Wong Wah on v. Tsung Tsin Association and Others
Read the full judgment text of HCMP 2056/2018 on BabelCite. This Court of First Instance judgment was delivered on 10 January 2019 before Hon Harris J.
Companies – Unfair prejudice petition – Companies Ordinance, Cap 622 s.724 – section 725 – Hong Kong incorporated company limited by guarantee – Tsung Tsin Association Limited – petition by member to reconstitute board – extraordinary general meeting convened under article 25 of the Articles of Association – whether EGM duly convened under articles 15 and 16 – whether quorum present – whether resolutions passed on show of hands validly reconstituted the board – 2nd to 10th respondents were former directors whose positions ended by 2008 under article 68 – old board refused to accept EGM resolutions and continued to hold itself out as the board – Companies Registry declined to accept filings of change of director without court order – whether unfair prejudice made out – First issue: whether the EGM was duly convened in accordance with the Articles of Association – held yes, the requisite 50 members under article 15, proper notice under article 16, quorum, and validly passed resolutions – Second issue: whether unfair prejudice established under sections 724 and 725 – held yes, the 2nd to 10th respondents failed to act in accordance with the EGM resolutions, hand over books and records, or cease holding themselves out as the board – relief granted in terms of paragraphs [1] to [5] of the prayer – declaration that the new Executive Committee and Executive Standing Committee form the current committees – order for handover of corporate records, seals, keys, legal documents, title documents, and bank statements within 14 days – order that the 2nd to 10th respondents cease holding themselves out as directors or officers and vacate office space within 14 days – 2nd to 10th respondents to pay the petitioner's costs – Companies (Unfair Prejudice Petitions) Proceedings Rules, Cap 622L
Legal issues: Whether the EGM was duly convened in accordance with the Articles of Association · Whether the petitioner has established unfair prejudice justifying relief under sections 724 and 725
Outcome: Petition granted; orders made in terms of paragraphs [1] to [5] of the prayer; 2nd to 10th respondents ordered to pay the petitioner's costs.
Cited by 1 case · Cites 1 case
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HCMP 2056/2018 [2019] HKCFI 240 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO 2056 OF 2018 ________________
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________________ Before: Hon Harris J in Chambers Date of Hearing: 10 January 2019 Date of Decision: 10 January 2019 ________________ D E C I S I O N ________________ 1.I haver before me a petition dated 20 November 2018 issued by Mr Wong Wah On, a member of the 1st respondent Tsung Tsin Association Limited, pursuant to section 724 of the Companies Ordinance, Cap 622. The 1st respondent is a company limited by guarantee and it was formed on 2 May 1959 (“the Company”). Its objects and its purpose are to protect and promote the industrial, commercial and other lawful interests of the Hakka Community in Hong Kong, China and abroad. The 2nd to 10th respondents were, it is accepted by the petitioner, properly appointed to the board of the Company. However, it would appear that by 2008, their positions as directors of the Company ended as a result of the provisions of the articles requiring board members to stand for re‑appointment if they wish to continue in office, pursuant to article 68 of the Articles of Association. 2.It would appear that in recent years, concerns have arisen amongst members of the 1st respondent concerning the management of the Company and as a consequence, steps were taken by disgruntled members to have an extraordinary general meeting convened at which they could vote on resolutions to reconstitute the board. This eventually took place, as a consequence of requisitions that were served pursuant to article 25, at an extraordinary general meeting on 22 May 2018 (“the EGM”). 3.I am satisfied that the EGM was duly convened in accordance with the Articles of Association of the 1st respondent; the requisite number of members, namely 50, required by article 15 for a requisition was satisfied; article 16 which governs the service of notices convening an extraordinary general meeting was satisfied; the necessary quorum was present at the EGM; and in the absence of the persons who until that time had been holding themselves out as the chairman and vice chairman of the board (or as it is known in the case of the 1st respondent its Executive Committee), they were replaced by a duly elected chairman and resolutions reconstituting the board were duly passed on a show of hands. 4.It would appear that initially, the old board refused to accept that the resolutions passed at the EGM ousted them from office and reconstituted the board. Disputes arose, and one consequence of that is that the Companies Registry has declined to accept the filing of notices of change of director and change the Company’s records in the Companies Registry without an order of the court. As a result, the petition was issued. 5.The petition relies on various grounds for seeking relief. However, as the relief that is sought only concerns the reconstitution of the board and the consequences of its reconstitution, and, although I am satisfied that all the respondents have been properly served, none of them have attended court to oppose the petition, it seems to me it is only necessary to focus on the complaint that the 2nd to 10th respondents have failed to act properly in accordance with the resolutions passed at the EGM and hand over the books and records of the Company to the new board, and to cease holding themselves out as being the board of the Company. 6.I find on the basis of the evidence that has been filed in court that the petitioner’s complaint, that there has been unfair prejudice as a consequence of the matters which I have described in the preceding paragraphs, is made out, and this is an appropriate case for the court to make orders for the necessary relief pursuant to sections 724 and 725. 7.The relief that is sought is contained in the prayer in the petition and is in the following terms:
8.The order that is sought by Mr Singh, who appeared on behalf of the petitioner today, is in the form of the prayer and I will make an order in the terms of [1] to [5] of the prayer to the petition. I will order that the 2nd to 10th respondents pay the petitioner’s costs of the proceedings.
Mr Harprabdeep Singh, instructed by Nixon Peabody CWL, for the petitioner The 1st respondent was not represented and did not appear The 2nd respondent was not represented and did not appear The 3rd respondent was not represented and did not appear The 4th respondent was not represented and did not appear The 5th respondent was not represented and did not appear The 6th respondent was not represented and did not appear The 7th respondent was not represented and did not appear The 8th respondent was not represented and did not appear The 9th respondent was not represented and did not appear The 10th respondent was not represented and did not appear |
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