LO WO AND OTHERS v. CHEUNG CHAN KA JOSEPH AND ANOTHER

HCA 618 of 1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 618 OF 1997

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J U D G M E N T

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1. I have an application by the 1st Defendant to cease to be a party under Order 15 Rules 6(2) of the Rules of the High Court and or alternatively for an order that the 1st Defendant be excused to take part in the proceedings. I will deal first with the question of whether the 1st Defendant should cease to be a party.

2. The claim of the Plaintiffs against the 1st Defendant is reflected in the Prayers where at p. 20 of the Bundle it can be seen apart from Prayers 1 and 2, Prayers 3, 4, 5, 6, 7, 8 are all directed against the 1st Defendant. The 1st Defendant does not say to the Court that he is willing to submit to the judgment on these Prayers. So there is clearly an issue between the Plaintiffs and the 1st Defendant arising out of these Relieves. There can be no basis, just reading the pleadings, for the 1st Defendant to cease to be a party. This is the first ground for me to refuse the application of the 1st Defendant to cease to be a party.

3. The second way of looking at it is that the Court in this rather unusual case, is exercising its equitable jurisdiction where the fraudulent conduct in the equitable sense of the 1st Defendant and of the 2nd Defendant are called into question and to grant the appropriate equitable relief which is of extremely flexible approach of the Court, very different from the exercise of common law jurisdiction. I would have thought that the presence of the 1st Defendant is very much necessary and appropriate in the circumstances.

4. Thirdly, it has to be borne in mind that there had been a substantial striking out application before Yeung J. on 9th December 1997 where not only the question of striking out was considered but also the form of the reliefs sought now by the Plaintiffs as embodied in the proposed Amended Statement of Claim. Yeung J. decided against the 1st Defendant. And one will have thought that all arguments that could be presented to the judge by the 1st Defendant should be decided at such application. It would be quite wrong for me now at this stage to dissect the judgment of Yeung J. and then to see to what extent the point is covered or not covered or ought to be covered.

5. Then lastly, it seems to me that it is really too late for such an application to be made. There had been directions hearing. There had been a pre-trial review. If the 1st Defendant does not wish to take part in the proceedings, it should have been done so a long time ago. This is so far as this application to cease to be a party to the proceedings is concerned.

6. I now turn to the question of the practical arrangement of the 1st Defendant's suggestion that he should cease to take part. It is of course a matter very much for the 1st Defendant as to whether he wishes to take part whether by the presence of leading counsel or junior counsel or solicitors, but what he is asking is the blessing of the Court and for the court to make this extraordinary order to excuse the 1st Defendant from taking part in the proceedings. There is no basis for such an order to be made, notwithstanding what had been said to be the opening of Mr. Remedios which makes it clear that certain claims such as common law damages for fraud are not being sought against the 1st Defendant.

7. The state of the present proceedings is such that it is entirely a matter for the 1st Defendant as to whether he wishes to save costs and thereby not take part in the proceedings. The Court of course appreciates the undertaking given by Mr. Chan on behalf of the 1st Defendant that he is willing to abide by any order of the Court made at the trial along the lines of what are in the Prayers if the Court decides in favour of the Plaintiffs against the 2nd Defendant. But that however does not seem to me to wholly answer the question of whether the 1st Defendant should be excused from the proceedings.

8. I regret that I am unable to accede to the application of Mr. Chan on behalf of the 1st Defendant. The 1st Defendant will have to take what he deems to be the right course. The Plaintiffs is to have the costs of the application.