BOLD SHINE INVESTMENT LTD v. TSUI YEE KWAN

HCA 1867/1999

HCA 1676/2011

[2024] HKCFI 1470

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1867 OF 1999

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AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1676 OF 2011

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(Heard together)

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R U L I N G

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1.  The plaintiff asks me to make a ruling today that the defendants should not be allowed to challenge the plaintiff’s authority to sue in this trial.

2.  I decline to make that ruling.

3.  It is correct, as Mr Chain submits, that any challenge to authority to sue should be raised at the earliest opportunity. That principle is well established. In my view, the principle is primarily based on case management considerations.

4.  In the present case, the question as to when the defendants could raise the challenge was discussed before Madam Justice Au-Yeung back in 2022. At that hearing, the judge imposed a 28-day time limit for the defendants to take out any application to challenge standing.

5.  But the hearing was followed by subsequent correspondence. The overall effect was that the time limit originally imposed on the defendants no longer applied.

6.  At the pre-trial review hearing in April this year, I had a lengthy and thorough discussion with the parties as to whether the defendants should be allowed to raise the challenge.

7.  The authority issue and the substantive claim made by the plaintiff both turn on substantially the same factual issue. As a matter of common sense, they can both be dealt with at the same time at the trial should the defendant wish to pursue that challenge.

8.  At the PTR hearing, a conclusion was reached with the agreement of both parties as follows:

(1)  There will be no time limit for the defendants to raise the challenge.

(2)  They may do so at the trial.

(3)  There was no need for the defendants to take out any formal application.

(4)  If the defendants wish to pursue that challenge, they should include that as an item in the agreed list of issues to be lodged with the court.

9.  The relevant discussion was contained in two parts. I will put it on record. The first part started at 9:58:07 and finished at 10:09:00. The second part started at 10:54:45 and finished at 11:00:40.

10.  Given the agreement of the parties, it is not open to the plaintiff to now say that it is impermissible for the defendants to raise this challenge in the trial.

11.  I therefore refuse to make the ruling as requested by the plaintiff.

12.  I wish to express my dissatisfaction and frustration that no one, except me, seems to pay any serious regard or attention to what was discussed and agreed at the PTR hearing. I am also very surprised that after having had the opportunity to hear the tape recording twice, Mr Chain still does not accept the agreement reached by the parties as I have just outlined. For the plaintiff, I would say, as I remarked in the course of counsel’s oral submissions, the plaintiff’s written opening submissions were made as if the discussion at the PTR hearing had not taken place.

13.  Lastly, Mr Chain’s submission is that even if the plaintiff had made the concession, the concession had been made wrongly as a matter of law and that ought to be set aside or disregarded.

14.  In my view, the rule set out or the principle set out in cases such as Kammy Town is a matter of case management. It does not impose any absolute bar on the court. The court still retains the discretion to determine whether the defendants should be allowed to run the challenge at the trial.

15.  Here, in light of the procedural history, the express agreement reached by both parties at the PTR hearing, and the overlapping factual disputes between the substantive claim and the authority issue, I would exercise my discretion to allow the defendants to run the challenge in this trial.

(Discussion re costs)

16.  This is my order on costs. I would award costs to the defendants on the authority issue, summarily assessed at $49,900, payable within 14 days from today.

17.  Given the procedural history, the plaintiff’s objection ought not to have been made in the first place. Hence the plaintiff should bear the costs of the first day of the trial which has, in my view, been wasted on a non-issue.