TAN MAN KOU AND ANOTHER v. CHIME CORPORATION LTD AND OTHERS

CACV124/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 124 OF 2003

(ON APPEAL FROM HCMP NO. 4146 OF 2001)

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J U D G M E N T

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Hon Ma CJHC (giving the judgment of the Court) :

1. On 20 February 2004, we handed down judgment allowing an appeal by the Petitioners, thereby permitting certain amendments to be made to the petition that was presented against the Respondents.

2. In so doing, this court held as a matter of principle that a shareholder was able to present a petition under section 168A of the Companies Ordinance on the basis of wrongs directly committed against the company (but only indirectly committed against him) and claim for financial relief in relation to the damage suffered by the company even though he himself had not suffered any direct loss. It was a part of our judgment that, as a matter of law, section 168A permitted relief to be claimed in the form of financial compensation in favour of the company. Of course, whether the Petitioners actually can receive any financial compensation will necessarily depend on the outcome of the trial.

3. By a Notice of Motion dated 25 February 2004, the 2nd Respondent seeks leave to appeal to the Court of Final Appeal under section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance. It is submitted that the following questions are matters which by reason of their great general or public importance, or otherwise, ought to be submitted to the Court of Final Appeal for determination :-

(1) Whether, in light of the company autonomy principle and on a proper approach to section 168A of the Companies Ordinance (Cap.32), a shareholder is entitled to present a petition under section 168A to seek financial relief on behalf of the company in relation to alleged wrongs suffered directly by the company and not directly by the shareholder himself.

(2) Whether upon a proper construction of section 168A(2) the Court has jurisdiction to grant damages or financial relief to redress alleged wrongs done directly to the company where the shareholders suffered no more than indirect, reflective loss.

4. We fully appreciate the point made by Mr Ambrose Ho, SC for the Petitioners (who resist this application) that the decision is an interlocutory one and one that involved the grant of leave to amend. However, the point of law that this Court determined is an important one (as both this Court and the Companies Judge below found) and is one that, in our view, involves questions of great general or public importance. It seems to us that the only opportunity of having these questions determined by the Court of Final Appeal will be on appeal from our decision. This is notwithstanding Mr Ho's submissions this morning implicitly to the effect that perhaps the same points could be revisited at the hearing of the petition. There is also the point that Mr Winston Poon, SC makes in relation to the fact that the Petitioners have recently sought leave further to amend the petition to plead various additional matters relying upon the correctness of our decision. Further, our attention has been drawn to at least one other decision in which our judgment on the issue apparently has been applied.

5. In the circumstances, we are minded to grant leave to the 2nd Respondent to appeal to the Court of Final Appeal upon the questions set out above. We will hear the parties on consequential directions, if any.