Pacific Electric Wire & Cable Co Ltd v. Lau Wu Kwai King Lauren and Another
Read the full judgment text of HCMP 2208/2005 on BabelCite. This High Court CFI judgment was delivered on 20 December 2005.
1. This is an originating summons issued under sections 219 and 255 of the Companies Ordinance, Cap. 32 by Pacific Electric Wire & Cable Company Limited (“PEWC”), seeking an order that Central Pacific Enterprises Limited (“CPE”), which is in members’ voluntary liquidation, do allow PEWC to inspect and take copies of all books and papers in the possession of CPE, or such documents taken into the possession of CPE by its liquidators.
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HCMP 2208/2005 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO. 2208 OF 2005 ____________
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_______________ Before: Hon Kwan J in Chambers Date of Hearing: 20 December 2005 Date of Decision: 20 December 2005 _____________ D E C I S I O N _____________ 1.This is an originating summons issued under sections 219 and 255 of the Companies Ordinance, Cap. 32 by Pacific Electric Wire & Cable Company Limited (“PEWC”), seeking an order that Central Pacific Enterprises Limited (“CPE”), which is in members’ voluntary liquidation, do allow PEWC to inspect and take copies of all books and papers in the possession of CPE, or such documents taken into the possession of CPE by its liquidators. 2.The liquidators of CPE do not oppose the application. 3.The originating summons was also served on Robert Ma Kam Fook and Trident (Asia) Limited (“Trident”), although they were not made respondents to the application, as some of the documents held by the liquidators are documents taken into their possession as the result of the execution of an Anton Piller Order made against Mr Ma and Trident in HCMP No. 799 of 2005 on 18 April 2005. 4.The solicitors for Mr Ma and Trident had written to the solicitors for PEWC on 17 December 2005 stating that they have no objection to the originating summons, although they raised the contention that the application was made for a collateral purpose for PEWC to fish for evidence in existing proceedings against their clients. Mr Ma is a defendant in 3 of the actions brought by PEWC but Trident is not a defendant in any of the actions. 5.As the application is effectively unopposed, I will deal with the matter shortly. 6.I am satisfied I have jurisdiction to make the orders sought under the relevant provisions and that PEWC clearly has locus to apply. 7.For the background matters of this application, I refer to the decision I gave in HCMP No. 4691 of 2003 on 4 November 2003 and the decision in HCMP No. 799 of 2005 mentioned earlier. 8.The papers of CPE sought to be inspected by PEWC fall into 2 groups:
9.I am satisfied I ought to exercise my discretion to allow inspection by PEWC for these reasons. 10.PEWC was de-listed in April 2004 because it was unable to provide satisfactory explanation to the regulatory authorities in Taiwan of the propriety of writing off of massive losses. The de-listing of PEWC on the Taiwan Stock Exchange has to date been the biggest corporate scandal in Taiwan and over 300,000 shareholders have suffered loss as a result. The directors of PEWC are seeking to obtain a re-listing of its shares in Taiwan. They would need to conduct further investigations to reconstruct the true financial position of PEWC. Such investigations would include the affairs of CPE, the wholly owned subsidiary of PEWC which carried out treasury functions for the group and through which funds of US$800 million were channelled. 11.With this purpose in mind, PEWC had obtained an order in HCMP No. 4691 of 2003 to reinstate CPE, so the voluntary liquidation of CPE is continuing under the current liquidators, and PEWC has been funding the work of the liquidators. The liquidators’ investigation into CPE would assist PEWC to reconstruct its group financial statements because of CPE’s central role in the financing of PEWC’s activities. PEWC also needs to carry out its own investigation on a whole group basis, and for this purpose, it requires access to the documents held by the liquidators. 12.The investigations carried out by PEWC are likely to benefit the liquidation of CPE. This may alleviate some of the work which the liquidators have to do. Both parties have a common objective to reconstruct the accounts of the group. The liquidators have reached agreement with PEWC to share their papers which were not obtained by virtue of a court order, subject to the mutual reservation of non-disclosure of papers for which legal privilege is claimed and subject to PEWC’s right to withhold papers not relevant to the liquidation of CPE. 13.As for the collateral purpose alleged by Mr Ma and Trident, I do not think there is anything in this point. Trident is not sued by PEWC. As a defendant in 3 of the actions, Mr Ma is obliged to give discovery in any event of the relevant documents. He is sued as an accounting party in these actions. The defence he filed in each of actions does not seem to disclose a positive case. There has been no application taken out by Mr Ma to strike out any of the claims against him. 14.I would grant the relief sought in the originating summons, and make an order as per the draft minute of order submitted by counsel as amended. I make no order as to the costs of this application.
Miss Barbara Wong instructed by Messrs W K To & Co., for the Applicant Mr Hughes of Messrs Simmons & Simmons, for the Respondents |