XCHRX JIANG SHAOLIANG v. ZHANG XINNENG

HCMP 877/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 877 OF 2001

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J U D G M E N T

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1. This is an application for the following relief under Section 114B of the Companies Ordinance, namely that an extraordinary general meeting of Long Prime Limited (which I shall refer to hereafter as "the Company") may be convened by the court for the purpose of considering and if thought fit passing the resolution set out in the schedule.

2. The resolution set out in the schedule was originally to remove the Defendant Mr Zhang Xinneng as Director of the Company, but it has since been amended to a resolution to reappoint Mr Jiang Shaoliang and Mr Zhang Xinneng as directors of the Company and to appoint two other persons as directors of the Company.

3. When this matter was originally taken out, the Plaintiff was the Company itself. That was clearly the wrong procedure and on the last occasion when this matter first came before me, the legal advisers for the Plaintiff recognized that error and this has led to an amendment of the Originating Summons such that the Plaintiff has now become Mr Jiang Shaoliang.

4. The evidence is clear and for that reason, this matter can be dealt with at the first hearing. The affirmation of Mr Jiang Shaoliang shows that he and Mr Zhang set up the Company in March 1994 and were at all material times the only two directors and shareholders. Of the two shares, one was held by Mr Jiang and other one by Mr Zhang.

5. However, it would appear that since 2000, Mr Zhang the Defendant has not been accessible and has not reported to duty.

6. Numerous telephone calls had been made to Mr Zhang at this mobile telephone number but no one has answered the telephone, and correspondence sent to him at various addresses have been unanswered. Consequently, it would not be possible to hold any meeting of this Company, and for that reason, the present application has been taken out.

7. On the last occasion when this matter was put before me, I queried the manner of notice served on the Defendant. The articles of association of the Company do not specify any particular means of notice. However it applies Table A of the Companies Ordinance, and Article 132 of Table A provides that: "a notice may be given by the company to any member either personally or by sending it by post to him, or to his registered address or (if he has no registered address in Hong Kong) to the address, if any, within Hong Kong supplied by him to the company for the giving of notice to him".

8. In the present case, it is clear from the evidence that the address supplied by the Defendant to the Company for the giving of notice to him was an address in Jupiter Street, North Point. This was the address which was given at the time when the Company was set up. It was included in the first annual returns of the Company. It was used in a Transfer Note dated 11 May 1994 which was signed by the Defendant, and the said address has since been used as his address in all annual returns of the Company until the year 2000 and the annual returns up to that date has been signed by the Defendant himself.

9. As a matter of extra caution, there has also been served on the Defendant the relevant papers on another address which was known to the Plaintiff. That having been done, I am satisfied that there has been adequate notice of these proceedings to the Defendant.

10. In view of the difficulties in contacting the Defendant, it is necessary and proper for the court in the exercise of its discretion under Section 114B(1) to order a meeting of the Company to be held, including a direction that only one member of the Company present in person or by proxy shall be deemed to constitute a meeting.

11. The case of Re Sticky Fingers Restaurant Limited [1992] BCLC 84 is authority for the proposition that the court would only be prepared to order a meeting for the purpose of appointing an additional director upon the applicant's undertaking not to remove the other director. Consequently, the Plaintiff's legal advisers have amended the schedule, as I have referred to above, to delete the original proposed resolution to remove the Defendant as a director.

12. In my view, the fact that the Defendant has chosen not to make himself accessible to the Company and to the other shareholder makes it clear that this is a case where the exercise of my discretion is in favour of the granting of the order sought in the Amended Originating Summons. Consequently I will order that an extraordinary general meeting of Long Prime Limited be convened for the purpose of considering and if thought fit passing the resolution set out in the schedule to the Amended Originating Summons and I would direct that one member present do constitute a meeting.

13. I see no further directions that are necessary.