SHIH HUA INVESTMENT CO., LTD (suing for and on behalf of itself as shareholder of EVERGLORY ENERGY LTD) v. ZHANG AIDONG AND OTHERS

HCA 2682/2016

[2021] HKCFI 2808

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2682 OF 2016

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D E C I S I O N

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1.  On 30 April 2019 I handed down my decision in respect of three applications issued by the Defendant and two parties associated with it relating to the enforcement of undertakings given in support of two injunction orders made in October and November 2016 by Lok J and DHCJ Yee respectively.

2.  The summons issued by the Defendant and dated 10 October 2017 sought the following orders:

“1. Pursuant to the Plaintiff’s undertakings in damages as contained in: (1) Schedule 2 to the Injunction Order granted by the Honourable Mr. Justice Lok on 25 October 2016 (‘1^st Injunction Order’) and (2) Schedule 2 to the Injunction Order granted by Deputy High Court Judge Kent Yee on 22 November 2016 (‘2^nd Injunction Order’) (collectively, the ‘Injunction Orders’):

(a) Damages be summarily assessed and payable by the Plaintiff forthwith;

(b) Alternatively, an inquiry be directed as to the amount of damages suffered by the Defendants herein as a result of the Injunction Orders having been wrongly granted.

2. In the event an inquiry is ordered pursuant to paragraph 1(b) above:

(a) Such inquiry be heard before a Master, who shall make all necessary directions for the conduct of such inquiry; and

(b) The parties do fix a hearing for directions before a Master in consultation with counsel’s diaries, with 30 minutes reserved.”

3.  By a summons dated 5 February 2018 Everglory (Macau) International Co., Limited sought leave to be joined in the proceedings as an intervener and the same substantive orders as I have quoted in the previous paragraph.  By another summons dated 5 February 2018 EG Investment Holdings Limited sought the same orders.  I determined the applications in a decision dated 30 April 2019 (“Decision”), which sets out the background to this matter, which I shall not repeat.  I summarised my decision in [8]–[9] of the Decision.  My reasons for my decision are set out in [10]–[18].

4.  As is quite clear, and not in dispute, I granted the 1^st and 2^nd Interveners’ applications.  So far as the application to enforce the undertakings was concerned my reasons explain that a decision in respect of that application should await the outcome of the appeals of the decisions referred to in the Decision.  However, I had heard full argument from counsel on behalf of the Plaintiff on the matters, which were submitted on its behalf as reasons why I should not enforce the undertakings.  The principle one is explained and rejected in [16].  The upshot was that I had determined that subject to the Court of Appeal’s decision the undertaking should be enforced.

5.  The Court of Appeal dismissed the Plaintiff’s appeal on 21 January 2021.  On 25 March 2021 the Defendants’ solicitors (Jun He Law Offices) (“Jun He”) wrote to the Court requesting that their summonses be restored for directions with three hours reserved.  On 30 March 2021 the Plaintiff’s solicitors (Alvan Liu & Partners) (“Alvan Liu”) wrote to the Court.  They say this: “The Defendants and Interveners now proposed to fix a hearing for determination of the summonses before His Lordship. This proposal is made without regard to the decision made by His Lordship on 30 April 2019.  In paragraph 8 of the Decision, His Lordship decided that ‘This case is not suitable for a summary assessment and the inquiry should be conducted by a Master.  Therefore, if the appeal is unsuccessful directions should be made for conduct of the assessment and inquiry’.”  This suggests that Alvan Liu understood that subject to anything the Court of Appeal might say, I had determined by the Decision that the undertakings should be enforced by an inquiry into damages carried out by a Master and that as the Plaintiff’s appeal had been dismissed and nothing helpful to the Plaintiff said all that was required was directions for the inquiry to proceed.  It would appear that Jun He read the letter in this way because on 29 March 2021 they wrote to the Court saying that all they sought was an inquiry as to damages to be undertaken by a Master and that they had requested a hearing because they understood the Plaintiff’s still resisted the summons.  Alvan Liu replied on 31 March 2021 saying that “The Defendants and Interveners have now clarified their position that they are only trying to have the determination of their right to enforce the subject undertakings.  On that basis, the Plaintiff now sees no reason to suggest another set of directions for his Lordship to consider. The Plaintiff has not changed its stance as alleged by the Defendants.”  It should have been clear to Alvan Liu from Jun He’s letter that this was not what they were doing as they understood that subject to the result of the appeal I had determined that there should be an inquiry conducted by a Master.

6.  On 6 September 2021 a skeleton argument was served by Mr Hingorani on behalf of the Plaintiff.  Mr Hingorani did not represent the Plaintiff at the hearing of the summonses on 12 April 2018. In [1] of his skeleton argument Mr Hingorani submits: “There was no determination of the application nor was any order made.  In particular, the Court did not order the enforcement of the undertaking, contrary to D’s submission.”  It is correct that no order was made other than on the Intended Interveners’ summonses.  However, it was quite clear that I had determined the matter subject to the Court of Appeal’s decision.  Mr Hingorani’s skeleton makes no reference at all to the Court of Appeal’s decision.  As is apparent from Mr Hingorani’s skeleton what he sought to do was to reargue the matter that had already been argued by Mr Chan on behalf of the Plaintiff (as is apparent from Mr Chan’s skeleton argument) on 12 April 2018. That in my view is impermissible.  I informed counsel of this and that all I wished to be addressed on was the directions that should be made by a Master to conduct an inquiry.

7.  The directions of themselves are uncontroversial save for costs.  I will make the directions in [16] of Mr Ho’s skeleton save that [16.3] will provide that the directions hearing shall not take place before 25 February 2022.  It seems to me that this hearing could probably have been avoided and certainly did not need the time reserved or the preparation that counsel’s skeletons demonstrate has taken place.  I will order that the costs of and occasioned by the hearing on 10 September 2021 be paid by the Plaintiff to the 1^st to 4^th Defendants and the 1^st and 2^nd Interveners forthwith such costs to be taxed if not agreed with a certificate for one counsel.  I reserved the costs of the summonses by my decision dated 30 April 2019.  Those costs will be determined after the outcome of the inquiry as to damages.