RE TSUN TAT STATIONERY MANUFACTORY LTD

HCMP 631/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 631 OF 2005

____________

____________

_____________

D E C I S I O N

_____________

1.  I have before me an application taken out by Yip Man Sing under Section 114B of the Companies Ordinance, Cap. 32.  Mr Yip seeks an order that a general meeting be called with his attendance alone be deemed to constitute a quorum in respect of Tsun Tat Stationery Manufactory Limited (“Tsun Tat”).

2.  The originating summons has sought the same relief in respect of another company known as Swallow Sweet Development Limited.  I am informed by the solicitor appearing for Mr Yip that he does not intend to proceed with the application regarding the other company.  The background matters relevant to the application may be stated as follows.

3.  Mr Yip and Liu Wing On (“the deceased”) each held 50% of the shares in Tsun Tat.  They were the only directors.  To obtain banking facilities for Tsun Tat, each had provided properties owned by them as security to the bank.  The deceased passed away intestate on 22 December 2004.  It is envisaged that it would take some time before letters of administration would be granted, as there may be conflicting claims to his estate.  Tsun Tat has a factory in Huiyang, Guangdong with a staff of 800.  The deceased’s death has caused problem to the management, as the bank has withheld facilities, including facilities for opening letters of credit, until a new director is appointed to replace the deceased.

4.  The articles of association of Tsun Tat provide that a quorum for directors’ meeting shall be two directors personally present or represented by their substitutes appointed under another article.  As for general meetings, the quorum is two members personally present or by proxy.

5.  Mr Yip wanted to call a general meeting to appoint another director to run Tsun Tat and to act as a substitute provider of security vis-à-vis the bank.  Further, he would like to alter the bank mandate of Tsun Tat by adding another signatory to replace the deceased.

6.  Mr Yip had met with the family members of the deceased and informed them of the liquidity problems in Tsun Tat due to the temporary suspension of facilities.  The family members of the deceased indicated that they would not inject capital to the business and they did not appear to show concern in the company’s affairs.

7.  I am given to understand by Mr Yip’s solicitor that it is his intention to appoint his wife as a director of Tsun Tat.  I am satisfied in the circumstances that it is impracticable to call a meeting of Tsun Tat in the manner prescribed by the articles of association and that there are good reasons for a general meeting to be convened.  I therefore grant the relief sought and order that a general meeting of Tsun Tat be held with the attendance of Mr Yip alone be deemed to constitute a quorum.  I make no order as to costs for this application.