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Civil Action2009

CHINA GOLD (PRECIOUS METAL) STRATEGIC INVESTMENT LTD v. CHINA GOLD (CAPITAL) LTD AND OTHERS

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67363-EN-2009-08-21

CHINA GOLD (PRECIOUS METAL) STRATEGIC INVESTMENT LTD v. CHINA GOLD (CAPITAL) LTD AND OTHERS

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HCA1113/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1113 OF 2009

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BETWEEN  
    CHINA GOLD (PRECIOUS METAL)  STRATEGIC INVESTMENT LIMITEDPlaintiff
 and 
   CHINA GOLD (CAPITAL) LIMITED1st Defendant
 LAM YIH JIUN, MICHAEL2nd Defendant
 WONG YU KIT3rd Defendant

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Before:  Deputy High Court Judge Carlson in Chambers

Date of Hearing:  21 August 2009

Date of Ruling:  21 August 2009

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R U L I N G

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1.  In respect of the summons, the centrepiece of which is that there be a speedy trial, I am going to accede to that application.  I think this matter ought to be tried as soon as possible.  There is an injunction in place, which is making things difficult. 

2.  I can understand, certainly from the defendants' point of view, the plaintiff, itself, wants the matter resolved as soon as possible in the circumstances of this case and so that is the order that I make.

3.  I have been asked by the defendant that the trial, should be heard by a bilingual judge.  The reason for this is that there are a number of documents in Chinese.  They will need to be translated and the cost of translation would obviously add to the costs of the action overall.

4.  On the other hand, of course, I have been very much the judge before whom most of these applications have been listed and I am familiar with the papers.  On 4 August I spent the day hearing some cross-examination of one of the defendants in this action, Mr Wong Yu-kit.  So I think that is something that I ought to take into account.

5.  It seems to me that whilst I can see the great advantages of having the matter tried by a judge who can actually read the documents, I do not think they are so numerous that there should be any problem, really, in their translation.

6.  Another point raised by Miss Mak is that on the plaintiff's website there are a number of statements, which she says are defamatory in nature.  Mr Poon says that these can be translated.  There are two or three statements of about 200 or 300 words each.  That should not present a problem but Miss Mak says that a judge who cannot read Chinese might fail to capture the subtlety of the expressions.  Of course, I do have a court interpreter who will be able to assist me in that regard.

7.  So I think, overall, although I can see the force of the argument that there should be a bilingual judge I think I ought to continue with this matter, where I have been involved now for the past three months and I have heard a number of applications and I am familiar with the case.

8.  So, effectively, there is going to be an order in terms of the summons, save that under paragraph 4, mutual inspection will be within seven days and not three days, setting down after 56 days rather than 42 days.  That is paragraph 6 of the order.  Estimated length of trial, five days. 

9.  A point arises on this:  Miss Mak, in particular, has been anxious that I should perhaps make some formal order directing mediation.  Of course, that is something that the court is required to have regard to.  In a case such as this, where one really needs to be getting on with things, very much in the interests of both parties, I do not think that this would be an appropriate step to take.  In any event, by increasing the setting-down period from 42 to 56 days, there is a genuine window of opportunity there for the parties if they are so minded.  They both need to agree to go to mediation.  If it looks as if they are doing well with the mediator, then they could come back to me and I could adjourn the trial dates or take such other course as is appropriate.  That is what I say about mediation.

10.   Therefore, I will make an order in terms of the summons, subject to these alterations:  paragraph 4, seven days instead of three; paragraph 6, 56 days instead of 42 and the length of the trial, estimate at five days rather than four days.

(Discussion re unless summons)

11.   What I am going to say on your unless summons is that I am going to adjourn that, generally, with liberty to restore and I am going to reserve the costs of it.  Then you can take such course as you think is appropriate having regard to what you see within seven days.

12.   On the passing-off summons, the appropriate order would be no order on the summons because if there has been compliance, albeit late, but he says you have got to pay the costs.  What do you want to say about that, Miss Mak?  You have come in late.  You could have filed this.

(Discussion re costs)

13.   I am going to order costs against you but I think these costs, I am going to assess these. The passing-off has not figured very much in this.  I am going to assess costs at $4,000, these being the costs of and occasioned by the summons to be paid forthwith.

14.   So you have got the orders:  order in terms in respect of the speedy trial of the summons, as amended in the way that I have indicated.  The costs are in the cause there, unless order summons adjourned, generally with liberty to restore.  Passing-off summons:  no order on the summons but costs to you, Mr Poon, assessed at $4,000, to be paid forthwith.

   

 

 (Ian Carlson)
 Deputy High Court Judge

 

Poon Siu-bunn, instructed by Messrs Siao Wen & Leung, for the Plaintiff

Angel Mak, instructed by Messrs Jimmie K S Wong & Partners, for all Defendants

 

66885-EN-2009-07-20

CHINA GOLD (PRECIOUS METAL) STRATEGIC INVESTMENT LTD v. CHINA GOLD (CAPITAL) LTD AND OTHERS

HTML content

HCA1113/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1113 OF 2009

----------------------

BETWEEN  
   China GOLD (PRECIOUS METAL) STRATEGIC INVESTMENT LIMITEDPlaintiff
 and 
 CHINA GOLD (CAPITAL) LIMITED1st Defendant
 LAM YIH JIUN, MICHAEL2nd Defendant
 WONG YU KIT3rd Defendant

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Before:  Deputy High Court Judge Carlson in Chambers

Date of Hearing:  20 July 2009

Date of Judgment:  20 July 2009

 

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J U D G M E N T

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1.  There are two matters before me today.  The first and most important is whether I should direct that the 3rd defendant in this matter should submit himself for cross-examination.  The nature of the cross-examination would relate to discovery of the 1st defendant’s financial position, this against the background of a case where the plaintiff alleges that in effect, orchestrated by the 3rd defendant, the 1st defendant has hijacked the business of the plaintiff, is currently passing itself off as the plaintiff in such a way that the plaintiff’s good name is being used to the advantage of the 1st defendant, and also at the same time conducting business in such a way that it is affecting the good name of the plaintiff.

2.  When the matter was first before me there was still outstanding, production of the 1st defendant’s audited accounts.  The complaint on the last occasion was that the discovery had been insufficient, and I took the view that it was perhaps rather premature to direct cross-examination in this way at his interlocutory stage, which in any event would be a most unusual order, before I had an opportunity of looking at what the auditors have had to say about it.  This report is now available.   I am bound to say it is disappointing, because the auditor’s report, which is to be found at bundle B2, starting at page 663, contains a paragraph B64, entitled “Limitation of Scope” the following:

“We write in the report to you that during the past three months, ended 14 July 2009, your company is busy in updating the accounting records of the company.  The company’s operations involved those of Hong Kong operations and People’s Republic of China.  Accounting transactions are voluminous and complicated.  Our work was restricted as currently your computer trading system and the detailed information contained in thereto could not be accessed by your staff nor our staff to carry out an audit.  Accordingly, we are unable to express an opinion whether the company has maintained proper books and accounts.”

3.  Notwithstanding that an account has been produced it is I’m bound to say, pretty thin.  So given the contents of this auditor’s report, hedged as it is by that sort of disclaimer and qualification, Mr Poon now says that really the matter has become sufficiently urgent and the state of disclosure worryingly patchy, that I ought to exercise my power to direct that the 3rd defendant should be cross-examined at this interlocutory stage.  He has also relied on a very recently filed affirmation.  It is affirmed on 17 July - this is last Friday, today being Monday - by a Mr Ng Man-kit, who is the assistant general manager of the plaintiff, to show that worryingly clients are still attempting to get access to their funds and this has not been possible.  They have been referred by the 1st defendant to the plaintiff.  The plaintiff is not in a position to give the sort of assistance that it would wish to simply because it is not aware of the 1st defendant’s financial position, it does not know where it stands vis-à-vis  these people and all of this is harming its good name and reputation.

4.  It is quite clear from the authorities - and I was referred to them on the last occasion - that this is an order that is to be sparingly made.  The leading case is the decision of the English Court of Appeal in House ofSpring Gardens Limited & Ors v Waite & Ors [1985] FSR  at 173.  More recently - and more importantly because it is a decision in Hong Kong - is the case of Yau Chu Wah v Gold Chief Investment Limited & China Broadband Corporation Limited, HCA807/2001, a decision of Ma J, as he then was.  The principles are now clear from those authorities.  Firstly, this is a jurisdiction to be exercised sparingly.  It is a jurisdiction that is one which the court will exercise as a matter of discretion.  The object of it all is to make the Mareva injunction more effective. 

5.  As matters presently stand, Mr Poon complains that his client is in receipt of the benefit of the Mareva injunction, but the truth is that the disclosure here has been so sketchy that, without an order for cross-examination, his client will have to wait until trial to get at this information, by which time it might all be far too late.  I take the view that this is a submission that has merit in these circumstances, and I am reinforced in that conclusion by the contents of the auditors report.  Whereas on the last occasion I thought it would have been rather precipitate to make this order, and I wanted to give more time to the 1st defendant and those controlling its activities to come up with more disclosure, what has been produced has merely served to make the matter more worrying so far as the plaintiff is concerned, and more importantly on this occasion, so far as the court is concerned. 

6.  So I am going to direct that there be cross-examination of the 3rd defendant.  It will be a cross-examination directed to disclosure of the 1st defendant’s financial position.  I shall, in a moment, invite both counsel to indicate to me what directions they would wish me to give to give effect to the order that I have just made.  So that is going to be the order. 

7.  Then there is another summons which relates to the passing-off by the 1st defendant of a number of logos and so forth relating to the plaintiff’s corporate persona.  I have been shown a consent summons which had been prepared on behalf of the plaintiff.  It is right that it had been indicated to me that this was probably going to be agreed to and there would be no difficulty about it.  So I was prepared to merely adjourn the matter. 

8.  What has happened is that the plaintiff has prepared a consent summons.  It is a consent summons in two parts.  The first part effectively gave it summary judgment.  Unsurprisingly, when those advising the defendants looked at it they felt unable to consent.   So all of that has been struck out, that is the first three paragraphs, and I think rightly so.  This would be far too premature and too substantial a concession to expect at this stage.

9.  But the interim injunction contained what one might call the usual orders in respect of a passing-off action.  Much of it has also been struck out.  The justification for doing so is put forward by Miss Mak in this way; “Well, there is an undertaking that covers all of these matters.”  I do not think those undertakings, in the light of the evidence, is sufficient.  So I am going to make orders in respect of the passing-off in terms of paragraph 4, 5 and paragraph 6 of what was then described as a consent summons.  These orders are usual orders.  They should go, including paragraph 5, which requires delivery up on oath.  That is the usual order, and it should be made at this stage. 

10.   So far as costs are concerned, paragraph 6, where the plaintiff has been successful on an interlocutory basis the usual order is plaintiff’s costs in the cause, and I think that is the order that should be made.  So that is what I say about both of these matters. 

(Discussion re directions sought and costs)

11.   Order for costs will be Plaintiff’s costs in the cause. 

  

 

 (Ian Carlson)
Deputy High Court Judge

 

Poon Siu-bunn, instructed by Messrs Siao Wen & Leung, for the Plaintiff

Angel Mak, instructed by Messrs Jimmie K S Wong & Partners, for all Defendants