Saff Steel Furniture Factory Ltd v. Wong Sum Hui
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IN THE COURT OF APPEAL 1987 No. 46
___________ BETWEEN
___________ Coram: Hon. Cons, V.-P., Silke, V.-P. & Hunter, J.A. Date of hearing: 11th June, 1987 Date of delivery of judgment: 11th June, 1987 ___________ JUDGMENT ___________ Cons, V.-P.: 1. The Safe Steel Furniture Factory Ltd. was incorporated on the 29th December 1951. One of the Objects set out in its Memorandum, and which presumably has been pursued, was the manufacture of steel furniture. 2. However, in these proceedings we are concerned with the Company as it was some 20 years later, that is in July 1971. It is common ground that at that time it had two directors, Lee Li Shiang and his wife Lee Can May. There were also at that time four shareholders, Lee Li Shiang with 315 shares, Lai Ah Hung, his son by a previous marriage with 100 shares, lee Can May with 210 shares, and a Cheng Chia An, one of the original subscribers to the Memorandum, but apparently no longer on the scene, with a final 125 shares. 3. On the 4th July 1971 Lee Li Shiang died. A Wong Sum Hui was then appointed by Lee’s widow to be manager of the Company, because she did not wish to continue running it on her own. Mr. Wong has put forward a claim to some kind of partnership in the business, which is not accepted by the family, but it is certain that he was at least a long term employee, having worked since 1956 until his recent resignation, apart from a break of six years in the sixties. When Mrs. Lee appointed him manager she promised his some shares in the Company, which she thought “might provide him with an incentive”. 4. Two years later, on the 20th June 1973, we find a curious record of a Directors’ Meeting. Purported to be present were Lee Can May, Lee Li Shiang, whom we know was long dead, and “by invitation” Wong Sum Hui. Three items of business were apparently completed:
Lee Can May confirmed the minutes with her signature. 5. On the 17th September Bought and Sold notes in respect of the 200 shares were executed, - ostensibly at a consideration of $5 per share, although it is common ground that none was in fact given, - and signed by Wong Sum Hui as transferee and Lee Can May, on behalf of her husband, as transferor. On the same day an “Instrument of Transfer” in respect of the shares was similarly signed. The change of ownership is recorded in the Annual return of the Company for the year ended 31st December 1973. 6. Since then much water has flowed beneath the bridge. Other members of the family have come into the business which turned in an unusually large profit in 1985. Nevertheless a petition to wind it up has been filed, although we have few details. 7. In February this year the Company lodged an application to rectify the Register of Shareholders by removing Wong Sum Hui as holder of the 200 shares and substituting the two personal representatives of Lee Li Shiang, i.e. Lee Can May and her daughter, to whom Letters of Administration had been granted on the 22nd March 1972. 8. The application was supported on two grounds, which have been reiterated in this Court; firstly, that the transfer of the shares to Mr. Wong was void under the Articles of the Company, and secondly, that the transfer was void as being effected by only one of two administratrices. The application came before Jones J. some two months ago. He was satisfied that his jurisdiction in this respect was discretionary and that it would be “wholly inequitable” to remove Mr. Wong’s name from the Register as a result of what he termed “irregularities” that had taken place so long ago. He added that he would in any event have held the transfer valid by reason of Section 67 of the Companies Ordinance, which authorizes the transfer of a deceased member’s shares by his personal representative. 9. The Company appeals to this Court. Miss Yuen appears on its behalf, as she did in the court below. She concedes that the jurisdiction is discretionary. Moreover it has become clear in the course of argument that the Company is only interested in the correctness of its Register from the procedural point of view. It seeks no ruling as to the true title to the shares, nor is it concerned with any dispute between Mr. Wong on the one hand and the personal representatives on the other. 10. Within that limit, in my judgment the judge below was absolutely correct in his decision. The Company received the Instrument of Transfer to which I have already referred, signed by a person whose name was upon the Register as a holder of the shares in question. It had of course been signed by a third party on his behalf, but the Company, on the face of things, was at that time satisfied that the third party had the requisite authority to sign; it would seem likewise to have been satisfied that the directors had given approval to the transfer, otherwise it would not have changed the Register as it did. Since then, over a period of 14 years, it has not thought fit until now to raise any question. The Court is concerned in matters of this kind with what Lord Macnaghen called in Trevor v. Whitworth(1) “the equity the applicant has to call for its interposition”. In my view there is no equity whatsoever in the Company which calls for this Court to intervene at the Company’s instance at this stage. 11. Our attention has been drawn to Pellerby v. Rowland & Marwood’s Steamship Co. Ltd(2). In my view that case does not assist. It deals with a different situation, i.e. one in which it was not the company making the application to the court. 12. That case was brought to our attention by Mr. Lo who appears for the personal representatives of Lee Li Shiang. They have been served with notice of the Company’s motion and have appeared, apparently as they did below, to support the Company’s application. Mr. Lo has sought to involve us in the question of title, but for my part I am not prepared to allow these proceedings to be extended beyond the Company’s own application. It may be, but I deliberately express no opinion upon the point, that the Register does not accurately reflect the true title to the shares in question. That is a matter which may perhaps have to be decided in other proceedings. But the judge was not asked to decide that question, nor does it directly concern the Company. 13. For these reasons I would dismiss the appeal.
Silke, V.-P. 14. I am in agreement with the judgment just delivered by my Lord the Vice-President and there is nothing I would wish to or indeed could usefully add.
Hunter, J.A.: 15. I agree. It seems to me here that the Company is trying to put the cart before the horse. Since we have been told that Mr. Wong is the petitioner in the winding up petition, he must found his petitioner upon his position as shareholder. The Company’s advisers seem to have thought that advantage could be taken of Section 100 of the Companies Ordinance, having regard to documentation in the possession of the Company, to show that Mr. Wong was not a shareholder. That would bring his winding up petition to a speedy halt. Section 100(3) specifically empowers the court, on an application made under it, to deal with questions of title. The Company chose not to ask the court to deal with that question. The Company chose to come before the Court relying on matters which it considered so obvious that the Court could exercise it s discretion on documents alone. The real effect is that they are asking the Court to rectify the Register and arrive at a result without dealing at all with underlying question of title. Hence my opening words. 16. I totally agree that the application fails for two reasons. First because the Company as such, for the reasons given by my Lord, has no equity to invite this Court to intervene at all. Secondly, because in my view, it is very far from clear on the face of the documents that the Company, or indeed the personal representatives, are entitled to have the Register rectified.
Miss Maria Yuen (M/s Szeto & Yeung) for the Company/Appellant Thomas Lai (M/s Chow, Griffiths & Chan) for Wong Sum Hui/Respondent M.C. Lo (M/s Arthur K.H. Chan & Shum) for Lee Can May and Lai Wai Kam, the personal representatives of Lee Li Shiang, deceased (1) (1887) 12 App. Cas. 409 at 440 (2) (1902) Ch. 14 |