GORDON DAVID MICHAEL GEORGE OLDHAM (AS RECEIVER OF THE 3,000 ORDINARY SHARES IN WDI INTERNATIONAL (HK) LIMITED REGISTERED IN THE NAME OF MELVIN WAXMAN) v. WDI INTERNATIONAL (HK) LTD AND ANOTHER

HCMP 935/2025

[2026] HKCFI 275

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 935 OF 2025

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DECISION

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A.      Overview

1.  Mr Melvin Waxman (“Mr Waxman”) is a 30% shareholder of WDI International (HK) Ltd (the “Company”).

2.  Mr Li Fei Yu (“Mr Li”) holds 70% shareholding in the Company.

3.  By petition dated 6 June 2025 taken out pursuant to section 724 of the Companies Ordinance (Cap. 724) (the “Petition”), Mr Gordon David Michael George Oldham (“Mr Gordon Oldham”), as receiver of the 30% shareholding registered in Mr Waxman’s name, sought an order that Mr Li (or alternatively the Company) be compelled to purchase the 30% shareholding held under Mr Waxman’s name at a fair value to be determined by the court. It is Mr Gordon Oldham’s case that the affairs of the Company have been conducted in an unfair and prejudicial manner.

4.  Pursuant to the directions made by Anthony Chan J (as Anthony Chan JA then was) on 16 July 2025, this is the substantive hearing for determining the preliminary issue of whether Mr Gordon has locus standi to present the present Petition.

5.  It is not in dispute that Mr Waxman passed away on 24 October 2024. Pursuant to Senior Deputy Registrar Hui’s order dated 29 December 2025, Messrs Oldham, Li & Nie (“OLN”) was appointed as Mr Waxman’s administrator ad collingenda bona and authorized to prosecute the proceedings under the present Petition.

6.  By summons dated 30 December 2025[1], OLN (qua administrator) sought to (i) substitute Mr Gordon Oldham (qua receiver) as the petitioner in these proceedings; and (ii) amend the petition herein to reflect the substitution.

B.      Material Background

7.  The events that gave rise to the present Petition have an unusual procedural history.

8.  Mr Waxman (together with his son, namely Mr Larry Waxman (“Mr Waxman Junior”) and Mr Li were business partners and co-shareholders in the Company (among other corporate entities).

9.  In 2012, Mr Waxman and Mr Waxman Junior commenced HCA 1972/2012 against Mr Li. They were represented by OLN.

10.  The judgment of HCA 1972/2012 (see [2022] HKFI 3579) was handed down in November 2022. In short, Keith Yeung J dismissed the claims brought by Mr Waxman and Mr Waxman Junior, and they were ordered to pay 90% of Mr Li’s costs.

11.  It appears that Mr Waxman failed to pay the legal fees in HCA 1972/2012 to OLN. As such, OLN commenced HCA 263/2023 against Mr Waxman, and obtained default judgment against him on 29 June 2023.

12.  In the circumstances, on 2 January 2024, OLN obtained a charging order over the 30% shareholding registered under Mr Waxman’s name, and on 29 January 2024, Mr Gordon Oldham (who was and still is a partner of OLN) was appointed as receiver of Mr Waxman’s shares in the Company.

13.  On 9 June 2025, Mr Gordon presented the present Petition. As stated in paragraph 7, the “petition is taken out by the receiver of the 3,000 ordinary shares of the Company (the “Shares”) registered in the name of [Mr Waxman]…”.

14.  The petition came before Anthony Chan J (as he then was) at the hearing on 16 July 2025. There, Mr Li’s legal representatives indicated that they took issue in respect of Mr Gordon Oldhma’s locus standi. As such, the learned Judge directed that the Petition be adjourned for the determination of the locus issue.

15.  Before the present Petition was taken out, Mr Waxman passed away in the USA on 24 October 2024.

16.  In around September 2025, OLN engaged US lawyers and took preparatory steps for applying for an ad collingenda bona grant. The process was completed on 29 December 2025.  As mentioned, pursuant to Senior Deputy Registrar Hui’s order dated 29 December 2025, OLN was appointed as Mr Waxman’s administrator ad collingenda bona,and OLN was specifically authorized to prosecute the present Petition.

C.      Mr Gordon Oldham’s Locus Standi

17.  Mr Richard Khaw SC, leading Ms Bonnie Cheng and Mr Martin Ho, (for Mr Li) submitted that Mr Gordon Oldham, who is neither a current member nor a past member of the Company, has no locus standi to pursue the present Petition under section 724 of the Companies Ordinance.

18.  Mr Alexander Tang, together with Ms Lily Yeung, (for Mr Gordon Oldham and OLN) did not seriously dispute Mr Khaw’s submissions.

19.  Section 724(1) and (3) of the Companies Ordinance provide that:-

“(1) The Court may exercise the power under section 725(1)(a) and (2) if, on a petition by a member of a company, it considers that—

(a)the company’s affairs are being or have been conducted in a manner unfairly prejudicial to the interests of the members generally or of one or more members (including the member); or

(b)an actual or proposed act or omission of the company (including one done or made on behalf of the company) is or would be so prejudicial.

(3) The Court may exercise the power under section 725(4) if, on a petition by a past member of a company, it considers that at the time when the past member was a member of the company—

(a)the company’s affairs were conducted in a manner unfairly prejudicial to the interests of the members at that time generally or of one or more members at that time (including the past member); or

(b)an actual act or omission of the company (including one done or made on behalf of the company) was so prejudicial.”

(emphasis added)

20.  According to section 2 of the Companies Ordinance:-

“member (成員), in relation to a company, means—

(a)a founder member of the company; or

(b)a person who agrees to become a member of the company and whose name is entered, as a member, in the company’s register of members;”

(emphasis added)

21.  In Yeung Siu Ming v Man Shing Textiles Ltd [2019] 4 HKC 167 at para 25, Kwan JA (as Kwan VP then was) pointed out that only registered members or shareholders of a company have locus standi to present an unfair prejudice petition pursuant to section 724 of the Companies Ordinance. Her Ladyship stated:-

“For petitions of the present kind to be presented (a contributory’s petition under section 724(1), it is necessary for the petitioner to be registered to be a shareholder. It is immaterial that the registered shareholder holds the share beneficially or on trust.” (emphasis added)

22.  In Li Yiu Keung v Keen Lloyd Resources Ltd [2006] 3 HKLRD 280 at paras 7 to 16, Barma J (as Barma JA then was) further pointed out that a receiver cannot pursue an action in his own name, unless there is a cause of action that is vested in him personally. His Lordship stated:-

“9. Mr Beresford’s submission that an attorney cannot sue in his own name on behalf of his principal where no cause of action vests in the attorney is supported by Jones & Saldanha v Gurney (1913) WN 72 and Davis v Anthony (unrep., English Court of Appeal, 5 July 1995). In the latter case, the Court of Appeal accepted (as the Judge at first instance had pointed out) that if an attorney were to be permitted to sue in his own name, undesirable consequences could follow, in that (for example) an impecunious company might be able to avoid having to give security for costs, or the real plaintiff might be able to avoid liability for costs in the event that his claimed failed…

12. So far as receivers are concerned, the authorities and textbooks are all to much the same effect- the general rule is that a receiver cannot sue in his own name as a receiver, but there are exceptional cases in which he can do so.

……

16. While I would accept that no list of exceptions will be exhaustive, it does seem to me that it is possible to discern from the cases and textbooks that all of the instances of a receiver being entitled to sue in his own name are cases in which there is a cause of action vesting in him personally. Thus, the receiver who because of his receivership receives a cheque made out to him in his own name is able to sue personally on the cheque as he is named payee and holder of it. Similarly, as the bailee of chattels to whom possession has been delivered, he has a possessory title which would suffice to entitle him to maintain an action for conversion, or in bailment. Where he has let premises of which he is the receiver in his own name, he will be entitled to sue as a party to the contract. Similarly, where in the course of his receivership of a business undertaking he enters into contracts in respect of which he incurs personal liability, he will be entitled to sue on such contracts. Where a contract has been assigned to him, he can sue as assignee. But in each of these situations, there is something beyond the mere fact of his receivership that gives rise to a cause of action in him, even though the additional factor may only have come into being as a result of his being appointed receiver in the particular case.

(emphasis added)

23.  Applying the legal principles, I cannot see how it can be said that “there is something beyond the mere fact of [Mr Gordon Oldham]’s receivership that gives rise to a cause of action in him”: Li Yiu Keung (supra) at para 16.

24.  As pointed out by Mr Khaw, the aim of the statutory regime under section 724 of the Companies Ordinance is to protect minority shareholders concerning inequitable acts or conduct that impact on their interest qua shareholders of the Company. As such, the right to claim relief under such a regime must be vested in Mr Waxman. Mr Gordon Oldham, who has never been a shareholder of the Company, has no basis to seek relief under the statutory regime.

25.  For the above reasons, I conclude that Mr Gordon Oldham has no locus standi to present the Petition herein, and the Petition (as it is) is defective.

D.      OLN’s Substitution Application

26.  The next issue to determine is whether instead of dismissing the Petition outright, the court should allow OLN to substitute Mr Gordon Oldham as the petitioner. 

27.  It is hardly disputable that OLN (who has become Mr Waxman’s administrator ad collingenda bona) has locus standi to prosecute the Petition. In this connection, section 723(1)(a) of the Companies Ordinance provides that:-

“In this Division, a reference to a member of a company includes— (a) the personal representative of a person who, immediately before the person’s death, was a member of the company;…”

28.  In the premises, I am satisfied that OLN’s application for substitution pursuant to the summons dated 30 December 2025 is capable of remedying the defect in respect of the existing Petition. It cannot be said that the proposed amendments or the proposed substitution are useless or pointless.

29.  Relying heftily on Hauxwell v Barton-upon-Humber UDC [1974] Ch 432, Mr Tang submitted that where a claimant’s locus standi is challenged, it is open for an application to be made for the substitution of another person as claimant under Order 15, rule 6(2)[2].

30.  I see the force of Mr Tang’s submissions.

31.  It is important to bear in mind that the underlying objectives of the Rules of High Court include (i) increasing the cost-effectiveness of any practice and procedure to be followed and (ii) promoting a sense of reasonable proportion and procedural economy in the conduct of proceedings: see Order 1A, rule 1(a) and (c).

32.  I do not see any compelling reason why instead of prosecuting the claims under the present Petition, the personal representatives of Mr Waxman should be required to take out a fresh petition. This course is not convenient and/or economical.

33.  However, Mr Khaw’s submitted that the present Petition is devoid of merits and doomed to failure. As such, the proposed substitution is futile. In this connection, Mr Khaw submitted, inter alios, that:-

(1)     The gist of the complaint in the Petition is that instead of declaring dividends, the Company was caused to inject its profits into a company named Wodiya, which has been wholly owned by the Company. This could not ipso facto constitute unfair and prejudicial conduct. 

(2)     There is no basis to suggest that Mr Waxman had legal entitlement to the dividends of the Company. Neither Mr Oldham nor OLN was personally involved in the affairs of the Company or Wodiya, and they could not give any meaningful evidence.

34.  In response, Mr Tang submitted that:-

(1)     The Company had at least 3 subsidiary companies on records, including Wodia, Voreto, and WDI Precision. As evidenced by the Company’s financial statements, although the Company received a substantial amount of income over the years, the income had not been retained. Instead, the income was injected into the subsidiaries by way of loans or investments. Nonetheless, the loans and/or investments did not translate to a corresponding increase in the value of the subsidiaries.

(2)     In the financial year ended 31 March 2020, the Company disposed of Voreto (ie 1 of the 3 subsidiaries) in favour of a Mainland company named Eco (Xiamen) Technology Co Ltd (“ECO”), and Mr Li was the legal representative of ECO’s holding company. This was a significant related party transaction. However, there was no disclosure in the Company’s financial statements.

(3)     After Voreto was disposed of, Wodia came into the picture. It had replaced Voreto as the “black hole” that absorbed the Company’s income. It transpired that no dividends have ever been distributed in favour of the Company, and there has been no explanation.

(4)     There is some evidential basis for asserting that Mr Li is the beneficial owner of Wodiya. According to a well-known website for searching information of companies in the Mainland, Mr Li is the legal representative and beneficial owner (受益所有人) of Wodiya. In any event, the focus is not merely whether Mr Li is, legally speaking, the beneficial owner of the shareholding in Wodiya. Instead, the key point is that there is evidence showing that Mr Li has an interest in Wodiya, which gives rises to an issue of conflict.

35.     For present purposes, it is important to stress that pursuant to the directions made by Anthony Chan J (as he then was) on 16 July 2025, the purpose of the present hearing is to determine the issue of locus standi. It is obvious that Anthony Chan J did not envisage that issues relating to the underlying merits of the Petition would be argued substantively at this stage. Thus, his Lordship did not provide directions for the parties to file evidence.

36.     In the absence of substantive evidence from the parties, the court is not in a position to come up with an informed view as to whether the claims under the Petition are obviously doomed to failure as alleged, such that the proposed substitution would be entirely futile.

37.     Initially, I was inclined to the view that it would be preferable to leave it to Mr Li to pursue an application seeking to strike out the present Petition after the proposed substitution is allowed. However, having heard the submissions of Mr Khaw and Mr Tang, I have come to the view that the better course to take is to provide directions for the parties to file substantive evidence on the question of whether it is plain and obvious that the claims under the present Petition are doomed to failure. I take this view for the following reasons:-

(1)     The question of whether the claims under the present Petition are plainly doomed to failure is relevant to the court’s exercise of discretion on whether to allow the proposed substitution. As submitted by Mr Khaw, if it is plain and obvious that the present Petition cannot take off the ground, it would be pointless to allow the proposed substitution.

(2)     With directions for filing substantive evidence, Mr Li will have to identify the bases of his complaints with precision, and, meanwhile, OLN will have the opportunity to file evidence in response to Mr Li’s complaints. This course can ensure fairness, and the parties will know where they stand.

E.      Disposition

E1.    Directions

38.     To sum up:-

(1)     I find and conclude that Mr Gordon Oldham has no locus standi to present the Petition herein.

(2)     The defect in the present Petition can be cured by OLN’s application for substitution pursuant to the summons dated 30 December 2025.

(3)     However, in determining whether the substitution application should be allowed, the court should consider whether it is plain and obvious that the claims under the Petition are liable to be dismissed. To this end, it would be desirable (and indeed necessary) to give directions for the parties to file evidence.

39.     In the premises, in exercise of my discretion and case management powers, I order that:-

(1)     Mr Li shall have leave to file affirmation(s) within 28 days for the purpose of addressing the question of whether it is plain and obvious that the claims under the Petition are liable to be dismissed;

(2)     OLN shall have leave to file affirmation(s) in reply within 28 days thereafter;  

(3)     There be no further evidence without leave of the court; and

(4)     OLN’s summons dated 30 December 2025 seeking substitution be adjourned for further substantive argument with 3 hours reserved in consultation with counsel’s diary.

E2.    Costs

40.     In my view, Mr Li is entitled to recover the costs in respect of the preliminary issue of locus standi from Mr Gordon Oldham.

41.     For the reasons elaborated in Section C above, Mr Khaw’s submissions on locus standi were plainly correct, and Mr Gordon Oldham should not have taken out the present Petition in his own name. Indeed, the defect in respect of the Petition was only sought to be cured when OLN belatedly took out the application seeking substitution on 30 December 2025 (which was about a week before the present hearing took place). In my view, Mr Li was plainly entitled to pursue the challenge before the court.

42.     At the hearing, Mr Tang informed me that a without prejudice letter dated 2 December 2025 was issued to Mr Li’s solicitors, proposing that his challenge of Mr Gordon Oldham’s locus standi be withdrawn and that the present hearing be vacated. In my view, this without prejudice letter would not avail Mr Gordon Oldham at all:-

(1)     First of all, it was proposed that Mr Li’s challenge be withdrawn on the condition that he should pay costs in the sum of HK$100,000. Having said that Mr Li’s challenge was justified and would have succeeded (had OLN not belatedly taken out an application for substitution), Mr Li was entitled to reject the proposal.

(2)     Second, as of the date of the without prejudice letter (ie 2 December 2025), OLN had not yet taken out the substitution application, and it was uncertain as to whether a substitution application would be taken out. In this connection, I do not lose sight of the fact that Mr Waxman passed away as early as 24 October 2024. On the materials before court, I do not see any good reason why Mr Gordon Oldham and/or OLN did not take preparatory steps for obtaining the ad collingenda bona grant earlier. Had this been done earlier, much costs could have been saved. 

43.     In the premises, I order Mr Gordon Oldham to pay Mr Li’s costs in respect of the preliminary issue of locus standi, to be summarily assessed by this court on paper. Mr Li’s legal representatives have already lodged and served his statement of costs. Mr Gordon Oldham shall lodge his statement in opposition within 7 days.

44.     As regards OLN’s summons taken out on 30 December 2025 seeking substitution, I order that costs be reserved.

E3.    Other Matters

45.     Lastly, I express my gratitude to Mr Richard Khaw SC, Ms Bonnie Cheng, Mr Martin Ho, Mr Alexander Tang, and Ms Lily Yeung for their most helpful assistance.