Read the full judgment text of HCMP 006549/2001 on BabelCite. This High Court CFI judgment was delivered on 26 June 2002 before Yuen JA (sitting as an additional Judge of the Court of First Instance).
Company law – s.114B Companies Ordinance (Cap. 32) – court-convened meeting – impracticability – minority shareholders refusing to attend and thereby rendering EGM inquorate – 88% shareholder, 11.99% shareholder and 0.01% shareholder – shareholding deadlock broken by court-ordered meeting – discretion to order meeting where majority may pass resolutions oppressive to minority – whether court should pre-emptively determine substantive rights and fairness of resolutions at s.114B hearing – Shareholders Agreement and Supplemental Deed governing number and appointment of directors – quorum of 3 directors comprising 1 from each of majority, minority and former Silver Challenge shareholders – board "frozen" since September 2001 due to disputes over director appointments and alleged breach of quorum – failed Qingdao project and related litigation (HCMP 3653/01, HCA 3561/01) – potential negligence claim against EITIC group – conflict of interest in continued retainer of Woo Kwan Lee & Lo – refusal of minority to attend November 2001 EGM – application of Re El Sombrero Ltd, Re Opera Photographic Ltd, Harman v BML Group Ltd, Re Ma On Shan Whitehead Golf Centre Ltd and Re Whitchurch Insurance Consultants Ltd – court orders meeting limited to replacement of missing director Wu by a Plaintiff appointee, leaves other 27 resolutions to be dealt with at properly convened meeting – court declines to construe Supplemental Deed or implied term on Plaintiff's claimed right to appoint 5 directors at s.114B stage – remedies for oppression reserved (unfair prejudice petition, breach of fiduciary duty) – costs nisi that each party bear its own costs.
Legal issues: Impracticability of calling a meeting under s.114B · Exercise of discretion to order a court-convened meeting · Scope of the court's intervention at a s.114B application
Outcome: Application allowed in part; meeting ordered under s.114B of the Companies Ordinance for the limited purpose of considering and, if thought fit, passing a resolution to replace the missing director Wu with a person to be appointed by the Plaintiff. Each party to bear its own costs.