Read the full judgment text of HCMP 003773/1997 on BabelCite. This High Court CFI judgment was delivered on 12 February 1998 before The Hon Mrs Justice Le Pichon.
Company law – rectification of register of members – Companies Ordinance (Cap 32) s.100(1) – meaning of 'person aggrieved' – whether a director with only an indirect minority beneficial interest in a shareholder qualifies – Articles of Association – pre-emption provisions – waiver by a series of written agreements – whether an 'agreement in writing between all the members' is satisfied – validity of board resolutions – adequate notice of meeting – 23 minutes' notice by fax – irregularity principle – article 88 of Articles validating resolutions agreed by 75% of directors – costs – indemnity basis – where the underlying purpose is to unscramble a commercial transaction – sub-contract / sale of 84% shareholding by five shareholders to Wang Pacific Limited – Infotech's 60% shareholding sold at alleged undervalue – Originating Summons seeking rectification of register and declarations that the 30 July 1997 board meeting and resolutions were void – plaintiff was a director but never a shareholder – plaintiff had only an indirect beneficial interest through a chain of companies – held, the plaintiff was not a 'person aggrieved' under s.100(1) as his name was not to be entered on or omitted from the register – Originating Summons bound to fail in respect of rectification – held, no breach of article 24 of the Articles because the written waivers in the four sale agreements read together with Mr Dickson Chan's separate waiver satisfied the requirement for an agreement in writing between all members – held, the resolutions passed on 30 July 1997 were valid under article 88 of the Articles (resolutions agreed by at least 75% of directors valid without a duly convened meeting) and under the irregularity principle in MacDougall v. Gardner, Browne v. Le Trinidad, Hodgson v. NALGO and Cane v. Jones, since the substantive outcome (the share transfer and director changes) was one the majority was entitled to achieve and the irregularity would not have changed the result – Originating Summons struck out as disclosing no reasonable cause of action – following Re Piccadilly Radio plc, costs ordered on an indemnity basis because the plaintiff's real purpose was to reverse, halt or render void the Infotech/Wang sale transaction, an illegitimate ulterior purpose, and not to discharge any fiduciary duty as a director – no former shareholder entitled to complain had sought to be restored to the register
Legal issues: Whether plaintiff is a 'person aggrieved' under s.100(1) of the Companies Ordinance · Whether there was a breach of the pre-emption provisions in the Articles · Validity of board resolutions passed on 30 July despite alleged inadequate notice · Whether costs should be awarded on an indemnity basis
Outcome: Originating summons struck out as disclosing no reasonable cause of action; costs awarded to the defendant on an indemnity basis.