CHENG WING HONG v. YEUNG PING CHIU

HCA 2355/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2355 OF 2008

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DETERMINATION

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INTRODUCTION

1.  This is a dispute between two equal partner of an engineering business.  The Plaintiff (in his Statement of Claim) alleges the Defendant  of having wrongfully withdrawn from the partnership account a total sum of some $11 million without his knowledge or permission.

2.  The relevant paragraphs that lead to the present application by the Plaintiff for further and better particulars are paragraphs 6(a), (b), (c), 7 and 12 of the Defence and Counterclaim.

3.  The Defendant in paragraph 6 contends that there was an oral agreement between the parties regarding the sharing of profits:

(a)  For jobs done by the Plaintiff alone, the Plaintiff would be entitled to have exclusive profits;

(b)  For jobs done by the Defendant alone, the Defendant would be likewise entitled to exclusive profits;

(c)  For jobs that both the parties have taken part, the profits would be equally shared.

4.  In paragraph 7, the Defendant avers that most of the jobs of the partnership business were done by him without the Plaintiff’s involvement.

5.  In paragraph 12, the Defendant pleads to the alleged withdrawals by denying any wrongdoing regarding the withdrawals and avers that they were for the purposes of  (i) imbursements;(ii) purchase of materials and (iii) profits that the Defendant were allegedly entitled to as particularized in paragraphs 6 and 7.

PARTICULARS SOUGHT

6.  For particulars sought under paragraph 6, the Plaintiff requires the Defendant to provide particulars for those jobs done respectively by (a) the Plaintiff, (b) the Defendant and (c) by both of them.

7.  For particulars under paragraph 7, the Defendant is asked to give particulars for jobs that were allegedly done by the Defendant.

8.  In respect of paragraph 12, the Plaintiff requires the Defendant to:

(a)  state whether all withdrawals were authorized;

(b)  state the mode of the authorized withdrawals;

(c )  identify withdrawals relating to the alleged reimbursements;

(d)  (i) identify the jobs in respect of which the Defendant were allegedly to have been reimbursed; (ii) particulars of expenditures;

(e)  identify withdrawals for the payment of purchases of materials;

(f)  provide particulars similar to (d) above in relation to the withdrawals for the alleged purchases;

(g)  identify withdrawals that represented profits the Defendant ware allegedly to be exclusively entitled to;

(h)  provide particulars similar to (d) above in relation to the withdrawals for profits.

DISCUSSION

Issue

9.  Particulars will only be allowed if they are relevant to the issue in dispute.  From the pleadings, it appears that the issue in dispute is whether the withdrawals by the Defendant from the partnership account had been authorized.

10.  I will only allow particulars that are relevant in fairly disposing of this issue.

RULING ON THE PARTICULARS SOUGHT

Paragraph 6

11.  The particulars sought in respect of paragraph 6 are not relevant because the Defendant has only averred to an alleged agreement between the parties relating to the sharing of profit of the partnership business.  The detailed particulars sought, in my view, have no relevance to the issue of whether the withdrawals had been authorized.

12.  Hence, the request is declined.

Paragraph 7

13.  This request is also declined for the same reason that it does not go to show whether the withdrawals were authorized or not.

Paragraph 12

14.  This paragraph forms the core of the Defendant’s defence to the allegation of wrongful withdrawals.  The Defendant has simply given three bases of authorization: reimbursement, payment for materials and exclusive profits allegedly belonging to the Defendant only.

15.  The pleading as it presently stands however fails to identify the different alleged proper purposes in respect of the withdrawals. Particulars must be given.

16.  However I decline to allow request (a) as it is clear from paragraph 12 that it is the Defendant’s case that all the withdrawals were authorized.  The mode of withdrawal is not relevant and should also be declined.

17.  Hence, the Defendant shall provide particulars for (c), (e) and (g).

18.  As for the consequential requests of (d), (f) and (h), they hinge upon evidence, and I am not inclined to allow them in their present form. 

PARTICULARS ORDERED ON OWN MOTION (O.18 r.12(3A))

19.  However, I would instead order the Defendant to give the following particulars in relation to each alleged particular purposes for the authorized withdrawals:

(A)  Of each of the alleged  purposes for the withdrawals, if they were alleged to be for the purpose of reimbursement , and purchases, state

(i)  the type of the expenditures ,and of the purchases;

(ii)  purpose of the expenditure, and of the purchases;

(iii)  total amount of each type of expenditures, and of the purchases.

(B)  If exclusive profit was alleged, give particulars of the total amount of the alleged profits, when and how they were made.

ORDER AND DIRECTIONS

20.  I grant an order in terms of paragraphs 17 and 19 above.

21.  The Plaintiff has applied for particulars in respect of 3 paragraphs of the Defence, and has only succeeded in obtaining particulars for part of paragraph 12, I will therefore only allow ½ of the Plaintiff’s costs.

22.  I order that the Defendant do pay 50% of the Plaintiff’s costs (with costs reserved) together with a certificate for counsel.

23.  In the Plaintiff’s Statement of Costs, the Plaintiff claims a total sum of $50,730. The total amount of gross sum costs is assessed to be in the sum of $30,000, and 50% of that amount will be $15,000.

24.  The said costs order is nisi.