EASTERN CARIBBEAN SUPREME COURT
TERRITORY OF THE VIRGIN ISLANDS
COMMERCIAL DMSION
IN THE HIGH COURT OF JUSTICE
Claim No. BVlHC (Com) No. 149 of 2013
IN THE MAnER OF SECTION 86 OF THE BUSINESS COMPANIES ACT 2004
AND IN THE MATTER OF AMAZING INC.
BETWEEN:
Appearances:
1 (1901) 2 Ch 431
2 [195811 Ch 900
[1] CHANG HO KWOK DAVID
[2] SILVER SHADOW COMPANY UMITED
and
(1] WlNBLESS INC
[2J AMAZING INC
Mr Jeremy Child and Ms Colleen Farrington for the Claimants
Mr John Carrington QC for the first Defendant
The second Defendant did not appear
2014: March 12
March 19 …………………………………
JUDGMENT
Claimants
Defendants
(Shareholder requesting members meeting under section 82(2) Business
Companies Act, 2004 (‘BCA 1 – no board meeting held for purpose of
convening members meeting – one of two directors pwporting to convene
membels meeting – whether members meeting validly convened – In re
State of Wyoming Syndicate1 considered and followed – shareholder
applying in altemative for Court to convene members’ meeting pursuant to
section 86(1)(a) and (b) BCA – section 86(1}(b) considered – whether
conditions for convening meeting under section 86(1)(a) met – In re EI
Sombrero IJd2 considered and applied – whether fact that purpose of
1
meeting was to remove director meant that section 86(1){a) of no
application – Ross y TeIfonP considered – whether shareholder trustee
to be enjoined to vote at meeting in accordance with beneficiary’s
directions)
11] This is a clcim by the second Claimant, SHver Shadow Company limited (Silver
ShadoW) for a declaration that resolutions purpcrfedly passed on 18 October 2013 by
the second Defendant Amazing Inc (‘the Company’), were validly passed; or
altematively, for an order under section 86(1) of the Business Companies Act, 2004
(‘section 86(1),’1he BCA1 for the amvening of a meeting of the CompanY. coupled with
an order directing the first Defendant. Wmbless Inc (‘Wmbless’), to vote at such meeting
in accordance with the directions of the first Claimant fMr Chang’).
[2) The Company was incorporated in February 1993 under the International Business
Companies Act, 1984. It is common ground that its entire issued share capital is
beneficially owned by Mr Chang. lis function appeas to be to hotS Mr Chang’s interests
in a group of Chang family companies. For reasons whfch are not explained, Its only two
issued shares were issued to and are held by Silver Shadow (one share) and Wmb!ess
(one share). Silver Shadow is owned and contmlled by one of Mr Chang’s brothers and
he is and has been content to vote its share in accordance with Mr Chang’s wishes.
Wmbless is owned and controlled by Mr Chang’s sister (‘Ms Irene Chang’). The
Company has had three directors, Silver Shadow, WinbIess and the siblings’ mother
(‘Mrs Chang’) but the evidenc8 is that Mrs Chang’s mental and physical condition
deteriorated to such an extent that she ceased to be a director of the CompanY’ some
time ago, leaving Wmbless and Silver Shadow as the only two present directors of the
Company.
[3] The Company is required to have at least one and not rmre than seven directors. The
quorum for board meetings (on the fooling that Mrs Chang is no longer a director) is one
director, but a minimum of Ihree days notice of meetings of directors must be given.
Questions arising at board meeUngs are to be decided by a majority. with the chairman
havilg a casting vote. TheIe is no sIalding chainnan of the board. The board has a
power to delegate. but if I1at power has ever been exercised, it has not been exercised
in a sense material to the issues in this case.
[4] The directors have power to convene meeIi1gs of members at such time and place and
fn such manner as they think til Imporla’ltiy for present purposes. they are obr;ed. by
the terms of one of the Company’s Articles of AssocIation, mirroring the provisions of
section 82(2) of the BeA, to convene a members’ meeting on the wriUen request of
J (19971 ICC 945
4 pursuant to Article 56(t) of the Company’s ArtIcles of Association
2
members hokfmg more than 10% of the voting power carried by the Company’s Issued
share capital from time to time. The quorum for a meeting of members is the presence of
a member hoMing at least 50% of the shares of each class – meaning that a meeting
consisting of either of Silver Shadow or Winbless alone would be quorate.
(5] Anally, I should mention that the Company’s Articles of Association provide that transfers
of shares lake effect subject to approval by a resolution of directors, on registration and
surrender of the certificate representing 1he transferred shares. There 818 no default
provisions to deal with the position if the board refuses. or merely withholds, ‘consent to
registration.
The dispute
[6] There is an express written declaration of trust by WDlbIess of its share in the Company
in favot.u” of Mr Chang. The declaration states that Winbless holds the share as his
noninee. Winbless undertakes to transfer the share to Mr Chang, or to his order. on
request The declaration further provides Ihat Mr Chang has the right at any time to
dispose of the share by executing, as Winbless’ agent. all relevant documents of transfer.
including an instrument of transfer and bought and sold notes. Fmally. Mr Chang was
given a power of attorney to complete or alter any transfer so made. In fact. there is in
existence a transfer of the single share executed by Winbless in favour of Mr Chang and
dated 11 J…, 2012 (‘the transfer’). H may be incomplete in certain particulars but, as I
have said, Mr Chang is in a position to fill in any missing particulars.
(7) On 15 August 2012 Mr Chang’s brother sent the transfer to a company seaetarial
agency employed by the Company in Hong Kong fProservet
) asking it to register a
transfer of lite share from Wfnbless to SDver Shadow. This instruction was confinned in
a letter from Mr Chang. Proserve declined the request in the absence of an order of the
Court. citing in support of that refusal ongoing litigation involving the famDy.
(8J Silver Shadow’s next move was to convene a board meeting in November 2012 for the
purpose of considering the transfer and approving registration of Silver Shadow as
member in place of WDlbIess. but Winbless refused to attend on the grounds that it would
be a waste of time for it to do so, saying that the meeting was certain to be deadlocked.
RfghUy or wrongly, Silver Shadow/Mr Chang took Ute view that Ibis refusal meanllhat no
business could be transacted at 1he meeting and Mr Chang subsequenUy brought
proceedings ‘claim no 18′ here to compel Wmbless to transfer legal tiUe in the share to
Silver Shadow and for the rectification of the Company’s register accordingly. An
appfication for summary judgment was dismissed on 15 May 2013. I understand that
that decision is presently under appeal. Those proceedings are therefore currently at a
standstill.
3
[9] In the murse of those proceedings, Ms Irene ChanglWllbless made dear that there was
no objection to a transfer to Mr Chang personally. VVinbiess did, however. object to a
transfer to Silver Shadow in the absence of execution by Mr Chang of a declaration that
in requiring the shm:e to be transfened to SHver Shadow he is not engaged in evading
United States revenue or criminal laws and an indemnity indemnifying Winbless against
any nabnily it might incur by making the transfer to SDver Shadow instead of to Mr Chang.
The reasons given why Ms Irene ChangIWinb!ess should be under any apprehension in
this regard are self evidently spurious. rn fact. and given the terms of the declaration of
trust. Winb!ess can have no gl’Oll1ds for refusing to bansfer the share to any party.at Mr
Chang’s direction, short of such transfer infringing the laws of the Hong Kong SAR,
something which Wmbless does not allege. It has no right to impose conditions for
compliance with its sole beneficiary’s instructions.
[10] On 26 September 2013 Silver Shadow de6vered to the Company. as it was entitled to do,
a written request, dated 25 September 2013 and made pUlSuant to section 82(2) of the
BCA, for the oonvening by the Company of a members’ meeting for the purposes of
considering and approving resolutions removing Winbless (and Mrs Chang senior) from
the Company’s board and for the amsequentiaJ amendment of the Company’s Register
of Directors. A copy of the notice was also sent to SabaIs Law. which had acted for
Wlllbless in claim No 18, asking that the meeting be convened for 18 October 2013 at an
address in Hong Kong. SabaIs Law was asked to confirm that Winbless agreed to the
convening of this meeting and that it would vote at the meeting in accordance with Mr
Chang’s wishes.
[11J On 4 October 2013. without waiting for a response. Harneys sent Wlnbless what
purported to be a notice of meeting of members to consider the resolutions set out in the
requisition. to be held at the date, time and place there mentioned. This notice was
signed by SHYer Shadow as a arrector.
[12] On 7 October 2013 Sabals Law responded to both Ute letter and the notice, pointing out
that it was for the board by resolution. rather than Silver Shadow as a director. to set the
date and place of the meeting and thai no meeting of directors had been convened for
this purpose. There was no pRWision in 1he eeA, the fetter went on, pennitting a single
director to issue a notice oonvening a members’ meeting and Winbless intended on that
account to treat the notice as invalid. After raising some criticisms of the fonn of the
previously proffered insIrument of transfer. Sabals Law restated Winbless’ willingness to
transfer the share to Silver Shadow, but only provided that Mr Chang could satisfy it that
that would not restdt In a liability under United Stales tax legisla1ion. It asked for
confinnation. pending a properly convened meeting. but without giving any reasons
beyond those previously advanced, that the United Stales Inland Revenue Service could
condud a tax auall in relation to Mr Chang’s interest in the Company. Thus Winbless
4
had added fudler condition before it would consent to registration of a transfer to SDver
Shadow or to any person other than Mr Chang.
[13] On 15 October 2013 Harney’s replied. saying they did not agree that a board resolution
was required to mnvene the meeting and repeating that the meeting would take place
three days later, as previously notified. The request for assurance that Winbless would
vote its share in accordance with Mr Chang’s wishes at the meeting was repeated.
(14] SabaIs Law replied on, I think. 16 0cI0ber 2013.5 They said that Wmbless would not be
attending the meeting, on the grounds that it had not been validly convened. The
question about the manner in which the Winbless share was to be voted was not
expressly addressed.
(15] On 18 October 2013 Silver Shadow pwporIed to resolve that Wmbless and Mrs Chang
be removed from the Companys board.
(16) On 26 November 2013 Mr Chang and Silver Shadow commenced the present
proceedings. They seek a declaration that the resolution of 18 October 2013 was
effective to remove WinbIess and Mrs Chang from the Companys board: in the
alternative, they seek an order convening a meeting of the members of the Company
under section 86(1) CIld an order that Wmbless vote its share at the meeting in
aa:ordance with the directions of Mr Chang.
[17] The case was tried on 12 March 2014 on the pleadings and the affirmations and
affidavits of Mr Chang and his brother and Ms Ilene Chang and the material thereto
exhibited. No oral evidence was called.
Was the resolution of 18 October 2013 validly passed and effective?
[18] Mr John Canington ac. for Wmbless,6 submitted that a meeting of members convened
otherwise than pursuant to a valid resolution of a companys board is pn the absence of
some provision in a company’s articles of association making alternative provision) a
nuDity. He relies upon section 82(1) of the BCA. which provides that the directors of a
oompany or a person authorized by the oompany-s memorandum or articles In that behalf
may call a meeUng of members. He also poInts to ArtIcle 27 of the Company’s Articles of
Association, which confers upon the diJectOJs the power to convene meetings of the
Companyl
5 the letter Is actuaDy dated 7 October
‘In view of the Impasse In control. the Company was not represented
7 the same ArtIcle obDges the dJrectars to convene a members’ meeting upon receipt of a valid requisition
5
[19) Mr Carrington relies strongly upon the English authority of In re State of Wyoming
Syndlcate.8 In that case Wright J had to deal with a creditor’s petition for the compulsory
winding up of the company. The petition was opposed on the grounds (1) that the
company had already passed a msolution that it should be wound up voluntarily and (2)
that the petitioning creditor was unable to show that he would be prejudiced by the
continuation of the voluntary winding up. The resolution relied upon had been
purportedly passed in consequence of a requisition delivered to the directors asking them
to convene an extraordinary general meeting to consider a resolution that the company
should be voluntarily wound up as insolvent Unlike section 82(2) of the BCA, the
provision of the English Companies Act 1900 goveming the convening of general
meetings on membersl requisitions contained default provisions. If the directors did not
convene a meeting to be held within 21 days of delivery of the requisition. the
requisitionists (or a majority in value of them) courd proceed themselves to convene a
meeting in the same manner, as far as possible, as a meeting convened by the directors.
Before the expiry of the 21 day period the companys secretary, on his own authority
only, sent out notices of meeting. The meeting took place and was attended by the
requisitionists and by a large number of other sharehoklers. The proposed resolution for
voluntary winding up was passed by the required statutory majority and a liquidator was
appointed. Six days later the creditor issued his petition.
(20] Wright J held that the secretary had had no power to convene the meeting. which. in the
absence of ratification. was a nullity acamIingly.
(21] The case is obviously different in certain respects from the present one. This is not a
winding up case – a feature which strongly influenced Wright J’s decision and indined
him not to treat the maHer as one of mere irregularity. For all Utat, however, it seems to
me that Mr Carrington is right Only the directors of the CompanyD may convene
meetings at which resolutions passed othenvise than unanimously will be capable, of
binding a company. That does not mean. as Mr Carrington appears to say in his written
submissions.10 that the boaJd must be unanimous in convening Ute meeting. nor does it
mean that it is only at meetings duly convened by the board that acts may be done which
bind the company. For example. if all members of a company consent to a proposal,
whether in a meeting (however convened – or even if occurring by accident) or
oiheJWise, their consent wiD bind the company despite the fact that it was not given at a
meeting regularly convened by the board. and Article 44 of tile Company’s ArtIcles of
AssociaUon provides for the Company to be bound by written resolutions subscribed to
by the required majority. without the need for boaJd involvement. But in my judgment it is
not open to one out of a number of directors to convene a meeting of members on its
8 [1901) 2 Ch 431
9 or the Court
10 paragraph 2S
6
own initiative. There may be cases where errors in the convening of meetings can be
treated as mere irregularities, capable of being put right without objection or even
overlooked, but this cannot be such a case. The meeting was obviously convened as the
result of a deliberate decision to bypass Ute board.
(221 I do not think that the position is affected by the fact that both directors had a statutory
obligation to join in convening a meeting in response to the requisition. Section 82(2)
itself recognizes that it is for ‘the directors’ to comply with the obligation and I do not think
that a single director in a case where the board has other members who have not been
cxmsulted on the matter is competent to convene a meeting on his own. The regrettable
absence from section 82(2) of any defadt provisions dealing with what is to happen on
the failure or refusal on the part of a board to comply with a requisition, cannot permit the
Court to step into the gap and supply ad hoc default provisions – such as reaching the
conclusion that since each and every director had an obligation to comply. each board
member who is in favour of such a course must be entitled to call a meeting in the
cDence of a resolution of lie board to that effect. The result, if that were so, could be
chaoS.11
[23] In my judgment. therefore. the purported resolution of 18 October 2013 was ineffective to
bind the Company.
Ought a meeting to be convened pursuant to section 88(1) BCA?
[24] Section 86(1)(8) of the BeA proWfes that If Ite Court is of the opinion that 1t is
impracticable to call or conduct a meeting of a company’s members in the manner
specified in the BeA or the company’s memorandum and articles of association, the
Court may order a meeting of members to be held and conducted in such manner as the
Court ORIels. Section 86(1)(b) confers upon the Court the same power and discretion if it
is of the opinion that it is in the interests of the members of the company that a meeting
of members be held. Mr Jeremy Child, who appeared, together with Us Colleen
Farrington, for the Claiman1s in this matter, relies upon both limbs of section 86(1).
(25) The purpose behind subsection 86(1)(a) is identical to that behind the corresponding
section 371 of the UK Companies Act 1985 (‘section 3711. It is designed to meet the
case where there are olffia.dties in the mechanics of amvening or conducting a meeting
of members. The UK statute. however, contails no provision conespoooing to
subsection 86(1}(b) and unsurprisingly, therefore. I was taken to no authority on the
meaning and effect of that subsection. One is therefore left with the language of the
provision. In my judgment. subsection 86(1)(b). which does not depend upon difficulties
in convening or conducting meetings, is intended to provide the Court wHh a general
power to direct a meeting where it considers that Ute membership of a company as a
11 see the arpment of Mr Gore-8towne in Wyomlns at p 434
7
body would benefit from the holding of a meeting. H is as unnecessary as it wculd be
unwise to imagine factual circumstances where tt might be appropriate to exercise the
power. It is sufticient for pI8S8Ilt purposes to say that it can have no ~on to a
case such as the presen~ where the Court can have no opinion whether a meeting for
the PWp0s8S of removing WinbIess as a director of the Company would be for the benefit
of the Company’s members as a whole. The Court does not take sides in boardroom
disputes.
(26] That leaves sedlon 86(1)(a). on which I was referred to UK authority.
(27] In In 18 EI SombnHo IJd12 the appeUant had acquired 90% of the issued shares of the
company from their previous holder. The respondents held the other 10% and were the
only directors of the company, which had never held a general meeting. It appears that
the respondents were fearful that at any such meeting they would be removed as
diJectols and had managed to prevent that happening by a combination of relying upon
the fact that the quorum for a general meeting of the company was two and not turning
up for meetings. The appeI1ant asked for an order under the materially identical UK
predecessor of section 371 that the Court direct the convening of a meeting of the
company’s members at which the quorum should be one. Wynn-Pany J first considered
the meaning of the word ‘impracticable.’ He held. first that ‘impracticable’ is not
synonymous wi1h ‘impossible’ and went on to say that there was no doubt that it was
possible for the meeting to be convened and held. The question. he said. was whether
as a practical matter the meeting could be conducted and he concfuded that, given the
attitude of the respondents. it coufd not He therefore directed a meeting at which the
quorum should be one. The judge dismissed an argument that by so directing he was
removing an erdiUement in the mspondents to prevent a meeting from being conducted
by use of the quorum provisions by saying that that was not an entiUement which the
respondents enjoyed under the mmpany’s articles. but the resuH of the accidental
distribution of the sharehoklings.
[28] It is important for present purposes to appreciate why it was that In that case Wynn-Parry
J did not oonsider that it was inpracticabIe for a members’ meeting to be convened,
despite the fact that the only two members of the company’s board were opposed to any
such thing happening. The Ie8SOI1 was that if the board refused to act in comp6ance with
a requisition by a qualifying shareholder. the UK Companies Act 1948 gave the
requisitionist the right to convene a vald meeting by himself. That was why the only
difficulty in that case was over the conduct of any meeting. The position is different here,
where the BCA does not give recpsiIonists the right to convene a meeting on the
board’s defautl In the present case, a meeting validly convened could be conducted
J2 (1958) lCh900
8
with a quorum of one shareholder present without the need for any intervention by the
Court. The difficulty. if Ihere Is a dlfftculty. is in the convening of any meeting.
[29] In Ross v TeIford13 1he English Court of Appeal held that section 371 did not entitle the
Court to give directions whose effect would be to disable the right of someone who had
from the outset been and was intended to be an equal board member to brock the
passing of a dlreclors’ resolution to which she objected. The shares in the CXHI1pany in
question fACo1 had from the outset been held equally between a husband and a
company of which he and his wife were equal shareholders (‘BCo·). The quorum for
shareholders’ meetings of each of ACo and BCo was two. The board of each of ACo
and BCo cxmsisted of two persons – the husband and wife. The husband wished the
board of ACo to pass a resolution ratifying proceedings which the husband had
commenced in the name of ACo without the authority of any resolution of ACo’s board.
The wife objected to any such resolution being passed by the ACo board. In the fight of
the wife’s opposition, the husband could not obtain his object without an alteration in the
composition of the ACo board. He therefore sought an order under section 371 for the
convening of a meeting of ACo with a quorum of one. thus sidestepping the wife’s right to
prevent any meeting of ACo being qoorate by refusing, at BCo board level, 10 appoint a
representative of BCo to attend the ACo meeting. The first instance judge did not grant
that renel. Instead. he directed. without any resolution of BCo’s board, that the
husband’s solicitor should be appointed to represent BCo at a meeting of ACo’s
members to be convened for the purpose of considering a resolution to appoint the
solicitor as an additional crrrector of ACo. The effect of the order itself was thus to
destroy the wife’s veto at BCo board level in order to enable her veto at ACo board level
to be overridden.
(30] The EngUsh Court of Appeal held that section 371 could not be used so to arrange
matters that a member without any previous abDity to do so could defeat opposition to a
decision at board level. What was ordered was not, in truth. the facilitating of a
members’ meeting. but an interference with the batance of power within the company
structure.
Discussion
(31] As mentioned earlier. it appears that Mrs Chang senior ceased to be a director of the
Company some time ago and. in that case. that the quorum for a meeting of directors of
the Company is one. If that is correct. then Silver Shadow does not need an order of the
Court to convene a membets· meeting. When I put this to Counsel, neither embraced
the suggestion. perhaps, in Mr Chikfs case. because of concerns that the Company’s
Register of Directors continues to show Mrs Chang senior as a member of its board. At
II (1997) BCC 94S
9
aD events, that was not how the case was argued and I shaD therefore proceed on the
footing that no members’ meeting can be convened without either the consent of
Winbless or an older under section 86(1Xa).
[32] Mr C8nirrJlOn says that section 86(1)(a) Is not In play in this case because there is no
evkIenat that it is impracticabE for a general meeting of the Company to be convened
and no evidenc:e that it would be impractical for it to be conducted. He is plainly right
about the second point, since Silver Shadow has sufficient votes to form a quorum. As
for the convening of such a meellng, Mr C8ninglon submits that in the absence of any
evidence that aly previous attempt to convene a meeting of the board for the purpose of
considering the calDng of a general meeting has been frusbated, there is no evidence
that it would be impracticable to convene a meeting of members. He also subnits. in
reliance upon a dictum in Ross v Telford, that section 86(1) has nothing to do with
meetings of a board.
[33J M 10 the first point I do not accept that there is no evidence that Winbless would
frustrate any attempt to procure a resolution of the Company’s board convening a
members meeting. It is on record as proclaiming that it will not attend board meetings
because they are deadfocked and, thus, a waste of time. Mr Carrington says that that
was said in relation to registration of share transfers, which he says is a different matter.
but I accept Mr ChUd’s submission that Wmbless has evinced a seWed intention, ever
since the transfer was first sent for regisbation. to be as obstructive and uncooperative
as it could manage to be. within the strict IirniIs of the law, in frustrating Mr Chang’s wish
to take this company under the legal ownership of Silver Shadow. It is irrelevant 1I1at that
Intransigence was evinced In relation to the share transfer. rather than the composition of
the Company’s board. There is every reason to believe that Winbless would be no more
co-operative In relation to his wish to remove it as a director than it has been in relation to
the registration of the transfer.
[34] In my judgment therefore. the convening of a members meeting in the present case is
no less impracticable. in the sense explained by Wynn-Pany J. than was the conducting
of a meeting in the case before him. Wmbless might have a change of heal. as night
have had the cftredors in the o1her case, but in each case their track record speaks (or
spoke) to the contrary.
[35] Mr Canington is right that the Court of Appeal in Ross v Telford approved a submission
of munsel to 1he effect that section 371 has nothitll to do with board meetings. That has
to be read In the context in which that case was decided. Nourse W was simply saying
that H was not the function of section 371 to engineer changes in company boardrooms
by interfering with entrenched righls. He was not saying that section 371 can never be
invoked if the object of the members’ meeting in question is to change the constitution of
a company’s board. Indeed. that was the object of the meeting in EI Sombrero itself.
10.
(36) The convening of a meeting in the present case, by contrast, will not destroy entrenched
rights or shift the balance of power in the Company at any level. It is dear that, until she
became incapacitated, MIS Chang senior had a casting vote at meetings of the
Company’s board. The fact that the board now happens to be deadlocked is the result of
the unfortunate accident of her incapacity, not of any structure deliberately designed to
ensure deadlock at board 1eve1, as was the case in Ross v Telford. Winbless never had
an entrenched right to equal representation at board level.
(37) In any case, in the present context the question does not arise. Winbless is cunenly
under a statutory obligation, imposed by section 82(2). to join in convening a meeting of
the Company’s members. It cannot escape from that obligation by saying (even if it were
true) that the outcome of the meeting might be objeclionable on some other ground. If
that were so, H would have its remedy.
(38) In my judgment the necessary conditions for the making of such an order are satisfied
and I consider that justice would be served by making it
An injunction compelling Winbless to vote at Mr Chang’s direction?
[39] The prayer for relief asks for an order directing Winbless to vote its shares in the
Company in accordance with the directions of Mr Chang. There is no doubt that it Is
obliged to do that and the only question for me is whether it is just and convenient that it
should be ordered to do so.
[40] The order is sought under section 86 and/or under the inherent jurisdiction of the Court.
There is nothing in section 86 giving the Court the power to make any such order. The
conduct of the meeting wiD be unaffected by the manner in which, if it attends. Wmbless
uses its voting power.
[41] The question, therefore is whether I shOUld use my discretion under the inherent
jurisdiction to require Winbless to vote in accordance with Mr Chang’s instructions. Mr
Camington says that there is no justification for the making of such an order, becalase.
he submits, Winbless has given no indication that it Will not comply with its responsibility
as trustee. I am afraid that I calnot agree with that Win bless has refused to offer any
comfort in response to direct questions asking whether at any meeting of the Company it
would vote the share in accordance with Mr Chang’s instructions. The given reason for
declining to d~ so (that there has to date been no valid meeting in contemplation. making
the question otiose) does not encourage. More irnportanUy. quite apart from Us obstinate
refusal to cooperate with any step proposed by Mr Chang in relation to registration of the
shu which it holds on his behalf (see above, passim), Winbless has twice14 gone on
record as sayilg that it refuses to comply with Mr Chang’s insbuctions unless he meets
14 see paragraphs 9 and 12 above
11
· ,
conditions which it is not in Wmbless’ power to impose. These are clear breaches of
trust on the part of Winbless. Given a party ready to recotd its determination to remafn in
breach of trust unless iSs illegitimate demands are met.15 it seems to me that there is
every reason to fear that it Will refuse at any meeting convened under seelion 86 to vote
the shares as Olf8Cled by Mr Chang. In my judgment a[l of this more than justifies the
grant of the injJnction sougbl
Conclusion
[42) I shall therefore make an order convening a meeting of the Company for the purpose of
considering resolutions in the tenns of the resolutions set out in the Written Request for
Meeting, dated 25 September 2013, which accompanied Harney’s letter of 26 September
2013 to SabaIs Law. It will be for Silver Shadow to serve notices of the meeting, such
notices to comply with and be subject to Articles 28 and 109-111 of the Company’s
Articles of Association and to be tIeated for aD purposes as notices duly given by the
Company by its dlredors. The meeUng wiD be held at the offioes of 2701 Admiralty
Centre, Tower 1. 18 Harcourt Road, Hong Kong. SAR. or at such other place as may be
considered by Silver Shadow to be convenient for representatives of the members to
attend. on a specified business day not earfier than 14 days following the giving of the
notices. to commence at a spedtied time between the hours of 10.00 am and 4.00 pm
local time. Conduct of the meeting wiD be given to SUver Shadow (by its duly authorized
representative), which shaD transact its busi1ess as nearly as possible in accordance
with the relevant provisions of the Articles of Association of the Company. Silver Shadow
shall make and sign a true minute of the proceedings and place the same when made
with the books and papers of the Company.
(43) For the reasons given abOve. I wiI also make an order that if Winbless attends and votes
at the meeting. It must not vote its shale otherwise than in accordance with the most
recent instructions received by it from Mr Chang or his duly appointed representatives.
Commercial Court Judge
19 March 2014
15 not only are they JIIe&ltImate. the second is incapable of being c:ompDed with In the absence of assistance from
the United States IRS
12