WONG WAH ON v. TSUNG TSIN ASSOCIATION AND OTHERS

HCMP 2056/2018

[2019] HKCFI 240

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2056 OF 2018

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D E C I S I O N

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1.  I haver before me a petition dated 20 November 2018 issued by Mr Wong Wah On, a member of the 1^st respondent Tsung Tsin Association Limited, pursuant to section 724 of the Companies Ordinance, Cap 622. The 1^st respondent is a company limited by guarantee and it was formed on 2 May 1959 (“the Company”). Its objects and its purpose are to protect and promote the industrial, commercial and other lawful interests of the Hakka Community in Hong Kong, China and abroad. The 2^nd to 10^th respondents were, it is accepted by the petitioner, properly appointed to the board of the Company. However, it would appear that by 2008, their positions as directors of the Company ended as a result of the provisions of the articles requiring board members to stand for re‑appointment if they wish to continue in office, pursuant to article 68 of the Articles of Association.

2.  It would appear that in recent years, concerns have arisen amongst members of the 1^st respondent concerning the management of the Company and as a consequence, steps were taken by disgruntled members to have an extraordinary general meeting convened at which they could vote on resolutions to reconstitute the board.  This eventually took place, as a consequence of requisitions that were served pursuant to article 25, at an extraordinary general meeting on 22 May 2018 (“the EGM”). 

3.  I am satisfied that the EGM was duly convened in accordance with the Articles of Association of the 1^st respondent; the requisite number of members, namely 50, required by article 15 for a requisition was satisfied; article 16 which governs the service of notices convening an extraordinary general meeting was satisfied; the necessary quorum was present at the EGM; and in the absence of the persons who until that time had been holding themselves out as the chairman and vice chairman of the board (or as it is known in the case of the 1^st respondent its Executive Committee), they were replaced by a duly elected chairman and resolutions reconstituting the board were duly passed on a show of hands.

4.  It would appear that initially, the old board refused to accept that the resolutions passed at the EGM ousted them from office and reconstituted the board.  Disputes arose, and one consequence of that is that the Companies Registry has declined to accept the filing of notices of change of director and change the Company’s records in the Companies Registry without an order of the court.  As a result, the petition was issued.

5.  The petition relies on various grounds for seeking relief.  However, as the relief that is sought only concerns the reconstitution of the board and the consequences of its reconstitution, and, although I am satisfied that all the respondents have been properly served, none of them have attended court to oppose the petition,  it seems to me it is only necessary to focus on the complaint that the 2^nd to 10^th respondents have failed to act properly in accordance with the resolutions passed at the EGM and hand over the books and records of the Company to the new board, and to cease holding themselves out as being the board of the Company.

6.  I find on the basis of the evidence that has been filed in court that the petitioner’s complaint, that there has been unfair prejudice as a consequence of the matters which I have described in the preceding paragraphs, is made out, and this is an appropriate case for the court to make orders for the necessary relief pursuant to sections 724 and 725.

7.  The relief that is sought is contained in the prayer in the petition and is in the following terms:

“(1) a declaration that the Petitioner and other members of the New Executive Committee form the current Executive Committee of the Association;

(2) a declaration that the Petitioner and other members of the New Executive Standing Committee form the current Executive Standing Committee of the Association;

(3) the 2^nd to 10^th Respondents shall, within 14 days, hand over (or cause to be handed over) to the Petitioner (or his appointee(s)) all the corporate records and instruments of the Association including, but not limited to, the statutory records including the register of members and register of directors, corporate seals and stamps, keys (or passcode) to the Principal Business Address, all legal documents including employment and business contracts signed by the Association and title documents of properties and assets and all bank statements.

(4) the 2^nd to 10^th Respondents henceforth shall not hold themselves out as directors/officers/Executive Committee members/agents of the Association or as acting on behalf of the Association in any way whatsoever;

(5) the 2^nd to 10^th Respondents shall, within 14 days, vacate their office space at the Principal Business Address;

(6) costs of this Petition be paid by the 2^nd to 10^th Respondents; or

(7) any other order that the Court thinks fit.”

8.  The order that is sought by Mr Singh, who appeared on behalf of the petitioner today, is in the form of the prayer and I will make an order in the terms of [1] to [5] of the prayer to the petition.  I will order that the 2^nd to 10^th respondents pay the petitioner’s costs of the proceedings.