[2024] HKCFI 319, DHCJ Ashley Burns SC allowed the claims by the plaintiff (“

”) (founder of the Sincere Group) against the defendant (“

”) for unpaid director’s fees, wages and other emoluments. The judgment addresses a number of important principles concerning directors’ remuneration and the construction of articles of association.

The dispute concerns whether P’s entitlement to remuneration under a letter of confirmation (“

 and unenforceable. The Letter confirmed P’s appointment as Deputy Chairman and CEO and provided for P’s entitlement to salary and emoluments recommended by the Recommendation Committee (“

”) from time to time. However, D’s articles of association envisage that the method of fixing directors’ remuneration would be determined at the annual general meeting.

Reconciling conflicting English authorities, the Court held there is no general rule that there must be a wholesale implication of a company’s articles into a director’s service agreement. However, the Court accepted that the service agreement remains subject to and should be read with those provisions in the articles concerned with the appointment of directors, their terms of service, remuneration and powers and duties.

The Court held that the Letter unambiguously shows that the RC’s recommendation, by itself and without more, gives P an entitlement to remuneration. This is also consistent with the power of D’s directors under the articles to delegate their remuneration-fixing power to committees. Accordingly, it was concluded that a subsequent board resolution passed by D, which purported to nullify the RC’s recommendation, would not affect P’s contractual entitlement to remuneration.

, instructed by Holman Fenwick Willan, acted for the defendant.

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