GENERAL LITE GROUP CORP. v. T & L SECURITIES LTD

HCMP 2113/2021

[2023] HKCFI 315

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2113 OF 2021

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BETWEEN

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DECISION

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THE APPLICATION

1.  On 7 October 2022, this Court handed down a Judgment (“the Judgment”) by virtue of which an order of production and inspection of various documents pursuant to section 740 of the Companies Ordinance (“the S.740 Application”) was made against the defendant (“the Order”).

2.  On 21 October 2022, the defendant served a Notice of Appeal against the Judgment.

3.  By summons filed on the same day (“the Summons”), the defendant applied for stay of execution of the Order pending determination of the appeal against the Judgment.

THE LEGAL PRINCIPLES

4.  The legal principles governing stay of execution are trite. In Star Play Development Limited v Bess Fashion Management Co. Ltd. [2007] 5 HKC 84, it was held by Ma J (as his Lordship then was) that the starting point is that the successful party is not to be deprived of the fruits of his success, and it is always relevant to consider the prejudice that would be caused to the successful party in the event a stay is granted.

5.  The existence of an arguable appeal (that is, one with reasonable prospect of success) is the minimum requirement before a court would even consider granting a stay. However exceptional the circumstances may be otherwise justifying a stay of execution, if there exist no arguable grounds of appeal, no stay will be granted.

6.  In the event the court is satisfied that there is a strong likelihood that the appeal would succeed, that in itself would enable a stay to be granted because this would constitute a good reason for a stay.

7.  If there is just an arguable appeal instead of a strong one, the appellant has to provide additional reasons as to why a stay is justified. The demonstration of an appeal being rendered nugatory in the absence of a stay is a common example.

THE ISSUES

8.  Mr Lam and Mr Cheung who act for the plaintiff fairly accepted that the appeal will be rendered nugatory if no stay of execution is granted. However, they contended that there should be no stay of execution because the grounds of appeal are not arguable.

9.  Hence, this Court has to consider the defendant’s grounds of appeal and form a preliminary view on the merits of those grounds.

THE GROUNDS OF APPEAL

10.  The defendant has put forward two grounds of appeal as follows:

(1) This Court has erred in:

(a) disregarding the concept of separate legal entities; and

(b) conflating the personal interest of Bobby Li, as the shareholder of the plaintiff, with the corporate interest of the plaintiff itself,

when determining that the plaintiff’s S.740 Application, construed in its proper context (including section 741 of the Ordinance). In doing so, this Court has wrongly ascribed importance to the fact that Bobby Li is the sole shareholder of the plaintiff. (“Ground 1”)

(2) This Court erred in failing to give due or proper regard to the plaintiff’s and Bobby Li’s admissions against interest made in sworn evidence and in submissions that its application was made for the purpose and benefit of Bobby Li, which does not qualify as a proper purpose of the plaintiff under section 740 of the Companies Ordinance (when construed in its proper context). (“Ground 2”)

11.  In substance, Ground 2 is in support of Ground 1, rather than a separate ground of appeal as such. If Ground 1 fails, Ground 2 cannot stand on its own.

MERITS OF THE APPEAL

12.  It is difficult to understand how the defendant could allege that this Court had disregarded the concept of separate legal entities or conflated the personal interest of Bobby Li, as the shareholder of the plaintiff, with the corporate interest of the plaintiff itself, because it had been made clear in paragraph 38 of the Judgment that the Court would consider:

“whether the purposes put forward by the plaintiff are properly something that pertain to the plaintiff’s corporate interest as a shareholder of the Company as opposed to Bobby Li’s personal interest in disguise.”

13.  Mr Kwan and Ms Chong submitted on behalf of the defendant that:

“It is at least arguable that, in coming to its conclusion at §§37-38 that ‘where Bobby Li is the sole shareholder and director of the plaintiff’, the ‘purposes relied on are proper purposes in the interest of the plaintiff as shareholder of the [defendant]’, the Court has fallen into the same error as the CFI and CA in Perfekta, namely wrongly treating the plaintiff as a mere nominee or alter ego of Bobby Li.”[1]

14.  I am afraid counsel for the defendant had read the relevant parts of the Judgment totally out of context, for they had extracted and put together two phrases from two different paragraphs of the Judgment for the purpose of supporting their submissions for stay of execution.

15.  To understand properly what this Court meant when this Court referred to “where Bobby Li is the sole shareholder and director of the plaintiff”, paragraph 36 of the Judgment must also be quoted. For the sake of completeness, I set out the entirety of paragraphs 36 to 38 of the Judgment as follows:

“36. The Company even went as far as to submit that even if the Court makes an order pursuant to the application, the Company would not consent to disclosure of any information upon inspection to any person who is not the plaintiff (including but not limited to Bobby Li).

37. With greatest respect, this argument is misconceived, at least in the circumstances of the present case, where Bobby Li is the sole shareholder and director of the plaintiff. If Bobby Li is not allowed to read the documents to be provided by the Company to the plaintiff, then in effect no one can read them. This cannot be right.

38. I agree with Mr Lam and Mr Cheung that the question here is: whether the purposes put forward by the plaintiff are properly something that pertain to the plaintiff’s corporate interest as a shareholder of the Company as opposed to Bobby Li’s personal interest in disguise. In this regard, I accept the plaintiff’s argument that the purposes relied on are proper purposes in the interest of the plaintiff as shareholder of the Company.”

(emphasis added on the phrases quoted by the defendant’s counsel)

16.  It can therefore be seen that, when this Court emphasised that Bobby Li is the sole shareholder and director of the plaintiff, it was dealing with the defendant’s stance that “even if an order of inspection were made, it would not allow anyone other than the plaintiff (including but not limited to Bobby Li) to inspect the documents”. I took the view that if even Bobby Li (who is the sole shareholder and director of the plaintiff) were not allowed to inspect the documents to be disclosed, then in effect no one could read those documents.

17.  However, by stating the above, it does not mean that this Court had disregarded the concept of separate legal entity, nor that this Court had equated the personal interest of Bobby Li as the interest of the plaintiff as shareholder of the defendant.

18.  Indeed, the conclusion that “the purposes relied on are proper purposes in the interest of the plaintiff as shareholder of the Company” was reached upon the Court’s consideration of the question posed by the plaintiff’s counsel: “whether the purposes put forward by the plaintiff are properly something that pertain to the plaintiff’s corporate interest as a shareholder of the Company as opposed to Bobby Li’s personal interest in disguise”[2].

19.  It is true that the background of the S.740 Application is that the entire procedure has been necessitated by Bobby Li having lost control of the plaintiff for a number of years. However, I accepted that the plaintiff has made out a reasonable case for investigation because there is a reasonable case that the plaintiff’s interest as a shareholder of the defendant had not been adequately protected while Teresa Pu was in control. This point was explained when this Court dealt with the defendant’s argument that a “but-for” test (“If Bobby Li has not regained control of the plaintiff, would the plaintiff make this application?”)[3] should be applied. It was stated in paragraph 41 of the Judgment that:

“[…] Take the Category 6 documents (relating to management fees) as an example. On the face of the information revealed so far, it appears that management fees in the sum of $2.4 million had been paid to a company of which Teresa Pu’s mother is a director. If the plaintiff (or Bobby Li) is right, this is prima face a related party transaction. If the plaintiff is still under the control of Teresa Pu, I am not surprised at all that she would not mount any challenge against this transaction. However, that does not mean that the fact that the plaintiff is now asking for documents in relation to such management fees means that it must be for the purpose of Bobby Li but not the plaintiff. If there is really impropriety in such a transaction, the plaintiff, as a 40% shareholder of the Company, is obviously entitled to look into the matter.”

20.  The above demonstrated that the Court has to consider carefully whether the purposes put forward by the plaintiff are properly something that pertain to the plaintiff’s corporate interest as a shareholder of the defendant as opposed to Bobby Li’s personal interest in disguise.

21.  As I see it, the defendant is in effect suggesting that the personal interest of Bobby Li and the interest of the plaintiff must be mutually exclusive, and that, as a result, if it is in the personal interest of Bobby Li to inspect the defendant’s documents, then it cannot be in the interest of the plaintiff to do the same. This argument is misconceived and cannot be accepted.

22.  It is also remarkable to note that, in the grounds of appeal and throughout the two sets of written submissions lodged by the defendant in support of this application, the defendant’s counsel had not explained how it could be said that the plaintiff has failed to, in respect of each of the individual categories of documents, establish a reasonable case of investigation from the perspective of the plaintiff.

23.  For reasons of the aforesaid, it is concluded that the grounds of appeal are not arguable.

DISPOSITION

24.  The application for stay of execution pending appeal under paragraph 1 of the Summons is dismissed.

25.  In paragraph 4 of the Summons, the defendant asked that if the application for stay is dismissed by this Court, then an interim-stay of execution of the Order for 14 days should be granted so that it could re-new its application before the Court of Appeal.

26.  The plaintiff did not make any submissions in opposition in this regard in its written submissions.

27.  I therefore order that there be an interim-stay of execution of the Order for 14 days from the date hereof.

COSTS

28.  Costs should follow the event.

29.  I therefore make an order nisi that the defendant shall bear the plaintiff’s costs of the Summons, to be taxed if not agreed.

30.  The above order nisi shall become absolute in the absence of application to vary (which, if any, shall be made by letter, and will be disposed of on paper) within 14 days hereof.

Mr Keith Lam and Mr John Cheung, instructed by Tony Kan & Co., for the plaintiff

Mr Steven Kwan and Ms Fiona Chong, instructed by Vincent T. K. Cheung, Yap & Co., for the defendant

HCMP 2113/2021

[2022] HKCFI 3080

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2113 OF 2021

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JUDGMENT

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THE APPLICATION

1.  By Originating Summons filed on 13 December 2021 (‘the Originating Summons’), the plaintiff applied for an order of production and inspection of various documents of the defendant (‘the Company’) pursuant to sections 620, 653W and 740 of the Companies Ordinance (Cap.622, Laws of Hong Kong) (‘the Ordinance’).  The documents requested may be summarised as follows:

(1)  All minutes of all general meetings and all resolutions of members of the Company for the past 10 years (‘Category 1’);

(2)  The audited financial statements of the Company for each of the financial years from its incorporation to the financial year ended 31 March 2017 (‘Category 2’);

(3)  All records evidencing the bank loans taken out by the Company, or that were outstanding, from 1 April 2011 to the date of the Order (‘Category 3’);

(4)  All records evidencing the shareholders’ loans taken out by the Company, or that were outstanding, from 1 April 2011 to the date of the Order (‘Category 4’);

(5)  All documents provided to the Auditor in preparation of the property investment figures as recorded in the audited financial statements of the Company, for each of the financial years ended 31 March 2017, 2018, 2019 and 2020 (‘Category 5’);

(6)  All records relating to the management fee in the amount of $2,400,000, as recorded in the audited financial statements of the Company for each of the financial years ended 31 Mach 2018, 2019 and 2020 (‘Category 6’);

(7)  The latest Register of Significant Controllers of the Company (‘Category 7’).

2.  The Company has, in the Affirmation of Pu Mei Lee Teresa filed on 11 May 2022 (‘Pu’s Affirmation’), confirmed that it has no objection against producing documents under Category 1 and Category 7 and these documents have indeed been provided to the plaintiff on 27 June 2022[1]. 

3.  However, the Company opposes the application in relation to the documents under Categories 2 to 6.

THE LEGAL PRINCIPLES

4.  Section 740(2) of the Ordinance provides that:

‘The Court may make an order authorizing a person to inspect a record or document if it is satisfied that—

(a)  the application is made in good faith; and

(b)  the inspection is for a proper purpose.’

5.  The applicable legal principles are well settled.  For the purpose of the application before this Court, the following principles are relevant:

(1)  The basis of a member’s right to inspection flows from his proprietary interest in the company.  Although a member does not have a proprietary interest in the assets of a company, he has a very real interest in the company itself.  He can reasonably expect to able to protect his interest and section 740 facilitates this by providing the member with access to corporate information, which might not otherwise be available to him (Wong Kar Gee Mimi v Hung Kin Sang Raymond [2011]5 HKLRD 241, at [17] – [18]);

(2)  The procedure under section 740 of the Ordinance is enacted for the protection of shareholder rights and interests and the community’s more general interest in the maintenance of good corporate governance.  This section should therefore be interpreted and applied in a manner consistent with these legislative objectives.  This can be achieved through taking a generous approach to the interpretation of what constitutes an interest ‘reasonably related’ or ‘germane’ to the applicant’s status as a shareholder (Wong Kar Gee Mimi (supra), at [25]);

(3)  The good faith and proper purpose requirements constitute two separate and independent tests (Wong Kar Gee Mimi (supra), at [14]);

(4)  The Court will determine whether the applicant is acting in good faith and whether the inspection is made for a proper purpose by applying an objective test (Veron International Ltd v RCG Holdings Ltd [2013] 3 HKLRD 657, at [19]);

(5)  The burden of proof rests on the applicant (Veron International Ltd (supra), at [19]);

(6)  While an application made by a substantial and long-standing shareholder may in and of itself discharge the burden of establishing good faith and proper purpose (as opposed to an applicant who has only recently acquired a shareholding in the company) (Wong Kar Gee Mimi (supra), at [23]), there is no presumption in favour of a substantial shareholder of an entitlement to inspect (Re LehmanBrown Ltd [2011] 5 HKLRD 668, at [33]);

(7)  ‘Good faith’ in section 740 of the Ordinance means ‘honesty with no ulterior motive’. This requirement only requires that the applicant himself acts ‘honestly’ with a purpose that he himself believes to be proper (Wong Kar Gee Mimi (supra), at [16]);

(8)  If the applicant’s primary or dominant purpose is a proper purpose, whether an inspection may be of benefit to the applicant for some other purposes is irrelevant (Veron International Ltd (supra), at [19]);

(9)  The rights provided by section 740 should not be regarded as affecting the basic rule of company law that a shareholder should not ordinarily have recourse to the Courts to challenge a managerial decision made by or with the approval of the directors (Veron International Ltd (supra), at [19]);

(10)  An applicant is not entitled to go on a fishing expedition in search of a cause of action to support his or her mere suspicion of wrongdoings.   Section 740 shall not be used as a substitute for pre-action discovery (Wong Kar Gee Mimi (supra), at [40]);

(11)  If the purpose is to investigate alleged misconduct, there must be proper evidence to support a reasonable case for investigation, taking into account any explanations offered by the defendants.  Mere assertions of misconduct will not suffice (Re Bank of East Asia Ltd [2015] 4 HKC 137, at [25]);

(12)  The Court is not required, and should not endeavour, on an application under section 740 of the Ordinance, to reach conclusions about the merits of the matters relied on as constituting a ‘proper purpose’ (Re Bank of East Asia Ltd (supra), at [26]);

(13)  Even where an applicant is acting bona fide and has shown a proper purpose, the Court has a discretion whether to order inspection (Veron International Ltd (supra), at [19]).  When the Court considers whether to exercise the discretion, it is entitled to take into account a wide spectrum of matters (Leung Chung Pun v Masterwise International Ltd [2014] 1 HKLRD 1129, at [25]);

(14)  Insufficient prospect of anything useful resulting from the inspection sought is a relevant consideration  (Wong Kar Gee Mimi (supra), at [39]);

(15)  The fact that the applicant may have other means of obtaining the information elsewhere does not mean that he cannot satisfy the two requirements, but it is relevant to the court’s decision whether to exercise its discretion to grant an order (Veron International Ltd (supra), at [38.2]);

(16)  Confidentiality is a relevant consideration but concerns of confidentiality can be addressed by undertakings restricting the use of information (Re Bank of East Asia Ltd (supra), at [27] & [29]);

(17)  Substantial prejudice to the company in complying with an inspection order is also a relevant consideration (Veron International Ltd (supra), at [38.4]).

THE BACKGROUND OF THE APPLICATION

6.  The factual matters which I set out below are undisputed or indisputable.

7.  The Company was incorporated in 1992.  At all material times, it was used as a vehicle for the development of 11 luxurious houses on Lot 868 of District Lot 1 (‘Lot 868’) in Nga Kau Wan, Lamma Island (‘the Development’).  The sole business and operations of the Company was to construct the Development.

8.  Since June 2002, the shares in the Company were ultimately owned by Bobby Li (40%), Teresa Pu (10%) and Franklin Li (or his successor) (50%).

9.  Bobby Li and Teresa Pu got married in 2000. They separated in 2007.  While they were initially able and willing to communicate with each other on financial and commercial matters after their separation, their relationship deteriorated in around 2011 or 2012 and eventually broke down.  They commenced their matrimonial proceedings in 2019.

10.  Since August 2014, Keung Po Hung (Teresa Pu’s mother) became a director of the Company, together with Legend Times Limited (Teresa Pu’s company) and Innovest Group Ltd (Franklin Li’s company).

11.  Lot 868 was purchased by the Company from the Government in September 1997 at the price of $64 million.

12.  In around 2004, construction work for the Development began.  The construction cost of the Development was funded partly by a construction loan and partly by King Wong Development Ltd (‘King Wong’), a company through which Bobby Li (and others) conducted property development business.[2]

13.  In relation to the construction loan, the Company took out a building loan from the Overseas Union Bank Limited on 23 September 1997 for the sum of around $38 million, and executed a debenture incorporating a building legal charge and a floating charge over Lot 868 and all the Company’s assets to this facility.

14.  In relation to the funding from King Wong, King Wong has paid for the construction and renovation costs of the Development throughout the years in the total sum of over $70 million ($28.6 million as construction costs and $44.7 million as renovation costs).[3]

15.  Construction of the Development was completed in 2012.

16.  It may be recalled that Bobby Li was said to be the ultimate owner of 40% of the shares in the Company.  He held such 40% shareholding via the plaintiff which was incorporated on 13 May 2002.  At the time of its incorporation, Bobby Li was its sole director and shareholder (as the beneficial owner of the sole bearer share in the plaintiff). 

17.  However, in around 2011 or 2012, Bobby Li discovered that Teresa Pu claimed herself to be the sole shareholder and director of the plaintiff.  He therefore commenced HCA 873/2013 against her to claim back his shareholding in the plaintiff.  Eventually, by a Judgment dated 15 May 2019 (‘Lok J’s Judgment’), Lok J ordered Teresa Pu to transfer the shareholding in the plaintiff back to Bobby Li, which Teresa Pu did in May 2020.  The procedure to register such transfer of shares in the BVI was completed in June 2020.

THE PLAINTIFF’S GROUNDS OF INSPECTION

18.  Having regained control of the plaintiff, Bobby Li wrote to Teresa Pu’s solicitors, the Company’s Board of Directors (‘the Board’) as well as Chong Hing Bank Limited to request for access to documents and information pertaining to the Company’s management.  At the end of the day, the Board sent the following documents to the plaintiff’s solicitors:

(1)  A copy of the minutes of the Company’s AGM held on 29 April 2020;

(2)  The audited financial statements for the years ended 31 March 2018 and 31 March 2019 respectively.

19.  It is alleged by the plaintiff that in respect of documents under Categories 2 to 6, it has established a reasonable case for investigation and therefore an order of inspection should be made in respect of those documents. The plaintiff’s case in respect of each Category of documents is summarised below.

Category 2 – audited financial statements

20.  It is Bobby’s Li’s case that he has lost control of the plaintiff since at least 2011, and therefore, he has lost the means to, through the plaintiff, have access to the Company’s documents and financial information since then.

21.  While on his own case Bobby Li only lost control of the plaintiff in 2011, he argued that he should be entitled to inspect the audited financial statements of the Company over the period even prior to 2011, because he said he had all along left the administrative and financial matters of the plaintiff and the Company to Teresa Pu to handle.  He therefore claimed that he should be entitled to obtain copies of the audited financial statements of the Company for each of the financial years from its corporation to the financial year ended 31 March 2017.

Category 3 – records evidencing bank loans

22.  The plaintiff stated that it was found in the Balance Sheet of the audited financial statements for the year ended 31 March 2018 and 31 March 2020 respectively (‘the 2018 Financial Statements’ and ‘the 2020 Financial Statements’ respectively) that the bank loan as at 31 March 2017 and 31 March 2020 were in the sums of $109,995,877 and $107,507,050.38 respectively, which was a significant increase from 2011, when the then corresponding figure was only around $43 million.   It was alleged that there is no legitimate reason for the Company to have a more than doubled amount of bank loans between 2011 and 2017, because the construction of the Development had already been completed in 2012, hence the largest portion of the costs of the Development would have been incurred by then, and the Company did not have any other business up to at least 2019.

23.  The plaintiff had also drawn this Court’s attention to the manner the Company used the bank loans obtained.  While it was stated in Pu’s Affirmation that the Company still had to incur substantial expenses in the post-construction stage (in the form of bank charges/interest, interior design and renovation costs, ongoing maintenance costs and deferred construction and marketing costs) after 2012, the plaintiff’s counsel pointed out that the bank loans were drawn down in significant amounts (in the sums of $20 million, $26 million and $6 million in May 2013, June 2016 and May 2018 respectively), and the entirety of such loans was withdrawn immediately thereafter.  Such one-time withdrawals in significant amounts were said to be inconsistent with the kind of regular continuing expenses in relatively modest amounts as put forward by the Company.

24.  Although the plaintiff made inquiries about such a matter with the Board through correspondence and at the Annual General Meeting held on 7 June 2021, the Board did not give any substantive reply.

Category 4 – records evidencing shareholders’ loans

25.  A similar query was raised in relation to shareholders’ loans.  According to the 2018 Financial Statements, the shareholders’ loan as at 31 March 2017 was recorded at $168,746,440.  The amount rose to $186,456,009.11 as at 31 March 2020.  The plaintiff’s case was that there was no apparent reason why the Company would have to incur such a large amount of shareholders’ loan.

Category 5 – Documents on property investment figures

26.  The plaintiff claimed that, from the 2018 – 2020 Financial Statements, it can be seen that there had been an increase in the value of property investment since 31 March 2017 ($288,429,754 as at 31 March 2017; $291,601,297 as at 31 March 2018; $294,726,165.68 as at 31 March 2019 and 31 March 2020).

27.  Since the construction costs of the Development would have been incurred and funded by the construction loan in the sum of $38 million and by King Wong in the sum of around $70 million by 2012, it was said that the total costs of the Development would not significantly exceed the sums mentioned above.  Hence, it was alleged that the plaintiff should be entitled to information relating to the increased property investment figures.  However, the Board had repeatedly ignored the plaintiff’s repeated queries raised through correspondence.

Category 6 – records relating to management fees

28.  In each of the 2018 – 2020 Financial Statements, there was an item of ‘management fee’ in the sum of $2.4 million on top of the sum of around $400,000 spent on security services.

29.  In Pu’s Affirmation, she disclosed that the said management fees were paid to a company known as Maxrange Development Limited (‘Maxrange’).

30.  According to the plaintiff, subsequent investigation shows that the director of Maxrange is Keung Po Hung, i.e. Teresa Pu’s mother, who is also a director of the Company.

31.  Given Keung Po Hung’s involvement in both Maxrange and the Company, the management agreement reached between the Company and Maxrange is a related party transaction, but this was not disclosed in any of the Company’s financial statements in 2017 to 2020.

THE COMPANY’S GROUNDS OF OPPOSITION

32.  Despite the fact that many grounds of opposition had been mentioned in Pu’s Affirmation, the Company’s counsel only relied on the following three grounds in their written submissions:

(1)  The application is made for the purpose of Bobby Li but not the plaintiff;

(2)  The findings of fact in Lok J’s Judgment are inadmissible herein;

(3)  The scope and breadth of the application show that this application is not made in good faith.

33.  They will be dealt with in turn below.

Application not for the purpose of the plaintiff

34.  The Company’s counsel had referred this Court to various parts of the Affirmations filed by the plaintiff and of the plaintiff’s written submissions so as to demonstrate that it is in fact not the plaintiff as shareholder of the Company but Bobby Li who is interested in finding out the financial position of the Company.  It was submitted that this is not a proper purpose. 

35.  This Court was also reminded of the importance of the concept of separate legal entity.

36.  The Company even went as far as to submit that even if the Court makes an order pursuant to the application, the Company would not consent to disclosure of any information upon inspection to any person who is not the plaintiff (including but not limited to Bobby Li).

37.  With greatest respect, this argument is misconceived, at least in the circumstances of the present case, where Bobby Li is the sole shareholder and director of the plaintiff.  If Bobby Li is not allowed to read the documents to be provided by the Company to the plaintiff, then in effect no one can read them.  This cannot be right.

38.  I agree with Mr Lam and Mr Cheung that the question here is: whether the purposes put forward by the plaintiff are properly something that pertain to the plaintiff’s corporate interest as a shareholder of the Company as opposed to Bobby Li’s personal interest in disguise. In this regard, I accept the plaintiff’s argument that the purposes relied on are proper purposes in the interest of the plaintiff as shareholder of the Company.

39.  The Company then argued that the plain purpose of Bobby Li is to consider whether to mount a challenge (through the plaintiff) to the managerial and commercial decisions of the directors of the Company in the past.  On my part, I cannot see that is the purpose at all. On the other hand, I am satisfied that the plaintiff has established a reasonable case for investigation.

40.  The Company’s counsel then suggested that the matter should be tested by a ‘but-for’ test, and ask: If Bobby Li has not regained control of the plaintiff, would the plaintiff make this application?

41.  I agree with the Company that the answer to this question must be ‘No’.  However, the Court should not disregard the surrounding circumstances of the case.  Take the Category 6 documents (relating to management fees) as an example.  On the face of the information revealed so far, it appears that management fees in the sum of $2.4 million had been paid to a company of which Teresa Pu’s mother is a director.  If the plaintiff (or Bobby Li) is right, this is prima face a related party transaction.  If the plaintiff is still under the control of Teresa Pu, I am not surprised at all that she would not mount any challenge against this transaction.  However, that does not mean that the fact that the plaintiff is now asking for documents in relation to such management fees means that it must be for the purpose of Bobby Li but not the plaintiff.  If there is really impropriety in such a transaction, the plaintiff, as a 40% shareholder of the Company, is obviously entitled to look into the matter.

42.  As far as the financial statements of the Company are concerned, counsel for the Company also submitted that it must be assumed that the plaintiff as a shareholder of the Company has been provided with such financial statements: Morris v Kanssen [1946] AC 459 at 475.

43.  Putting aside the question of whether such a presumption is applicable to a company’s obligation to provide its shareholders with financial statements under sections 429 and 430 of the Ordinance, the circumstances of the present case clearly show that such a presumption, if applicable, is rebutted.  This is because while there is a clear demand on the part of the plaintiff as a shareholder to be provided with such financial statements, the Company has never contended that the plaintiff has been provided with such financial statements before.  Indeed, it would not be difficult for the Company to state that such financial statements had been duly provided to the plaintiff.  To the contrary, Teresa Pu, in her Affirmation, unequivocally stated that the Company would have no objection to the production of the audited financial statement ‘per se’.  The only point that was taken was that the plaintiff’s request to be provided with financial statements from the date of incorporation of the Company is unreasonable.

44.  This ground is therefore rejected.

Lok J’s Judgment inadmissible

45.  The Company’s counsel submitted that the plaintiff had placed reliance on the findings made in Lok J’s Judgment and that this is not permissible since such a Judgment, which concerned an action of which the Company was not a party, is inadmissible herein.  In this regard, the Company’s counsel referred to the following matters which they said Bobby Li and the plaintiff had placed reliance on, namely:

(1)  Bobby Li through King Wong has paid for the construction and renovation costs of the Development in the total sum of over $70 million;

(2)  Bobby Li was all along the sole shareholder of the plaintiff;

(3)  A non-party to these proceedings had exchanged the sole bearer share into a registered share in her name by way of fraud; and

(4)  Bobby Li had ‘lost control’ of the plaintiff from December 2009.

46.  With respect, such an argument is totally misconceived, because, while the plaintiff did refer to the findings made in Lok J’s Judgment in its supporting affidavit, there was in fact direct evidence (apart from one matter – see further below) in the plaintiff’s supporting affidavit (Affidavit of Lo Kwan Wong George) in support of the aforesaid factual matters[4].

47.  The only matter in respect of which no direct evidence has been adduced herein is in relation to the allegation that Teresa Pu had purportedly exchanged the sole bearer share (of which she was keeping custody for Bobby Li) into a registered share in her name by the use of certain forged instruments in December 2009.  However, in my view, the plaintiff’s application is not adversely affected even if the Court does not take this matter into account.

48.  In other words, the plaintiff did not have to rely on Lok J’s Judgment herein, and the inadmissibility thereof has no impact on the present application.

Scope and breadth of the application

49.  Lastly, the Company’s counsel invited this Court to infer, on the basis of the scope and breadth of the inspection sought, that there is lack of good faith on the part of the plaintiff and that it is fishing for information with an ulterior motive.

50.  The mere fact that the application covers a wide scope with great breadth of documents per se, in my view, does not entitle the Court to draw the aforesaid inference.  The first question which this Court must ask is whether the extensive coverage of the documents requested is justified.  Only if it is not justified that the Court would proceed to consider whether such an inference should be made.

51.  In the present case, the Company submitted that:

(1)  Category 1 seeks inspection of documents going back to 10 years ago;

(2)  Category 2 seeks inspection of documents going back to more than 30 years ago;

(3)  Categories 3 and 4 seek inspection of documents going back to 11 years ago.  They go beyond the period for which the Company is required to keep record under the law;

(4)  Category 5 seeks inspection of documents for 4 years which ‘perhaps’[5] amount to virtually all documentation ever produced by the Company.

52.  As far as Category 1 (AGM minutes and resolutions) is concerned, this is an item in respect of which the Company had conceded and agreed to produce for inspection.  It is not open to the Company to complain that the request is unjustified.

53.  In relation to Category 2 (audited financial statements), I agree that the request made is too wide in the sense that the audited financial statements to be provided should not be dated back to the date of incorporation.  As it was the plaintiff’s evidence that Teresa Pu claimed herself to be the sole shareholder and director of the plaintiff in around 2011 or 2012 (which coincides with the time when it was said that the relationship between Bobby Li and Teresa Pu deteriorated), I am of the view that the financial statements to be provided should only cover the period between the year ended 31 March 2012 and 31 March 2017.

54.  Although it was alleged that Bobby Li did not have knowledge as to the financial position even before his relationship with Teresa Pu turned sour, in my view, this should not entitle the plaintiff to inspect financial statements earlier than the financial year ended 31 March 2012.  Given their harmonious relationship at that time, there is nothing which suggests that there is anything which worth investigation.

55.  In respect of Categories 3 and 4 (documents relating to bank loans and shareholders’ loan), though the documents requested date back to 11 years ago, I think such requests are reasonable in the light of the circumstances relied on by the plaintiff.  The fact that such requests go beyond the period for which the Company is required to keep record under the law is neither here nor there.  In any event, it is not the evidence of Teresa Pu that any of the documents which were more than 7 years old had been destroyed or otherwise disposed of.

56.  For Category 5, (documents provided to the auditor in relation to property investment figures), I am satisfied that the request is reasonable, even if that would cover all documentation ever produced by the Company on this matter.  Since those documents had been provided to the auditor before, it should not be difficult for the Company to gather these documents for inspection purpose. 

57.  Hence, the only category of documents which I consider too wide in scope is Category 2.  I do not think that alone would be enough for the Court to infer that there was a lack of good faith on the part of the plaintiff or that it had an ulterior motive in launching this application. 

DISPOSITION

58.  By reasons of the aforesaid, I make an order in terms of the Originating Summons, save that in the Schedule attached to the Originating Summons:

(1)  Paragraphs 1 and 7 be deleted; and

(2)  Paragraph 2 shall read: ‘The audited financial statements of the Company for each of the financial years from the financial year ended 31 March 2012 up to the financial year ended 31 March 2017.

COSTS

59.  Costs should follow the event.  However, the costs order should reflect the result that a small part of the requests has been disallowed.

60.  I therefore make an order nisi that the defendant shall bear 90% of the plaintiff’s costs of the Originating Summons, to be taxed if not agreed.

61.  The above order nisi shall become absolute in the absence of application to vary (which, if any, shall be made by letter, and will be disposed of on paper) within 14 days hereof.

HCMP 2113/2021

[2022] HKCFI 2121

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2113 OF 2021

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DECISION

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BACKGROUND

1.  By Originating Summons filed on 13 December 2021 (“the Originating Summons”), the plaintiff applied for an order of production and inspection of documents pursuant to sections 620, 653W and 740 of the Companies Ordinance (Cap.622, Laws of Hong Kong). The application was supported by the Affidavit of Lo Kwan Wong George filed on the same day (“George Lo’s 1^st Affidavit”).

2.  The defendant opposed the Originating Summons and filed the Affirmation of Pu Mei Lee Teresa on 11 May 2022 (“Teresa Pu’s 1^st Affirmation”) for this purpose.

3.  In reply, the plaintiff filed the followings on 20 June 2022:

(1)  2^nd Affidavit of Lo Kwan Wong George (“George Lo’s 2^nd Affidavit”).

(2)  1^st Affirmation of Li Kin Keung (“Bobby Li”).

4.  The substantive hearing of the Originating Summons was initially fixed to be heard on 30 June 2022. By consent, it was ordered on 2 June 2022 that the matter shall be dealt with by way of paper disposal.

5.  On 27 June 2022, the defendant took out a summons (“the Summons”) and asked for leave to file the 2^nd Affirmation of Pu Mei Lee Teresa (“Teresa Pu’s 2^nd Affirmation”).

6.  This is the hearing of the Summons which was opposed by the plaintiff.

THE NEW EVIDENCE

7.  It was explained in Teresa Pu’s 2^nd Affirmation that the defendant should be given a further opportunity to file evidence for the following reasons:

“7. I have also been advised that the exceptional circumstances presented in the current proceedings would be valid grounds and justification for the Court to order parties to file and serve further round of affidavit evidence and we respectfully seek the Court’s indulgence for the same and the reasons are set out as follows:

(1) The constructions and renovation costs of HK$70 million (the ‘Alleged $70M Costs’) allegedly provided and settled by King Wong is blatantly false and misleading and not supported by any evidence; and more importantly, this very allegation was not mentioned in the Lo’s 1^st Aff, intentionally or otherwise, which the Defendant should have the opportunity to address the same to assist the Court’s truth finding in respect of the Alleged $70M Costs, among others baseless allegations carefully plotted by the Plaintiff for no other purpose than framing the Defendant as the wrongdoer for such fanciful but non-existent fault in the Plaintiff’s head.

(2) There is no reason to deprive the Defendant from reply to such new allegations which ultimately will be important assistance for the Court to reach its decision for the OS, as well as safeguarding the procedural fairness; and

(3) To show to the Court that, by documentary evidence exhibited hereto, the allegations raised by the Plaintiff for supporting its OS was wrong, without basis and completely unjustified, and that these proceedings are not the 1^st occasion the Plaintiff put on this particular show. This time I decided to stand up for myself firmly in the hope shut this nonsense drama of the Plaintiff once and for all.

8. With these in mind, I shall limit the content of this affirmation in replying to the following issues:-

(1) The Alleged HK$70M Costs which King Wong In Fact Never Paid [see Part A hereinbelow];

(2) The Plaintiff’s newly raised concerns over the magnitude was nothing but the fanciful wrongdoing which never happened – the Mortgage Loan was well supported by the Values of the 868 Development at the material time as shown in the relevant valuation reports arranged by the Lending Bank which are new evidence previously unavailable to the Defendant [see Part B hereinbelow];

(3) Clarifications on other allegations created against the Defendant [see Part C hereinbelow].”

8.  I will deal with these matters in turn below.

DISCUSSION

The Alleged $70M Costs

9.  As a matter of background, it is undisputed that the defendant was used as a vehicle for the development of 11 luxurious houses on Lot 868 of District Lot 1 in Nga Kau Wan, Lamma Island (“the Development”).

10.  It goes without saying that this project required capital injection.

11.  While it is the plaintiff’s case that the Development was funded partly ($70 million) by King Wong Development Limited (“King Wong”), a company through which Bobby Li (and others) conducted property development business, the defendant denied such an assertion.

12.  By virtue of Teresa Pu’s 2^nd Affirmation, the defendant would like to adduce evidence so as to explain, among other things, that:

(1)  The Judgment of Lok J given on 15 May 2019 in HCA 341/2013 and HCA 873/2013 (“Lok J’s Judgment”) in which it was mentioned[1] about the Alleged $70M Costs should be disregarded for the purpose of the present case;

(2)  The reason why Teresa Pu had decided not to dispute certain assertions made by Bobby Li in court hearings;

(3)  How the Alleged $70M Costs was in fact used by Bobby Li.

13.  As aforesaid, the defendant alleged that it should be given a chance to file new evidence at this stage because, it was said, the plaintiff’s allegation that King Wong had provided and settled the Alleged $70M Costs was not mentioned in George Lo’s 1^st Affidavit at all. Teresa Pu referred to paragraph 9 of George Lo’s 2^nd Affidavit which provided that:

“The only other matter I referred to the Lok J Judgment for is the fact that it was King Wong (Bobby Li’s company) which paid for the construction and renovation costs of the Development (see paragraph 18 of my 1^st Affidavit). It is clear from paragraph 18 of my 1^st Affidavit that this is my direct evidence (I was personally involved in the matter since 2010 and I have also confirmed this with Bobby Li). I referred to the finding in the Lok J Judgment for the fact that this was disputed in those proceedings by Pu and how the Judge in the end ruled in Bobby Li’s favour out of fairness and completeness. I am advised and I verily believe that: (1) Pu has not given any evidence in her Affirmation disputing that King Wong did contribute those costs, and she has not suggested who else has done so (and I believe this is because she has no basis whatsoever for suggesting otherwise); and (2) in any event this is not an issue that needs to be finally resolved by the Court in this application.”

14.  With greatest respect, the defendant’s allegation that the Alleged $70M Costs was a new matter raised in George Lo’s 2^nd Affidavit is plainly incorrect.

15.  In George Lo’s 1^st Affidavit, it was stated that:

“16. In around 2004, construction work for the Development began. The construction cost of the Development was funded partly by a construction loan and partly by King Wong Development Ltd (‘King Wong’), a company through which Bobby Li (and others) conduct a property development business.

[…]

18. In relation to the funding from King Wong, King Wong has paid for the construction and renovation costs of the Development throughout the years in the total sum of over HK$70 million (to be precise: HK$28.6 million in construction costs and HK$44.7 million in renovation costs). For completeness, this was disputed by Pu in earlier legal proceedings between Bobby Li and Pu, and in the end the Court made the finding that King Wong did contribute such costs. For the present purpose, it is sufficient for me to refer to the finding made in a Judgment by Mr Justice Lok dated 15 May 2019 in HCA 341/2013 & HCA 873/2013) (‘Lok J Judgment’), at paragraph 88 […]” (emphasis added)

16.  In fact, in her 1^st Affirmation in opposition, Teresa Pu had expressly referred to paragraph 18 of George Lo’s 1^st Affidavit. This was what she stated:

“I agree with the background and funding of the construction of the Lot 868 Development mentioned in paragraphs 15 to 17. While I do respect the decision made by Mr Justice Lok as to the contribution of the construction costs of the Lot 868 Development during the early stage of the construction, as a matter of law, the plaintiff could not rely/refer to the finding made in Lok J Judgment as he did in paragraph 18 of P’s Aff.”

17.  Since the Alleged $70M Costs was not a newly raised topic in George Lo’s 2^nd Affidavit, there is no reason why the defendant should be allowed to file further evidence on this issue.

18.  Before I leave this matter, I need to refer to the “Court Note” of counsel for the defendant (taken to be their skeleton submissions) in which they argued in paragraph 9 that:

“These new evidence in Pu’s 2^nd Affirmation is mainly to address the allegations contained in paragraph 9 of Lo’s Affidavit that ‘Pu has not given any evidence … disputing that King Wong did contribute those costs…’. This statement made by Lo was simply untrue and it is only fair if the Plaintiff is allowed to adduce Pu’s 2^nd Affirmation and the new exhibits to correct this contention.”

19.  With greatest respect to counsel, they should not have omitted a very important part of the said paragraph 9 of George Lo’s 2^nd Affidavit. The whole sentence which counsel quoted actually read:

“Pu has not given any evidence in her Affirmation disputing that King Wong did contribute those costs […]” (emphasis added)

20.  In my view, it is clear that George Lo did not say anything untrue when he stated that Teresa Pu did not give any evidence in Pu’s 1^st Affirmation disputing the assertion that King Wong did contribute to the Alleged $70M Costs.

21.  Counsel must be reminded that they must think twice if they chose to omit a part of a sentence when they quoted any passage from the evidence, and they have got to be satisfied that, by doing so, they were not twisting the meaning of the evidence.

The magnitude of the loans

22.  Under this heading, Teresa Pu referred to paragraphs 14 to 23 of George Lo’s 2^nd Affidavit and alleged in her 2^nd Affirmation that:

“19. […] as can be seen in paragraph 18.1 of Lo’s 2^nd Affirmation, the so-called concern from the Plaintiff is now on the magnitude of the bank loans taken out by the Company over the years.

[…]

21. In view of the Plaintiff’s present concern, I am advised that there has been a shifting in goalpost by the Plaintiff who initially claimed in Lo’s 1^st Aff that its concern was ‘some apparently irregular and unexplained transactions disclosed in the Company’s latest financial statements’.

22. I wish to emphasisze that never had the Plaintiff in Lo’s Aff expressed its particular concern over the magnitude of the loans taken out by the Company. As such, I only explained in My 1^st Affirmation the areas and/or nature of the expenses incurred and I simply was not able to respond to such allegation concerning the magnitude which I should have been afforded an opportunity to do so.

23. In the circumstances, as a matter of fairness, I verily believe that I should be given a chance to respond to the Plaintiff’s alleged concern over the magnitude of the loans.” (Teresa Pu’s emphasis)

23.  What was stated in paragraph 18.1 of George Lo’s 2^nd Affidavit was as follows:

“The point I made in my 1^st Affidavit is not concerned with the fact that there were further loans after the completion of construction in 2012 at all, but the magnitude of the further loans. As I mentioned in paragraph 48 of my 1^st Affidavit, the outstanding amount of bank loans was only about HK$43 million in 2011. But the amount of the bank loans increased to about HK$110 million in 2017 (see paragraph 47 of my 1^st Affidavit). Even if the Company had to pay interest on the mortgage loans, such interest cannot possibly account for a drastic increase of the outstanding loan amount of about HK$57 million in the space of 6 years.”

24.  I only have to quote the following paragraphs of George Lo’s 1^st Affidavit to demonstrate that the defendant’s argument here is totally hopeless:

“47. From the audited financial statements for 2018 and 2019, it can be seen that the amount of bank loans under the ‘Non-Current Liabilities’ section for the preceding three years was:

47.1 HK$109,995,877 as at 31 March 2017;

47.2 HK$107,275,704.36 as at 31 March 2018; and

47.3 HK$110,525,164 as at 31 March 2019.

[…]

48. This was a significant increase from 2011, when according to publicly available information, the outstanding amount of bank loans was only about HK$43 million.

[…]

50. In other words, the Company’s borrowing has somehow more than doubled in the period from 2011 to 2017 (a period when the Company was completely controlled by Pu and Franklin Li), and is continuing to increase up to now. As far as Bobby Li and I are aware, there appears to be no legitimate reason for the Company to incur such significant bank loans […]” (emphasis is mine)

25.  While the word “magnitude” did not appear in George Lo’s 1^st Affidavit, the concern on the part of the plaintiff had been clearly expressed therein. There was nothing new in this regard in George Lo’s 2^nd Affidavit. The defendant’s case to adduce further evidence on this matter is simply not made out.

The defendant’s alleged failure to respond to shareholders’ enquiries

26.  Teresa Pu sought to reply by her new Affirmation to the plaintiff’s case that the defendant had failed to respond to shareholders’ enquiries.

27.  Here, she did not even attempt to justify the filing of further evidence.

28.  Worse still, as pointed out by Mr Lam for the plaintiff, the letters which Teresa Pu exhibited to her 2^nd Affirmation had in fact been produced already by George Lo.

29.  The defendant should therefore not be permitted to file further evidence in this regard.

The defendant’s alleged failure to consult Li Kin Keung

30.  Again, this matter had plainly been raised in George Lo’s 1^st Affidavit. The defendant should therefore not be allowed to file further evidence at this stage.

The defendant’s production of documents

31.  By her 2^nd Affirmation, Teresa Pu also sought to provide the plaintiff with some of the documents requested. She does not need to do this by way of affirmation.

The plaintiff’s alleged abuse of process

32.  The last point which Teresa Pu wanted to bring to the attention of this Court was her assertion that the plaintiff’s application under the Originating Summons in fact overlaps with the issues in the matrimonial proceedings between her and Bobby Li. She exhibited an Affirmation which she made in the said matrimonial proceedings (“the FCMC Affirmation”), and submitted that “it is not unreasonable to believe that these proceedings were planned to be oppressive”[2].

33.  It cannot be disputed that this point could have been made in Teresa Pu’s 1^st Affirmation. Further, by the time Teresa Pu’s 1^st Affirmation was filed on 11 May 2022, the FCMC Affirmation was already in existence. There is no doubt that she could have produced this document herein if she so wished.

Other general arguments

34.  Counsel for the defendant further argued that:

“Ultimately, irrespective of how the Plaintiff views the relevancy or probative value of Pu’s 2^nd Affirmation, it should be clear that no significant prejudice would be suffered by the Plaintiff if leave is granted to adduce Pu’s 2^nd Affirmation:

(1) First, directions have been given for the Originating Summons to be proceeded on paper. Thus, the filing of Pu’s 2^nd Affirmation would not disrupt any milestone date previously fixed.

(2) Second, it does not appear that there is any urgency in these proceedings and parties’ rights to substantiate their cases properly should not be compromised;

(3) Third, in the event that leave is granted to adduce Pu’s 2^nd Affirmation, the Company agrees that the Plaintiff should have the right to reply. The Plaintiff will therefore continue to have the last say which was originally accorded to it.”[3]

35.  These arguments are rejected:

(1)  The substantive hearing of the Originating Summons was originally fixed to be heard on 30 June 2022. The hearing date was vacated only because of the Court’s decision to deal with the matter on paper. I am quite sure that the Summons would have been fixed to be heard on 30 June 2022 if the hearing was not vacated. If the Summons were heard on 30 June 2022 right before the substantive hearing of the Originating Summons, the Court would not have agreed to accede to the application made in the Summons unless the defendant could demonstrate that there were exceptional circumstances, because granting leave to file and serve further affirmations would necessarily mean that the substantive hearing date (which is a milestone date) had to be varied. Although we do not have any milestone date as such at the moment[4], this is a matter which the Court must take into account;

(2)  Directions had been given for the purpose of paper disposal of the Originating Summons. According to the timetable set, but for the defendant’s application herein, the defendant should have lodged and served its written submissions by today, followed by the plaintiff’s written reply submissions to be lodged within 2 weeks thereafter. In other words, the making of the present application by the defendant has already caused delay to the whole matter;

(3)  It cannot be disputed that the plaintiff has the right to have the Originating Summons adjudicated on as soon as possible. Hence, the plaintiff would be prejudiced if the directions for lodging of submissions for paper disposal of the Originating Summons have to be stayed any further;

(4)  Even if “no significant prejudice would be suffered by the plaintiff” by reason of the filing of further affirmations, this is just one of the factors which this Court would take into account;

(5)  This Court must bear in mind the underlying objectives of the Civil Justice Reform, especially Order 1A rule 1(b) of the Rules of the High Court (“RHC”) (to ensure that a case is dealt with as expeditiously as is reasonably practicable), rule 1(c) (to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings) and rule 1(d) (to ensure fairness between the parties) in the present case. In my view:

(a)  the Originating Summons should be disposed of as expeditiously as is reasonably practicable;

(b)  a sense of reasonable proportion requires that no leave should be granted for the filing of further evidence unless it is justified in the circumstances;

(c)  it would not be fair to the plaintiff if the defendant is allowed to file further evidence even if such a request cannot be justified;

(d)  I do not agree with the defendant’s counsel when they submitted that “it would be extremely unfair” to the defendant if it were to be deprived of the opportunity to reply to George Lo’s 2^nd Affidavit. The defendant had had its chance to respond to the plaintiff’s case when it filed Teresa Pu’s 1^st Affirmation. There was nothing new in George Lo’s 2^nd Affidavit;

(e)  I also disagree with the defendant’s suggestion that parties’ rights to substantiate their cases properly would be compromised if the Summons is dismissed. As aforesaid, the defendant had had its chance. It cannot blame anyone if for whatever reason it decided not to put in all evidence it had when the affirmation in opposition was filed.

ORDER

36.  By reasons of the aforesaid, the Summons is dismissed.

COSTS

37.  Costs should follow the event.

38.  The defendant shall bear the plaintiff’s costs of the Summons summarily assessed pursuant to Order 62 rule 9A(1)(a) of the RHC at $69,500, which shall be payable on or before 25 July 2022.

Mr Keith Lam, instructed by Tony Kan & Co., for the plaintiff

Mr Eric Leung and Ms Fiona Chong, instructed by Vincent T. K. Cheung, Yap & Co., for the defendant