FONG SHUI HIN AND OTHRS v. LAM KIT SING AND OTHERS

HCMP 1989/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1989 OF 2004

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D E C I S I O N

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1.  This is a summons taken out by the 1^st, 4^th and 5^th respondents in HCMP No. 1989 of 2004 on 26 July 2005.  HCMP No. 1989 of 2004 is a petition presented under section 168A of the Companies Ordinance, Cap. 32 on 11 August 2004.

2.  In the summons the relevant respondents seek an order that:

“Hong Kong Chung Shan Lung Chan Clan Association (“the Association”), the 7th respondent herein, do convene an extraordinary general meeting of Association to complete the election of the 24th Board of Directors of the Association, and that directions be given as to the method of so doing”.

3.  The summons cited the provisions under which the application was made.  They are sections 111 and 114B of Cap. 32 and Order 102 rule 2 of the Rules of the High Court.  The summons was served on the petitioners and on the former receivers appointed by the court on 15 October 2004 in HCMP No. 1989 of 2004 by way of interim relief and discharged by an order made on 29 June 2005. 

4.  The former receivers took the position that they have no interest in this application but as the summons was served on them, they had appeared by counsel to give assistance to the court.  Mr William Wong for the former receivers served his written submissions dated 5 August 2005.  He set out in detail why the application is procedurally wrong and why the court may not have jurisdiction to make the order sought.

5.  Mr Joseph Vaughan in his written submissions in reply informed the court that the provisions cited in the summons were due to an oversight and the provision relied on for making the present application should be section 168A.

6.  I cannot see how that can be right.  I go back to the circumstances in which the two orders were made by Mr Barma J on 15 October 2004 in HCMP No. 1989 of 2004 and in HCMP No. 1642 of 2004.  HCMP No. 1642 of 2004 was brought by an originating summons on 29 June 2004.  The plaintiffs are the same individuals who later presented the section 168A petition in HCMP No. 1989 of 2004.  The application in HCMP No. 1642 of 2004 was made under sections 111 and 114B seeking an order to convene an annual general meeting or an extraordinary general meeting of the Association for considering various resolutions in the schedule including the election of a new board of directors for the Association.  Before any order was made in HCMP No. 1642 of 2004, the petition in HCMP No. 1989 of 2004 was presented in August 2004, on the basis that the affairs of the Association were conducted in a manner unfairly prejudicial to its members.  The relief sought was for the appointment of receivers over the assets of the Association, an injunction to restrain the 1^st to 6^th respondents from dissipating the assets of the Association, an injunction restraining the 1^st to 7^th respondents from utilising the assets of the Association in defence of the 1^st to 6^th respondents to the amended petition, an order for regulating the conduct of the 24^th election committee, and an order that such proceedings be brought in the name of the Association against the 1^st to 6^th respondents on such terms as may be ordered by the court.  A summons for interim relief for the appointment of receivers was issued on 30 August 2004 and amended on 6 September 2004.

7.  On 15 October 2004, both proceedings came before Barma J.  In HCMP No. 1642 of 2004, he made an order that the receivers appointed on the same day in HCMP No. 1989 of 2004 be at liberty to convene an annual general meeting of the Association within 56 days of the order, for the purpose of considering the agenda set out in the schedule.  He also gave directions for the holding of the annual general meeting.

8.  In respect of the summons for interim relief in HCMP No. 1989 of 2004, he appointed receivers and gave them various powers including the power to convene the annual general meeting of the Association pursuant to his order of the same day in HCMP No. 1642 of 2004 and to assume all of the powers formerly exercised by the election committee of the Association to conduct an election of a new board of directors at the annual general meeting to be convened.

9.  The annual general meeting was held by the receivers on 2 and 29 December 2004.  At the meeting on 29 December 2004, the receivers announced the outcome of the election of the 24^th board of directors.  They then applied for release on 21 April 2005 and an order was granted for their release on 29 June 2005.

10.  A contention has been raised by the 1^st, 4^th and 5^th respondents that the board of directors elected at the annual general meeting on 29 December 2004 was not a properly constituted board of directors, as the constitution is not in compliance with article 28 of the Articles of Association, in that only 58 persons were elected as directors, not 60 persons as required.  So in the summons before me today they seek an order to convene an extraordinary general meeting to complete the election of the 24^th board of directors.

11.  The power given to the court to order a meeting to be held for a company not in liquidation is to be found in the statute.  They are sections 111 and 114B.  There is no basis for suggesting that there is power to grant interim relief under section 168A by ordering an extraordinary general meeting to be convened.  The order made by Barma J on 15 October 2004 in HCMP No. 1642 of 2004 for an annual general meeting to be convened was made under section 111 or 114B.  Such an application should be by way of an originating summons in separate proceedings.  I rule that it is procedurally incorrect to proceed by summons in the section 168A proceedings.

12.  Quite apart from procedure, if section 114B is relied on, for the court to exercise its power to order a meeting to be convened, the applicant would have to satisfy the court that it is impracticable to call a general meeting in any manner.  There is at present no evidence before the court to indicate that that is the case.

13.  Mr William Wong has raised a number of avenues in his written submissions by which an extraordinary general meeting could be called.  If it is the position of the respondents that none of the avenues raised in Mr Wong’s submissions are open to them, they should depose to that on affidavit.

14.  For the above reasons, I dismiss the summons issued by the 1^st, 4^th and 5^th respondents on 26 July 2005.