Wong Chi Leung Neville and Another v. Ctrisks Rating Ltd

HCMP 1383 & 1384/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1383 OF 2016

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AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1384 OF 2016

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D E C I S I O N

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1.I am satisfied that based on the special facts of this case, the relief sought should in substance be granted. The special circumstances include the following. During the years in question, namely the financial years 2012 to 2014, the only two shareholders were Mr Wong Chak Sham and Mr Delhaise, and the only two direcors were Ms Anita Wong and Mr Lam Yat Fai up to 1 December 2012, and thereafter, Ms Anita Wong and Mr Neville Wong. The company secretary was Ho Tak Sang (Company Secretaries) Limited.

2.It was realised by the present management at the beginning of this year that no AGM had been held for 2012 to 2015 and the members had not been provided with the audited accounts for those years in general meetings, hence the present application. 

3.The evidence shows, however, that there was close supervision by the shareholders over the financial position of the company through monthly management accounts.  The audited accounts for the years duly signed by the auditors for the years in question were actually provided to the shareholders for consideration, albeit not in the context of general meetings.

4.The evidence also shows that the company, being at the time a quasi-partnership between Mr Wong and Mr Delhaise, was run without formal meetings, although it would appear that the two of them ran the company and communicated on a regular basis. 

5.Further, as a licensed corporation, the company filed with the Securities and Futures Commission each year its audited financial statements, as well as an annual operational review report, in the preparation of which the shareholders were involved. 

6.It follows, it seems to me, that the failure to hold the general meetings and to place the audited financial statements before the members in general meeting was entirely a technical one. 

7.The evidence also shows that the failure had been inadvertent on the part of the directors, in that such administrative steps were delegated by the directors to Mr Delhaise and his assistant, Sonia. In particular, Mr Delhaise was on record the company’s Compliance Officer from December 2012 onwards, assisted by Sonia who was responsible for liaising with the auditors and the company secretary.  It appears the directors had relied on Mr Delhaise, who did not take steps to cause general meetings to be formally convened and held for the purpose of approving the accounts. 

8.In these circumstances, having regard in particular to the fact that the shareholders were at all times fully apprised of the financial position of the company, and given the financial reporting that was done in fact, it seems to me an appropriate case in which to exercise the court’s discretion. 

9.I have also taken into account the measures devised recently by the company to ensure future compliance with the relevant requirements of the Companies Ordinance.

10.I will therefore make the necessary orders under sections 111 and 122 of the previous Companies Ordinance (Cap 32) and under section 610 of the current Companies Ordinance (Cap 622) the terms of which I will now discuss with counsel. 

Mr Vincent Lung, instructed by Loeb & Loeb LLP, for the 1^st and 2^nd applicants in HCMP 1383/2016 and the applicant in HCMP 1384/2016

The respondent in both cases was not represented and did not appear