SHUM CHOI SANG v. CONFUCIUS HALL OF HONG KONG LTD

HCMP359/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.359 OF 2005

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REASONS  FOR  JUDGMENT

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1. This is the application by Mr Shum Choi Sang (“Mr Shum”) for :

(1)	an order that an annual general meeting of Confucius Hall of Hong Kong Limited (“the Hall”) be convened under section 14 of the Companies Ordinance (“the Ordinance”); and
(2)	rectification of the register of members of the Hall under section 100 of the Ordinance.

On 22 March 2005, I allowed the application.  These are my reasons.

The Hall

2. The Hall was incorporated on 12 October 1932 as a company limited by guarantee to promote and preach the doctrines of Confucius.  It is a charitable institution within the meaning of section 88 of the Inland Revenue Ordinance.   According to the records available, the affairs of the Hall had since the 1950s been conducted in a very loose and sometimes confusing manner.

3. When the Hall was incorporated, an English Memorandum and Articles of Association (“the English M&A”) was filed with the Companies Registry.  The English M&A remains the only memorandum and articles of association registered with the Companies Registry.  However, since 1953, the Hall had resolved to revise its articles of association at several general meetings and had since conducted its affairs accordingly.  For some reasons unknown, such resolutions had not been filed with the Companies Registry either.

4. At the general meeting held in 1961, the Hall considered that some articles of association were inconsistent with its actual operation and resolved to revise it in the manner as set out in the minutes of the meeting.  Again, the resolution was not filed with the Companies Registry.  It appeared that after the 1961 general meeting, a Chinese Memorandum and Articles of Association (“the Chinese M&A”) was prepared, which reflected the various revisions made previously to the articles.  However, it is not clear if the Hall had ever formally adopted the Chinese M&A and if so, when.  The Chinese M&A was never filed with the Companies Registry.

5. The last general meeting of the Hall was held on 19 October 1965.  Since then, no general meeting has been held up to date.

6. The management of the Hall is and was at all material times vested with its General Committee and Management Committee.  The last election of the committees was held back in 1964.  No further election pursuant to the articles of association had been held since then.  Although those members elected in 1964 have remained in office up to now, not all of them took part in the management.  Some had simply ceased to do so, some left Hong Kong and some passed away.  Only about four continued to take care of the Hall’s affairs, including Mr Shum.

7. The Hall has declined substantially both in terms of membership and activities since the 1960s.  The last register of members was dated 1959.  Since then, it had not been updated. 

8. The state of affairs of the Hall was far from satisfactory, to put it mildly.

Need to call an AGM

9. The need for the present application is obvious.  Mr Shum put forward the following matters in support.

10. First, the current constitution of the Management Committee of the Hall may be defective as the appointment and resignation of members of the Management Committee has been informal and irregular.  An AGM is required to rectify the acts of the existing Management Committee and to elect a new team of the Management Committee.

11. Second, as the Hall has down-sized in terms of membership, some provisions in the English M&A have become cumbersome and inappropriate and need to be revised.  For instance, there are plainly insufficient members for a General Committee comprising 100 members and a Management Committee comprising 31 members to be elected as required.  It may no longer be necessary for a General Committee to exist in view of the much reduced membership of the Hall.  The quorum provisions (27 members to be present) for the purpose of a general meeting are no longer workable.  It is desirable to merge and convert different classes of membership to two classes of membership (Permanent Members and Ordinary Members) for better management. 

Impracticable to call an AGM

12. Mr Shum also explained that it is impracticable to convene an AGM of the Hall.  A notice has to be served on every member personally or by post (in accordance with the Chinese M&A) but this could not be complied with fully since the Hall does not have a complete and updated list of members.  It is unlikely to have sufficient members present in person to constitute a quorum as required under the English M&A.

Need to rectify the register

13. Moreover, it is necessary for the register of members of the Hall to be rectified in accordance with the complete list of membership of the Hall pursuant to section 100 of the Ordinance.

Allowing the application

14. I am satisfied that it is impracticable to call an AGM and to procure the attendance of sufficient members to constitute a quorum.  The present case calls for a straightforward application of the court’s power under section 114B of the Ordinance to rectify the irregularities referred to above.  And indeed the sooner the meeting is called, the better.  Thus I will exercise my discretion to order the meeting.

15. The need to rectify the register of members is also obvious and must take place as soon as possible.

16. For the above reasons, I allowed the application.