A director of the 1st Defendant (“ABBY”), the holding company of a payment-services joint venture, applied under ss. 373–375 of the Companies Ordinance (Cap. 622) and at common law to inspect 40 categories of documents. The 2nd to 4th Defendants had answered each item by solicitors’ letter, followed by a sentence in a defendant’s affirmation, producing some documents and asserting that others did not exist or were not held.
The Court allowed all but five items and made four points of general application.
First, the Court confirmed that there is ancillary or inherent jurisdiction to require a respondent to affirm whether the documents have ever existed and been within his possession, custody or power and, if so, what became of them. A bare affirmation of non-existence does not secure proper compliance. This is an instructive clarification of practice: a respondent can no longer discharge the obligation by asserting that documents do not exist or are not held, but must depose to their history.
Secondly, that jurisdiction extends to requiring an affirmation that the documents produced are the complete set.
Thirdly, redesignation away from day-to-day management does not attenuate a director’s right of inspection: responsibility and liability attach to the office.
Fourthly, a shareholders’ agreement restricting inspection cannot trump the right conferred by the Ordinance and the common law, though it may supply context for an allegation of abuse of confidence.
The reasoned decision can be accessed here.
Ernest Ng and Calvin Ng of Parkside Chambers appeared for the Plaintiff.
Read more about Ernest here
Read more about Calvin here
