Deng Can Guang v. Toolplus Hongkong Ltd and Others

HCMP 1424/2025 and HCMP 1425/2025

(Heard Together)

[2026] HKCFI 2952

HCMP 1424/2025

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1424 OF 2025

________________________

________________________

BETWEEN

________________________

AND

HCMP 1425/2025

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1425 OF 2025

________________________

BETWEEN

________________________

(Heard Together)

________________________

J U D G M E N T

________________________

A.  Introduction

1.By originating summonses dated 22 August 2025, the Plaintiff asks the court to grant, inter alios[1], the following declarations: -

(1)  the board resolution of the 1^st Defendant, namely Toolplus Hongkong Ltd (the “Company”), dated 2 October 2024 (the “2024 Board Resolution”)  is null, void and invalid; and

(2)  the board resolution of the Company dated 4 March 2025 (the “2025 Board Resolution”)  is null, void and invalid.

B.  Material Background 

2.Since around 1995, the Company has been carrying on a business of trading and manufacturing hardware tools.

3.The Company wholly owns 2 subsidiaries in the Mainland, ie, (i)  進業(天津)輕工製品有限公司; and (ii)  進興(滄州)輕工製品有限公司 (collectively the “Mainland Subsidiaries”).

4.The Company has 3 directors, ie, (i)  the Plaintiff; (ii)  the 2^nd Defendant; and (iii)  the 3^rd Defendant.

5.The shareholding of the Company is as follows: -

Shareholders	Shareholding
The Plaintiff	22.25%
The 2nd Defendant	22.25%
The 3rd Defendant	22.25%
Mr Stanley Yip	22.25%
Harvest Gold Investment Ltd	11%

6.The 2^nd Defendant, the 3^rd Defendant and Mr Stanley Yip are brothers, and the Plaintiff is their relative.  

7.It is obvious that: -

(1)  the 2^nd and 3^rd Defendants are the majority of the Company’s board of directors; and

(2)  the 2^nd Defendant, the 3^rd Defendant and Mr Stanley Yip (who hold 66.75% shareholding together)  are the majority shareholders of the Company.

8.However, the Plaintiff, who was familiar with the business environment in the Mainland, was entrusted to act as the legal representative of the Mainland Subsidiaries.

9.According to the 2^nd and 3^rd Defendants: -

(1)  Since around 2022, the relationship between the Plaintiff on the one hand and on the other hand themselves and Mr Stanley Yip has turned sour due to disagreement regarding the distribution of dividends.

(2)  Subsequently, they discovered that the Plaintiff had established, and was in de facto control of, another Mainland company (namely 天津億盛集團有限公司), which carried on a competing business against the Company and/or the Mainland Subsidiaries.

(3)  Meanwhile, the Plaintiff withheld financial information, and it was believed that there was a serious discrepancy between the Plaintiff’s financial representations and the reality.

(4)  The Plaintiff’s conduct constituted breaches of fiduciary duties.

10.In the circumstances: -

(1)  At the board meeting that took place on 2 October 2024, the 2^nd and 3^rd Defendants passed the 2024 Board Resolution. In gist, it was resolved that (i)  legal proceedings be commenced against the Plaintiff and other related parties; and (ii)  lawyers in the Mainland be appointed to handle the legal proceedings.

(2)  At the board meeting that took place on 4 March 2025, the 2^nd and 3^rd Defendants further passed the 2025 Board Resolution. In gist, it was resolved that the Plaintiff be removed as the legal representative of the Mainland Subsidiaries.

11.In these proceedings, the Plaintiff challenged the validity of the 2024 and 2025 Board Resolutions.

12.Insofar as the 2024 Board Resolution is concerned: -

(1)  It is not in dispute that there was a notice dated 28 September 2024 in respect of the board meeting convened on 2 October 2024.

(2)  However, the Plaintiff said that he did not receive the said notice of meeting by email until 7 October 2024. By this time, the 2024 Board Resolution had already been passed.

(3)  The Plaintiff further emphasized that he was not in Hong Kong at the material times, and 28 September 2024 to 1 October 2024 were weekends and general holiday.  Thus, he could not have received 3 days’ notice in accordance with article 23 of the Company’s articles of association.

13.As regards the 2025 Board Resolution, the Plaintiff said that he had not received any notice in respect of the board meeting on 4 March 2025 at all.

14.In the premises, the Plaintiff commenced the present proceedings on 22 August 2025.

15.However, after these proceedings were commenced, on 13 February 2026, an extraordinary general meeting of the Company was convened (the “2026 EGM”). There, the Company’s shareholders passed, inter alios, an ordinary resolution, affirming the validity of the 2024 Board Resolution and the 2025 Board Resolution.

C.  Deliberation

C1.  The Validity of the 2024 and 2025 Board Resolutions

16.Article 23 of the Company’s articles of association (“Article 23”)  provides that: -

“The Directors shall meet as often as possible and three days’ previous notice shall be given. In the case of emergency a meeting of the Directors may be called by the Chair of the Board of Directors or by any two Directors and, in which case, 24 hours’ previous notice shall be given.”

17.However, by virtue of article 2 of the Company’s articles of association[2], article 100 in Part I of Table A (“Article 100”)  has been adopted or incorporated.  The relevant parts read as follows: -

“The directors may meet together for the dispatch of business, adjourn, and otherwise regulate the meetings, as they think fit…It shall not be necessary to give notice of a meeting of directors to any director for the time being absent from Hong Kong”

18.Mr Richard Yip (for the Defendants)  was correct in pointing out that the notice requirement under Article 23 is subject to the specific caveat set out in Article 100. If a director is absent from Hong Kong, it shall not be necessary to give notice of meeting to him in accordance with the requirements under Article 23.

19.In my view, the words in the caveat under Article 100 are most clear and unequivocal.

20.I cannot see how Mr Kelvin Wong (for the Plaintiff)  can seriously suggest the effect of Article 100 is such that Company’s directors must serve notice on a director who is absent from Hong Kong. This proposed construction is diametrically contradictory to the literal meaning of the words in Article 100. There is no room to twist the words of Article 100 in this manner.

21.On the evidence, I have no doubt that the Plaintiff was not in Hong Kong at the times when notice could have been given to him pursuant to Article 23 and the times when the relevant board meetings took place: -

(1)  Insofar as the board meeting on 2 October 2024 is concerned: -

(a)  As mentioned, the Plaintiff expressly admitted that he was not in Hong Kong during the period from 28 September 2024 to 1 October 2024.

(b)  Whilst the Defendants had flagged up this issue in their affirmations in opposition, the Plaintiff did not seek to retract his admission. He did not suggest that he was in Hong Kong from 28 September 2024 to 1 October 2024 or that he was in Hong Kong on 2 October 2024. The Plaintiff had not adduced a shred of evidence to show that he was in Hong Kong at the material times.

(2)  As regards the board meeting on 4 March 2025: -

(a)  It is the Defendants’ case that they were informed by the Plaintiff’s accountant that he was not in Hong Kong at the material times.

(b)  Despite this assertion, the Plaintiff did not suggest that he was in Hong Kong at the time when notice could have been given to him pursuant to Article 23 and/or the time when the meeting took place. Again, he has not adduced a shred of evidence to show that he was in Hong Kong at the material times.

22.In the premises, I find and conclude that: -

(1)  The Plaintiff was not in Hong Kong (i)  during the 3-day periods before the board meetings on 2 October 2024 and 4 March 2025 took place and (ii)  at the times when the said board meetings took place.

(2)  Hence, by virtue of Article 100, it shall not be necessary to give notices of the said board meetings to the Plaintiff

23.For completeness, I should mention that Mr Kelvin Wong took issue as to whether the 2^nd and 3^rd Defendants genuinely knew and believed that the Plaintiff was not in Hong Kong. There is no substance in this contention. In my view, in considering whether Article 100 is engaged, the question to ask is whether the Plaintiff was in Hong Kong at the material times. The answer to this question is based on objective facts, not the subjective state of mind on the part of the 2^nd and 3^rd Defendants. 

24.In the premises, I conclude that the 2024 and 2025 Board Resolutions (which were passed at the aforesaid board meetings on 2 October 2024 and 4 March 2025)  were not irregular for want of notice. There is no basis for the Plaintiff to challenge the same.

25.For this reason alone, the Plaintiff’s claims in these proceedings should be dismissed.

C2.  Irregularity Principle

26.In any event, I am of the view that the Defendants are entitled to rely on the irregularity principle at common law.

27.In Peter Yip v Asian Eletronics Ltd [1998] 2 HKC 96, 102I, Le Pichon J (as she then was)  stated: -

“The irregularity principle really comes to this: the lawfulness of a decision taken by a meeting of members or board cannot be questioned if the only facts alleged to make it unlawful is a mere informality and irregularity and the intention of the meeting is clear. This is particularly so if there is no evidence that the decision of the meeting would have been different if the correct procedure had been observed.” (emphasis added)

28.In Chen Pao Tzu v Chen Sheng Kuei [2021] 1 HKLRD 1071 at paras 19 and 21, Linda Chan J stated: -

“19. In my judgment, the counterfactual posited by D1 is not the correct one. As the authorities explain, the Court does not simply look to ascertain whether the result of the resolution was one which the majority shareholders would approve of. Rather, it considers whether the same result would have obtained had the correct procedure been followed (Re Dalny Estates, §18 per G Lam J). There is thus an implicit requirement that the irregularity was one which could have been cured by the majority. In other words, the principle does not operate to validate a resolution which the majority shareholders could not have lawfully passed.”

“21. As Mr Lung accepts in his oral submissions, the burden is on the party seeking to rely on the ‘irregularity principle’ to demonstrate that the principle applies, and the threshold is one of inevitability.” (emphasis added)

29.The present case falls squarely within the irregularity principle. As mentioned, the Company’s board consists of (i)  the Plaintiff, (ii)  the 2^nd Defendant, and (iii)  the 3^rd Defendant. Even if there were any irregularity due to questions of notice, the outcome of the board meetings on 2 October 2024 and 4 March 2025 would have been the same, and the 2024 and 2025 Resolutions would have been passed anyhow.

30.Mr Kelvin Wong contended that had the Plaintiff attended the board meetings on 2 October 2024 and 4 March 2025, he might have convinced the 2^nd and 3^rd Defendants (i)  not to cause the Company and/or the Mainland Subsidiaries to commence legal proceedings against him; and (ii)  not to remove him as the Mainland Subsidiaries’ legal representative.

31.In Re Green Valley Investment Ltd [2003] 2 HKLRD 915 at paras 49 to 50, Yuen J (as Yuen JA then was), referring to MacDougall v Gardiner [1875] 1 Ch D 13 at 23, rejected a similar argument. Her Ladyship stated: -

“49. … It has been well-established since MacDougall v Gardiner [1875] 1 Ch D 13 that the majority shareholders are the only persons who can complain about a technical miscarriage of a meeting.

50. James LJ expressly rejected the suggestion (put forward in the present case by counsel for the Plaintiffs)  that minority shareholders are entitled to have a meeting held in strict form so that they could try to persuade the majority shareholders their way (at 23).

‘Has a particular individual the right to have it [a meeting held in strict form in accordance with the articles] for the purpose of using his power of eloquence to induce the others to listen to him and to take his view? That is an equity which I have never yet heard of in this Court, and I have never known it insisted upon before; that is to say, that this Court is to entertain a bill for the purpose of enabling one particular member of the company to have an opportunity of expressing his opinions viva voce at a meeting of the shareholders. If so, I do not know why we should not go further, and say, not only must the meeting be held, but the shareholders must stay there to listen to him and to be convinced by him. The truth is, that is only part of the machinery and means by which the internal management is carried on’.”

32.I agree with observations of Yuen J (as she then was)  and James LJ in Re Green Valley Investment and MacDougall v Gardiner.

33.Indeed, Mr Wong’s contention is simply unreal. The reality was that the parties’ relationship had broken down for years, and the 2^nd and 3^rd Defendants had reasons to believe that the Plaintiff had breached his duties owed to the Company and/or the Mainland Subsidiaries and that the Plaintiff could not be entrusted to act as the Mainland Subsidiaries’ legal representative. I do not believe that the presence of the Plaintiff at the board meetings on 2 October 2024 and 4 March 2025 would have made a difference.

34.Mr Kelvin Wong also sought to contend that the 2^nd and 3^rd Defendants did not act in good faith, such that the irregularity principle is inapplicable.

35.I am unable to agree with Mr Wong.

36.Based on the materials available to the court, I am of the view that the 2^nd and 3^rd Defendants had valid reasons to take the view that: -

(1)  the Company and/or the Mainland Subsidiaries have valid claims against the Plaintiff and the parties that are said to be associated with him; and

(2)  the Plaintiff cannot be entrusted to manage the Mainland Subsidiaries.

37.These are matters of commercial judgment. I am unable to conclude that the 2^nd and 3^rd Defendants exercised their directors’ power in bad faith and/or for improper purposes.

38.For all the above reasons, had I decided that the board meetings on 2 October 2024 and 4 March 2025 were irregular, I would have held that the irregularity principle is engaged, and I would have declined to grant the declarations sought by the Plaintiff.

C3.  The 2026 EGM

39.The fact that the Company’s shareholders had affirmed the validity of the 2024 and 2025 Board Resolutions at the 2026 EGM is another reason why I would have declined to grant the declarations sought by the Plaintiff (had I held that the board meetings on 2 October 2024 and 4 March 2025 were irregular).

40.At the 2026 EGM, the Company’s shareholders resolved, among other things, that: -

(1)  the Plaintiff be removed as a director of the Company (the 1^st resolution);

(2)  Mr Stanley Yip be appointed as a director of the Company (the 2^nd resolution); and

(3)  The 2024 and 2025 Board Resolutions be affirmed (the 3^rd resolution).

41.Mr Kelvin Wong contended that the 2026 EGM was invalid because it was convened for the unlawful purpose of excluding the Plaintiff from participating in the management of the Company.

42.I do not accept Mr Wong’s submissions: -

(1)  First of all, it appears to me that Mr Wong’s contention barks up the wrong tree: -

(a)  Mr Wong’s complaint only concerns the 1^st resolution (ie the Plaintiff be removed as the Company’s director).

(b)  However, for present purposes, the 3^rd resolution (ie the 2024 and 2025 Board Resolutions be affirmed)  is material. The 3^rd resolution ultimately concerns (i)  the legal proceedings against the Plaintiff and (ii)  the Plaintiff’s status as the legal representative of the Mainland Subsidiaries. These matters have nothing to do with the Plaintiff’s ability to participate in the Company’s affairs.

(2)  In any event, I do not see any reason why the Company’s majority shareholders may not take the view that the Company and/or the Mainland Subsidiaries should sue the Plaintiff and that the Plaintiff should no longer act as the legal representative of the Mainland Subsidiaries. Putting the Plaintiff’s case to the highest, he, at most, has grounds to believe the 1^st Defendant, the 2^nd Defendant and Mr Stanley Yip have conducted the Company’s affairs in a manner that is “unfairly prejudicial” to his interest as a member. This does not ipso facto invalidate the relevant corporate acts on the part of the Company at the 2026 EGM, though the Plaintiff may seek appropriate remedies pursuant to sections 724 and 725 of the Companies Ordinance (Cap 622)  (if he considers that it would be feasible and advisable to do so).

43.Mr Kelvin Wong also suggested that the Plaintiff would wish to file further evidence to show that he had been prohibited from participating in the 2026 EGM via Zoom[3].

44.In this connection: -

(1)  I am skeptical about the Plaintiff’s assertion. In his affirmation filed on 6 May 2026 under HCMP 126/2026 (the issues of which touch upon the validity of the 2026 EGM), the Plaintiff did not suggest that he had been prohibited from participating in the 2026 EGM.

(2)  In any event, even if there were any irregularity regarding the proceedings of the 2026 EGM as alleged, the irregularity principle is applicable, and the analysis set out in Section C2 hereinabove is apposite. Had the Plaintiff participated in the 2026 EGM, the 2^nd Defendant, the 3^rd Defendant and Mr Stanley Yip (who collectively held 66.75% shareholding in the Company)  would still have resolved that the 2024 and 2025 Board Resolutions be affirmed, and the outcome would have been the same.

45.For all the above reasons, I am of the view that there was no reason why the Company’s shareholders could not, at the 2026 EGM, resolve to affirm the 2024 and 2025 Board Resolutions. As a result, any alleged irregularity in relation to the 2024 and 2025 Board Resolutions must have been rectified by the Company’s shareholders.

46.As Kwan VP pointed out in Convoy Global Holdings Ltd v Kwok Hiu Kwan [2022] 1 HKC 551 at para 29, a plaintiff, who seeks to invoke the court’s discretionary jurisdiction to grant a declaratory relief, has to satisfy the court that (i)  he has a real interest in the subject matter; (ii)  he has a real interest in obtaining a declaration against the adverse party; and (iii)  the adverse party is a proper contradictor.

47.Having said that any alleged irregularity in relation to the 2024 and 2025 Board Resolutions must have been rectified already, the Plaintiff is plainly unable to satisfy requirement (ii).

D.  Disposition

48.For all the above reasons, I dismiss the Plaintiff’s originating summonses herein dated 22 August 2025.

49.There is no reason why costs should not follow the event.

50.I order the Plaintiff to pay the Defendants’ costs in these proceedings, to be taxed if not agreed[4].

51.I thank Mr Kelvin Wong, Mr Allen Tze, and Mr Richard Yip for their helpful assistance.

Mr Kelvin Wong and Mr Allen Tze, instructed by M/s Benny Kong & Tsai LLP, for the Plaintiff

Mr Richard Yip, instructed by M/s Or & Partners for the 1^st to 3^rd Defendants