TRENUS OCEANWAY LTD v. RICHLAND INTERNATIONAL LTD AND ANOTHER

HCCW 352/2014

[2022] HKCFI 1419

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP)  PROCEEDINGS NO 352 OF 2014

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HCA 228/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 228 OF 2017

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(Heard Together)

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DECISION

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1.  This is the application of the Defendant in HCA 228/2017 and the 1^st Respondent in HCCW 352/2014 (“Lau Camp”)[1] to have the said two sets of proceedings tried together or heard at the same time. The application is resisted by the other side in those proceedings (“Chu Camp”).

2.  Mr Lau Wing Yan and Mr Chu Kong are the primary antagonists in not only these proceedings.  Between them and their associates or nominees, they had generated over 30 sets of proceedings in Hong Kong alone.  Their disputes can be traced to a business divorce when they decided to terminate their cooperation in January 2014. 

3.  On 23 March 2021, after 5 of the proceedings between the two Camps were docketed to this court, a global CMC was held.  In addition to the 5 proceedings, all other proceedings which were on foot between the two Camps[2] were considered by the court with the view to minimising the wastage of the court’s resources.

4.  At the end of the global CMC, 2 set of proceedings were directed to be tried together, namely, HCA 228/2017 and HCA 1431/2015 (both docketed to this court).  It was agreed by the two Camps that the determination of these proceedings would resolve the core dispute between Mr Lau and Mr Chu over the division of their business.  The resolution of the core dispute should either dispose or lead to the disposal of many of the other proceedings.  With the consensus of the two Camps, the other 3 actions which were docketed to this court were stayed pending the final determination of HCA 228/2017.

5.  Having elicited the view of both Camps on whether the other proceedings on foot should be stayed, the stay was subsequently extended to 7 additional actions after consulting the parties involved.

6.  HCCW 352/2014 was discussed in the course of the global CMC and there was a general consensus that it should not be stayed because winding up proceedings should be resolved quickly, and it should be allowed to run its course.

7.  In support of this application, the Lau Camp says that there are common issues of law and facts in both HCA 228/2017 and HCCW 352/2014; the rights to relief claimed are intertwined; there is significant overlap in the evidence; and having the two proceedings tried together is desirable as a matter of proper case management. 

8.  In opposing the application, the Chu Camp says that it is both contrary to the consensus of the parties at the global CMC and the earlier decision of Mr Justice Harris made on 13 September 2019 (Decision dated 26 March 2020)  by which Mr Lau’s application to have HCCW 352/2014 tried together with HCA 227/2017 and HCA 228/2017 was dismissed. 

9.  Whilst I accept that case management decisions may be revisited with sufficient cause, it would not be conducive to efficient and effective case management if pervious decisions are changed without sufficiently strong reason. 

10.  I am unable to accept that the reason advanced by the Lau Camp, namely, change of circumstances, has been made out.  In particular, this court was informed at the global CMC about the overlap of issues in HCCW 352/2014 as well as the development in those proceedings – the vacation of the trial and existence of unresolved interlocutory applications. By the same token, it is not clear why the Lau Camp is now changing their mind on letting HCCW 352/2014 run its course.

11.  Although there is force in the grounds advanced in support of this application, on careful analysis there is much downside in having the 3 actions tried together. 

12.  Firstly, HCA 228/2017 and HCA 1431/2015 involve many issues in addition to those which overlap with HCCW 352/2014 (“Common Issues”).  This can be seen from the Lists of Agreed Issues filed in HCA 228/2017 and HCA 1431/2015.  Those Lists may be amended pursuant to the order given by this court on 26 April 2022.  HCCW 352/2014 also involves other issues in addition to the Common Issues.  In particular, there will be company law issues such as whether Mr Chu has come to court with clean hands in seeking winding up relief on just and equitable grounds. 

13.  There can be no doubt that a trial of all 3 actions will be very complex in terms of the magnitude of issues alone, and it will last many days.  The adjourned trial of HCCW 352/2014 was fixed for 10 days.  More days will likely be required as a consequence of additional issues introduced after the adjournment.  On a conservative estimate, a consolidated trial of all 3 actions will likely require no less than 20 days.  This brings the second point.  As far as this court’s diary is concerned, a 20-day trial can only be accommodated in 2024 at the earliest.  Taking 10 years to have a winding up action tried is highly undesirable.

14.  Thirdly, I am not convinced by the Lau Camp that HCCW 352/2014 and HCA 228/2017 are at similar stage of readiness.  At the global CMC, the court had expressed the view that the core dispute should be resolved as soon as possible.  More than a year later, at the next CMC on 26 April 2022, there was little real progress made by the parties to get the case ready for trial.  The pleadings still required amendments and supplemental witness statements had to be filed. 

15.  I pause to observe that, given their considerable resources, the delay in advancing actions started in 2015 and 2017 tends to show that neither Mr Lau nor Mr Chu is keen to have their disputes resolved by the court with speed. 

16.  Judging by the multiplicity of interlocutory applications in HCCW 352/2014, including applications for leave to appeal against interlocutory decisions, there is little reason to believe that the parties will be less contentious in the conduct of HCA 228/2017 or HCA 1431/2015 and the trial of these actions can be set down in the near future.  Having all 3 actions tried together will not assist in resolving any of the disputes with expedition.

17.  Finally, the risk of inconsistent findings by different court is mitigated by the acceptance by both Camps that the findings made in any of the 3 proceedings on the Common Issues will be binding on Mr Lau, Mr Chu and their proxies. 

18.  For these reasons, I dismiss the application (both Summonses).  I make an order nisi that the costs of the application be paid by the Lau Camp with a certificate for two counsel.  The order nisi will become absolute in the absence of variation application made within 14 days from the date of this Decision.

19.  The costs are to be summarily assessed on paper, if not agreed, for which purpose a Statement of Costs is to be lodged and served by the Chu Camp within 14 days from the date of this Decision.  The Lau Camp is to lodge and serve their comments thereon (limited to 3 pages in font size 14 with double line spacing)  within 7 days thereafter.  Reply to the comments (limited to 2 pages in font size 14 with double line spacing), if any, is to be lodged and served by the Chu Camp within 3 days thereafter.