Read the full judgment text of HCMP 53/2011 on BabelCite. This Court of First Instance judgment was delivered on 5 June 2012 before Deputy High Court Judge L. Chan.
Company law – inspection of company records – sections 152FA and 152FB of the Companies Ordinance (Cap 32) – shareholder's right of access to corporate information – application by equal shareholder to inspect books and records of company licensed to import live pigs from mainland China – applicant initially managed the company alone, generating substantial commission income and profit, but was removed as director in March 2008 – 2nd and 3rd respondents subsequently took over management and engaged Hong Kong Agriculture Special Zone Management Limited as sub-contractor, resulting in bad debts of HK$1,912,938 – whether 'good faith' and 'proper purpose' under s.152FA(3) constitute separate or composite tests – court followed Re LehmanBrown Ltd [2011] 4 HKLRD 237 and Wong Kar Gee Mimi v Hung Kin Sang Raymond [2011] 5 HKLRD 241, holding the two requirements are separate and independent tests – good faith is subjective requirement, proper purpose is objective – whether application made in good faith – held yes, applicant had reasonable questions and respondents failed to provide satisfactory answers – whether applicant demonstrated proper purpose – held yes, protection of shareholder's economic interest and exposure of alleged mismanagement are purposes germane to status as shareholder – filing of s.168A petition does not negate proper purpose and is not a substitute for inspection – scope of inspection – court granted inspection in respect of board minutes, business contracts, management accounts, employment contracts, bad debt records, directors' current accounts, and bank statements, with period extended to financial year ended 31 March 2011 – costs order nisi that 2nd and 3rd respondents pay applicant's costs
Legal issues: Whether 'good faith' and 'proper purpose' under s.152FA(3) constitute separate or composite tests · Whether the application was made in good faith · Whether the applicant demonstrated a proper purpose for inspection · Scope of inspection order
Outcome: Application for inspection of documents granted; 2nd and 3rd respondents ordered to pay the applicant's costs of the application.
Cited by 3 cases