HCMP2621/2009

HCMP 2621/2009
& HCA1511/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2621 OF 2009

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JUDGMENT

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Introduction

1.  This is a Case Management Conference in this action.  On 7 July 2010, Master Lung made an order directing that the following three summonses in the action be heard at this Case Management Conference.  The three summonses are : (i) the plaintiff’s summons dated 28 June 2010 for leave to file the supplemental witness statement of Mr Michael Pantalony, (ii) the 2^nd defendant’s summons for leave to file her supplemental witness statement, and (iii) the 2^nd defendant’s summons for an order that the present action be tried together with HCA 1511 of 2009.

2.  The first two summonses are not controversial.  The substantive argument before me today has been in respect of the summons for an order that the action be tried together with HCA 1511 of 2009.

3.  In keeping with the normal practice on an application under RHC Order 4 rule 9, a similar summons for an order that HCA 1511 of 2009 be tried together with this action has been issued by the 6^th to 10^th defendants in HCA 1511of 2009.

The applications to file supplemental witness statements

4.  These applications were not controversial.  Since the only issue in respect of the supplemental witness statements appears to relate to the question of relevance of the evidence contained in those supplemental statements, I propose to make the following orders in respect of them :

(1)     leave be granted to the plaintiff to file the supplemental witness statement of Mr Michael Pantalony attached to the plaintiff’s summons dated 28 June 2010 within 10 days from the date of this order, without prejudice to the 2^nd defendant’s right to dispute the relevance of any part of that statement at trial; and

(2)     leave be granted to the 2^nd defendant to file the supplemental witness statement attached to the 2^nd defendant’s Listing Questionnaire dated 5 November 2010 within 10 days from the date of this order, without prejudice to the plaintiff’s right to dispute the relevance of any part of that statement at trial.

5.  I direct that the costs of the plaintiff’s summons dated 28 June 2010 (in respect of the supplemental witness statement of Mr Pantalony) and the costs of the 2^nd defendant’s summons dated 30 June 2010 (in respect of her supplemental witness statement) be reserved.

The application that the two actions be tried together

6.  Under RHC Order 4 rule 9(1), where two or more causes or matters are pending, if it appears to the court that some common question of law or fact arises in both or all of them, or that the rights to relief claimed therein are in respect of or arise out of the same transaction or series of transactions, or that for some other reason it is desirable to make an order under this rule, the court may order those causes or matters to be consolidated on such terms as it thinks just or may order them to be tried at the same time, or one immediately after another, or may order any of them to be stayed until after the determination of any other of them.

7.  In order to determine whether the circumstances for an order under RHC Order 4 rule 9(1) exist, it is necessary to examine briefly the underlying claims in the two actions.

8.  HCA 1511 of 2009 is a claim by the plaintiff against 10 defendants with a view to recovering a judgment debt of US$3,556,034.22 awarded to the plaintiff in proceedings against the 1^st to 5^th defendants in HCA 1511 of 2009 in proceedings against them in the US for trademark counterfeiting and trademark infringement.  The 6^th to 10^th defendants in HCA 1511 of 2009 were joined as parties alleged to be holding assets as nominees for and on behalf of the 4^th defendant, Mr Lam Chong (“Mr Lam”).  The 8^th defendant, Madam Kwok Kam Wai (“Madam Kwok”), is the ex-wife of Mr Lam.

9.  The 1^st to 5^th defendants have chosen not to defend the action in HCA 1511 of 2009 and so judgment has been entered against them for the judgment debt of US$3,556,034.22 and fixed costs of HK$13,045.  The 6^th to 10^th defendants are defending the action and have instructed Messrs Kong & Tang to act on their behalf.

10.  The 6^th to 10^th defendants hold 7 different properties and 16 bank accounts in Hong Kong (“the Assets”).  They do not admit the plaintiff’s claim and deny that those assets held in their names are available for execution to satisfy the judgment debt and costs in question.

11.  In HCA 1511 of 2009, the plaintiff has obtained a charging order absolute in respect of three properties, one of which is a property of which Mr Lam is the sole registered owner (“the Property”).

12.  Since the judgment debt and costs as against the 1^st to 5^th defendants in HCA 1511 of 2009 have not been paid, the plaintiff commenced this action, HCMP 2621 of 2009, by way of originating summons against Mr Lam for an order for sale of the Property.

13.  Although Mr Lam filed an acknowledgement of service in this action stating that his address for service was an address in Douglaston, New York, he has filed no further documents in this action.

14.  Messrs Kong & Tang, solicitors for the 6^th to 10^th defendants in HCA 1511of 2009, filed a notice to act for Madam Chen Choi Ying (“Madam Chen”).  Madam Chen filed an affirmation to oppose the plaintiff’s application in this action, HCMP 2621 of 2009, for an order for sale of the Property on the basis that she is living in the Property and is the beneficial owner of it. An order was made that Madam Chen be joined as 2^nd defendant to this action and that it be continued as if the proceedings had been begun by writ.

Discussion

15.  In the light of the background of HCA 1511of 2009, the issues in dispute and the questions of law and fact arising are :

(1)     whether the 6^th to 10^th defendants were acting as nominees of Mr Lam in Hong Kong in acquiring, receiving and/or holding the Assets in the names of the 6^th to 10^th defendants respectively on behalf of or to the order and/or control of Mr Lam;

(2)     whether the plaintiff is entitled to take enforcement action against the Assets.

16.  In this action, HCMP 2621 of 2009, the issues in dispute and the questions of law and fact arising are :

(1)     whether the 2^nd defendant, Madam Chen, has any beneficial interest in the Property;

(2)     whether the plaintiff is entitled to an order for sale of the Property.

17.  Mr Roland Lau, counsel for the 2^nd defendant in this action, submits that it will be economical to try the two actions together.  He refers to the fact that the principal witness for the plaintiff in both actions is Mr Pantalony and that his witness statements in the two actions contain many similar allegations of fact.  He makes the point that if Mr Pantalony were to give evidence separately in the two actions, this would involve more costs as he is resident outside Hong Kong and will therefore have to travel to Hong Kong on two separate occasions in order to give evidence.  I accept that, if Mr Pantalony were only to have to come to Hong Kong once to give evidence that there would be some savings in costs, and I will take that into account in exercising my discretion.

18.  Mr Lau also submits that cost savings will be achieved if the two actions are tried together because the same solicitors act for the plaintiffs and the solicitors for the 6^th to 10^th defendants in HCA 1511of 2009 and the 2^nd defendant in this action, HCMP 2621 of 2009, are the same.  As against this, I am informed by Mr Philips Wong, counsel for the plaintiff in this action, HCMP 2621 of 2009, that different counsel have been instructed on behalf of the plaintiff in HCA 1511of 2009.  I accept, however, that the effect of common solicitors in the two actions and the instruction of the same counsel for the defendants in both actions will result in some savings of costs, and I will take that into account in exercising my discretion.

19.  As against these factors, however, I consider the following matters to be relevant. First, the Assets which are the subject of HCA 1511of 2009 do not include the Property, the subject of HCMP 2621 of 2009.  Secondly, the particular issues in HCA 1511of 2009 concern the capacity in which the 6^th to 10^th defendants acquired, received or hold the Assets, whereas in this action, HCMP 2621 of 2009, the question is whether the 2^nd defendant, Madam Chen, has any beneficial interest in the Property.

20.  Although, therefore, the underlying purpose of the two actions is to recover the judgment debt and costs, the issues and the questions of law and fact arising are not the same.

21.  Furthermore, although some of the background evidence in respect of the relationship between Mr Lam, Madam Kwok and Madam Chen is common to both actions, I am satisfied that the allegations and facts relied on by the plaintiff and the 6^th to 10^th defendants in HCA 1511of 2009 on the one hand and by the plaintiff and the 2^nd defendant in this action, HCMP 2621 of 2009, on the other hand, are different.  I am also satisfied that the documentary materials relied upon by the plaintiff in the two actions are different.

22.  The trial of the action in HCA 1511of 2009 has been fixed to commence on 11 May 2011, with 8 days reserved.  The trial of this action, HCMP 2621 of 2009, has not yet been set down.  There is a risk, if this action were ordered to be tried together with HCA 1511of 2009, that the trial of HCA 1511of 2009 might be delayed.

23.  Notwithstanding the possible cost savings elements identified by Mr Lau, I am satisfied that the two actions are sufficiently distinct that it is not appropriate for an order to be made that they should be tried together.  The application for consolidation has been made at a relatively late stage and it would appear that it was only after the exchange of witness statements in this action, HCMP 2621 of 2009, that the application was made.  I therefore think there is some merit in Mr Wong’s submission that the lateness of the application suggests that the defendants in both actions and their legal advisers had hitherto not thought the issues in the two actions were sufficiently similar to justify an application that they be tried together.

24.  For these reasons, I dismiss the 2^nd defendant’s summons dated 28 June 2010 Under RHC Order 4 rule 9 in this action, HCMP 2621 of 2009.

25.  I also dismiss the 6^th to 10^th defendants’ summons also dated 28 June 2010 under RHC Order 4 rule 9 in HCA 1511of 2009.

26.  Finally, I grant leave to the plaintiff to set down the present case within 42 days for a 3-day trial before a judge alone in the fixture list.  I direct that there be a pre-trial review before the trial judge for 30 minutes on a date 12 weeks before the trial.  The parties are to confirm the length of the trial by counsel in charge at the pre-trial review.  Upon setting down, all interlocutory applications shall be listed to be heard by the trial judge or a judge.

27.  In respect of the costs of the two summonses, I order that :

(1) the 2^nd defendant pay to the plaintiff the costs of and occasioned by her summons in HCMP 2621 of 2009 dated 28 June 2010 forthwith, to be taxed if not agreed; and

(2) the 6^th to 10^th defendants pay to the plaintiff the costs of and occasioned by their summons in HCA 1511 of 2009 dated 28 June 2010 forthwith, to be taxed if not agreed.