LAM YAN YEE AND ANOTHER v. THIS THIS RICE (HONG KONG) LTD AND OTHERS

LAM YAN YEE AND ANOTHER v. THIS THIS RICE (HONG KONG) LTD AND OTHERS

The plaintiffs' asserted purpose to verify whether dividends are payable under the shareholders agreement is a proper purpose under section 740; while audited financial statements and management accounts would normally suffice, the absence of verified audited accounts and evidence of suspicious conduct by defendants...

Source-derived case information.

Citation
[2025] HKCFI 1378
Parties
1st Plaintiff: Lam Yan Yee; 2nd Plaintiff: Tse Hiu Wang; 1st Defendant: This This Rice (Hong Kong) Limited; 2nd Defendant: Lin Xiaoling; 3rd Defendant: Keung Hon Sing Samuel
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
3 April 2025
Case Number
HCMP1979/2024
Procedural Posture
Section 740 Companies Ordinance Inspection Application / Decision on Originating Summons
Legal Topics
Section 740 Companies Ordinance, Inspection of Company Records, Subsidiary Records, Dividends, Shareholders' Agreement, Removal of Directors
Source Language
en
Company Law Shareholder Disputes Civil Procedure Evidence Section 740 Companies Ordinance Inspection of Company Records Subsidiary Records Dividends +2 more

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Parties

Lam Yan Yee

1st Plaintiff

Tse Hiu Wang

2nd Plaintiff

This This Rice (Hong Kong) Limited

1st Defendant

Lin Xiaoling

2nd Defendant

Keung Hon Sing Samuel

3rd Defendant

Procedural Posture

Section 740 Companies Ordinance Inspection Application / Decision on Originating Summons

Legal Issues

  1. 1 Whether documents of the subsidiary companies fall within the scope of 'records or documents of the company' under section 740
  2. 2 Whether the applicants have a proper purpose to inspect the requested documents
  3. 3 Whether audited financial statements and management accounts offered by defendants are sufficient

Ratio Decidendi

The plaintiffs' asserted purpose to verify whether dividends are payable under the shareholders agreement is a proper purpose under section 740; while audited financial statements and management accounts would normally suffice, the absence of verified audited accounts and evidence of suspicious conduct by defendants justifies a wider investigatory inspection, subject to the principle that only subsidiary records in the company's possession or to which the company is legally entitled fall within section 740.