ZHANG ALLIE v. KIM DAVID NAM AND OTHERS

CACV 265 /2025, [2026] HKCA 915

On appeal from [2025] HKCFI 1471

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 265 OF 2025

(ON APPEAL FROM HCMP NO 1645 OF 2024)

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REASONS FOR JUDGMENT

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Hon Kwan VP (giving the Reasons for Judgment of the Court):

1.  This appeal is brought by the plaintiff, Zhang Allie, against the decision of Deputy High Court Judge Le Pichon on 9 April 2025 (“Decision”)[1]. By the Decision, the judge dismissed the originating summons of the plaintiff seeking, inter alia, (1)  a declaration that the documents submitted for filing on 10 July 2023 and 9 July 2024 with the Companies Registry (“CR”)  in respect of the 2^nd defendant, Blep Technologies (HK)  Limited (“the Company”), set out in the schedule to the originating summons are null and void; (2)  a declaration that the plaintiff has been and remains a director of the Company, and other consequential relief.

2.  The core contention of the plaintiff in this appeal is whether her resignation as a director effective on 23 June 2023 was validly withdrawn with the consent of the Company, alternatively whether she was re-appointed as a director, by the time the 1^st defendant, Kim David Nam, filed Form ND2A with the CR on 10 July 2023, giving notice that she ceased to be a director as from 23 June 2023.

3.  At the conclusion of the hearing, we dismissed the appeal with costs to the defendants.  These are our reasons.

Background

4.  The relevant background matters are taken from the Decision and other matters not in dispute.

5.  The plaintiff and the 1^st defendant co-founded the Company in Hong Kong on 14 May 2021.  Each owns 50% of the shares.  They were the only directors until the events which gave rise to the present dispute in June 2023.  The Company is in the business of data technologies.  They also jointly owned a Seychelles company known as Neural Data Technologies Ltd.

6.  The plaintiff was the Chief Executive Officer and focused on developing the technologies and steering the technical team.  The 1^st defendant was the Chief Operating Officer and his responsibilities were business development, marketing, finance, accounting and compliance.  

7.  Since November 2022, there were disagreements between the plaintiff and the 1^st defendant.

8.  On 23 June 2023, the plaintiff sent an email at 9:19 pm addressed to the Company at its registered address but it was actually sent to the 1^st defendant (“23 June email”)  and copied to Carmen Cho of A&G Consultancy Limited which was the company secretary.  The email read:

“David,

I am writing to formally resign from my position as CEO and Director of [the Company], effective immediately.

I would like to express my sincere thanks for the opportunity to work with and learn from you.

Sincerely,

Allie Zhang”

9.  The plaintiff sent three further emails that day: (1)  an email to herself at 10:14 pm requesting immediate termination of her consulting agreement with the Company instead of 30 days’ notice as required; (2)  an email to herself at 10:16 pm in reply to (1)  agreeing to immediate termination of her consulting agreement; and (3)  an email at 10:27 pm to five persons in the Company including the 1^st defendant that she called “the Blep Team”, informing them of her decision “to step down from [her] role as CEO and Director of [the Company], effective immediately”.

10.  On 24 June 2023, the 1^st defendant sent this email to the plaintiff (“24 June email”):

“Hi Allie,

I cannot accept your resignation at this time. For starters, consider handing over all the accounts you have admin access to. Also, approving your resignation via your company account and email account is not an acceptable form of approval. There is something called segregation of duties in basic business law and principles.

Accounts you are admin/owner:

[9 accounts were listed]

You may transfer these to dk@blep.ai or dk@nakji.network depending on domain.

Otherwise, if you choose to continue to keep these accounts owned by the companies hostage, please prepare to receive legal action for every day in passing, shortly.

Note that despite your public resignation statement, on paper, you still currently hold a director title at both companies until legally removed.

Lastly, although you provide a statement of resignation, you fail you [sic] state whether you are giving up your shares and if so, at what price. If your intention is to give up all your shares without profit, there needs to be a dollar amount attached to it so I suggest you provide a written a [sic] statement selling your all your shares for $1.

Regards,

David”

11.  On 29 June 2023, the solicitors for the Company, Ellalan, wrote to the plaintiff complaining of her wrongful acts as a director and the CEO.  More particularly, they alleged that on 23 June 2023, the day she tendered her resignation as the CEO and director, she had without authorisation of the Company held in her sole custody 15 assets as listed (“Assets”)  over which the Company had proprietary rights.  They also complained she had archived the Google Cloud server from January 2023 without the Company’s approval prior to her resignation.  Ellalan stated these wrongful acts amounted to misappropriation of the Company’s property; breach of director’s duties, fiduciary duties, duty of confidence; breach of the consulting agreement and the confidential information and invention assignment agreement; and infringement of copyright.  Ellalan emphasised that the plaintiff is legally obliged to keep the confidential information in strict confidence, and such obligation “survives the termination or completion of [the plaintiff’s] employment and directorship”.  The plaintiff was asked to provide a written undertaking to cease and desist from the wrongful acts and to deliver up all soft copies and hard copies of the Assets within seven days.  Ellalan stated if they did not receive positive response from the plaintiff on or before 6 July 2023, legal action might be taken without further notice.

12.  On 7 July 2023, the plaintiff sent an email to the 1^st defendant in the following terms (“7 July email”):

“Dear David,

I confirm that I am still a director at [the Company].”

13.  On the same day, the plaintiff sent an email to Carmen Cho as follows:

“Dear Carmen,

Based on the below message from David, I confirm that I am still a director at [the Company]. Do not process ND2A or ND4 lodgment with the [CR].

Best regards,

Allie Zhang”

14.  The “below message” referred to in the plaintiff’s email to Carmen Cho was the 24 June email.

15.  On 10 July 2023, the 1^st defendant filed a Form ND2A with the CR.  It was dated 4 July 2023 and signed by him as a director, giving notice that the plaintiff ceased to be a director of the Company on 23 June 2023.  

16.  On 24 July 2023, the plaintiff’s solicitors, Franki Ho & Associates (“FHA”), wrote to CR stating: (1)  by the 23 June email, the plaintiff informed the 1^st defendant of “her intention” to resign from her directorship; (2)  by the 24 June email, the 1^st defendant informed the plaintiff he “did not accept” her resignation; (3)  by the 7 July email, the plaintiff wrote to the 1^st defendant “confirming” she was still a director, and there had been no board resolution to accept her “intended resignation” at all; (4)  the Form ND2A signed and filed by the 1^st defendant on 10 July 2023 was “totally untruthful, misleading or even fraudulent”.  FHA requested CR to remove the Form ND2A from the Companies Register at the soonest.

17.  CR replied on 25 July 2023 referring to section 42 of the Companies Ordinance, Cap 622, and suggested to FHA to apply for a court order under that provision if they considered there was sufficient evidence that any information on the Companies Register was incorrect.

18.  On 3 May 2024, the Company brought proceedings against the plaintiff and others in the State of California.

19.  On 9 July 2024, the 1^st defendant filed the annual return of the Company being Form NAR1 at the CR.  The annual return was dated 8 July 2024 and made up to 14 May 2024 and it stated that the 1^st defendant was the sole director.

20.  The plaintiff issued this originating summons on 30 August 2024.

21.  As noted by the judge, the outcome of the originating summons would have implications for the ongoing litigation in the US.  If the plaintiff were to succeed in this appeal, she would be able to apply to the US court to dismiss the entire US action.  In the event of the 1^st defendant succeeding in resisting this appeal, the US court would regard him as the sole director. 

The Decision

22.  As stated in §23 of the Decision, the issue for determination was whether the plaintiff remained a director and this involved determining:

“(i)  whether the 23 June email which was addressed to the Company took immediate effect when it was sent; and, if so,

(ii)    whether the 24 June email and/or the 7 July email reversed or nullified the effect of the 23 June email.”

23.  As to (i), the judge found the legal position clear.  Upon sending the 23 June email, the plaintiff ceased to be a director with immediate effect[2]. Mr Jin Pao, SC, who appeared for the plaintiff on appeal[3] but not below, accepted this.  This is now common ground.

24.  As to (ii), the judge’s reasoning may be summarised as follows:

(1)  A resignation that is immediately effective may be withdrawn.  However, a resignation once tendered cannot be withdrawn unless the plaintiff can establish that the withdrawal was with the consent of the Company[4].

(2)  Insofar as the plaintiff sought to invoke the Duomatic[5] principle, the principle requires that the relevant members must have the appropriate or full knowledge as to what they are assenting.  It will not be enough if they are unaware that consent is being sought or that their consent will be significant[6].

(3)  The fact that the plaintiff sent the 1^st defendant the 7 July email of itself is neither here nor there.  Looked at objectively, the 1^st defendant had already revoked the plaintiff’s authority as an authorised signatory to the Company’s bank account[7] and had also signed Form ND2A on 4 July 2023[8] [9].

This appeal

25.  The crux of this appeal is whether the plaintiff’s resignation on 23 June 2023 was withdrawn with the consent of the Company.

26.  Mr Pao contended there was unanimous shareholders’ assent to the plaintiff continuing to act as a director, evidenced principally by the 24 June email and the 7 July email.  His arguments ran along these lines:

(1)  A company may consent to the withdrawal of a resignation of a director even after it has taken effect.  It is not the case that a resignation can only be withdrawn before the resignation is effective.  Otherwise, there could never be a withdrawal in most situations where notice of resignation is given[10].

(2)  A director’s resignation may be withdrawn with the consent of the directors even without a board resolution[11], or informally through the unanimous agreement of the shareholders under the Duomatic principle[12].

(3)  It is entirely permissible for a finding of unanimous shareholder consent to be made based on an assent given at different times.  It does not matter whether that assent is given at different times or simultaneously.  “Whether the approval is given in advance or after the event, whether it is characterised as agreement, ratification, waiver, or estoppel, and whether members of the group give their consent in different ways at different times, does not matter.”[13]

(4)  The Company has only two equal shareholders, the plaintiff and the 1^st defendant, who were the only directors of the Company.  The critical evidence lies in the relevant exchanges between them from 23 June 2023 to 7 July 2023.

(5)  By the 24 June email, the 1^st defendant responded to the plaintiff’s resignation stating he “cannot accept [her] resignation at this time”.  The plaintiff was reminded she “still currently hold a director title at both companies until legally removed”.  Thus, he clearly expressed the view she was to remain a director.  This was never qualified or retracted from or withdrawn subsequently.  It is not necessary for the 1^st defendant to mention expressly he was consenting to a withdrawal of the plaintiff’s resignation, when he had stated his belief and position that the plaintiff remained a director and that would suffice[14].

(6)  In the letter of Ellalan to the plaintiff dated 29 June 2023, although they referred to the plaintiff’s resignation on 23 June 2023, they did not actually say “the Company had regarded the Plaintiff as already having resigned”.  Nor did Ellalan qualify the 24 June email in any way.

(7)  By the 7 July email, the plaintiff responded to the 24 June email and “unequivocally confirmed” she was still a director.  The 1^st defendant did not respond to this email with an objection.  The plaintiff also wrote to Carmen Cho on 7 July 2023 stating that “based on” the 24 June email, she was still a director.  The company secretary acceded to the plaintiff’s request and did not make any filing at the CR recording the plaintiff’s resignation as a director.

(8)  Viewed objectively, a consensus was reached between the plaintiff and the 1^st defendant by reference to their exchange of correspondence.

(9)  The 1^st defendant unilaterally filed a Form ND2A with the CR on 10 July 2023 after the plaintiff confirmed in the 7 July email she was still a director.

(10)  The judge referred to the 1^st defendant having notified HSBC in late June 2023 that the plaintiff was no longer a director and authorised signatory.  This is a misreading of the plaintiff’s affirmation[15] and the finding is not supported by evidence.

(11)  The judge referred to the 1^st defendant having signed Form ND2A on 4 July 2023 as indicative that he did not consent to the plaintiff remaining a director.  However, there is no evidence to suggest that the plaintiff knew about the Form ND2A when she confirmed she was still a director by the 7 July email.

(12)  The above facts are equally capable of supporting a finding there was unanimous shareholders’ consent to the re-appointment of the plaintiff as a director on 7 July 2023, as the appointment of a director may be dealt with by members’ agreement.

Discussion

27.  There is no dispute that the evidence should be assessed objectively to determine if the Company gave consent to the withdrawal of the plaintiff’s resignation which took effect immediately on 23 June 2023.

28.  We are of the view that viewed objectively, the evidence is clear.  It has not been established there was any consensus of the two shareholders that the plaintiff was to remain a director despite her resignation which took effect immediately on 23 June 2023.  There was no indication that the 1^st defendant had assented to any withdrawal of the resignation tendered by the plaintiff.  It follows that no consent was given by the Company to the withdrawal of her resignation.

29.  The 24 June email must be read in context.  It was in response to the resignation tendered the day before, which had already taken effect.  At the time it was sent, withdrawal of the plaintiff’s resignation would simply not have crossed the mind of the 1^st defendant.  He was not asked to consent to any withdrawal of resignation, nor could the email be read as the 1^st defendant giving any sort of consent to the plaintiff withdrawing the resignation.  Rather, he was protesting (wrongly)  that the plaintiff’s resignation did not amount to ‘legal removal’ as a director as understood by him, and, in light of her “statement of resignation”, he asked her to transfer to him all the accounts of the Company that she had access to.  He also invited the plaintiff to give up her shares in the Company.  Quite clearly, notwithstanding his protest, he was attempting to deal with the 23 June email on the basis that the plaintiff was to cut ties with the Company.

30.  On the plaintiff’s part, she had understood the 24 June email as a rejection of her resignation[16].  Her case on her 1^st affirmation is that as her resignation by the 23 June email was not accepted by the 1^st defendant in the 24 June email, the resignation did not take effect and by the 7 July email she confirmed that she was still a director[17]. That was the position stated in the letter of FHA to the CR in the letter dated 24 July 2023.  She averred she simply acted on the 1^st defendant’s non-acceptance of her resignation[18]. Implicit in this stance is that she was not required to seek consent from the 1^st defendant to withdraw her resignation, and it is fair to say at no time did she seek consent from him.

31.  Both the 1^st defendant and the plaintiff had misunderstood the legal position at the material time.  The 1^st defendant wrongly thought the plaintiff could not terminate her directorship legally by serving notice to take effect immediately.  The plaintiff wrongly thought her resignation did not take effect as it was not accepted by the 1^st defendant on 24 June 2023 so it could be disregarded and she could confirm on 7 July 2023 that she remained a director without seeking any consent.

32.  There is plainly no meeting of minds in this situation.  The parties were not aware of their respective legal rights.  Neither party was aware of the need for the Company to give assent to the withdrawal of the plaintiff’s resignation.  The Duomatic principle, however formulated, is really only a principle of waiver.  It would be very odd if one could waive the destruction of rights of whose destruction one was ignorant[19]. The 1^st defendant did not have the appropriate knowledge to enable him to assent to any withdrawal of resignation by the plaintiff, let alone that the obtaining of his assent is significant in relation to the matter[20]. This was the principle mentioned by the judge in §37 of the Decision.

33.  As rightly submitted by Mr Vincent Lung for the 1^st and 2^nd defendants[21], in the absence of indication of an attempted withdrawal of the resignation, still less any request from the plaintiff for the Company to assent to such a withdrawal, it cannot be said that the 1^st defendant was in any position to appreciate that his consent was being sought or required.  By the time the plaintiff sent her email of 7 July 2023, there could not be any meeting of minds between the plaintiff and the 1^st defendant (and thereby the Company).

34.  We do not think the statements in Bhavin Rashmi Mehta at §42 would assist the plaintiff.  Those statements must not be read in isolation and must be understood in the context of the case.  There was ample evidence in that case that the director concerned had consented to withdrawal of each notice of resignation served by another director.

35.  The letter of Ellalan dated 29 June 2023 referred explicitly to the plaintiff having tendered her resignation and to her duties surviving the termination of directorship.  The Company sought the delivery up of the Assets held by the plaintiff within seven days in light of the tendering of her resignation.

36.  There is no basis to support the further contention that the plaintiff was re-appointed as a director on 7 July 2023. 

37.  For the above reasons, which are different from those reasons mentioned in §38 of the Decision, we conclude that on an objective assessment of the evidence, the Company did not consent to the withdrawal of the plaintiff’s resignation.  We have therefore dismissed the plaintiff’s appeal with costs.