KOMAL PATEL AND OTHERS v. CHRIS AU AND OTHERS

HCA 183/2014 &
HCA 2063/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 183 OF 2014

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AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2063 OF 2015

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(Heard Together)

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D E C I S I O N

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Introduction

1.  There are two summonses before me in relation to two separate actions where each of the plaintiffs makes application to consolidate the two actions so that they can be heard together. 

2.  The first action is HCA 183/2014 and the second action is HCA 2063/2015.

3.  I will briefly describe the two actions and without intending any discourtesy I will refer to the individual parties by their surname and the corporate parties by an abbreviation of the corporate name.

4.  The first action was instituted in January 2014 by the 1^st, 2^nd, 3^rd and 4^th plaintiffs (Patel, Cohen, Apostolides and Rocky Cape respectively) against the 1^st, 2^nd and 3^rd defendants (Au, Ho and Retribution respectively) and later in that action Au instituted a counterclaim against the four plaintiffs, Essence, Yew and Retribution which were the 1^st, 2^nd, 3^rd, 4^th, 5^th, 6^th and 7^th defendants by counterclaim (Patel, Cohen, Apostolides, Rocky Cape, Essence, Yew and Retribution respectively).  Essence and Yew later instituted a counterclaim to the counterclaim against Au, Ho and Prime Mark Group Ltd which were the 1^st, 2^nd and 3^rd defendants by counterclaim to counterclaim (Au, Ho and Prime Mark respectively).

5.  The second action was instituted in September 2015 by the 1^st, 2^nd and 3^rd plaintiffs (Kudeta, Iconic Locations and Iconic Entertainment respectively) against the 1^st, 2^nd, 3^rd and 4^th defendants (Au, Ho, Retribution and Prime Mark respectively).

6.  Both sets of plaintiffs seek an order in their respective action that the trial of the action be heard together with or immediately before or after the trial of the action of the other by the same judge.

Issue of service in the second action

7.  At the hearing of the consolidation applications which were heard together, a somewhat bizarre situation arose where Au appeared in person and Ho was legally represented to challenge the application in the first action but both were technically not present in relation to the same application in the second action. 

8.  I was informed by Mr David Chen, counsel for the plaintiffs in the second action, that service had been effected of the amended writ of summons and of the consolidation application on Au, Retribution and Prime Mark.  Au claimed he had not been served with the papers in relation to the consolidation application even though he had been served with the amended writ which he had yet to acknowledge. 

9.  Mr Chen also informed me that service of the action had been effected on Ho by registered post and insertion in the letterbox at her address but the papers for the consolidation application had been returned.  Evidence had been filed by the plaintiffs of service of the amended writ and application on Ho by sending them at her last known address in Hong Kong and on Au by sending them at one of his two last known addresses and at his office in Singapore (pursuant to an order from Master Ho for service out of the jurisdiction).  Service of the proceedings was effected on Retribution and Prime Mark at their respective registered office. 

10.  When I asked Mr Martin Ho, counsel for Ho, what was her position in relation to the application in the second action, he said he had no instructions.  It is to be noted that notwithstanding the position taken by Au and Ho in relation to the application in the second action, they clearly had notice of the application in the second action and addressed in detail both applications in their written and oral submissions before the Court. 

Relevant legal principles

11.  Order 4 rule 9(1) of the Rules of the High Court (RHC) provides:

“Where two or more causes or matters are pending, then, if it appears to the Court-

(a) that some common question of law or fact arises in both or all of them, or

(b) that the rights to relief claimed therein are in respect of or arise out of the same transaction or series of transactions, or

(c) 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.”

12.  In Sincere View International Ltd v Kenco Investments Ltd, HCA 301 and 569/2005, 3 February 2006, unreported, Kwan J (as she then was) explained at §4 that:

“In deciding whether to order consolidation of actions, the court has an unfettered discretion. The power is to be exercised in a flexible way with regard to the particular circumstances of the situation. The objective of such an order is to save time and costs. There is no hard and fast rule that just because the parties are identical and some common question of fact or law is involved in both actions, it would be expedient and proper to order consolidation.”

13.  The court has an unfettered discretion in deciding whether to order consolidation of two or more causes or matters.  Even though the power is to be exercised with some degree of flexibility, a court must nevertheless be satisfied that it would be proper and expedient to make such an order, having regard to the particular circumstances of the situation, including, amongst other things, that the objective of such an order is to save time and costs, and that where there is a substantial overlapping of issues and parties, it is desirable to resolve the disputes in the different actions on one occasion by the same judge: Big Island Construction (HK) Ltd v Wu Yi Development Co Ltd, HCA 1957 and 2196/2005 and 714 and 886/2007, 10 April 2008, unreported, at §§40 and 41 per Chu J (as she then was). 

14.  In Re The Prudential Enterprises, Limited, HCCW 594/1999 and HCA 1240 and 4225/2001, 19 August 2003, unreported, Chu J (as she then was) concluded in that case that given the substantial overlapping of issues and parties, it was desirable that the disputes in the three actions be resolved on one occasion and by the same judge, but on the question as to whether they should be tried together or one after another, she explained that the matter had to be approached from the perspective of case management rather than principles of law.  In this regard, she said at §8 that: “In making case management decisions, the court is primarily concerned with savings of time and costs, and also with the avoidance of unnecessary delay, undue complexity and overloading of issues.” 

15.  Chu J went on to examine the practical implications of trying the actions together and whether there were real and tangible benefits in the efficient and just disposal of the cases by doing so, weighing up the relevant factors and circumstances, which included in that case, the additional time needed to address further issues, the adoption or admission of the evidence of witnesses in subsequent trials, the risk of losing reserved trial dates and the different stages the actions had reached before going to trial. 

16.  It is pertinent to note that in more recent times as a result of the Civil Justice Reform, the emphasis is on the efficient and just resolution of disputes before the courts and case management is therefore important in ensuring that this is achieved.  See the underlying objectives of Order 1A of the RHC.  Accordingly, when addressing an issue of consolidation, the Court should take a practical and commonsense approach to meet the justice of the situation. 

17.  In Zuckerman on Civil Procedure, Principles of Practice, Third Edition, at §13.12, it was explained that the ultimate aim of consolidation was to avoid wasting party and court resources in a multiplicity of proceedings that involve identical or similar issues and to protect defendants from the cost and vexation of having to defend in separate proceedings against essentially the same allegations.  To this end, it was noted that the essence of the matter is that the court will order different claims to be tried together when there is substantial overlap between them or where trying them separately would create a risk of irreconcilable decisions.  See generally Hong Kong Civil Procedure, 2016, at §4/9/2.

18.  For the purpose of the consolidation rule, it has been held that a cause or matter becomes “pending” as soon as the writ of summons has been issued and this can invoke the court’s jurisdiction to entertain an application for the consolidation of two or more causes or matters even though one or more of the writs have not been served.  This statement of principal was held in Arab Monetary Fund v Hashim and Ors (No 4) [1992] 1 WLR 1176, at 1180F-H, where the Court of Appeal applied a broad construction to the consolidation rule which it agreed was intended to give the court wide powers to control its own process.  This is relevant in this case, as there seems to be some dispute between the parties as to whether or not the amended writ of summons in the second action has been served.  Any reliance on this point would appear to be academic, given that both Au and Ho are before the Court in relation to same application by the plaintiffs in the first action.

Brief description of the two actions

(a) The first action

19.  There is a long history in relation to the first action that has involved the parties in an intense legal and personal battle.  The case concerns a dispute between a group of investors of a highly successful restaurant and bar operating in Singapore. 

20.  The controlling company of the business is Kudeta, a British Virgin Islands company, which it operates through two Singaporean companies, Iconic Locations and Iconic Entertainment (the two Singaporean companies were previously named Ku De Ta SG and KDT Entertainment).  The various investors have held their interests in the Kudeta business either through Retribution or Essence which changed on 30 January 2014 when L Capital Investments Ltd (L Capital) acquired a 51% majority interest in Kudeta.

21.  The plaintiffs allege that Au, through his nominee, Ho (the sole shareholder and director of Retribution which holds an interest in Kudeta), has misappropriated and misapplied funds belonging to the business and has sought to prejudice the contractual relations with L Capital.

22.  It is claimed that the parties entered into a General Agreement whereby it was agreed, amongst other things, that Kudeta would become an investment holding company and distribute its profits (“distributable profits”) to the partners in the joint venture.  In breach of the General Agreement, however, some of the distributable profits were divested from Kudeta, Iconic Locations and Iconic Entertainment.  The funds divested from Kudeta over the period from 2009 to 29 January 2013 approximated HK$29.5 million; and the funds divested from Iconic Locations and Iconic Entertainment over the same period approximated HK$3.7 million.

23.  It is also claimed that Ho held the 1,000 registered shares in Retribution on trust for Patel, Apostolides and Au pursuant to a Declaration of Bare Trust.  In breach of the trust, Ho under the control and/or instruction and as the nominee of Au caused some of the distributable profits to be transferred away from Kudeta.  The funds divested from Kudeta over the period from 30 January 2013 onwards approximated HK$0.43 million; and the funds divested from Iconic Locations and Iconic Entertainment over the same period approximated HK$4.89 million.

24.  Under the agreements of the L Capital acquisition, L Capital paid on 30 January 2014 a total consideration of SGD38,100,537.89 for a 40.1% stake in Kudeta in two tranches of SGD11,984,782.89 (which was transferred to the bank account of Retribution) and SGD26,115,755 (which was transferred to the bank account of Essence).  A part payment for the acquisition from L Capital of SGD16,675,880 was arranged to be transferred to a Hong Kong bank account of Retribution and these funds have been frozen pursuant to an injunction order. 

25.  Also in dispute between the parties is the percentage interest held by the various investors in the business (through Retribution or Essence) and whether there was an agreement to buy out Au as he has claimed.  The plaintiffs claim that they beneficially own a 75.3% stake in Retribution and that Patel and Apostolides are entitled to a two-thirds share of the monies held by Retribution under the Declaration of Bare Trust. 

26.  Au in early 2015 issued a counterclaim against the four plaintiffs, Essence, Yew and Retribution on the grounds that at the time of the L Capital acquisition, he held 35.5% of Kudeta and it was agreed that he would be paid SGD33,732,539.50 for his stake.  The defendants by counterclaim deny there was such an agreement.

27.  Essence and Yew issued a counterclaim to the counterclaim in which it is claimed that Au breached the General Agreement and that he and Ho breached their fiduciary duties owed to Essence and Yew in relation to the payment of distributable profits.

(b) The second action

28.  The second action has been initiated by Kudeta and the two holding companies which operate the restaurant and bar in Singapore. 

29.  It is claimed that over a period from October 2010 to January 2014, Au had control and power over the management of the plaintiff companies.  It is also claimed that Retribution and Prime Mark are the corporate vehicles of Au and that Ho was a nominee and under the control and/or instruction of Au.  It is alleged that over this period Au caused the plaintiff companies to transfer funds to himself and/or his affiliated parties.  It is further alleged that the transfers served no commercial purpose and were detrimental to the interests of the plaintiff companies and aggregated around HK$42 million.  It is claimed that the funds transferred from Kudeta approximated HK$32 million and that from Iconic Locations and Iconic Entertainment approximated HK$10 million.

30.  These figures are taken from forensic accountant reports prepared by Deloitte & Touche Financial Advisory Services Pte Ltd pursuant to the instructions given by the plaintiffs of the first action. 

31.  The plaintiff companies seek repayment from the defendants of the HK$42 million on the grounds of breach of fiduciary duties, knowing receipt and dishonest assistance, constructive trust, unjust enrichment, abuse of separate legal personality and conspiracy of the defendants against the Kudeta business.

(c) Common claim of the two actions

32.  The similarity between the two actions was explained in the 10^th Affirmation of Patel as follows:

“3. This Action (i.e. HCA 183/2014) concerns a shareholders’ dispute between myself and my fellow Plaintiffs (who are all shareholders in the KDT Business in some manner or another) of the one part and the Defendants (who are also all shareholders in the KDT Business in some manner or another) of the other part.

4. The disputes center around 3 key issues, the third of which raises issues of law and fact which are common with those in HCA 2063/2015:-

(i) the extent of the parties’ respective shareholdings at all material times;

(ii) the extent of the parties’ (in particular the Plaintiffs’) respective entitlements to distributable profits flowing from the KDT Business which were payable to the shareholders in KDT BVI; and

(iii) alleged siphoning off of the KDT Business’ funds by the 1^st Defendant which led to the Plaintiffs being either underpaid and/or never paid at all.

…

6. HCA 2063/2015 is an Action instituted by the KDT Business against the same Defendants (by Original Action and by Counterclaim to Counterclaim) in HCA 183/2014 over the key issue of the alleged siphoning off by the Defendants of funds which ordinarily belonged to the KDT Business and would have been used by the KDT Business for itself or for provision to its shareholders as distributable profits. The 4^th Defendant in 2063/2015 is Prime Mark Group Limited, a corporate vehicle of the 1^st Defendant which also received some of the funds which are the subject of 183/2014.

7. It is therefore a common theme between myself and my fellow Plaintiffs’ claims, the 5^th and 6^th Defendants’ (by Counterclaim) claims and the KDT Business’ claims against the Defendants that the 1^st Defendant wrongfully and, in the Plaintiffs’ case, in breach of a shareholders’ agreement, used a significant portion of the KDT Business profits for his own benefit under the guises of his excessive and unauthorized salaries, housing entitlements and alleged 10% EBITDA bonuses. This financial mismanagement and/or breach of the shareholders’ agreement did the KDT Business immense financial harm and also prejudiced the position of myself and my fellow Plaintiffs as shareholders of the KDT Business who were denied the share of distributable profits to which we were entitled.

8. It is clear, therefore, that there is a substantial overlap between the claims pursued by the Plaintiffs in this Action and the Plaintiffs in HCA 2063/2015 in that:-

(i) there are common questions of law or facts that arise in both Actions, namely the entitlements and extent of such entitlements to funds that the Defendants siphoned off which either belonged to the KDT Business or belonged to the KDT Business’ shareholders; and

(ii) the relief claimed by the Plaintiffs in both Actions emanate from the same series of transactions that the 1^st Defendant carried out with the aid of his fellow Defendants whereby funds that ordinarily belonged to the KDT Business or its shareholders were instead paid out by the 1^st Defendant under questionable pretexts.”

33.  It is submitted by the parties for consolidation of the two actions that the issue of the funds (with some slight differences) is common between them.

34.  It is pointed out that the main issues which arise for determination in relation to the funds in both actions are:

(1) whether the funds were transferred from Kudeta, Iconic Locations and Iconic Entertainment to various recipients as set out in the forensic accountant reports;

(2) whether the transfers of the funds were justifiable or constituted a breach of contract and/or breach of trust; and

(3) whether the defendants are liable to repay the funds or part thereof to the plaintiffs.

35.  It is submitted that there are common questions of fact or law that arise in both actions, and the rights to relief claimed are in respect of or arise out of the same transaction or series of transactions.

36.  The first action raises other issues but it is submitted that the propriety of the transfers of the funds forms the crux of the first action and will take up the most time in trial.

37.  It is argued that even though the various causes of action advanced in the first action appear to be on different legal bases for the recovery of the funds in the second action, they in fact largely overlap with those pleaded in the second action.  It is noted, however, that the claims in the first action in relation to interference with contractual rights and loss to the plaintiffs under the L Capital investment raise distinct issues which do not immediately overlap with the relevant issues in the second action, although it is submitted that their resolution would not take up a significant amount of time.

Submissions

38.  The parties for consolidation are the plaintiffs in the two actions and the 5^th and 6^th defendants by counterclaim in the first action.  The parties against are the 1^st and 2^nd defendants in the two actions.

Argument for consolidation

39.  The following is a summary of the arguments for consolidation. 

40.  First, there are clear common questions of law and fact arising out of both of the first and second actions.  In particular, both actions concern practically identical relief against practically identical parties arising out of the same transactions.  Even though the claims under the first action are more extensive than the second action, it is principally concerned with the same claim, that is, the alleged siphoning off of funds of the Kudeta business by Au.  The plaintiffs in the second action will mainly rely on the evidence presented by the plaintiffs in the first action. 

41.  It is submitted that consolidation of the two actions is highly desirable for the following reasons.  In order to determine whether the alleged funds that have been siphoned off by Au and Ho belonged to the Kudeta business or to the beneficial shareholders of the Kudeta business. The relief claimed by the plaintiffs in both actions emanate from the same series of transactions that Au and Ho allegedly carried out from October 2010 to January 2014.  A hearing of the two actions together would address Au’s allegation of the plaintiffs in the first action falling foul of the reflective loss principle and the Court can therefore ensure there is no double recovery.

42.  I consider there is clear overlapping of issues and parties between the two actions that would make it highly desirable in the interests of justice for them to be dealt with on the one occasion by the same judge.  There is no doubt that the claims of the first action are more extensive than the second action but the principal claim between the two of them is the alleged siphoning off of the funds of the Kudeta business by Au.

43.  Secondly, it follows because of the commonality between the two actions that having them heard together would result in considerable saving of time and costs for all parties and the Court.  It is noted that it would be undesirable from a case management point of view if the parties were required to call evidence and make submissions on two separate occasions before two different judges in respect of the same factual matters and issues. 

44.  Thirdly, there can be no complaint by Au or Ho of any prejudice occasioned by the two actions being heard together.  In particular, given that the original dates of the trial of the first action have been vacated due to the need for more time for the parties to prepare witness statements and expert reports, there will be ample opportunity to enable the parties to the second action to attend to all procedural matters without any delay or adverse impact on a trial for the two actions. 

45.  It seems it will be some months before trial dates will be fixed for the first action and most likely in the second half of the year.  This should provide sufficient time to address by appropriate directions all pre-trial matters in relation to the second action.  It has also been indicated by the plaintiffs of the two actions that given the overlap of issues and evidence between them, not many additional hearing days will be required by having the two actions heard together. 

46.  Fourthly, there is no substance to the forum non conveniens objection taken by Au and Ho.  It is noted that no application has been made to stay the second action on this ground and Au and Ho have in any event already submitted to Hong Kong’s jurisdiction in relation to the first action. 

Argument against consolidation

47.  The following is a summary of the arguments against consolidation.

48.  First, the two actions are at different stages before going to trial.  It is argued that the second action is still in its infancy and pre-trial matters will take time before the case is ready for trial.  It is pointed out that Ho is still to be served with process of the second action, although this is disputed.  It is further argued that in the first action it has been emphasised that a speedy trial is needed to minimise any prejudice flowing from the injunctive relief granted and to secure a prompt resolution of the dispute which is acting against the interests of the parties by being unduly prolonged.  As I have indicated, it is most likely that a trial of the first action will take place in the second half of this year and this will provide appropriate time to deal with the pre-trial matters for both actions so that they may be heard together.  Any concern about delay can be addressed by appropriate directions and strict adherence to requirements and timeframes. 

49.  Secondly, there is another forum more convenient to deal with the dispute.  It is argued that the second action should be tried in Singapore and not Hong Kong due to the doctrine of forum non conveniens (this is a discretionary power where a court may dismiss a case because another court or forum is better suited to hear it).  Such an application sometimes involves considering whether the court chosen by the plaintiff is inconvenient for witnesses or poses an undue hardship on the defendant.  The basic principle is that a stay will only be granted on this ground where the court is satisfied that there is some other available forum, having jurisdiction, which is the appropriate forum for the trial of the action, in that the case may be tried more suitably for the interests of all the parties and the ends of justice. See Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 at 476; Rambas Marketing Co LLC v Chow Kam Fai David [2001] 3 HKC 250 at 253G to 255E per Recorder Geoffrey Ma SC (as the Chief Justice then was).  It is important to note that it is not enough to identify factors that connect the case to a particular jurisdiction but rather to focus on the appropriateness of the forum from the point of view of the trial of the action. 

50.  In response to this argument, the plaintiffs of both the first and second actions note that Au and Ho have submitted themselves to the jurisdiction in the first action and most of the matters of law and fact in the second action will be the subject at trial in relation to the first action: Murthy & Anor v Sivajothi & Ors [1999] WLR 467; Swiss Life AG v Moses Kraus [2015] EWHC 2133.  They say that there is no substance to the argument or prejudice to the defendants as a consequence. 

51.  In any event, I do not see any need to address the matter as it will depend on whether an application is made on the doctrine of forum non conveniens and the basis of the argument in support of such an application. 

52.  During the course of argument, Au, in support of his submission that the proper jurisdiction to try the second action was Singapore, pointed out that there were currently three sets of civil proceedings in Singapore involving him and Iconic Locations and Iconic Entertainment.  He produced copy documents in relation to three suits: 570/2015 Iconic Locations Singapore Pte Ltd v Catalunya Pte Ltd for SGD$1,136,024.74; 237/2015 Iconic Locations Singapore Pte Ltd v Tony’s Pizza for SGD$32,734.59; and 761/2015 Catalunya Pte Ltd v Iconic Entertainment Pte Ltd for SGD$495,241.28.  I am told that the second suit which is for a small amount has settled, but other than that I do not have sufficient information to accurately assess the relevance and impact the suits would have on the claim of the alleged siphoning off of funds under both actions.  As Mr Chen has rightly pointed out, any funds relevant to the claim that have been recovered in other proceedings can be simply deducted from the broader claim made in the two actions. 

53.  Thirdly, there are no common questions of law and fact.  It is argued that the first action concerns a private contractual arrangement between the shareholders of the Kudeta business whereas the second action concerns allegations that Au breached duties owed to the plaintiff companies as a director/chief executive officer. 

54.  This argument is somewhat simplistic and broad. The claim by the plaintiffs in the first action covers essentially the breach by Au of a general agreement between the investors of the Kudeta business; it does deal with other heads of claim that concern allegations of Au’s role as a director and control of the various corporate entities involved.  The second action deals with more or less the same subject as contained in the first action in relation to the misappropriation and misapplication by Au of funds from the three plaintiffs of the second action. 

55.  Fourthly, the consolidation would result in an irregularity because the two sets of plaintiffs are represented by different firms of solicitors which procedurally may act to the disadvantage of the defendants, in that it would allow each set of plaintiffs to cross-examine the others’ witnesses and have the advantage of being able to put leading questions to a witness who would be substantially on the same side.  See Lewis v Daily Telegraph (No 2) [1964] 2 QB 601.

Further submissions

56.  Au in a letter to the Court dated 9 January 2016 made further submissions in relation to the application in the second action by questioning the right of the plaintiffs to bring the proceedings.  Written submissions in reply were submitted by the other parties on 13 January 2016. It is to be noted that the written submission from the solicitors of Ho supported the argument of Au which was to the effect that L Capital, contrary to the terms of the acquisition agreements, has instituted the second action. 

57.  All that needs to be said at this stage is that the second action has been instituted by the separate legal entities, Kudeta, Iconic Locations and Iconic Entertainment, and the issue that has been raised by Au has not been made the subject of any application before the Court.  There is no need for me to comment any further on the matter.

Discussion

58.  I am satisfied that the claim in the second action concerns practically the same funds and seeks redress, even though on a different basis, from the same parties as the claim contained in the first action. The second action is seeking recovery of funds belonging to the three plaintiff companies from Au and his related entities by dishonest misappropriation and in breach of his fiduciary duties.  The first action is similarly seeking recovery of the funds on the basis that Au breached the General Agreement as to the distribution of the profits of the Kudeta business to the investors of the joint-venture.  On the information before me, it is clear that the plaintiffs in the second action are relying on the forensic accounting evidence of the plaintiffs in the first action as well as other evidence that goes to the allegation of the misappropriation and misapplication of the funds of the Kudeta business.  There is clear overlap both in terms of the claim and evidence between the two actions, even though the first action has more extensive claims. 

59.  I should note that there seems to be no issue between the parties that if the two actions are tried in Hong Kong that they should be heard by the same judge, even though Au and Ho argue that the second action should be tried in Singapore.  I am obviously of the view that the two actions should be heard on the same occasion and before the same judge. 

60.  As stated by Chu J in Re Prudential Enterprises Ltd once it is decided that the actions should be resolved on the one occasion and by the same judge, the question as to whether they should be tried together or one after another is a matter of case management where the court is primarily concerned with savings of time and costs, and also with the avoidance of unnecessary delay, undue complexity and overloading of issues.  Normally, in deciding what is the most appropriate method in trying two or more actions, a court will consider the advantages and disadvantages from a case management perspective.

61.  I agree with the submissions of the parties seeking consolidation that there are distinct advantages from a case management perspective in having the two actions heard together.  The advantages include:

(i) One judge instead of two can consider all the evidence in one trial, so as to prevent any chances of conflicting judgments.

(ii) Less time will be spent and more costs will be saved, as matters will not be duplicated.

(iii) Factual witnesses such as Au and Ho, who are common defendants in both actions, will only need to give evidence once instead of twice in court and the same applies to expert witnesses and other common evidence.

(iv) The parties in both actions can appoint one single joint expert on each side for both actions in order to avoid the possibility of multiple expert witnesses appearing in two different actions.  It is noted that the plaintiffs in the second action rely on the expert evidence of the plaintiffs in the first action.

(v) Trial bundles can be compiled for one single action so as to avoid duplication.

(vi) One judge can consider two sets of pleadings in one trial to avoid the need for parties in both actions compiling one consolidated set of pleadings.

(vii) The possibility of res judicata and/or double recovery is minimised. 

62.  On the issue of forum non conveniens, there is as yet no such application or any other application in the second action that would have any bearing at this stage on whether or not to consolidate the two actions.  Until such time as an application or applications are made and determined, it is difficult to assess what impact, if any, this would have on a decision to consolidate.  Putting off a decision to consolidate on the possibility of a future application would act contrary to its purpose of ensuring the proper and expedient resolution of the litigation.  It is important in the circumstances of this case that if the two actions are to be tried together that a decision is made as early as possible so that the necessary pre-trial matters are appropriately dealt with according to a timeframe for the trial of the two actions.  I do note, however, that consolidated actions may be deconsolidated if the circumstances arise that warrant such a decision by the court: Lewis v Daily Telegraph (No. 2) [1964] 2 QB 601. 

63.  On the issue of irregularity, I see more of an advantage than a disadvantage in making the consolidation order.  Any irregularity as suggested can be appropriately addressed by the remedial measures available to a court in controlling its processes and ensuring the parties receive a fair trial.  But if the circumstances warrant it, the second action can be heard immediately after the first action to address any risk of injustice.  I will leave that option open but in the meantime the two actions will proceed on the basis that they will be heard together before the same judge. 

64.  I should stress that I have come to this view on the information and material before me, and in order to ensure that no unnecessary delay or disruption occurs to the trial of the two actions on the assumption that the second action is to be tried in Hong Kong. 

Conclusion

65.  For the foregoing reasons, I grant the consolidation order sought by the plaintiffs in the two actions.  I make an order nisi that costs of the applications be in the cause.