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Zpmc Offshore Service Co Ltd (Formerly Known As Shanghai Zhenhua Heavy Industries Shipping Co Ltd) v Philip Jeffrey Adkins And Others

Judgment Cited authorities 2 Cited in Precedent Map Related
Vincent
Judgment Date12 October 2018
Neutral Citation[2018] HKCFI 2291
Year2018
Judgement NumberHCMP426/2017
Subject MatterMiscellaneous Proceedings
CourtCourt of First Instance (Hong Kong)
HCMP426/2017 ZPMC OFFSHORE SERVICE CO LTD (Formerly known as SHANGHAI ZHENHUA HEAVY INDUSTRIES SHIPPING CO LTD) v. PHILIP JEFFREY ADKINS AND OTHERS

HCMP 426/2017

[2018] HKCFI 2291

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 426 OF 2017

________________

IN THE MATTER of ZPMC – Red Box Energy Services Limited （振華海洋能源（香港）有限公司 ）
and
IN THE MATTER of sections 728 and 729 of the Companies Ordinance (Cap 622) and inherent jurisdiction

________________

BETWEEN
ZPMC OFFSHORE SERVICE CO LTD (Formerly known as SHANGHAI ZHENHUA HEAVY INDUSTRIES SHIPPING CO LTD) Applicant
AND
PHILIP JEFFREY ADKINS 1st Respondent
RBF HK LTD 2nd Respondent
LIHUA LOGISTICS CO LTD 3rd Respondent
ZPMC – RED BOX ENERGY SERVICES LIMITED
（振華海洋能源（香港）有限公司） 		4th Respondent

________________

Before: Hon Harris J in Chambers

Date of Hearing: 4 October 2018

Date of Decision: 12 October 2018

______________

D E C I S I O N

______________

1. On 24 February 2017 the Plaintiff issued an originating summons seeking declarations to establish that a board resolution of the 4th Respondent (“Company”) passed at a meeting on 14 February 2017 and the ratification by the board of the resolution on 25 April 2017, removing the chief executive officer (“CEO”) of the Company were valid (“contentious resolutions”). The CEO was Phillip Adkins. Mr Adkins was a director at the time. He was not removed as a director. Mr Adkins is the beneficial owner of the majority interest in one of the three shareholders in the Company, RBF Hong Kong Limited (“RBF”). RBF owns 32.5% of the Company. The remaining shares are owned by the Plaintiff as to 51% and by Lihua Logistics Company Limited (“Lihua”) as to the 26.5%. The board consisted of seven directors. Four were nominated by the Plaintiff (“majority directors”), RBF nominated two and Lihua nominated one. The contentious resolutions were passed at the majority directors’ behest.

2. On 18 April 2018 I ordered that the proceedings continue as if commenced by writ. On 27 June 2018 the Plaintiff issued a summons pursuant to O 14, r 1 seeking summary judgment against the Respondents in the following terms:

“1. Final declaratory judgment be entered against the Respondents that:-

1) The Board Meeting of the 4th Respondent held on 14 February 2017 was a valid meeting of the directors of the 4th Respondent;

2) The resolutions passed at the Board Meeting and/or April Board Meeting are valid and effective decisions of the 4th Respondent, in particular declarations that:-

a. The 1st Respondent is and was as of 14th February 2017 no longer the Chief Executive Officer of the 4th Respondent; and

b. Mr Chen Bin is and has since 14th February 2017 been the interim Manager of the 4th Respondent;

c. The only signatories to the bank accounts of the 4th Respondent or any of its subsidiaries shall be the Financial Controller, the Chief Operating Officer and the Chief Financial Officer, Mr Li Chun Kai.

2. Final injunctive relief be ordered against the 1st and/or 2nd Respondent that:-

1) They or each of them shall not hold Mr Philip Adkins out to be the Chief Executive Officer of the 4th Respondent or any of its subsidiaries; and/or

2) Mr Philip Adkins be restrained (whether by himself, servants or agents) from being involved in the day to day management of the 4th Respondent or any of its subsidiaries; and

3) The 1st and/or 2nd Respondent shall do all things necessary and incidental to give effect to the resolutions passed at the Board Meeting;

…”

3. The principles by reference to which the court assesses applications for summary judgment are not contentious. To the extent relevant to this application they can be summarised as follows:

(1) Once a plaintiff has established a prima facie case the burden passes to the defendant to establish a triable issue, failing which summary judgment will be entered.[1]

(2) If there is a legal issue, which needs to be determined it should be a crisp one and not one that requires mature and detailed consideration.[2]

(3) If summary judgment is declined the court should not produce reasons that express a view on the merits of the evidence and the various arguments that have been advanced.

4. In my view RBF and Mr Adkin have demonstrated triable issues. I will explain briefly why I have reached this conclusion.

5. As can be seen from the relief that is sought the Plaintiff seeks declarations that bind the shareholders of the Company and Mr Adkin. RBF and Mr Adkin contest the Plaintiff’s right to the declarations on the grounds pleaded in para 30 of their Defence and Counterclaim:

“In purporting to pass the Purported CEO Resolution at the 14/2 Board Meeting and in subsequently issuing a purported notice of termination of Mr. Adkins’ employment dated 16 February 2017 (‘Termination Notice’), it is averred that (a)...

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