WING FAI CONSTRUCTION CO LTD v. BENEFIT HOLDINGS INTERNATIONAL LTD AND OTHERS

HCA810/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.810 OF 2003

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D E C I S I O N

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1. This is an appeal against the decision of Master Wolley made on 24 February 2004, where the learned Master dismissed the defendants' application for Further and Better Particulars of the Statement of Claim. The request for Further and Better Particulars that remained relevant for the purpose of this hearing are nos. (1), (8), (9), (12), (13) and (14), and they fall within three broad categories which I would call the "Shadow Directorship Claim", the "Damages Claim" and the "HK$3 million Claim."

The Shadow Directorship Claim

2. Turning first to the claim for Shadow Directorship, the request was made under paragraph 20(b)(i) of the Statement of Claim. The pleading reads :

"(i)	The Appointed Directors acted on instructions from the Second, Third and Fourth Defendants in all matters to do with the Plaintiff's business and management."

The request is to ask for all facts and matters relied upon by the plaintiff for the allegation that the appointed directors so acted.

3. Having heard Mr Clifford Smith, SC on behalf of the defendants and having heard Mr Jose Maurellet on behalf of the plaintiff, I am of the view that it is not possible for the plaintiff to further particularize how exactly the 2nd, 3rd and 4th defendants have behaved as shadow directors. As stated in the Statement of Claim, the appointed directors acted on their instructions in all matters to do with the plaintiff's business and management, and I would think that in the light of that broad allegation, the defendants must be able to know what exactly is the case that they have to meet. It is not a case that some of the appointed directors on occasions on matters of importance acted on instructions from one or more of the defendants in question, the claim is sweeping as it is : that the appointed directors acted upon instructions from the 2nd, 3rd and 4th defendants in all matters to do with the plaintiff's business and management, so effectively they say that the 2nd , 3rd and 4th defendants acted as directors throughout. In my view that matter is not something that the plaintiff can be asked to provide further particulars on. To ask more would, in my view, be asking for evidence to support the plaintiff's case.

The Damages Claim

4. Turning to the request which are numbers (8) and (9) under paragraph 35 of the Statement of Claim, that is the request for the plaintiff to particularise their loss and damage suffered as a result of the alleged conspiracy pleaded against the defendants. The complaint is that no particulars have been given and the defendants have submitted that these particulars must be given, relying on ADS v. Wheelock Maden [1994] 2 HKC 264.

5. I accept the principle as stated in the ADS case. However in the plaintiff's solicitors' letter dated 20 November 2003, at paragraph 6, the plaintiff's solicitors have made it clear that their claim is against the defendants for a declaration against the 1st defendant, who is the recipient of the HK$5 million in question, that it holds that sum as constructive trustee for the plaintiff and an account of that sum or, in the alternative, the plaintiff seeks damages against all four defendants in the sum of HK$5 million.

6. It seems to me very clear from that paragraph that the damages that the plaintiff's claim is in the sum of HK$5 million. Of course that is special damages claimed by the plaintiff and that does not preclude general damages, the damages at large which the court may choose to award in the event that a successful claim for conspiracy is made out. But it seems to me that once one looks at the terms of that letter, insofar as the nature of the plaintiff's claim in terms of damages arising from the alleged conspiracy is concerned, the plaintiff's claim is clearly limited to HK$5 million and not any other sum. It would not be permissible for the plaintiff to spring on the defendants at the trial any sum other than the HK$5 million. Of course that does not mean that they cannot be allowed to claim a sum less than HK$5 million, but the defendants would have the "comfort" (if that may be the word) of knowing that that is the limit of the claim made against them in terms of the damages arising from the alleged conspiracy. So in relation to those paragraphs, the appeal is dismissed.

The HK$3 million Claim

7. The other remaining requests nos. (12) to (14) are requests made under paragraph 15 of the Statement of Claim. I will not read out the paragraph of the Statement of Claim. In short, what the defendants are complaining about is that the plaintiff have been able to particularise how HK$2 million out of that HK$5 million allegedly went from the plaintiff's bank account via Sino Glister and found its way to the 1st defendant. What they are complaining of is that there is no pleaded case as to how the remaining HK$3 million was transferred to the 1st defendant save that there is pleading as to how the HK$3 million originated from the plaintiff and found its way to Sino Glister.

8. Having heard from Mr Maurellet and Mr Smith, it seems to me that the plaintiff's position is that they are at the moment unable to say what is the precise case on the movement of the HK$3 million. Mr Smith said that even if that be the case, it would be helpful to the defendants for the plaintiff to set that out formally in the pleading, so that they would know exactly what to do and how to take the matters from there.

9. In my judgment, Mr Smith is correct in that regard. I would,for the reasons that he advanced, order that the plaintiff do provide the particulars as sought in relation to Answer paragraph 1(2)(v), which is the number used in the Further & Better Particulars of the Statement of Claim given on 2 October 2003, alternatively, a statement of their case in relation to the sum of HK$3 million. So if the plaintiff cannot give the particulars as sought, they can at least give a statement of their case. If they are not able to give a statement of their case, then the defendants will know the position and they can decide for themselves what next to do. For that reason, I will allow the appeal insofar as the requests under paragraph 15 of the Statement of Claim are concerned.

[Submissions on Costs]

10. Having heard the arguments on costs, I think at least in relation to the hearing before the Master, I am not prepared to disturb the costs order that he made. It seems to me that even taking into account the result of the decision today, the plaintiff was substantially the winner before the Master and I would, therefore, not disturb the Master's order.

11. In terms of the hearing today, Mr Smith has argued that he is substantially the winner and he emphasized the importance of the arguments on the case for the HK$3 million. However, I agree with Mr Maurellet that when one looks at the matter broadly, I think this is probably more or less a draw. For that reason, I am of the view that the costs for today should be costs in the cause. That I think would be a fair order to make.