TOPPAN PRINTING CO LTD v. CHAMPION DRAGON DEVELOPMENT LTD

1985, No. 4984 - 4987

IN THE SUPREME COURT OF HONG KUNG

HIGH COURT

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JUDGMENT

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1. I have before me identical summons in four different actions. The plaintiffs in each action are said to be Toppan Printing Company Limited and that is how they are described. It is a mis-description. They should be printed in this way : Toppan Printing Company (HK) Limited. That was the subject matter of an application to adjourn this matter which I dismissed earlier.

2. The defendants are four different publishing companies. One is called Discovery Publishing Company Limited; another the Yellow Book Publishing Company Limited; the third Tinder Investments Limited, and the fourth Champion Dragon Development Limited. The plaintiff obtained judgments in default against each of the companies for quite substantial sums of money back in September, against Dragon on the 4th September and against the others on the 11th of September. In each of the actions they then made the same application, which was to have Mr. Wai Kin Bong examined upon the basis that he was an officer of the defendant company in question. An officer for the purpose of 0.48, r.1, in my judgment means, anyone who is actively concerned in the management or direction of the company, however he may be described. That is the effect of looking at the definitions of "directory" and "officer" in section 2 of the Companies Ordinance, and of paragraph 540 of Halsburys Laws Vol. 7, 4th edn. So the question is: Was Mr. Wai actively concerned in the management and direction of these companies?

3. Upon the evidence which has been put before me, there is only one possible answer to that question. Mr. Wai purported to resign as a director of Discovery, the only company of which he was named as a director, on the 22nd April of last year. But it is perfectly apparent that both before and after that date, from the trading documents which passed between the plaintiff and the defendants, that he was actively conducting the management of that company. Strikingly he was the sole signatory upon the cheques which the defendant company was then paying to the plaintiff. I should explain this that all the claims arise out of printing work done by the plaintiff for the defendant company. He continued to operate in exactly the same way for Discovery. He was never a director of any of the other companies. But there is before me almost identical evidence of his performing management or directorial functions for those companies by making contracts, given instructions for the delivery of printing material or signing cheques.

4. This order empowers the Court to make orders against someone who is an officer of the company, whether he is a current officer of the company, or whether he has in fact purported to resign from his earlier position of the company. That is made clear by the decision of the Court of Appeal in Société Générale Du Commerce Et De L'industrie En France v. Joharn Maria Farina & Co.⁽¹⁾. "Officer" in other words mean present or past officer for this purpose. On the evidence which is now before me, it is perfectly apparent that the Court would be justified in making an order for the examination of this man. Further he appears almost certainly the only person who can provide any information about the affairs of this company. Because what seems to have happened on the material before me is that three of the companies are no longer conducting active business. One of them appears to have transmitted its proprietary rights and the goodwill which attached to one of the magazines, and that magazine has now been revived by yet another company in which the same Mr. Wai appears to be actively involved. This may be a source of income or a source of property for at least one of the debtor companies, I know not. If ever there was a case which justified an order for examination being made is this.

5. What has happened? On 17th February Master O'Donnell made an order in each of the actions for Mr. Wai's examination. When that was served, two things seem to have happened quickly. Mr. Wai instructed solicitors and on 12th March, an application was made to set the order aside, and Mr. Wai sworn an affirmation in support of that in which he said, "I am not an officer; I have ceased to be a director: and I am not a member of the Tin Tin Group. There is no basis for making the order against me because I am not an officer. "  Acting upon that Master Woolley set aside Master O'Donnell's order; allowed Mr. Wai to intervene in the action for their purpose; and shortened the time for the hearing of the summons. So that there was no opportunity given to the plaintiff to add anything to the evidence which had already been put before the Court by Mr. Lee.

6. Mr. Lee, in his affirmation on behalf of the plaintiff company, had said two things. First the applicant Mr. Wai was an officer of the defendant company; and secondly, he said, he verily believed that the defendant company is part of a group of companies which he described as the Tin Tin Group which published named magazines (those are the publications of the other defendant companies) and that Mr. Wai is a key officer in the group. That is another way of saying, as I see it that he believed that he was equally connected with the other companies, which he was collectively calling the Tin Tin Group, and that he was an officer of those companies. It seems that he said exactly the same thing directly in each of those actions, in relation to each of those companies, when he said that he was an officer of the defendant.

7. The first objection that was made to the granting by Master O'Donnell of the original leave, and to justify the order of Master Woolley setting it aside, is that Mr. Lee's original affirmation contained a material mis-statement of fact. The principal mis-statements of fact being:

1.    That he was an officer of the defendant company Discovery; and

 

2.    The belief about him being an officer of the other company.

I had put before me the wellknown decision of The King v. The General Commissioners of Income Tax for the District of Kensington Ex parte Polignac ⁽²⁾ as authority in support of the proposition. If the court is deceived, or feels it has been deceived, by a failure of an applicant on an ex parte application to show the utmost good faith, the court can discharge the order that is made without going into the merits. This is a wellknown principle and is a very necessary principle to ensure full disclosure of material facts on ex parte applications. But I am getting, I am bound to say, increasingly shorttempered about the number of, what I am going to describe as rubbishy applications which are made in Hong Kong seeking to discharge ex parte orders upon these basis. With the greatest respect to Miss Pinto, this is another one. She is forced to try to say that there was a material mis-statement here which cannot be corrected by subsequent information. Rather unkindly, I Put to her the question: "who deceived whom?" before Master Woolley. It is perfectly apparent upon the evidence before me, that the deception before Master Woolley was the work of her client and not Mr. Lee at all. There was no mis-statement, there was no lack of a good faith in Mr. Lee's affirmation in any shape or form. The person who got away with it before Master Woolley by putting a story before him that he was not an officer of the company, was Mr. Wai. That decision, I am bound to say in my judgment, was wrong. Master Woolley, I think, acted probably a bit quickly. He might have been more sensible not to have shortened the time. Certainly if he had a touch of the evidence that I have had before me, he would, I think, have formed a totally different view, and would not have interfered with the order Chat Master O'Donnell had made.

8. In my judgment therefore, these appeals must be allowed, the order of Master O'Donnell must be restored, and this examination must proceed.

(1)    (1904) 1 K. B. 794
(2)    (1917) 1 K.B. 486