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Hong Kong Law Reform Commission |
7.1 This section does not form part of the winding-up provisions of
the Companies Ordinance. It comes under Part IV of the Companies Ordinance
(Management and Administration) and provides minority members of a company with
a remedy in cases of unfair prejudice. The Companies (Winding-up) Rules, rule
1, applies the Companies (Winding-up) Rules to section 168A.
7.2 The
section provides that a member of a company who complains that the affairs of
the company are being conducted in a manner unfairly prejudicial to the
interests of members generally, or of some of the members, including himself,
may petition the court for an order under the section.
7.3 The
provision is used frequently though in the context of solvent, not insolvent,
companies. We do not intend to comment on the section except insofar as it
relates to the general body of the winding-up
provisions.[39] We note that the
Review of the Hong Kong Companies Ordinance has made specific
recommendations in relation to the unfair prejudice or oppression
remedy.[40]
7.4 The Official Receiver's Office submitted that:
“A petition under section 168A should be exempted from the requirement to pay a deposit to the Official Receiver, who has no involvement in such petitions.”
7.5 We
understand that the question of whether or not a deposit is required depends on
whether the proceedings are described as “Miscellaneous
Proceedings” or “Winding-up Proceedings”.
7.6 Petitions under section 168A usually attract a miscellaneous
proceeding number but if a petition contains a prayer for a winding-up order as
an alternative, the case would be allotted a winding-up number and so attracts a
deposit under the Companies (Winding-up) Rules, rule 22A, because it would come
under the winding-up jurisdiction. The alternative prayer for a winding-up
order would usually be made on the just and equitable ground under section
177(1)(f).
7.7 We recommend that in the event that a
miscellaneous proceeding does contain a prayer for a winding-up order, the
proceeding should be allocated a winding-up number and the Companies
(Winding-up) Rules should then be observed and a deposit paid, but not
otherwise. This would mean that a proceeding would have both a miscellaneous
proceeding number and a winding-up number but we cannot see how this can be
avoided.
[39] See Companies (Winding-up) Rules, rules 22A and 23A.
[40] Review of the Hong Kong Companies Ordinance, paragraphs 7.08 and 7.09.