TACHING PETROLEUM CO LTD v. MEYER ALUMINIUM LTD

HCA 1929/2017 &
HCA 1069/2018

[2019] HKCFI 515

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1929 OF 2017

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AND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1069 OF 2018

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D E C I S I O N

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Introduction

1.  These 2 cases were heard together with related competition proceedings. This decision should be read with the decision of the Competition Tribunal handed down on the same date in respect of CTA 1 and 2 of 2018 (“the Tribunal’s Decision”).

2.  Taching and Shell respectively sue Meyer for the costs of industrial diesel oil.  Meyer contends that there was breach of the First Conduct Rule in the Competition Ordinance, Cap 619 (“CO”) in that Taching and Shell colluded to fix the price or exchange price information. 

3.  Meyer now suggests that there be a stay of the High Court proceedings pending resolution of the competition issue in the Tribunal.  Taching is neutral.  Shell suggests that all issues on liability in both the High Court Actions be tried at the same time, separate from the issues on quantum.

Analyses

4.  The general rule is that all issues in a case are to be tried at the same time.  Departure from this rule would only be ordered if it is just and convenient to do so: Hong Kong Civil Procedure 2019, Vol 1, §33/4/9. This general rule applies notwithstanding competition issues are involved and are hived off to the Tribunal.

5.  The pleadings disclose that the only issue on liability in these High Court Actions that is not found in the CT Actions is the averment that “by reason of” the breach of the First Conduct Rule in the CO, the relevant agreement for supply of industrial diesel oil between Shell/Taching and Meyer “is tainted with illegality and unenforceable” against Meyer.  Meyer seeks to set off unpleaded damages against the liquidated sums claimed by Taching/Shell. 

6.  It is plain that the issues of illegality and unenforceability in the HC Actions have no independent existence from the competition defence in the Tribunal.  So all issues on liability must be tried together with the Tribunal proceedings.

7.  What then is left of the trial on quantum?  Meyer’s indication is that it has no right of action without a determination of a contravention of a Conduct Rule by virtue of section 110(1) CO.  Meyer has pleaded nothing to set off against any sum to be awarded to Taching/Shell.

8.  As a matter of law, I fail to see how a future cause of action can support a defence to a present claim.  As the pleadings now stand, there is simply nothing left for the court to investigate on quantum after determination of the issue of liability.  I see no basis for ordering a split trial. 

9.  I therefore order as follows:

(1) The trial of the High Court Actions should be carried out at the same time as the Competition Tribunal proceedings, before the same judge constituting the Tribunal.

(2) The Tribunal’s Decision on inspection of documents, specific discovery, filing of witness statements and case management conference shall apply to these 2 High Court Actions.

(3) The witness statements filed in the Competition Tribunal Proceedings shall stand as witness statements of the parties in these 2 High Court Actions.

(4) The filing of witness statements in these 2 High Court Actions is dispensed with.

(5) Half of the costs of this CMC on 21 January 2019 (excluding costs of the Confidentiality Summons and Redaction Summons in the CTA proceedings), including 30 minutes of the hearing time, shall be in the cause of these 2 High Court Actions.  Such costs are to be equally divided between the 2 High Court Actions.

(6) There shall be liberty to apply.

10.  I thank counsel for their assistance.