated for its shares in HK Zhengtan.

(3)  On the resolution to appoint 5 additional directors to HK Zhengtan nominated by the CPG Liquidators, Mr Li disallowed Tiffany Wong’s vote, disallowed Mr Li’s vote “to be fair”, and only accepted Ms Yu’s vote which was against the resolution, so that the resolution purportedly failed.

(4)  Mr Li refused to entertain any objections or questions from Tiffany Wong.

29.  On 23 February 2024, the CPG Liquidators caused Top Integrated to apply to wind up HK Zhengtan and appoint provisional liquidators, which was granted (“PL Order”). HK Zhengtan was wound up on 13 May 2024.

30.  After being appointed provisional liquidators of HK Zhengtan, the CPG Liquidators discovered the various corporate actions purportedly taken on 6 February 2024 (“Shanghai Zhengtian Unauthorised Changes”), i.e.:

(1)  Board resolutions of HK Zhengtan were purportedly passed by the 6 Directors, to introduce Shanghai Yanchen as an additional shareholder of Shanghai Zhengtian; increase the registered capital of Shanghai Zhengtian; and authorise Ms Yu to handle all related matters.

(2)  Ms Yu approved the minutes of Shanghai Zhengtian’s general meeting, to introduce Shanghai Yanchen as a shareholder of Shanghai Zhengtian; increase the registered capital; and amend the Articles of Shanghai Zhengtian. The amendments were inter alia (1) to add a veto power for every shareholder, including Shanghai Yanchen, in relation to various changes to corporate form (Article 11); and also (2) a provision preventing Shanghai Zhengtian’s executive director from being replaced for 3 years (Article 15).

31.  The net effect of the Shanghai Zhengtian Unauthorised Changes was to dilute HK Zhengtan’s equity interest in Shanghai Zhengtian, and introduce a new purported shareholder in the form of Shanghai Yanchen, which is owned and controlled by two of the 6 Directors (namely Mr Wang Shixiang and Mr Yang).

32.  The amendment of Shanghai Zhengtian’s articles also gave Shanghai Yanchen a veto right on major corporate actions, posing yet further obstacles to the CPG Liquidators’ efforts to take control of and realise the valuable underlying PRC real estate assets.

33.  Ms Yu made an application to the SAMR to register the Shanghai Zhengtian Unauthorised Changes.

34.  Despite that Ms Yu had already resigned as a director of the Company by the 23.9.2023 Resolutions, the resignation was not disclosed to SAMR. Instead, in the application to the SAMR, Ms Yu was listed as authorised signatory with a supporting resolution of Shanghai Zhengtian signed by Ms Yu on behalf of HK Zhengtan, without disclosing the resignation, I agree, evidently to induce (indeed, mislead) the SAMR into accepting the application.

35.  For completeness, the CPG Liquidators have made various attempts in the PRC to unwind the Shanghai Zhengtian Unauthorised Changes, as detailed in Wong 6^th §§37-40.

36.  Further, on 26 May 2025, the CPG Liquidators (as directors of HK Zhengtan) passed resolutions to invalidate the appointment of the 6 Directors and the 6.2.2024 Resolutions.

37.  Mr Francis (together with him Mr Keith Chan) invite this Court to take into account of the previously judicial observations of Linda Chan J which I agree are highly pertinent.

(1)  The 6 Directors were “closely associated” with Mr Wong. There was no evidence that they had been properly appointed as directors.

(2)  Ms Yu, Ms Ho and the 6 Directors had engaged in “extensive obstructions” to prevent the CPG Liquidators from taking control over CPG and its subsidiaries and the projects in Chongqing.

(3)  It is “indisputable” that Top Integrated is the only person entitled to take control over HK Zhengtan. It is also “indisputable” that upon their appointment, the CPG Liquidators are the only persons entitled to take control over, inter alios, Top Integrated, HK Zhengtan, and the projects in Chongqing. But HK Zhengtan remained under the control of the 6 Directors as a result of the “wrongful actions” taken by the CPG Former Directors, Ms Yu, Ms Ho and the 6 Directors. Unless and until the 6 Purported are displaced, the CPG Liquidators had “no means to ensure that the assets of [HK Zhengtan] would not be dissipated or misapplied by the [6] Purported Directors, who have no right or interest in [HK Zhengtan]”.

(4)  The “extensive actions taken by Mr Wong and his associates to prevent the [CPG] Liquidators from taking control over [Top Integrated] and [HK Zhengtan]… left the court with much unease that if the [6] Purported Directors were allowed to remain in their position, they would do anything to fit their own or Mr Wong’s purposes and without regard to the interests of CPG or [HK Zhengtan]”.

(5)  “There was simply no basis for Mr Wong and his associates ([Ms Yu and Ms Ho], [Mr] Wang and [Mr] Hsieh) to deny Tiffany Wong’s authority to represent [Top Integrated] after 24 July 2023, or to change the constitution of the board of [HK Zhengtan] against the instructions of Tiffany Wong. This was particularly so after the court had held (in the 1^st Decision [of this Court on 15 September 2023]) that Tiffany Wong was the only person with authority to act on behalf of [Top Integrated].”

(6)  “It was disturbing to see that after Mr Wong (through his counsel) had successfully persuaded the court that it was not “impracticable” for [HK Zhengtan] to hold any EGM as requisitioned by [Top Integrated], he saw fit to procure his associates ([Ms] Yu, [Mr] Wang, [Mr] Hsieh and “Mr Li”) to defeat the votes casted by Tiffany Wong on behalf of [Top Integrated] at the EGM for appointment of 5 additional directors.”

(7)  “The conduct of Mr Wong’s associates at the EGM could only be described as contumelious, as by the time of the EGM, both the Hong Kong court and the BVI court had held that Tiffany Wong was the only person with authority to represent [Top Integrated].”

(8)  “[V]ery substantial time and costs had already been incurred by the [CPG] Liquidators in the past 10 months in trying to take control over [Top Integrated], [HK Zhengtan] and the Chongqing Projects, which would not have been unnecessary had [the CPG Former Directors and Ms Yu and Ms Ho] cooperated with the [CPG] Liquidators in the same way as any former directors and officers of a company being wound up by the court.”

(9)  “[T]he constant changes in the constitution of the board of [HK Zhengtan] at the behest of Mr Wong’s associates left much uncertainty in the state of [HK Zhengtan] and if allowed to continue, would only result in further dispute and litigations between Mr Wong’s camp and the [CPG] Liquidators.”

(10)  “[I]t had not been explained, let alone established, whether before or at the EGM, how “Mr Li” could assume the position as chairman of the EGM when he had not been appointed as a director of [HK Zhengtan]… it was only on 26 January 2024 (i.e. 2 weeks after the EGM) that KBCC provided the resolutions purporting to show that [Mr Li, Mr Wang, Mr Yang and Mr Chen] had been appointed as directors one day before the EGM. In any event, it was impossible to see how Mr Li could have acted in “good faith” in disallowing the votes casted by Tiffany Wong when the court had already held that she was the only person who has authority to act on behalf of [Top Integrated].”

(11)  “[T]he fact that “Mr Li” could not have acted in reliance on the independent legal opinion of the BVI law firm is confirmed by the fact that the said opinion was only produced on 15 January 2024, which was 3 days after the EGM had been held. In view of the holdings of the Recorder and Wallbank J, there is no proper basis to suggest that there is any issue as to the authority of Tiffany Wong to act on behalf of [Top Integrated] or that such issue remains pending in the BVI Proceedings.”

38.  As a result of the above, in her Costs Decision of 25 November 2024, [2025] 1 HKLRD 151 (“PL Costs Decision”), Linda Chan J made a non-party costs order against Mr Wong on an indemnity basis (§§21-25); and a wasted costs order against KB Chau & Co (“KBCC”) on an indemnity basis, as KBCC had opposed the appointment of provisional liquidators purportedly on the instructions of the 6 Directors who had no authority (§§26-39). In particular, the Judge reiterated that the 6 Directors and Ms Yu and Ms Ho did not have authority (§27), and that KBCC ought to have known that they had no authority (§33). KBCC’s reliance on the 23.9.2023 Resolution as proof of authority was specifically rejected by the Judge (§§32(1), 33(3)).

39.  I must stress that this Court had also handled some applications arising out of the CPG liquidation. The above conduct of Mr Wong and his associates are very wrong and are blatant attempts and strategies to outmanoeuvre legal effects and consequences of the appointment of the Liquidators. Such conduct cannot be allowed to stand and must be reprimanded. This Court comes to this view independently without any difficulties.

ANALYSIS AND DETERMINATION

Applicable Legal Principles

40.  The requirements of declaratory relief are well established . As held in Convoy Global Holdings Ltd v Kwok Hiu Kwan [2022] 1 HKC 551, §§29-31 (Kwan VP), the applicant must show that:

(1)  He has a real interest in the subject matter of the declaration (‘real issue’ requirement);

(2)  He has a real interest in obtaining a declaration against the adverse party (‘real interest’ requirement);

(3)  The adverse party is a proper contradictor (‘proper contradictor’ requirement).

41.  The jurisdiction to grant declaratory relief is extremely wide, and does not depend on the existence of a cause of action: Koo Ming Kown v Rev Mr Mok Kong Ting [2018] HKCFI 967, §§15-16 (DHCJ To). The Court adopts the practical utility approach by asking whether its jurisdiction to grant declaratory relief is properly exercisable instead of applying nice tests as if it were raising a strict jurisdictional issue: §18.

42.  The meaning of ‘interest’ is a real interest of a material character to be enforced or protected as opposed to a merely academic or hypothetical question or one raised out of curiosity: Koo Ming Kown, §19; Convoy, §31.

43.  An applicant has to show that he has a real interest of a material character to be enforced or to protect or a genuine and legitimate interest in obtaining a decision from the court against an adverse party: Koo Ming Kown, §19.

44.  A ‘proper contradictor’ is someone presently existing who has a true interest to oppose the declaration sought: Koo Ming Kown, §19.

45.  I have no doubt that the Plaintiffs are entitled to the declarations sought and the sooner the same is made the better. As this Court indicated earlier, this Court will do what is necessary to assist the Liquidators to discharge their duties vis-à-vis the general body of creditors.

46.  In terms of analysis, the requirements for declaratory relief are readily satisfied in this case:

(1)  First, the Plaintiffs have a real interest in the subject matter of the declarations. The Plaintiffs clearly have a strong interest to obtain formal declarations from the Hong Kong Court (being the Court which made the winding up order) as to the invalidity of purported resolutions and corporate acts taken Mr Wong and his associates to obstructing and frustrating the winding up of CPG and keep its valuable assets out of the control of the CPG Liquidators appointed by this Court. Such actions have been repeatedly deprecated by the Hong Kong Court. A fortiori, as the CPG Liquidators are appealing from the PRC Judgment which held that there was insufficient evidence to prove the invalidity of the 23.9.2023 Resolutions, 11.1.2024 Resolutions and 6.2.2024 Resolutions, Plaintiffs have a real interest to obtain the declaratory relief in order to support its litigation efforts in the PRC. This is in no way an academic or hypothetical question.

(2)  Secondly, the Plaintiffs clearly have a real interest in obtaining the declaratory relief against the adverse parties (Ms Yu and Ms Ho). They are the persons who purportedly executed the 23.9.2023 Resolutions, for the obvious purpose of keeping the control of Top Integrated (and its subsidiaries) out of the hands of the CPG Liquidators. The Plaintiffs therefore have a genuine and legitimate interest to obtain a declaration from this Court against the two of them.

(3)  Thirdly, Ms Yu and Ms Ho are the proper contradictors. As stated above, they executed the 23.9.2023 Resolutions, by which Mr Wang and Mr Hsieh were purportedly appointed as the (only) directors of HK Zhengtan. If Mr Wang and Mr Hsieh were not validly appointed, they could not have validly passed the 11.1.2024 Resolutions to appoint the rest of the 6 Purported Directors. In turn, this means that all of the resolutions and corporate actions in OS §§2-4 must be invalid, and those declarations must necessarily follow. Hence, it suffices to join Ms Yu and Ms Ho to these proceedings. There is no need to join any other parties (e.g. the 6 Directors or Shanghai Zhengtian), and their joinder would only lead to an immense waste of time and costs as they are all located outside the jurisdiction (in the Mainland). In any event, those other parties (who are all associates of Mr Wong acting together to frustrate this liquidation) would plainly be aware of these proceedings, and have not applied to join: Si Tou Choi Kam v Wealth Credit Ltd [2018] 4 HKC 247, §§27-30 (Cheung CJHC, as he then was).

47.  More fundamentally, as this Court observed in its Resolutions Decision at §19, the Hong Kong Courts “not only have a supervisory jurisdiction over liquidations in Hong Kong… they also have a duty to assist liquidators appointed by the Hong Kong Courts to effectively and efficiently discharge their professional duties in the best interest of the general body of creditors. Hong Kong Courts will render every assistance to the Liquidators to address their and the Official Receiver’s concerns in this liquidation”. The Court has an “implied jurisdiction to make whatever orders are necessary to give effect to its own judgments” (§21).. In the exercise of its supervisory jurisdiction and duties, the Court should grant the declarations sought by the Plaintiffs in order to facilitate the work of the CPG Liquidators in the face of strenuous obstruction by Mr Wong and his associates.

48.  Additionally, I am of the view that there is a clear legal basis for each of the declaratory reliefs sought.

49.  OS §1: it is indisputable that the 23.9.2023 Resolutions cannot be valid:

(1)  On 16 August 2023, Tiffany Wong as sole director of Top Integrated had already directed Ms Yu and Ms Ho to appoint the CPG Liquidators to replace themselves as directors. But instead of complying with Tiffany Wong’s direction above, Ms Yu and Ms Ho (baselessly) disputed the authority of Tiffany Wong to act on behalf of Top Integrated. Then, they purportedly passed the 23.9.2023 Resolutions to place HK Zhengtan under the control of other associates of Mr Wong (viz. Mr Wang and Mr Hsieh), in defiance of Tiffany Wong’s direction.

(2)  In light of Tiffany Wong’s direction on 16 August 2023 (which she was entitled to give as sole director of Top Integrated), Ms Yu and Ms Ho had no authority to pass the 23.9.2023 Resolutions. Even if they had not been formally removed as directors yet, the irregularity principle is engaged, as Top Integrated (as 99.9% shareholder of HK Zhengtan) would have been able to remove Ms Yu and Ms Ho as directors in any event. The irregularity principle applies to defects whether ‘minor’ or ‘substantive’: Zhong Da Mining Holding Ltd v Lam Wo Ping [2024] 3 HKLRD 365, §§34-44 (DHCJ Sara Tong SC).

(3)  In any event, Ms Yu and Ms Ho passed the 23.9.2023 Resolutions in breach of their fiduciary duties to HK Zhengtan, including their duties to act in good faith in the best interests of the company, to act only for proper purposes, and not to put themselves in situations of conflict. They did so for the purpose of frustrating the CPG Liquidators’ efforts to take control of HK Zhengtan and instead keep control in the hands of Mr Wong’s camp, which was plainly an improper purpose and not in the interests of the company. The resolutions are and should be declared null and void: Elysium Ltd v Sum Ka Kuen Dominic [2023] HKCFI 612, §40 (DHCJ Jenkin Suen SC).

(4)  Obviously, the 23.9.2023 Resolutions (or any of the other impugned resolutions) would not have been ratified by the shareholders of HK Zhengtan, as 99.9% shares are held by Top Integrated which is controlled by the CPG Liquidators. The CPG Liquidators have all along strenuously opposed the attempts of Mr Wong and his associates to retain control of CPG and its subsidiaries, and have never accepted the validity of the impugned resolutions.

(5)  On the evidence before this Court, I take the view that Ms Yu and Ms Ho were acting together with other individuals (including the 6 Directors and the CPG Former Directors), who were all associates of Mr Wong, to keep control of CPG and its subsidiaries out of the hands of the CPG Liquidators.

(6)  There is nothing in Ho 1^st  which gives rise to any valid defence. She merely makes a bare denial of breach of fiduciary duties (§6), which is completely unsubstantiated. She also contends that she and Ms Yu passed the 23.9.2023 Resolutions pursuant to “what [they] understood and believed to be a proper and lawful request under BVI law from the directors of [Top Integrated]” (§7). I agree this cannot be true, as this Court had already held that Tiffany Wong was the legitimate director of Top Integrated in the Resolutions Decision on 15 September 2023, one week before the 23.9.2023 Resolutions were passed.

50.  OS §2(a): the 11.1.2024 Resolutions cannot be valid. As explained above, if Mr Wang and Mr Hsieh were not validly appointed as directors under the 23.9.2023 Resolutions, then they could not have validly passed the 11.1.2024 Resolutions to appoint the rest of the 6 Directors. In any event, these resolutions were obviously passed for the purpose of keeping HK Zhengtan out of the control of the CPG Liquidators and in the hands of Mr Wang’s camp, and thus in breach of fiduciary duty, similar to OS §1 above. They should be declared null and void.

51.  OS §2(b): likewise, the 6.2.2024 Resolutions cannot be valid. If the 6 Directors were not validly appointed, then they could not have passed the 6.2.2024 Resolutions to make the Shanghai Zhengtian Unauthorised Changes.

52.  In any event, again, these resolutions were plainly passed for the purpose of keeping Shanghai Zhengtian and the underlying valuable PRC real estate assets out of the control of the CPG Liquidators and in the hands of Mr Wang’s camp, and thus in breach of fiduciary duty. Thus, these resolutions should be declared null and void.

53.  I also agree that the purported authorisation of Ms Yu to handle all related matters is plainly contrary to Ms Yu’s own undertaking that she would not perform the role of an officer of HK Zhengtan whether de jure or de facto.

54.  OS §§2(c), (d): if the 6.2.2024 Resolutions were not validly passed, then Ms Yu could not have acted on behalf of HK Zhengtan in relation to the Shanghai Zhengtian Unauthorised Changes, including signing minutes of the general meeting of Shanghai Zhengtian on 6 February 2024.

55.  Likewise, Ms Yu could not have (as authorised signatory of HK Zhengtan with a supporting resolution of Shanghai Zhengtian signed by herself on behalf of HK Zhengtan) filed any application to register the Shanghai Zhengtian Unauthorised Changes to the SAMR. Even if these were actions taken in relation to a PRC company, there is no reason why the Hong Kong Court should not make a declaration against Ms Yu who performed these actions and is “subject to the in personam jurisdiction of Hong Kong Courts”: Resolutions Decision, §23.

56.  OS §3: by reason of the matters in respect of OS §§1-2 above, HK Zhengtan indisputably remains the parent company holding 100% of the shares in Shanghai Zhengtian – at least from the perspective of the Hong Kong Court applying Hong Kong law (and the declaration can be qualified in this way if necessary).

57.  OS §4: I am also of the view that the acts of Mr Li and Mr Wang at the EGM were invalid:

(1)  Mr Li and Mr Wang were not properly appointed as directors, by reason of the invalidity of the 11.1.2024 Resolutions as explained above. Thus, Mr Li could not have been appointed chairman of the EGM. Similarly, Mr Wang could not have been the proxyholder of Top Integrated’s shares in HK Zhengtan.

(2)  In any event, as Linda Chan J held, there is no plausible explanation as to how Mr Li could assume the position as chairman of the EGM when there was no proof at the time that he had been appointed as director of HK Zhengtan (as such ‘proof’ was only disclosed two weeks later on 26 January 2024).

(3)  Further, as Linda Chan J also held, Mr Li could not have acted in good faith in disallowing the votes cast by Tiffany Wong, when it was already established that she was the only person who had authority to act on behalf of Top Integrated: her PL Decision §79(2); cf. Kwok Hiu Kwan v Johnny Chen (No 2) [2021] 4 HKC 167, §§8, 41-50 (Kwan VP).

(4)  Hence, the resolution appointing the 5 persons nominated by Top Integrated as additional directors of HK Zhengtan ought to have passed, if Tiffany Wong’s vote and Ms Yu’s vote were counted and Mr Wang’s vote was not counted, which is what ought properly to have happened.

58.  Mr Dobby, acting for the Defendants, fairly agreed that there is no contrary foreign law (BVI laws) evidence to suggest that the legal position in BVI is different from the analysis set out above. That, I must say, is a very sensible position to take.

DISPOSITION

59.  For all the reasons stated above, I made an order in terms of the Originating Summons §§1-4.

60.  I also make a costs order against Ms Yu and Ms Ho on indemnity basis, with certificate for a solicitor advocate and a junior counsel. I take note that in pre-hearing correspondence, the Plaintiffs had repeatedly warned Ms Yu and Ms Ho not to unreasonably oppose this application, in light of the facts and the prior findings of the Hong Kong Court, and the fact that they had no longer had any position in HK Zhengtan. However, they persisted in their unmeritorious opposition, made every effort to delay the matter in order to further obstruct the CPG Liquidators’ performance of their duties, and raised no meaningful defences in their 4-page affirmation.

61.  The 1^st and 2^nd Defendants contend that a declaration will not be made in default or on admissions or by consent. Whilst that is true, I am of the view that the present application is necessitated by the wrongful actions of the 1^st and 2^nd Defendants who also actively contested the same.

62.  I also agree that the 1^st and 2^nd Defendants’ submission that they should be responsible for that aspect of the Originating Summons which related to them is wrong. The validity of all subsequent corporation acts was the result and consequences of the invalidity of the resolutions of the 1^st Plaintiff on 23 September 2023. The Plaintiffs cannot be faulted for seeking all related reliefs in one application.

63.  Indemnity costs order is imminently suitable in the present circumstance to also express this Court’s reprimand of Ms Yu and Ms Ho’s reprehensible conducts.

64.  I order a certificate for two counsel as I  find the assistance of Mr Chan is valuable to this Court (as suggested by Mr Francis).

65.  I summarily assess the costs at the full sum of HK$557,730 as requested by the Plaintiffs.

66.  Finally, it remains for this Court to thank Mr Francis and Mr Chan for the Plaintiffs and Mr Dobby for the Defendants for their very helpful assistance.