KWOK KWAI KONG AND ANOTHER v. LO KWING CHIU AND ANOTHER

HCMP 2480/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2480 OF 2006

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D E C I S I O N

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1.  This is an application brought by two of the shareholders of Jetco Company Limited (“the Company”) under section 114B of the Companies Ordinance, Cap. 32, seeking an order to convene an extraordinary general meeting on the ground that it is impracticable to do so. 

2.  The two plaintiffs with the 1^st defendant are the only shareholders and directors of the Company.  On 17 October 2006, the 1^st defendant issued a writ against the Company in the District Court claiming arrears of remuneration as a director at $60,000.00 a month from 10 May 2006 to present and a declaration that he is entitled to have access to the accounts and records of the Company.

3.  The plaintiffs intended to engage solicitors for the Company to defend the action.  It is their contention that the 1^st defendant had mistakenly treated his share of profits in a partnership with the plaintiffs as director’s remuneration in the Company.

4.  On 16 November 2006, a notice was issued on behalf of the plaintiffs to convene a board meeting on 21 November 2006 for the purpose of appointing solicitors to act for the Company in the District Court action.  The 1^st defendant replied through his solicitors that he would not attend the board meeting.

5.  Under the articles of association, the quorum for a directors’ meeting is 3 directors personally present or represented by their substitute.  The quorum for a general meeting is 3 members either personally present or by proxy.  The plaintiffs believe that the 1^st defendant would also refuse to attend any general meeting.  Hence, this originating summons was issued on 27 November 2006.

6.  I am satisfied it would be impracticable in the circumstances to hold a general meeting and it would be appropriate to grant the relief sought.  I make an order in terms of paragraphs 1 and 2 of the originating summons.  I do not think it is necessary to make any order in terms of paragraph 3.

7.  Regarding the costs of this application, I think it is appropriate that the 1^st defendant should bear the costs, as this application is necessitated due to his refusal to attend the board meeting.  So there will be an order in terms of paragraph 5 of the originating summons.