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HCMP 2340/2025
[2026] HKCFI 3954
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
MISCELLANEOUS PROCEEDINGS NO 2340 OF 2025
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IN THE MATTER of Lite Beaute Limited (“the Company”) |
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and |
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IN THE MATTER of section 740 of the Companies Ordinance (Cap 622) |
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BETWEEN
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NG KAR HO SAMMY |
Plaintiff |
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and |
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LITE BEAUTE LIMITED |
1st Defendant |
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MAK PUI SHAN ANGELA |
2nd Defendant |
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| Before: |
Deputy High Court Judge Gary CC Lam in Chambers (open to public) |
| Date of Hearing: |
17 June 2026 |
| Date of Decision: |
17 June 2026 |
| Date of Reasons for Decision: |
17 July 2026 |
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REASONS FOR DECISION
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I. INTRODUCTION
1. At the end of the hearing, I made an order that the 1st and 2nd Defendants shall produce for inspection the following two classes of documents (out of eleven classes set out in Schedule 1 to the Originating Summons filed on 28 November 2025) with a verifying affirmation:-
(1) Audited financial statements; and
(2) Management accounts for the period after the latest date of the audited financial statements.
2. Here are my reasons.
II. BACKGROUND
3. The Plaintiff was a registered shareholder of the 1st Defendant (the “Company”) holding 20% of its shareholding in his name. There seemed to be dispute over whether the Plaintiff holds the shares for himself or for his daughter. Sensibly, Mr Jesse Shum, counsel for the 2nd Defendant, did not take any point as a ground of opposition to Plaintiff’s locus in the present application under section 740 of the Companies Ordinance (Cap. 622), given that the rights of the registered shareholders under the section did not depend on whether the shares were held on trust or not.
4. The Plaintiff (whether on his own behalf or on behalf of his daughter), the 2nd Defendant and the other shareholder entered into an oral joint venture agreement (the “Joint Venture Agreement”) to incorporate the Company to beauty business. The Plaintiff’s evidence was that under the Joint Venture Agreement, when the Company made profits, it would distribute such profits to the shareholders proportional to their respective shareholdings. The 2nd Defendant’s evidence did not traverse it. For the present purpose, I accepted the Plaintiff’s evidence.
III. LEGAL PRINCIPLES
5. I shall not repeat here the legal principles in relation to section 740 as summarised by DHCJ William Wong SC in Wong Sau Man Samuel v Wong Kan Po Wilson [2017] 4 HKLRD 542 at §39. These principles are trite.
IV. ISSUES
6. The issues before me were:-
(1) Whether the application was made for improper purposes; and
(2) Whether the application lacked good faith.
V. IMPROPOER PURPOSES?
7. The Plaintiff’s evidence was that the purpose was to ascertain the profits, if any, the Company had made, and therefore to ascertain how much dividend, if any, the Company should have distributed under the Joint Venture Agreement.
8. This purpose was prima facie a proper purpose. Mr Shum also fairly accepted that for ascertaining the distribution of profits, “the management accounts together with the audited financial statements would be sufficient”: see the 2nd Defendant’s written submissions §19.
9. The first ground advanced by the 2nd Defendant alleging that the purpose was improper was that the 11 classes of documents sought were more than necessary for the purpose. In brief, the classes of documents other than the audited financial statements and the management accounts would be the underlying documents related to the audited financial statements and the management accounts. In my view, unless there was evidence showing that the audited financial statements and the management accounts were inaccurate, I saw no reason why the Plaintiff would need more than the audited financial statements and the management accounts for the period after the audited financial statements. Mr Leo Wong, counsel for the Plaintiff, raised for the first time in his written submissions that the 2nd Defendant had suspicious and evasive conduct, relying on the text communication between the Plaintiff’s daughter and the 2nd Defendant exhibited in the Plaintiff’s evidence. Mr Wong submitted that based on such suspicious and evasive conduct, the Plaintiff would need to inspect the other classes of the documents. In my view, while the text communications were exhibited in the Plaintiff’s evidence, no allegation was raised in the evidence that the text communications showed any suspicious and evasive conduct. The text communications were exhibited without specifying the exact purpose. Had such allegation been raised, the 2nd Defendant may have answers to how to interpret the text communications. In the circumstances, I did not accept Mr Wong’s reliance on any suspicious and evasive conduct raised in his written submissions. In my view, the management accounts and the audited financial statements should be sufficient for the present purpose at this stage.
10. The second ground raised by the 2nd Defendant was that she had already provided some of the documents sought under her solicitors’ letter dated 19 December 2025. However, the letter did not specify which documents were corresponding to which classes of the documents. Except for the audited financial statements for the period from 6 August 2024 to 30 November 2024, the commercial tenancy agreement dated 8 August 2024 and the employment contracts, there was difficulty in knowing what exactly the documents were. In any event, there was no management account provided at all.
11. The third ground raised by the 2nd Defendant was that the Plaintiff used the present application as a discovery application for his action in DCCJ 1937/2025 against the 2nd Defendant for breach of the Joint Venture Agreement to distribute profits of the Company. Mr Shum referred to §65 of Wong Sau Man Samuel v Wong Kan Po Wilson, supra, quoting §§40-41 of Lehman & Co. Management Limited v Effiscient Limited and Another [2011] 5 HKLRD 668. While there may be identity of the contents of the information to be obtained, the purposes were different. In my view, the present purpose was to investigate the extent of the profit sharing for the interest of the Plaintiff as a registered shareholder, while the purpose of the discovery application in DCCJ 1937/2025 would be to ascertain the extent of the breach of the Joint Venture Agreement by the 2nd Defendant. In any event, the availability of other means did not necessarily mean that the purpose was improper: see Wong Sau Man Samuel v Wong Kan Po Wilson, supra, at §39(o).
12. In the premises, I found that the purpose of the present application was proper.
VI. LACK OF GOOD FAITH?
13. The argument that the Plaintiff’s application lacked good faith ran like this: the Plaintiff’s evidence that he himself was the owner of the shares was dishonest because according to the 2nd Defendant’s evidence, the Plaintiff held the shares on behalf of the Plaintiff’s daughter.
14. While in appropriate circumstances, the Court could examine the affirmation evidence and may come to a conclusion of which factual account was correct, I did not feel able to come to such a conclusion on the evidence laid before me. In any event, more importantly, lack of good faith did not simply mean dishonest evidence in this context. Lack of good faith in the present context would mean that the pursuit of the application was not genuinely made, but that the applicant acted honestly with a purpose he believed to be proper: see Wong Sau Man Samuel v Wong Kan Po Wilson, supra, at §39(c).
VII. BREACH OF DUTIES?
15. In the 2nd Defendant’s affirmation, she raised that the Plaintiff’s daughter ran a competing business against the Company, and thus breached duties to the 2nd Defendant and/or the Company. In my view, the starting point was that a shareholder (assuming the shareholder to be the Plaintiff’s daughter for the sake of argument) owed no duty to the Company not to compete. There was also no evidence that the Joint Venture Agreement would prohibit the Plaintiff or the Plaintiff’s daughter from doing so. Mr Shum also did not raise any argument that the present application was an application to seek information to facilitate the competition against the Company.
VIII. CONCLUSION
16. For the above reasons, I made the order as set out in §1 above, and ordered the 2nd Defendant to pay 60% of the costs to the Plaintiff.
17. It remains for me to thank counsel for their assistance.
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(Gary CC Lam)
Deputy High Court Judge
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Mr Leo Wong, instructed by Khoo & Co., for the Plaintiff
Mr Jesse Shum, instructed by Kong & Lam, Solicitors, for the 1st and 2nd Defendants
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