WONG TAK HUNG v. F.E.B. FINANCE LTD AND OTHERS

1988 No. A2564

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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D E C I S I O N

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1. Insofar as Mr Fung purports to make an application for directions to be given by this Court, enjoining the defendants to begin under o.35, r.7(1) of the Rules of the Supreme Court, I need not trouble Mr Ching to respond to the many arguments advanced by counsel on behalf of the plaintiff. This Court cannot, in all the circumstances, accede to the purported application of the plaintiff for the defendants to be directed to begin.

2. In the fair and exhaustive analysis of Mr Fung, it would appear that the main factual issue joined between the plaintiff and the defendants to this action lies in the alleged instructions to purchase the one and a half million shares in Seapower. After the purchase, the margin account of the plaintiff with the 1st defendant was debited. Such debiting is alleged by the plaintiff to be a wrongful debit. After the alleged wrongful debit, the deficiency was transferred to another margin account. When the plaintiff did not meet the demand for reimbursement by the 1st defendant, shares hitherto pledged by the plaintiff with the 1st defendant were, inter alia, sold pursuant to the provisions of documentation entered into between the plaintiff and the 1st defendant through, I believe, at one time the intervention of the 2nd defendant.

3. The alleged wrongful debit and the alleged wrongful subsequent sale are said to hinge entirely on the main factual issue of instructions to buy. It is not a matter of disagreement between Mr Ching and Mr Fung that the burden of proof in respect to the alleged instructions lies on the shoulder of the 1st defendant or the defendants.

4. There are no less than five issues, the burden of proof of which admittedly remains with the plaintiff. First, there is the alleged constructive trust or resulting trust. Secondly, the alleged wrongful transfer of the debit to the B margin account is another matter the plaintiff has to prove. Thirdly, alleged conversion, in particular damages of conversion is a claim that the plaintiff must substantiate. Fourthly, commission and various outlay items will have to be accounted for also by the plaintiff. Lastly, there is a consequential prayer for account and tracing enquiry which the plaintiff still maintains and carries the burden of proof.

5. As for constructive trust or resulting trust, it is submitted my Mr Fung that the allegation depends largely on submissions. But it must not be overlooked that construction of documents is an aspect which the plaintiff has also to overcome. The alleged wrongful transfer of the debit to B account is, so Mr Fung submits, a matter of housekeeping. But that must also touch upon documentary interpretation. Damages of conversion are denied. Mr Ching has gone as far as to state, in the well of the Court, that the figures to be relied upon by the plaintiff and the defendants are dissimilar. I do not recall that counsel for the plaintiff has responded to that intervention of Mr Ching satisfactorily. It is, therefore, or may be, not a sheer case of formal proof, or as Mr Fung puts it, arithmatic. It cannot be put, as counsel contends, as a source not being in controversy. Commissions and other out-of-pocket expenses are said to be merely an exercise in computation. The claim is denied. The defendants have not been invited to agree to the quantum. It - proof of the items in this category –may well be more than what meets the eyes in the final analysis. What have been said on alleged constructive trust and resulting trust would appear to be equally applicable to the plaintiff's prayer for account and tracing enquiry.

6. For all these reasons, on all these matters, there does not seem to be any good or compelling reason for this Court to depart from O.35, r.7(2). The defendants clearly so not have the burden of proof of all the issues in the action, and the plaintiff shall begin unless directions are otherwise given. There is no sufficient justification for issuing the directions sought by Mr Fung, counsel for the plaintiff. Hence, insofar as Mr Fung purports to make an application under O.35,r.7(1), the same is refused.