M BERGMANN AG v. TSINLIEN METALS AND MINERALS CO. LTD.

HCCL198/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO.198 OF 1997

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D E C I S I O N

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1. At 10 a.m. on Tuesday, 21 November, the trial of this action in HCCL 198/1997 was called. Mr Anselmo Reyes, instructed by Messrs Clyde & Co. for the plaintiff, appeared to represent the plaintiff in this action, which had been set down for four days commencing on 21 November. It is a breach of contract case between a Swiss company and a Hong Kong company with Mainland interests.

2. At the commencement of the case yesterday, no representative from the defendant company, Tsinlien Metals and Minerals Co. Ltd, was present. Nor were any lawyers instructed by that company present in court to represent that company in this trial. The reason for this appeared tolerably clear. On 26 October 2000, those hitherto instructed by the defendant to represent it in this litigation, namely the solicitors firm of Messrs Raymond T.Y. Chan, Victoria Chan & Co., successfully applied to remove themselves from the record and to cease acting for the defendant. This was an application which had been served upon the defendant company. This application was, if my memory serves me correctly, made upon the dual basis of insufficiency of funds, and lack of instructions. The solicitor who appeared on that occasion explained to the court that with the trial approximately one month hence, she was very concerned about the position, and it appeared, at least from her evidence, that she did not have successful communications with those in charge of the defendant. In any event, that firm of solicitors was permitted to cease to act.

3. When there was no sign of anybody from the defendant at the opening of this case yesterday morning, the court suggested to counsel for the plaintiff, Mr Anselmo Reyes, that it would be advisable to attempt to check with the defendant company to ascertain the position. The court did not know, and there was no sign on the face of the court documents, that there had been any attempt by the defendant company to comply with the provisions of Order 5, rule 6(2)(b), but in any event, it was felt appropriate to try and make contact, principally to ensure that no misunderstanding had occurred. I therefore adjourned the case for approximately 30 minutes whilst my clerk made a number of telephone calls. She informed me that she had been able to contact the offices of the defendant company, but that no one who was present had known anything about this case, and that she had been able to speak with no one in authority. Against the background of solicitors ceasing to act and in light of this information, it was judged appropriate to commence the trial which, in substance, consisted of Mr Reyes attempting to prove his case.

4. A further phone call or calls, I understand from my clerk, were made during the short adjournment at approximately 11:30. Indeed, I understand that either during the initial set of phone calls or the subsequent contacts with the defendant that my clerk spoke to a gentleman named Mr Cao Ying Jian, who had said that he was not authorized to represent the company and, I believe (although I was not privy to the conversation) also indicated that he had little knowledge about this matter.

5. During the course of yesterday the trial continued until its conclusion at approximately 3:40 p.m. yesterday afternoon. Often in such cases, it is the practice of this court to render an immediate extemporary judgment. But due to the details of this particular case, and to one or two points which the court wish to consider further, the case was adjourned overnight, and an appointment was made for today, that is 22nd, at 2:30 p.m., for judgment to be delivered.

6. Shortly before entering court to deliver judgment, my clerk informed me that a gentleman known as Mr Cao Ying Jian was present in court. He had with him a letter of authority under the letterhead of Tsinlien Group Company Ltd, dated 21 November 2000, which reads as follows :

"To Whom It May Concern

Dear Sirs,

RE: LETTER OF ATTORNEY

We hereby authorized Mr Cao Ying Jian holder of Hong Kong Identity Card No.XXXXXXX(X), a manager, to represent us in High Court Commercial List No.198 of 1997.

For and on behalf of
Tsinlien Metals and Minerals Co., Ltd"

And a signature therein then follows which purports to be that of Mr Wang Guang Hao, a director. The letter also bears the chop of the Tsinlien Group Company Ltd, Hong Kong.

7. Prior to delivering judgment, the court permitted Mr Cao to say what he wished to say. Mr Reyes pointed out, perfectly correctly, that generally only directors have the right to address the court, but in these particular circumstances, the court exercised its discretion to hear Mr Cao.

8. The broad upshot of his address is as follows. He had indeed received a phone call from my clerk yesterday. Yesterday he had not been authorized to represent the company, but today he was authorized so to do. He confirmed that he is not a director of the defendant, and that he had been asked to come to court by Mr Wang Guang Hao, the chairman of the company, whom, he tells me, is in Hong Kong. The thrust of Mr Cao's address, apart from apologising for his late appearance, was to say (and here I attempt to summarize) that the person who knows the affairs of the defendant company best is one Mr Lu Jai Xin, who is presently in China, and he asked the court to adjourn the case for Mr Lu to appear, and in order to give Mr Lu time to instruct a lawyer to represent the company and "to have the case heard again". Mr Cao said he was fully aware that the plaintiff came here yesterday and is here today and that his company was absent yesterday, and he undertook to pay the costs of yesterday and today.

9. What had apparently happened, as was subsequently clarified, is that Mr Cao had not spoken yesterday to Mr Lu himself on the telephone, but that Mr Lu had had a telephone conversation with Mr Cao's boss, that is Mr Wang, who had then spoken to Mr Cao and had asked him to come to court. So that is the background to the somewhat unusual situation that has arisen.

10. On behalf of the plaintiff which, of course, attended here this afternoon through counsel merely in order to take judgment, Mr Reyes resisted the application for an adjournment. The matter had been heard, he said, and there was no real material upon which the court could properly exercise its discretion apart from the "say so" of Mr Cao, whom in any event was not a director and should not have been heard. The information, moreover, that Mr Cao had relayed to the court had come via Mr Wang, who had spoken to Mr Lu, who appears, from what Mr Cao had said, in practice to be the guiding force behind the defendant company. There was no evidence, said Mr Reyes, as to the alleged lack of funds which caused this company's former solicitors to come off the record, nor was there any evidence as to promised funds which are now said may be forthcoming. I note further that Mr Cao made no reference in his address in terms of how long the matter now should be adjourned, nor indeed proffered a timetable of any kind.

11. Apart from the provisions of Order 5, rule 6(2)(b) and Order 5, rule 6(3)(a) and (b), to which Mr Reyes drew my attention (the technical points), and apart from the fact that even now there was no director before the court, Mr Reyes submitted that to adjourn at this eleventh hour would be inappropriate in all the circumstances, and would cause prejudice to his client. He also drew my attention to the note in the White Book at 5/6/3, page 34. Looking at it in the round, although Mr Reyes properly recognized that the court has an overriding discretion in matters of this type, he invited the court to deliver its judgment now. It was clear, he said, that Mr Cao knew nothing of the case itself, and apart from the adjournment that Mr Cao had come to court to request - the adjournment of a case the hearing of which now had been completed - Mr Cao had said nothing whatever about the merits or the company's suggested defences to this case. In fact, it was abundantly clear that Mr Cao really had no knowledge of what this case was about. Nor did the court understand why, if the telephone call was made by Mr Lu to Mr Wang yesterday, that it was left until today for Mr Cao to appear. A significant number of matters remain unclear.

12. What, therefore, is the court to do in this circumstance? Every effort had been made to contact the company yesterday and nothing had occurred, and, indeed, I have also been reminded by Mr Reyes that his skeleton argument and enclosures was delivered to the company's registered office on Monday, 20 November, and that the letter accompanying those documents was stamped by the defendant company. So there is no question of lack of knowledge, and of course the court has no idea of what may have passed between the company's former solicitors and Mr Lu, who seems to have been primarily responsible for the activities of the company, and whose name appears not infrequently in the case papers before the court which were referred to in extenso by Mr Reyes during his submission yesterday.

13. During his address, Mr Cao made the comment that he trusted the court would deal with this case "in a just manner". That is a legitimate expectation, and it is undoubtedly the aim of all courts in the SAR to do precisely that. But justice is a two-way street. The justice of a case is not to be discerned simply from the point of view of one of the parties. The interests of the plaintiff must also be considered. Justice is nothing if not even-handed.

14. So the situation today is simply this. The trial has been concluded, subject to judgment being delivered; the defendant company now sends an emissary to ask that the matter be further delayed. There is no admissible evidence before the court upon which to act, although as I have said, as a matter of courtesy, Mr Cao was permitted to address the court.

15. In all the circumstances of this case, I am strongly disinclined to permit further delay. I have set out the background of this matter in some detail in this ruling because my decision now to proceed in the anticipated course must be viewed in that context. The plaintiff has come to trial and expects a judgment. The defendant did not come to trial; its solicitors came off the record and then immediately before the delivery of that judgment, seeks to ask, via a non-director, that the matter now be indefinitely postponed. I do not accede to that application. In the exercise of my discretion, after considering all the facts, I will now deliver my judgment in this case.