YIU CHEUNG MAN v. GOLDEN BRIGHT INDUSTRIAL LTD

HCMP 3963/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 3963 OF 2002

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D E C I S I O N

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1. I have before me an application taken out by Mr Yiu Cheung Man pursuant to section 114B of the Companies Ordinance, Cap. 32. The 1st Defendant herein is Golden Bright Industrial Limited ("the Company"). The 2nd Defendant is Ms Chan Wah Sham. The Plaintiff seeks an order for an extraordinary general meeting of the Company be convened for the purpose of considering and passing resolutions to appoint an additional director, to authorise the Plaintiff and the additional director to operate the bank accounts of the Company, to authorise the Plaintiff and the additional director to open new bank accounts for the Company, and to authorise the Plaintiff and the additional director to commence or to defend legal proceedings on behalf of the Company. The Plaintiff further seeks an order that for the purpose of the extraordinary general meeting, only one member of the Company present in person or by proxy is to be deemed to constitute a quorum for the meeting. The matters giving rise to the originating summons may be stated as follows.

2. The Plaintiff and the 2nd Defendant are the only shareholders and directors of the Company. The Plaintiff holds 5,100 shares out of 10,000 issued shares and the remaining 4,900 shares are held by the 2nd Defendant. Article 11 of the Articles of Association provides that until otherwise determined, two directors shall constitute a quorum for directors' meeting. Article 24 provides that the quorum for all general meetings shall be two members personally present and holding either in his own right or by proxy at least 51% of the paid up capital of the Company. The principal activity of the Company is general trading.

3. Some time in August 2002, the Plaintiff had made various attempts to hold a directors' meeting with the 2nd Defendant at the Company's office in Shantou City, China. Quite a number of telephone calls were made to the 2nd Defendant and the Plaintiff had also asked the workers of a factory to assist him to locate the 2nd Defendant at her home address in Shantou. All these attempts to contact the 2nd Defendant were not successful.

4. On 23 August 2002, the Plaintiff managed to obtain the assistance of the police in Shantou to help him to locate the 2nd Defendant. In early September 2002, the Plaintiff was informed by the police in Shantou that the 2nd Defendant was located and detained for questioning and later released on condition that she was to report to the police regularly.

5. On 21 September 2002, the Plaintiff issued a notice in writing to the 2nd Defendant for a directors' meeting to be convened at the Company's office in Shantou on 24 September 2002. This notice was served on the 2nd Defendant personally by courier service. The 2nd Defendant did not attend the meeting. Since August 2002, the 2nd Defendant has not attended to the affairs of the Company.

6. As the Plaintiff is not able to operate the bank accounts of the Company on his own, the Company has not been able to pay debts as they fell due. In September this year, a winding up petition was presented by a creditor and the petition was only dismissed on 1 December 2003 after the Plaintiff had paid off this creditor with a loan raised from his relatives and friends. Other creditors have also demanded payment and the Plaintiff is deprived of resources to save the Company if he has no access to the bank accounts.

7. The originating summons was served on the 2nd Defendant who is a resident in the Mainland in September this year. She has not filed any evidence in opposition to this application. There is no evidence before this court of any signs of co-operation on the part of the 2nd Defendant to attend any board meeting that may be convened.

8. I am satisfied on the evidence that it is impracticable for a board meeting or a general meeting to be held and that it would be appropriate to grant relief in these circumstances.

9. Miss Catrina Lam, who appears on behalf of the Plaintiff, has offered an undertaking on the part of the Plaintiff that the extraordinary general meeting to be convened will be held in the Company's office in Shantou City. I have asked for this undertaking just to forestall any objection that might be taken on the part of the 2nd Defendant that she cannot come to Hong Kong for any reason.

10. On the above undertaking, and on the further undertaking of the Plaintiff to file a supplemental affirmation exhibiting the notice dated 21 September 2002 to convene a directors' meeting, I make the following orders on this application:

(1) an extraordinary general meeting of the Company be convened for the purpose of considering and passing the resolutions set forth in the schedule to the originating summons;

(2) for the purpose of the extraordinary general meeting, only one member of the Company present in person or by proxy would be deemed to constitute a quorum at such meeting;

(3) the Plaintiff is to give 14 days' notice in writing to convene the extraordinary general meeting; and

(4) the Plaintiff's costs of this application are to be paid by the 2nd Defendant.