CHOW CHI KI v. LAM KWOK HUNG AND ANOTHER

HCMP 2016/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2016 OF 2007

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D E C I S I O N

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1.  This is an application under section 114B and/or 111(2) of the Companies Ordinance, Cap. 32.  The applicant, Chow Chi Ki, is a shareholder and director of Futin Limited (“the Company”).  The 1^st respondent, Lam Kwok Hung, is the other shareholder and director.  The 2^nd respondent is the Company.

2.  The applicant seeks an order that the Company be at liberty to convene an annual general meeting for the purpose of considering and, if thought fit, passing the proposed resolutions set out in a schedule to the originating summons and that one member present in person at the meeting is to constitute a quorum.

3.  The proposed resolutions in the schedule are to receive and consider audited financial statements of the Company with reports of directors and auditors for the years ended March 2002 to March 2006, to nominate and elect directors, to nominate and appoint Jim Siu Ming as a director, and to consider other related matters of the Company.

4.  The originating summons was issued as long ago as 18 October 2007, but the hearing date was adjourned due to the successive fruitless attempts to serve the 1^st respondent.  It was only on 20 January 2009 that an order was made by a Master for substituted the service of the originating summons on the 1^st respondent by publishing a notice of these proceedings once in a Chinese newspaper with the date of today’s hearing.

5.  The background matters may be stated as follows.

6.  The Company was incorporated on 9 June 1992 by the applicant and the 1^st respondent, with a view to using it as a vehicle to develop business opportunities in the property market.  The address of the 1^st respondent, in the return of first directors and secretary and the transfer note of his share was an address in Nam Shan Village, Sai Kung, New Territories.

7.  On 29 August 2002, upon the 1^st respondent’s instructions, a firm of certified public accountants prepared a form for the change of his address to an address in Argyle Street, Mongkok, Kowloon.

8.  The last time the 1^st respondent participated in the affairs of the Company was on 24 February 2003, when he and the applicant signed the audited financial statements for the year ended March 2002 before the firm of accountants.  Since then, the 1^st respondent has made himself inaccessible.  The audited financial statements for the years ended March 2003 to 2006 are still pending the approval of the board of directors and the operations of the Company have come to a halt.

9.  The applicant made a number of attempts to convene a general meeting and a board meeting in 2006 and 2007.  Notices were sent to the 1^st respondent’s Sai Kung address and Mongkok address and they were returned by post due to “Addressee unknown” and “No such person”.  Meetings were aborted as they were inquorate.  The articles of association provided that the quorum for a board meeting is two directors and the quorum for a general meeting is two shareholders present in person or by proxy.

10.  In the autumn of 2006, the applicant met the 1^st respondent by chance in Mongkok and asked for his contact information, but the 1^st respondent refused to provide any information other than his mobile telephone number.  The 1^st respondent also expressed unwillingness to take care of the Company’s affairs.  He refused to disclose his correspondence address.  The applicant tried to contact the 1^st respondent by telephone on three occasions in August 2007, but nobody answered the call.

11.  Quite clearly, the 1^st respondent has chosen not to make himself accessible.

12.  After the originating summons was issued, the applicant’s solicitors made renewed efforts to locate the 1^st respondent.  They conducted a directorship search at the Companies Registry.  The 1^st respondent was or is a director of six other companies.  Attempts were made to serve him at all the new addresses disclosed in the companies search but they were unsuccessful.  No one by the 1^st respondent’s name was found at any of those addresses.

13.  I am satisfied on the evidence it is impracticable for a general meeting to be held and it is appropriate to exercise my discretion to grant relief.

14.  I make an order in terms of paragraphs 1 and 2 of the originating summons as amended:

(1)     the Company be at liberty to convene an annual general meeting to be held in Hong Kong on a date after three weeks from today for the purpose of considering and, if thought fit, passing the proposed resolutions set out in the schedule as annexed to the originating summons; and

(2)     one member present at the meeting is to constitute a quorum.

15.  I order that the costs of this application be borne by the Company.