HCMP 1803/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1803 OF 2009

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D E C I S I O N

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1.  This is an originating summons issued by the Hong Kong Rifle Association (“the Association”) under sections 111(2) and 122(1B) of the Companies Ordinance, Cap.32, seeking directions:

(1)  deeming the annual general meeting of the Association held on 28 March 2009 as its 21^st annual general meeting; alternatively

(2)  the 21^st annual general meeting of the Association be called and be held on 15 November 2009 and one member of the Association present in person or by proxy shall be deemed to constitute a meeting; and

(3)  extending the period for laying the accounts for the years ended 31 December 2007 and 31 December 2008 before an annual general meeting from 9 months to a period as the court deems fit.

2.  The Association, being a company limited by guarantee, was incorporated on 1 October 1986.

3.  On 6 March 2009, the Association lodged the annual return for the year 2008 with its report of the council of the Association and the audited accounts for the year ended 31 December 2007 with the Companies Registry for registration. The registration documents were returned by the Registrar of Companies with an inquiry whether the Association had held an annual general meeting in the year 2008.

4.  The 20^th annual general meeting was held on 24 June 2007. There was no annual general meeting either within 15 months of that meeting or in the year 2008. This failure to hold an annual general meeting was due to inadvertence. The members of the council of the Association work on a voluntary basis and were ignorant of the requirement in section 111(1) to hold an annual general meeting in every calendar year within 15 months after the last annual general meeting.

5.  Upon receiving the letter of the Registrar of Companies dated 9 March 2009, the council immediately called the 21^st annual general meeting and it was held on 28 March 2009. The council’s report and the audited financial statements for the year ended December 2007 were approved in that meeting. The Association re-submitted the registration documents to the Companies Registry on 9 April 2009, they were again returned with an inquiry if section 122 was complied with. Section 122(1A) provides that the directors of a private company shall lay before the company at its annual general meeting a profit and loss account made up to a date not more than 9 months before the date of the meeting.

6.  Hence, the present application was taken out after the Association had sought legal advice.

7.  The honorary secretary for the Association deposed that omission to hold an annual general meeting in compliance with section 111(1) and failure to comply with section 122(1) were inadvertent, and they were not of a nature which would prejudice the position of creditors or members of the Association. He confirmed there has been no judgment against the Association, and no winding-up petition pending against the Association.

8.  To avoid further breach of section 122, the 22^nd annual general meeting was convened on 13 September 2009 to have the financial statements of the Association for the year ended 31 December 2008 laid before the meeting within 9 months after the date the financial statements were made up to. Given the invalidity of the 21^st annual general meeting on 28 March 2009, the 22^nd annual general meeting would also appear to be invalid.

9.  Section 111(2) empowers the court to direct a general meeting to be called if there is default in holding a meeting in accordance with section 111(1). The court has the discretion under section 122(1B) to extend the period provided in section 122(1A) on the laying of a profit and loss account before a company at the annual general meeting.

10.  I am satisfied it would be appropriate to exercise my discretion to grant relief. The failure to comply with the statutory obligations was due to inadvertence and no prejudice would appear to have been occasioned to members of the Association or its creditors. The council would learn from its mistakes and ensure that the Association is to comply with its statutory obligations in future.

11.  The Association does not seek an order in terms of paragraph (1) of the originating summons and does not seek a direction that one member of the Association present in person or by proxy shall be deemed to constitute a meeting, as the election of members of the council has to be re-conducted.

12.  I make an order in these terms:

(1)  the 21^st annual general meeting and the 22^nd annual general meeting of the Association be called and held on 15 November 2009; and

(2)  the period for laying the accounts for the years ended 31 December 2007 and 31 December 2008 before an annual general meeting from 9 months be extended to a period to expire on 15 November 2009.