SINODENTAL INVESTMENTS LTD AND OTHERS v. SIN CHUNG YIN RONALD AND OTHERS

HCA 2176/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2176 OF 2012

_________________________

_________________________

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D E C I S I O N

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THE APPLICATION

1.  This is yet another application by the plaintiffs against the 4^th and 7^th – 18^th defendants (collectively called “the defendants”) under O.24, r.7 and r.11 RHC for the following categories of documents:

a. “Category A refers todocuments relating to:

i. D13’s negotiation with Galaxy Interior Design Ltd (“Galaxy”) of the tenancy of the XD Group’s Shau Kei Wan clinic (“XD SKW Clinic”), D13’s tenancy agreement with Galaxy and payment records for rental deposits.

ii. D15’s negotiation with Stars Technology Ltd (“Stars”) of the tenancy of the XD Group’s North Point clinic (“XD NP Clinic”), D15’s tenancy agreement with Stars and payment records for rental deposits.

(§§1-2 to Schedule of the Summons [A/97-98])

b. Category B refers to bank records showing the capital injection into D7-18.

c. Category C refers to audited financial statements of D7-18.”[1]

2.  This application is contested by the defendants and the parties are legally represented.[2]

THE FACTUAL BACKGROUND

3.  The plaintiffs have summarized the factual background as follows:

“a. In brief, Ps are part of a group of companies which provide a wide range of dental care services (the “H&C Group”).  Ps claim that D1-6 have set up a group of companies, D7-18 (the “XD Group”), in competition with the H&C Group’s business.  D12-18 operated a number of dental clinics (the “XD Clinics”) in competition with the H&C Group’s clinics.

b. Ps claim against D1-6 for breaches of their shareholders’ agreements, employment agreements, fiduciary duties as employees and/or directors for their involvement in the formation and operation of the XD Clinics.

c. Further or in the alternative, Ps plead that D4 and D7-18 conspired with one another in carrying out unlawful competition against the H&C Group’s business by unlawful means [A/40-46/§§16-17].[3]”

THE DEFENDANTS’ GROUND OF OBJECTION

4.  The defendants’ grounds of objection are as follows:

a. In relation to the tenancy for Shau Kei Wan clinic, neither Galaxy nor Kinvic are parties to this action.  The defendants say that the 13^th defendant is not a party to the tenancy agreement and it had no knowledge of the rental deposit records of the Shau Kei Wan clinic.

b. The same reasons for the Shau Kei Wan tenancy apply to the North Point clinic tenancy agreement in relation to the 15^th defendant as neither Butterfly nor Stars are parties to this action and the 15^th defendant has no knowledge of the rental deposit records of the North Point clinic.

c. There is a real risk that the said payment documents of Kinvic or Stars would incriminate the 13th Defendant, the 15th Defendant or other Defendants or exposed these parties to criminal prosecution.

d. The defendants have already affirmed that “there is no written negotiation document concerning SKW and/or NP premises.[4]”

e. As to the banking records and the financial documents, the defendants have made comments, which will be dealt with in the discussion of those documents below.

DISCUSSION

The relevant legal principles

5.  Both parties have set out extensively the relevant legal principles on specific discovery cited in the previous authorities of my decision.  I do not propose to repeat them here.  Those legal principles would be applied in the discussion below.  In fact, it can be seen that the parties do not dispute over those legal principles cited in the authorities.  It is a matter of opinion or positions of the parties that they are unable to resolve their disputes themselves.  In my view, the difference in their opinions must be considered in light of the factual issues to be resolved in the trial.

The plaintiffs’ facts as pleaded

6.  The plaintiffs have set out the fundamental factual issues in support of their case against the defendants, upon which they now apply for specific discovery against the defendants.  I shall set out the plaintiffs’ facts as follows:

“ a. The foundation to Ps’ claims (set out in §§4-5 above) is the allegation that D1-6 participated in the establishment, management, operation and control of the XD Group to carry on businesses in direct competition with that of the H&C Group [A/40/§16].

b. D4 is a key player in the formation of the XD Group. It is pleaded that D4 was engaged as P3’s centre manager and was later promoted to general manager. On 4.1.2012, his employment was terminated [A/31/§3].

c. By reason of the following facts, it is pleaded that D4 has participated in the establishment, management, operation and control of the XD Group:

i. D4 is the sole shareholder of D8-18 [A/34, 37/§9(2, 6, 7)].

ii. D7-18 each bears the prefix “Xpert Dental” in its name [A/34-39/§9].

iii. The first XD Group company that was formed was D7, on 29.4.2011. It provides dental training courses in competition with a H&C Group company called Kellett Healthcare Training Ltd. D4 is the course director of D7 [A/34, 39/§9(1, 11)].

iv. Shortly thereafter, D8-11 were formed on 13.4.2012. D4 is the director of D8-11 [A/34/§9(2)].

v. Subsequently, D12-18 were formed between 15.5 and 10.10.2012 [A/35-37/§9(3-7)]. D4 was a director of each of these companies until late 2012 [A/36-37/§9(5-7)]. D12-18 operate clinics which compete with, or threaten to compete with, the H&C Clinics [A/39/§9(10)].

vi. In around 6.2.2012, D4 prepared and designed the logo of the XD Group [A/41/§16(2)].

vii. Since around 8.2.2012, D4 was involved in the interior fitting out of the XD NP Clinic (operated by D15) [A/41/§16(3)].”

7.  The defendants have raised no objection to the factual issues above.  As such, the parties’ argument must be considered upon the above facts.

8.  I shall now discuss the plaintiffs’ application for the categories of documents.

Documents relating to D13’s negotiation with Galaxy on XD SKW Clinic and payment records for rental deposits

9.  It will be convenient to set out the full reasons for the plaintiffs to discover the category A documents relating to the SKW clinic and the NP clinic tenancies:

“23. By seeking the Category A documents, Ps are not seeking to challenge the propriety of the tenancy arrangements. Rather, Ps are seeking to find answers to the obviously relevant questions as to:

(1) Who did what in negotiating, devising and implementing the arrangements that existed for D13 and D15’s purported taking up of the XD SKW Clinic and XD NP Clinic tenancies;

(2) Who ultimately paid the rental deposits under the SKW Tenancy and NP Tenancy; and

(3) Whether such arrangements were implemented for the purposes of furthering the conspiracy in competing with the H&C Group.”[5]

10.  The main reason is 23(3), evidence to show the arrangements furthering the conspiracy in competing with the H&C Group.  We must bear in mind that for the present proceedings, the investigation of the facts should focus on the defendants.

11.  The plaintiffs have pleaded that at the material times:

a. Between April 2011 and July 2012, a group of companies bearing a similar prefix “Xpert Dental” to the plaintiffs’ company names including the 13^th and the 15^th defendants were established in competition with the plaintiffs.

b. The 13^th defendant and the 15^th defendant were set up in May 2012.  See § 9(3)(ii) & (iv) of the Amended Statement of Claim.

c. The directors of the 13^th defendant and the 15^th defendant were the 4^th defendant, Dr. Emily Tsang and Dr. Angela Ho.  See §9(5) of the Amended Statement of Claim.

12.  The plaintiffs admit that they have difficulty in the documents they attempt to discover as they have difficulty in proving that the documents are in the possession, custody or power of the defendants.  However, this issue will become insignificant even if the plaintiffs are able to establish this fundamental condition for specific discovery as the documents are not relevant for the trial or they will not be for a fair trial or for saving costs as will be discussed below.

13.  It is quite difficult to understand why the plaintiffs should refer to the analysis in Kao Lee & Yip v Koo Hoi Yan [2003] 3 HKLRD 296 where the discussion was on when a fiduciary or employee crosses the line between legitimate and illegitimate preparatory steps to start a competing business.  The factual disputes in this matter do not match those discussed in Kao Lee & Yip case.  See §6 supra.  In any event, the plaintiffs rely upon the complicated factual situations below in support of their application for the documents under category A.

14.  The plaintiffs explain why the documents under this category are necessary.  They say that the property of the tenancy agreement of the 13^th defendant was first purchased by Galaxy, a company controlled by the 1^st to 3^rd defendants.  Galaxy entered into a tenancy agreement with a company called Kinvic Ltd and Dr. Angela Ho signed the tenancy agreement for Kinvic.  In March 2012, the property was then sold to another company, which nominated another company called Cheung Co to take up the property.  In November 2012, the property was sold to another company called TYW, the present landlord.  Upon discovery ordered by this Court, the 13^th defendant only produced rents records which did not show who paid the rental deposit.  Being suspicious, the plaintiffs had written to the 13^th defendant’s solicitors for an explanation.  The solicitors did not give the particulars of the transactions leading to the formation of the tenancy agreement, especially on who had paid the rental deposit for the tenancy agreement, the plaintiffs ask for discovery of the documents as set out in the schedule.

15.  It is apparent that those transactions before the tenancy agreements of the 13^th and the 15^th defendants were the conveyancing transactions of the respective properties.

16.  What the plaintiffs are trying to establish at trial in support of their conspiracy claims against the defendants is the fact that those tenancy agreements for the 13^th and 15^th defendants respectively were set up to accommodate their business in competition with the plaintiffs’ business.  The fact of who had paid the rental deposit may be of assistance to identify the beneficial lessees of the properties.  The real question as pleaded in the pleadings is whether the defendants or any one or several of them had conspired together by setting up the tenancies to accommodate the businesses in competition with those of the plaintiffs’.  Evidence of who had paid the rental deposit may not be conclusive as to who the beneficial owners of those tenancies are.  There are a number of possibilities.  They might be the lenders of the fund under separate agreement without taking up the beneficial interest of the leases.  As revealed in the letters between the solicitors of the respective parties, there might have been set-off of money paid for the conveyancing transactions.  The parameter of discovery should be whether the defendants were part of the conspiracy to compete with the plaintiffs.  This is the pleaded case of the plaintiffs.  Therefore, the question is whether it is necessary to require those documents as set out in the schedule for this purpose.

17.  In my view, it is not necessary to obtain those documents as proposed by the plaintiffs to establish the fact discussed above.  The prima facie fact has been established that the 13^th and the 15^th defendants were established by the 4^th defendant as the director of the companies until late 2012.  See §6(c)(v) supra.  The plaintiffs have the information of the shareholders of the 13^th and 15^th defendants.

18.  As to who had paid the rental deposits for the properties under the respective tenancy agreements is, in my view, insignificant as the burden will be on the defendants to show that the money did not come from the shareholders of the companies.

19.  The plaintiffs may still argue that in order to expel any ambiguity or argument as who the real owners of the tenancy agreements are, the ones who had paid the rental deposits should be identified.  It may be so.  But to embark on an expedition of such massive discovery of the documents as proposed is, in my view, disproportionate to the probative value of the evidence obtained.  The plaintiffs can, as suggested by the defendants, administer interrogatory on the defendants as to who had paid the rental deposits for the properties under the tenancy agreements entered into by the 13^th and 15^th defendants respectively.  If they refuse to answer, the matter can be taken further.  In any event, they have to answer the questions at trial during cross-examination.  Besides, the plaintiffs may discover the financial statements under the category B and category C for the information on top of those that I have mentioned above.

20.  Furthermore, the defendants have already affirmed: “there [is] no written negotiation documents concerning SKW and/or NP premises”.  The affidavit evidence must be taken as conclusive for the interlocutory applications.  See Ready Set Goal Ltd v Kay-El (Hong Kong) Ltd. [2015] HKEC 731.  However, in view of the arguments as put to this Court this morning, the expression in the 2^nd affirmation of the defendants may need clarification.  This may need to call upon the affirmant to make another affirmation to clarify or to order cross-examination of him in another hearing, which is depreciated by the authorities.  I do not propose to take this course for the reasons stated for category A documents.

21.  The discovery of the documents as proposed by the plaintiffs will not be for a fair trial as they may even muddle the issues.  They are not saving costs.  As such, the application for the documents is dismissed.

Documents relating to D15’s negotiation with Stars Technology Ltd on XD NP Clinic and payment records for rental deposits

22.  The plaintiffs’ reasons for the discovery of the documents of the NP clinic are similar to those for the SKW clinic as discussed above.  For the same reasons, I dismiss the plaintiffs’ application for discovery of the documents as requested.

23.  These documents are under category A, which I dismissed.

Category B & C: bank records showing the capital injection into D7-18 and the audited financial statements of D7-18

24.  Paragraph 30 of the plaintiffs’ written submissions states: “Category B refers to bank records showing the capital injection into D7-18.  Category C refers to the audited financial statements of D7-18.”

25.  The plaintiffs submit that “the documents are clearly relevant as they would show the parties who have funded the establishment and operation of D7-18 by way of injection of capital: 4th Lee §§13-14 [A/125-126].  It will also show when the companies were put in funds.”[6]

26.  The defendants’ grounds of objection to discovery of these categories of documents can be dealt with below:

a. “capital injection” and “the period covered” are not precise.  They have raised an example of payment for the purchase of stationery.  This can be dealt with briefly.  The interpretation of such terms must be within the context of the pleadings.  Properly construed, it is not difficult to understand that capital injection refers to the money injected for the purpose of setting up the clinics in question.  The money can, of course, apply to the purchase of stationery for the clinics, but that is not the main purpose.  The period covered is again clear from the pleadings.

b. The bank records or audited financial statements would not show who established XD Group and XD Clinics.  This is disputed by the plaintiffs. On a logical understanding of the matter, one can readily see the defendants’ argument is trying to split the meaning of the words, which will not assist the Court to make the decision.  The purpose of such financial information has been stated quite clearly in the plaintiffs’ 4^th affirmation of Lee Wan Tai – to show or shed light on the true beneficial owner(s) of the 7^th to 18^th defendants.  See §14.  It is quite clear that the information is relevant to paragraph 16(26) of the Amended Statement of Claim, in which the plaintiffs pleaded, inter alia, the 1^st to 6^th defendants participated in the establishment, management, operation and/or control of the XD Group of companies and clinics to carry on businesses in competition with that of the Health & Care Group.  At §20 of the Defence, the defendants specifically denied paragraph 16 and put the plaintiffs to strict proof.  Since the defendants have made such a demand, it is only fair for the plaintiffs to have an opportunity of making discovery of the defendants’ financial statements so that they may prove their case.  If the defendants insist that those financial documents do not show who established XD Group and XD Clinics, it will be incumbent upon the defendants to tell the plaintiffs and the court where such information can be found.  This is not the burden on the defendants to assist the plaintiffs’ case, but rather an obligation on them to clear the allegations against them to the court as they have raised strict proof upon the plaintiffs.  The defendants have not said that they do not have such information in the affirmations.

c. The fact that the plaintiffs may use interrogatories to obtain the answer is neither here nor there.  The plaintiffs are at liberty to adopt the appropriate ways under the law as they may be legally advised.  The question here is whether the plaintiffs are able to establish their case for their application.

d. That the audited financial statements contained trade secret and confidential information of the defendants are only factors that the court should take into account but are not available to the defendants as the defence for discovery.  See Science Research Council v Nassé [1980] AC 1028, Fenn Kar Bak Lily & Another v Matthew Chan & Another (unreported, HCPI402/2008 Bharwaney J.) 5 April 2011.  See also Tullett Prebon (Hong Kong ) Ltd. v Chan Yeung Fong Nick & Others (unreported, HCA2197/2009 To J. 9 June 2011 §18)  This Decision also held that the discovery of the documents was under an implied undertaking that the documents were not to be used for any other purpose.

27.  The defendants’ objection to these categories fails.

28.  The plaintiffs have succeeded in their application for Category B and Category C.

COSTS

29.  As to the costs of this application, having considered counsel’s submissions, I consider the appropriate order should be each party bears its own costs, with counsel’s certificate.

ORDERS

30.  I shall  now make an order in terms as follows:

a. Category A is dismissed;

b. Category B and Category C are allowed and the defendants shall disclose those documents, subject to redaction of any irrelevant materials to be agreed between the solicitors;

c. Liberty to apply;

d. Costs of this application, including the costs reserved be as per paragraph 29 supra.

HCA 2176/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2176 OF 2012

_____________

D E C I S I O N

_____________

The applications

1. There are two applications for this hearing:

a.  an application by the 5^th defendant and the 6^th defendant by summons dated 27 March 2014 to strike out certain parts of the Statement of Claim (“SOC”), relying upon O.18, r.19(a), (b) & (d) of RHC and the inherent jurisdiction of the Court;

b.  an application by the 1^st, 2^nd and 3^rd plaintiffs (collectively “plaintiffs”) by summons dated 12 June 2014 to amend the Statement of Claim (“plaintiffs’ amendment summons”).

2. The applications are contested.

3. Mr.  R. Zimmern, counsel, acts for the plaintiffs and Mr. C.Y. Li, senior counsel acts for the 5^th and the 6^th defendants.  Mr. F. Fong acts for the 4^th and 7^th to 18^th defendants, who support the 5^th and 6^th defendants’ application, opposing the application for amendment.  Ms. Young, solicitor acts for 1^st to 3^rd defendants, who have made no submissions on the applications.

4. Since this is the application of the 5^th and the 6^th defendants’, they will be referred to collectively as “the defendants” unless it is necessary to specifically identify them as the 5^th and the 6^th defendants respectively.

The factual background

5. The 1^st plaintiff is the majority shareholder of the 2^nd plaintiff, which is the holding company of a group of subsidiaries providing a wide range of dental services in Hong Kong and Macau.  The 3^rd plaintiff is the operating subsidiary under the control of the 2^nd plaintiff.  The 1^st, 2^nd and 3^rd defendants were the shareholders and directors of the 2^nd and the 3^rd plaintiffs.[1]  The 1^st, 4^th, 5^th and 6^th defendants were the employees of the 3^rd plaintiff.  The 7^th to 18^th defendants are the companies allegedly set up in competition with the plaintiffs’ business (“the XD Clinics”) and the 1^st to 6^th defendants were allegedly in breach of the shareholders’ agreements, the employment agreements and fiduciary duties by their involvement in the XD Clinics.[2]  The 19^th defendant was a consultant under an agreement with the 3^rd plaintiff.[3]

6. The plaintiffs claim against the 1^st to 6^th defendants for various breaches of their shareholders’ agreements, employment agreements and/or fiduciary duties as employees and/or directors for their involvement of the formation and operation of the XD Clinics.

7. Further or in the alternative, the plaintiffs plead that the 1^st to the 18^th defendants conspired with one another in carrying out unlawful competition against the plaintiffs’ business by unlawful means.[4]

The application for amendment of Statement of Claim

8. The defendants submit that the plaintiffs’ proposed amendments to the Statement of Claim would not affect the defendants’ application to strike out parts of the Statement of Claim.  They, however, contest that leave should not be granted to the plaintiffs to amend the Statement of Claim.[5]

9. Those grounds as stated in Mr. Li SC’s written submissions from paragraphs 5.12 (a) to (c) have been taken into consideration.  I consider that the defendants would have no ground to oppose the plaintiffs’ application because when the Court considers the defendants’ application for striking out, it has to consider whether the impugned parts of the Statement of Claim can be saved by way of amendments to the Statement of Claim.  See the Court of Appeal’s decision in Ha Francesca case below.  The striking out order would only be granted if the Court found that the proposed amendments would not save the parts of the Statement of Claim to be struck out.

10. For the other defendants, Mr. Fong has submitted that his clients support the 5^th and the 6^th defendants in their strike-out application and that they oppose the plaintiffs’ application for amendment for the reason that they had requested for further and better particulars from the plaintiff and that they want to reserve their positions to strike out the plaintiffs’ claim subsequently. They further say that the proposed amendments are useless for the plaintiffs’ case.  I consider that those are insufficient reasons to oppose the plaintiffs’ application for amendment.  Whether the amendments are useful for the plaintiffs’ case is for the plaintiffs’ legal advisors.

11. For the reasons above, I grant leave to the plaintiffs to amend the Statement of Claim as per the proposed draft.

12. I shall now consider the defendants’ application for striking out.

The application for striking out

13. The defendants apply to strike out paragraphs 16, 17, 18 and 21of the Statement of Claim as far as the defendants are concerned.

14. Paragraph 16 of the Statement of Claim contains allegation that the defendants participated in the establishment, management, operation and/or control of the XD Clinics.[6]

15. Paragraph 17 of the Statement of Claim alleges that the defendants had conspired with the rest of the defendants to carry out unlawful competition against the business interest of the plaintiffs’ by unlawful means.[7]

16. Paragraph 18 of the Statement of Claim contains allegation of the defendants doing acts with the predominant purpose of injuring the business interest of the plaintiffs’.

17. Paragraph 21 contains allegation of the defendants’ unconscionable breach of their employment agreements.

The reasons for the parts of the Statement of Claim to be struck out

18. The defendants submit that the above paragraphs in the Statement of Claim should be struck out on the followings grounds:

a.  in respect of paragraph 16, there is a singular absence of any material facts being pleaded in support of the allegation that the defendants “participated in the establishment, management, operation and/or control of XD Group of companies and clinics”[8];

b.  in respect of paragraphs 17 and 18:

  i.  There is no plea of what agreement had been entered into by the defendants for the alleged conspiracy.

  ii.  Whereas in paragraph 17 of the Statement of Claim, the plaintiffs’ plea unlawful means signifying just an intention to injure on the part of the 1^st defendant to the 18^th defendant, in paragraph18, the plea changed to become one of a predominant intention to injure signifying a lawful means conspiracy.  The pleas are inconsistent.[9]

c.  in respect of paragraph 21, the complaint is that there is no such cause of action as “unconscionable” breach of employment agreements as separate and distinct from just “breach” of employment agreements.[10]

The relevant legal principles

19. It will be, at this stage, convenient to consider the relevant legal principles for the application:

a.  In Pak Win Investment Ltd (in compulsory liquidation) v Chung Yuet Sheung, Lorrain and Others (unreported, HCA419 of 2011, DHCJ Au-Yeung (as she then was) 9 February 2012 at §§12 and 13) set out the relevant legal principles, which are undisputed:

“It is only in plain and obvious cases that pleadings should be struck out. The burden to establish this is on the applicant... The claim must be obviously unsustainable, pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed. Even if a case only has a slim chance of success, this is not sufficient to strike it out: Karex (HK) Ltd v Fortune Talent Development Ltd [1999] 4 HKC 203, at 210F. Nor should sparsity of detail lead to a similar result. The sufficiency of the facts pleaded should be assessed in the overall context of the pleadings and the case: The Bank of East Asia Ltd v Labour Buildings Ltd & ors [2007] HKCFI 1129.”

See also Jackson Xu Zhao Ze & Another v Tsai Tim Yuen & Another (unreported, HCA902/2011, 22 May 2013 DHCJ Tam SC at §§8-16);

b.  The above legal propositions are consistent with the decisions of the Court of Appeal in Ha Francesca v Tsai Kut Kan (No.1) [1982] 1 HKC 382 at 392:

“The claim must be obviously unsustainable, the pleadings unarguably bad and that it be impossible, not just improbable, for the case to succeed before a court will strike out. If the court does not think the matter to be clear beyond doubt or if it fails to be satisfied that there is no reasonable cause of action or that the proceedings are frivolous or vexatious, then, there should be no striking out.”

c.  Fok J. (as he then was) held in The New China Hong Kong Group Ltd (in Creditors’ Voluntary Liquidation) v The New China Hong Kong Development Ltd. (in Creditors’ Voluntary Liquidation) (unreported, HCA 519/2010, 11 February 2011)that although that case (referring to the Ha Francesca case) was decided before the implementation of the Civil Justice Reform, the passage cited remains fully applicable to an application to strike out (after the CJR).  The learned judge also held that particulars of fraud and dishonesty must be pleaded and it is not permissible to infer dishonesty on pleaded facts not consistent with dishonesty [65]; that it is an abuse of the process to state a case without solid foundation hoping that something will turn up in the course of the proceedings, for example at the stage of discovery or on cross-examination, or to stop time from running [70];

d.  The proper pleadings for conspiracy as illustrated in Pido v Compass Technologies Co Ltd [2012] 2 HKLRD 537, at §17 the Court of Appeal held:

“As a matter of pleading, a case based on conspiracy, must contain the following elements (emphasis added):

(1) The agreement between two or more persons. The means of carrying out the agreement, whether lawful or unlawful, must be set out.

(2) The intention to injure the Plaintiff, whether predominant (in the case of a lawful means conspiracy) or merely an intention to injure (in the case of an unlawful means conspiracy).

(3) The acts that were carried out pursuant to the agreement and the stated intention.

(4) The damage caused to the Plaintiff.

      See : Bullen & Leake & Jacob’s Precedents of Pleadings (16th edition) Vol.2 at paragraph 51-02.”

e.  As to the “element of agreement between two or more persons”, it was illustrated in Pak Win Investment Ltd (in compulsory liquidation)’s case at §15 of the Decision:

‘According to Kuwait Oil Tanker Co SAK v Al Bader [2000] 2 All ER (Comm) 271:

“… It is not necessary that every overt act is done by every conspirator, but the act must be done pursuant to the conspiracy or combination. (at page 312g)

… it is not necessary to show that there is anything in the nature of an express agreement, whether formal or informal. It is sufficient if two or more persons combine with a common intention, or, in other words, that they deliberately combine, albeit tacitly, to achieve a common end. (at page 312h)

‘… the origins of all conspiracies are concealed and it is usually quite impossible to establish when or where the initial agreement was made, or when or where other concentrators were recruited. The very existence of the agreement can only be inferred from overt acts. Participation in a conspiracy is infinitely variable: it can be active or passive ... Consent, that is agreement or adherence to the agreement, can be inferred if it is proved that he knew what was going on and the intention to participate in the furtherance of the criminal purpose is also established by his failure to stop the unlawful activity.’ (at page 312j-313b) (emphasis added)

Thus it is not necessary for the conspirators to join the conspiracy at the same time, but ... the parties to it must be sufficiently aware of the surrounding circumstances and share the same object for it properly to be said that they were acting in concert at the time of the acts complained of. (at page 313c)

…

In most cases it will be necessary to scrutinise the acts relied upon in order to see what inferences can be drawn as to the existence or otherwise of the alleged conspiracy or combination. It will be the rare case in which there will be evidence of the agreement itself. (at page 313d) (emphasis added)

… in order to establish an unlawful means conspiracy, it is necessary to establish an intention to injure the claimant but not a predominant intention or purpose to do so. (at page 314j)

… in many contexts it will be necessary in order to prove intention to ask the court to infer the relevant intention from the primary facts ... in the case of most conspiracies to injure by tortious means it will be clear from the acts of the conspirtors that they must have intended to injure the claimant. In the case of a conspiracy to defraud by wholesale misappropriation it would be absurd to argue that the conspirators did not intend just that.” (at page 315f-g)’

See also UBS Wealth Management v Vestra Wealth LLP [2008] IRLR 965 at §§21–38. Although this case was an application for a springboard relief of interim injunction, the rationale relating to circumstances, which could lead to conspiracy though there was lack of direct evidence of agreement equally applies to this case.

20. Bearing in mind the above legal principles, I shall proceed to consider the defendants’ application for striking out.

21. First of all, I shall set out the relevant allegations of the plaintiffs as set out in counsel’s written submissions below:

“(1) D5 and D6 signed their respective Employment Agreements which provide impliedly that they owed fiduciary duties to P3 and expressly not to compete with P3 within a specified area of the Tsuen Wan district for 2 years post-termination in the dental business (paras. 4, 5 and 8 of the SOC [68–70]).

(2) D5 and D6 both resigned on 17.07.2012 and ceased employment on 16.10.2012.

(3) Very shortly after the resignation of D5 and D6, the XD Tsuen Wan Clinic was established on 27.07.2012 (SOC para. 9(3)(vi) [72].

(4) At unknown dates, D2, D5 and D6, together with the ex-employees of P3 mentioned in sub-paragraph (5) below, presided at and provided dental services at the XD Tsuen Wan Clinic (SOC para. 9(8) [75]). This XD clinic uses strikingly similar price leaflets to that of P3 and is clearly designed to compete with P3 (SOC para. 16(4) [78]).

(5) Luzy Chin, Sharon Chong, Joyce Yeung, Cath Chan, Ng Sui Ting and Winnie Lau all resigned from P3’s employment from March to September 2012 and all subsequently took up work at the XD Tsuen Wan Clinic albeit at unknown dates (SOC paras. 16(20), (22) and (23) [81]).

(6) In total 23 employees, consultants and administrative staff moved en masse to join the XD Clinics. As to the proximity of the exodus of employees to the XD Clinics:

a. 13 former employees and consultants of P3 joined XD Clinics operated by D12-D17 as presiding dentists or hygienists [(SOC para. 9(8) [74]).

b. Over 10 former administrative staff of P3 had also joined the XD Clinics (SOC para. 9(9)[75]).

(7) By working at the XD Tsuen Wan Clinic D5 and D6 are in breach of the restrictive covenant in their Employment Agreements (SOC paras. 16(11) and (12) [79]).”[11]

22. The defendants admit that they were former employees of the 3^rd plaintiff and they are now employees of the 17^th defendant which they joined after having resigned from the 3^rd plaintiff.  They deny that they were involved in the establishment, management, operation and/or control of XD Clinics.  They also deny that XD Tsuen Wan clinic was in direct competition with H&C Group and they were in breach of the said clause 12 which was wider than necessary for protecting the interest of the 3^rd plaintiff.  They further deny the allegation of conspiracy with the purpose of injuring the business interest of the plaintiffs and they deny the alleged unconscionable breach of employment agreements.[12]

Paragraph 16 of the Statement of Claim

23. As to paragraph 16 of the Statement of Claim, the defendants argue that there is no pleaded facts in support of the plaintiffs’ claim “participated in the establishment, management, operation and/or control of XD Group of companies and clinics”.  The defendants say that it is speculative to draw the inference on the alleged proximity of time when the defendants and other ex-employees of the 3^rd plaintiff tendered their resignations from 3^rd plaintiff and their respective engagements in XD group of companies and clinics to mean that the defendants assisted or encouraged the 1^st to 4^th defendants to entice the ex-employees to leave the 3^rd plaintiff’s employment. The defendants insist that there must be material facts in support of the allegations, the proposed amendments are simply not sufficient.

24. The legal principles cited in Pak Win, supra have amply illustrated that it is possible to draw inference from the factual circumstances to infer agreement between the conspirators, whose agreement is normally tacit or unexpressed at all.  This trite principle is also demonstrated in Ming Shiu Chung, also known as Hubert Ming & Others v Ming Shiu Sum also known as Lawrence Ming Shui Sum & Others (2006)9 HKCFAR 334 (Ribeiro PJ, 23 May 2006) where the Court of Final Appeal held at §45 ‘As Sir Anthony Mason NPJ pointed out in HKSAR v Lee Ming Tee (2003) 6 HKCFAR 336, at §72, inferences of fraud or serious misconduct are “......not to be reached by conjecture nor ...... on a mere balance of probabilities.”  They are “to be plainly established as a matter of inference from proved facts”.’  This is contrasted with the situation where conspiracy or fraud was not pleaded at all as at §54, Ribeiro PJ said “The fraud theory was simply not open to the Judge.  It is nowhere pleaded.”  It was on this basis that this Court refused discovery in Joyce T. Ongsip t/a LT Enterprises Co. v Pimatronics Ltd. (unreported, HCA611/2010, 7 June 2012) because conspiracy was deliberately not pleaded in the pleadings.  For the same reason, I allowed discovery of the documents in this action on 20 June 2014 by the plaintiffs on their application for discovery of documents from the 4^th and 7^th to 18^th defendants. In this case, conspiracy has been expressly pleaded in the Statement of Claim.  Of course, it does not mean that whenever conspiracy is pleaded in the pleadings, the Court must allow discovery of documents even if it is a fishing exercise.  The Court should not exercise its discretion mechanically.  It has to consider the other relevant facts and circumstances as pleaded in the pleadings to be satisfied that the applicants have set up a prima facie case in support of conspiracy against the defendants.  In the exercise of its discretion, the Court must follow the judicial guidelines as Ma J (as he then was) said in Wing Mou Construction Co Ltd (in Liquidation) v Cosmic Insurance Corporation Ltd & Another (unreported, HCCT40/2001, 6 June 2002) at §15(6) : “…as with any exercise of discretion by the court, orders should only be made where necessary, just and convenient.”  The Court must look at the context of the case itself.

25. It is true that the defendants had requested the plaintiffs to supply further and better particulars in respect of paragraph 16 of the Statement of Claim and the defendants complain that the plaintiffs simply repeated paragraph 16 as the particulars, saying they would plead further particulars on the involvement of the 1^st to 4^th defendants in the establishment, operation and management of the XD Group of companies and clinics with the assistance/or encouragement of the defendants after discovery or interrogatories.  The defendants complain that the pleadings for paragraph 16 are half-pleaded claim, referring to the comments in Jackson Xu.[13]

26. The defendants are not, in this application, applying for an unless order for the plaintiffs to supply further and better particulars for paragraph 16 of the Statement of Claim.  They consider that it is unnecessary to do so because the plaintiffs’ pleaded paragraph 16 can be struck out as it now stands.

27. It is obvious that what have been pleaded by the plaintiffs in the pleadings are the best particulars that they are able to give in support of their case against the defendants.  The question therefore turns on squarely whether without further and better particulars, paragraph 16 should be struck out.

28. Applying the legal principles as set in Pak Win, it is apparent that, taking into consideration of the pleaded facts of the plaintiffs and the defendants’ admission in paragraphs 21 & 22 supra, it cannot be said that the plaintiffs’ case is so obviously bad that it is impossible for them to succeed at trial.  Clearly, the plaintiffs are now relying on the circumstantial evidence to say that the defendants conspired with other defendants to injure their business interest.  It is a matter of inference to be drawn at trial by the judge; the evidence being subject to cross-examination.  The overt acts as complained by the defendants can be seen from the resignation of the defendants and joining of the competing business within a short time and the leaving of other employees of the plaintiffs’ within a short period of time, then joining the XD Clinics, knowing of course, the competing business would be injurious to the plaintiffs’ business. Whether inferences can be drawn from such overt acts in support of the plaintiffs’ claims against the defendants will be for the trial judge.  As such, as held by the Court of Appeal in Ha Francesca v Tsai Kut Kan (No.1), this paragraph should not be struck out.  The Court should not embark upon an examination of the evidence at the interlocutory stage for this application.  Hong Kong Niroku Ltd v Kyokuto Securities (Asia) Ltd (unreported, HCA 4122/2000, Sakhrani J, 18 March 2002) at §§24-25.

Paragraphs 17& 18 of the Statement of Claim

29. The complaints are (i) there was no plea of conspiracy agreement due to lack of pleaded facts in support of agreement of conspiracy and (ii) pleas in paragraph 17 and in paragraph 18 are inconsistent.

30. The analysis for paragraph 16 above equally applies to paragraphs 17 and 18.  The plaintiffs have no direct evidence of the defendants’ agreement of conspiracy.  They simply rely upon the circumstantial evidence, asking the court to draw the inference of conspiracy against the defendants, which is a matter for the trial.  On this basis, these paragraphs should not be struck out.

31. As to the inconsistent pleas of paragraph 17 and paragraph 18, the plaintiffs have proposed amendment to paragraph 18, pleading the further and/or the alternative plea of lawful means.  Mr. Li SC has submitted that the defendants might not be in breach of their fiduciary duties the moment they had left the employment of the plaintiffs’.  The amendment has rectified the situation complained of.  In my view, these paragraphs should not be struck out.

Paragraph 21 of the Statement of Claim

32. The complaint is that there is no such cause of action as “unconscionable” breach of employment agreements as separate and distinct from just “breach” of employment agreements.[14]

33. The plaintiffs answer the complaint saying that the plea in paragraph 21 as against the defendants for equitable relief is based not only on the breach of their employment agreements but also the facts and matters pleaded in paragraphs 9 to 18 of the Statement of Claim.  It is pleaded in paragraph 17 that by virtue of the alleged conspiracy the defendants were in breach of their fiduciary duties owed to the 3^rd plaintiff (see also paragraph 8 and relief (3) by the 3^rd plaintiff against the defendants [88]).  As such, the plea has to be read in conjunction with these other pleas and not in vacuum.  Mr. Zimmern, however, agrees that the word unconscionable can be ignored.

34. I agree. If paragraphs 17 and 18 are not struck out as I have decided above, the plaintiffs’ claim for accounts for the defendants’ breach of fiduciary duties under the employment agreements will remain even if paragraph 21 were rectified to simple breach of the employment contract as proposed by the defendants.  The defendants are not taken by surprise.

35. Paragraph 21 should not be struck out on the ground as complained.

Costs and order

36. As to the costs of the applications, there is no reason that the plaintiffs should not bear the costs of and occasioned by their amendments to their Statement of Claim.  The costs are to be taxed, if not agreed, in any event.

37. As to the costs of the defendants’ application for striking out, the costs should follow the event.  The plaintiffs have given this Court two schedules of costs, one for the amendment and the other for the striking out.  I am to merge them together and make the assessment accordingly.  Taking a broad brush approach for the assessment, the plaintiffs’ costs for the striking out and the hearing on the amendment be assessed at $100,000, inclusive of all costs reserved in the meantime.

38. As to other defendants, since the plaintiffs are not asking for costs against them, I shall make no order as to costs for this hearing.

39. The Court now makes an order in terms as follows:

a. The plaintiffs’ application for amendment be allowed and, by consent, service thereof be dispensed with;

b. The 5^th and the 6^th defendants’ application for striking out be dismissed; and

c. The costs of the applications be as per paragraphs 36-38 supra.

HCA 2176/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2176 OF 2012

_________________________

BETWEEN

_________________________

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D E C I S I O N

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The application

1.  By summons dated 2 April 2014, the plaintiffs applied to the court pursuant to Order 24 rules 7 & 11 of RHC for specific discovery from each of the 4^th, 7^th to 18^th defendants by way of an affidavit in the prescribed form in respect of the documents set out in the schedule attached to the summons and for inspection thereof.  There are three categories of documents, namely,

a. Category A refers to the engagement agreements and/or documents pursuant to which the ex-employees of the 3^rd plaintiff were engaged to work in the business of 7^th to 18^th defendants;

b. Category B refers to the bank account opening documents and documents for change of bank account signatories in respect of all bank accounts used by the XD Group companies (7^th to 18^th defendants); and

c. Category C refers to the tenancy agreements of the business addresses of 7^th to 13^th defendants and also 15^th to 17^th defendants.[1]

2.  The defendants oppose the applications on the grounds that the documents are irrelevant, oppressive and disproportionate to the value that the plaintiffs would gain, if any, and it would not save costs.[2]  Defendants’ counsel states further in her written submissions that the documents contain confidential commercial secrets and that it is a fishing exercise.[3]

3.  Mr. J. Yu, counsel acts for the plaintiffs and Ms L. Lau, counsel acts for the defendants.

Factual background

4.  The 1^st plaintiff is the majority shareholder of the 2^nd plaintiff, which is the holding company of a group of subsidiaries providing a wide range of dental services in Hong Kong and Macau.  The 3^rd plaintiff is the operating arm of the 2^nd plaintiff.  The 1^st, 2^nd and 3^rd defendants were the shareholders and directors of the 2^nd plaintiff.  The 1^st, 4^th, 5^th and 6^th defendants were the employees of the 3^rd plaintiff.  The 7^th to 18^th defendants are the companies allegedly set up by the 1^st to 6^th defendants in competition with the plaintiffs’ business (“the XD Clinics”).

5.  The plaintiffs claim against the 1^st to 6^th defendants for various breaches of their shareholders’ agreements, employment agreements and/or fiduciary duties as employees and/or directors for their involvement of the formation and operation of the XD Clinics.[4]

6.  Further or in the alternative, the plaintiffs plead that the 4^th defendant and 7^th to the 18^th defendants conspired with one another in carrying out unlawful competition against the plaintiffs’ business by unlawful means.[5]

The relevant legal principles

7.  The relevant legal principles are as follows:

a. If the issue is not expressly pleaded in the pleadings, particularly for allegations of conspiracy, the documents concerning conspiracy are irrelevant and the application must be disallowed. Joyce T. Ongsip t/a LT Enterprises Co. v Pimatronics Ltd. (unreported, HCA611/2010, 7 June 2012)  at §§12 & 13;

b. However, relevance must be defined “by reference to the plaintiffs’ pleaded claim in its general sense, as distinct from its detailed exposition.  What matters for discovery purposes are the claim and defence to it in the broadest sense and not to the detailed particulars of either claim or defence.” by Deputy High Court Judge H Wong SC in Chan Hung v Yung Kwong Chung HCA 216 & 271/2004.  At paragraph 27 of the judgment, the Deputy Judge further said: “With respect, I agree with Colman J[6]. For the purpose of discovery, the relevance of a document should not be solely tested against the detailed particulars pleaded by the parties.  It is the pleaded case of the parties in the broad sense that one should be concerned with.  A document may be generally relevant to a party’s case as pleaded (many so-called “background documents” are of this nature) although its relevance cannot be specifically pinned to some pleaded particulars.  For discovery purpose, the pleadings have to be looked at broadly.”, see also Moulin Global Eyecare Holdings Limited (in liquidation)(formerly known as Moulin International Holdings Limited) & Or.vKPMG (a firm) (unreported, HCA118/2007, 8 June 2010), The Incorporated Owners of Kodak House II and No.321 Java Road v Kai Shing Management Services Ltd. (unreported, HCA711/2011, [2012] HKEC 1375) and adopted in Billion Lead Investment Ltd. v Union Joyce Ltd. & Others by M. Chan J. (unreported, HCMP2145/2011, 14 December 2012) and

c. Once the plaintiffs have shown to the court that the defendants have possession of or power over the documents, the relevance and disclosure of them will be for a fair trial or saving costs, the burden will shift to the defendants to show otherwise.  Tullett Prebon (Hong Kong) Ltd. v Chan Yeung Fong Nick & Others (unreported, HCA2197/2009, [2011] HKEC 761) by To J.;

d. The Court must not make oppressive order, the meaning of which depends on the circumstances of the case, such as massive class documents.  Deak and Company (Far East) Ltd. v N.M. Rothschild and Sons Limited & Others per Barker JA (unreported, CACV 28/1981, 4 November 1981) at page 5.

Discussion

8.  Defence counsel has set out the relevant issues of dispute in this matter as follows:

(i) whether there is a valid restrictive covenant,

(ii) whether there is any breach of employment agreements,

(iii) whether the Defendants had enticed away the ex-employees and ex-consultants of the Plaintiffs;

(iv) whether the XD clinics are in direct competition with the Plaintiffs’ business; and

(v) whether the 1^st to 18^th Defendants had conspired to wrongly compete with the Plaintiffs.[7]

9.  The defendants submit that whether the 1^st to 6^th defendants signed the engagement agreements, the tenancy agreements and/or become the authorized bank signatories of the 7^th to 18^th defendants are not relevant to the issues because they simply would not advance the plaintiffs’ case.[8]  Further, they submit that the dates of some ex-employees and ex-consultants of the plaintiffs engaged by the XD Companies or XD Clinics will not show whether they were enticed by the defendants or how and when they were so enticed into joining the XD Clinics.[9]  Finally, the defendants submit that the documents asked for by the plaintiffs contain confidential information about the defendant’s business and their personal particulars.  The court has the discretion to disallow the disclosure of those documents, relying on Re Global Info Ltd [1999] 1 BCLC 74 at 79a.

10.  This morning, the defendants go further to submit that the plaintiffs had through their solicitors in their correspondence told the defendants that the plaintiffs were concerned about the dates of the joining of the employees and the dates of the entering into the tenancy agreements for the business centres.  The plaintiffs had also agreed to redact the confidential information in the documents.  Now they are asking the court to have the documents without limitation.

11.  The defendants therefore submit that the plaintiffs’ application for discovery of the documents is merely a fishing exercise.

12.  On this issue of relevance, the plaintiffs submit that the massive exodus of employees from the 3^rd plaintiff was caused by the enticement of the 4^th defendant and others.  The exact words pleaded are:

“ By reason of all of the aforesaid, and in particular the involvements of the 1^st to 4^th Defendants in the set up/management/operation of the XD Group of companies and clinics; the proximity of the time of resignations of all of the aforesaid ex-employees of the 3^rd Plaintiff the proximity of the time of their respective engagements by the XD Group of companies and clinics, the Plaintiffs ask the Court to infer that these ex-employees of the 3^rd Plaintiff were enticed and/or solicited by the 1^st to 4^th Defendants to join the XD Group of companies and clinics” (emphasis added).[10]

13.  They rely upon the facts of the case of UBS Wealth Management v Vestra [2008] IRLR 965 §§21-38 and Tullett Prebon v Chan Yeung Fong Nick (unreported, HCA2197/2009, [2011] HKEC 761)  I do not want to have a detailed discussion of the facts of those cases, comparing them with the facts of this case here.  This should be within the province of the trial.  It is trite practice that the court should not embark upon a mini-trial of the matter in interlocutory proceedings on paper.

14.  Adopting the legal principle in Chan Hung’s case, it is not difficult to see that the documents that the plaintiffs are trying to discover from the defendants are related to the pleaded issues in paragraph 16(26) of the Statement of Claim.  Mr. Yu in his written submissions has hinted the use that he or his leader will put to those documents.  Those documents will be used for examination of the witnesses’ evidence at the trial. But I consider that they may also be useful for the defendants to advance the defence as well.  In any event, this is for the trial judge to consider.

15.  It should be borne in mind that the plaintiffs are asking the court to draw the inference from all the circumstances as pleaded to establish their case of conspiracy against the defendants.  As Sir Anthony Mason NPJ pointed out in Ming Shiu Chung& others v Ming Shiu Sum & others [2006] 2 HKLRD 831, at §72, inferences of fraud or serious misconduct are “......not to be reached by conjecture nor ...... on a mere balance of probabilities.”  They are “to be plainly established as a matter of inference from proved facts”.[11]  The plaintiffs have pleaded the facts in the Statement of Claim.  They are now asking for evidence in support of the alleged facts of their pleadings.

16.  If the defendants are so adamant that the documents to be discovered are irrelevant to the issues in dispute, I would be surprised that there is no application by the defendants to strike out paragraph 16(26) of the Statement of Claim.

17.  I consider that Mr. Yu is quite right that the documents the plaintiffs are seeking from the defendants are relevant, not only to the issue of conspiracy, but also the other causes of action viz. breach of the contract, the clause of restraint of trade, and fiduciary duties as directors and employees of the plaintiffs’.

18.  For these reasons, I consider that the plaintiffs have shown the relevance of the documents, the remaining questions for this court to exercise its discretion will be other grounds of confidentiality of the documents, oppression and whether they will save costs or for a fair trial.

19.  In Tullett Prebon (Hong Kong) Ltd., the court held that confidentiality is a factor to be considered but no defence to discovery and there is an implied undertaking not to use the documents for other purpose. See paragraph 18.

20.  The defendants’ objection on the ground of fishing will fall apart accordingly.

21.  The defendants say that the documents are disproportionate to their value to the plaintiffs and to compel the defendants to disclose them is oppressive. They rely upon the size of the documents as they say “ …the Plaintiffs are requesting the 4th, 7^th to 18^th Defendants to disclose at least tenancy agreements for 11 business entities, bank documents for 11 business entities, 38 engagement contracts for 11 business entities.  This is oppressive and completely disproportionate to the value that the Plaintiffs would gain (if there is any value which is not admitted) from this discovery exercise.”[12] 

22.  It appears that the defendants have no dispute over the number of business centres that they had set up for their business.  Nor do they dispute the number of employees allegedly from the plaintiffs’ set-up to the defendants’.  I consider that the court will require such evidence either from the plaintiffs or from the defendants at the trial.  It cannot be said to be oppressive to the defendants. Proportionality is out of the question in the circumstances.

23.  Finally, the defendants submit that the documents will not save costs. They propose that the plaintiffs may ask for information from them.  It is for the plaintiffs to determine the best way to advance their case.  They do not want to rely upon the defendants to supply the information voluntarily themselves.  Ultimately, if there is any dispute over the scope or the contents of the information, the plaintiffs may have to put the disputes before the court.  As I have considered that the burden on the plaintiffs in proving conspiracy against the defendants is heavy, relying upon the Ming Shiu Chung case, for the sake of fairness, the plaintiffs should be given access to those documents sought in order to advance their case.  The defendants have no dispute that they have the documents. Time will be wasted and the costs will be increased if they finally seek to produce them only at the trial.

24.  For the reasons above, I allow the plaintiffs’ application.

Costs and Order

25.  On the question of costs for today’s hearing, the costs should follow the event and are to be assessed under Order 62 rule 9A RHC at $75,000 to be paid by the defendants within 14 days from the date hereof.

26.  I shall now make an order in terms as follows:

a. An order for discovery in terms of paragraphs 1 and 2 of the plaintiffs’ summons dated 2 April 2014 as amended that the time for the defendants to make the affidavits be extended to 28 days from the date hereof and inspection to follow within 14 days thereafter;

b. The costs of this application, including the costs reserved and today’s hearing be to the plaintiffs as per paragraph 25 supra.

Mr. Jason Yu, instructed by Li, Wong, Lam & W.I. Cheung, for the plaintiffs

Ms. Lorinda Lau, instructed by Ng, Lie, Lai & Chan, for the 4^th, 7^th to 18^th defendants