PHILIP JEFFREY ADKINS v. ZPMC-RED BOX ENERGY SERVICES LTD AND OTHERS

PHILIP JEFFREY ADKINS v. ZPMC-RED BOX ENERGY SERVICES LTD AND OTHERS

The Court held that the plaintiffs (majority directors) are entitled to inspect and take copies of the Company’s accounting records including subsidiary records from 28 September 2016 to the date of judgment, because the right of inspection belongs to directors at common law and under the company’s articles, the Group’s records have been treated as the Company’s records, and Adkins and Muilwijk had possession, custody or control of those records; the BOC bank account documents were excluded from the order; Adkins’ objections (control of the Company, documents being subsidiary records, lack of particularity) were rejected; costs nisi ordered against Adkins on a common fund basis to be...

Citation
[2021] HKCFI 618
Parties
1st Plaintiff (hcmp 928/2020): Chen Bin (陳斌); 2nd Plaintiff (hcmp 928/2020): Liu Jianbo (劉健波); 3rd Plaintiff (hcmp 928/2020): Sun Guangbo (孫廣波); 4th Plaintiff (hcmp 928/2020): Li Chunkai (李純愷); 1st Defendant (hcmp 928/2020); 1st Respondent (hcmp 971/2020): ZPMC-Red Box Energy Services Limited (振華海洋能源 (香港) 有限公司); 2nd Defendant (hcmp 928/2020); Plaintiff (hcmp 971/2020): Philip Jeffrey Adkins; 3rd Defendant (hcmp 928/2020): Christiaan Pieter Muilwijk; Plaintiff (hcmp 971/2020): Philip Jeffrey Adkins; 2nd Defendant (hcmp 971/2020): Chen Bin (陳斌); 3rd Defendant (hcmp 971/2020): Li Chunkai (李純愷); 4th Defendant (hcmp 971/2020): Liu Jianbo (劉健波); 5th Defendant (hcmp 971/2020): Sun Guangbo (孫廣波)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
10 March 2021
Case Number
HCMP971/2020
Procedural Posture
Directors' Inspection Applications Under Sections 373–378 Companies Ordinance (cap. 622); Related Shareholder/director Dispute / Judgment (heard Together; Judgment Delivered 10 March 2021)
Outcome
Order granted in part for plaintiffs; inspection order for company accounting records (including subsidiaries' records) granted from 28 September 2016 to date, excluding BOC Documents; costs ordered nisi against Adkins on common fund basis
Legal Topics
Statutory Inspection Under Ss 373–378 Companies Ordinance, Directors' Right to Inspect Company and Group Accounting Records, Scope of Company Documents Vs Subsidiaries' Documents, Costs Order on Common Fund Basis
Source Language
EN
Company Law Directors' Duties and Rights Civil Procedure Statutory Inspection Under Ss 373–378 Companies Ordinance Directors' Right to Inspect Company and Group Accounting Records Scope of Company Documents Vs Subsidiaries' Documents Costs Order on Common Fund Basis

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Parties

Chen Bin (陳斌)

1st Plaintiff (hcmp 928/2020)

Liu Jianbo (劉健波)

2nd Plaintiff (hcmp 928/2020)

Sun Guangbo (孫廣波)

3rd Plaintiff (hcmp 928/2020)

Li Chunkai (李純愷)

4th Plaintiff (hcmp 928/2020)

ZPMC-Red Box Energy Services Limited (振華海洋能源 (香港) 有限公司)

1st Defendant (hcmp 928/2020); 1st Respondent (hcmp 971/2020)

Philip Jeffrey Adkins

2nd Defendant (hcmp 928/2020); Plaintiff (hcmp 971/2020)

Christiaan Pieter Muilwijk

3rd Defendant (hcmp 928/2020)

Philip Jeffrey Adkins

Plaintiff (hcmp 971/2020)

Chen Bin (陳斌)

2nd Defendant (hcmp 971/2020)

Li Chunkai (李純愷)

3rd Defendant (hcmp 971/2020)

Liu Jianbo (劉健波)

4th Defendant (hcmp 971/2020)

Sun Guangbo (孫廣波)

5th Defendant (hcmp 971/2020)

Procedural Posture

Directors' Inspection Applications Under Sections 373–378 Companies Ordinance (cap. 622); Related Shareholder/director Dispute / Judgment (heard Together; Judgment Delivered 10 March 2021)

Legal Issues

  1. 1 Whether majority directors can bring inspection application against company they control (Control Issue)
  2. 2 Whether documents held by subsidiaries form part of the company's accounting records and are inspectable (Subsidiaries Issue)
  3. 3 Whether the claim for documents was sufficiently particularised and capable of compliance (Specificity Issue)

Ratio Decidendi

The Court held that the plaintiffs (majority directors) are entitled to inspect and take copies of the Company’s accounting records including subsidiary records from 28 September 2016 to the date of judgment, because the right of inspection belongs to directors at common law and under the company’s articles, the Group’s records have been treated as the Company’s records, and Adkins and Muilwijk had possession, custody or control of those records; the BOC bank account documents were excluded from the order; Adkins’ objections (control of the Company, documents being subsidiary records, lack of particularity) were rejected; costs nisi ordered against Adkins on a common fund basis to be...

Court Disposition

Order granted in part for plaintiffs; inspection order for company accounting records (including subsidiaries' records) granted from 28 September 2016 to date, excluding BOC Documents; costs ordered nisi against Adkins on common fund basis

Orders

  • Plaintiffs granted leave to inspect and take copies of all accounting records of the Company including subsidiary records from 28 September 2016 to date, excluding the BOC Documents
  • Plaintiffs to submit draft order (taking into account Adkins' comments, if any) within 7 days of judgment; time limits for provision of documents to run as per the 971 OS order but from date order is approved