LEE TAK (or TUCK) YAN AND OTHERS v. THE PRUDENTIAL ENTERPRISES, LTD. AND OTHERS

HCA4225/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 4225 OF 2001

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D E C I S I O N

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1. There are before the court three applications for further and better particulars of the Amended Statement of Claim ("ASOC"). They are made by the 2nd, 3rd and 5th defendants, the 4th defendant and the 6th defendant respectively. I shall deal with them in turn.

The 2nd, 3rd and 5th defendants' Requests

(1) Request 2 : paragraph 1 of ASOC

A reading of paragraph 1 of the ASOC and of the ASOC as a whole will show that the term "The Group" is no more than an abbreviation or as Mr Mok, counsel for the plaintiffs says, a convenient reference. The request is therefore unnecessary. It is disallowed.

(2) Requests 3.1.2 and 3.1.3 : paragraph 5 of ASOC

The 2nd to 5th defendants will appreciate from other litigations involving them and the plaintiffs that the grouping of the shareholders or shareholding, as set out in paragraph 5 of the ASOC, is for ease of reference. It is not pleading the setting up or existence of formal groups or classes of shareholders or shareholding. The two requests are unnecessary. They are disallowed.

(3) Requests 4.2 and 4.3 : paragraph 7 of ASOC

Request 4.2 is not necessary and is covered by Request 4.1. As to Request 4.3, the answer to it is apparent from paragraph 7 of the ASOC itself. Paragraph 7 has identified the children of the 2nd defendant who were and/or are directors and also set out the periods when they began or were directors. Request 4.3 is unnecessary. Both requests are disallowed.

(4) Requests 10 and 11 : paragraph 14 of ASOC

The management of the carpark situated as Nos.5 and 7 Blue Pool Road has no relevance to the issues to be determined in this action. The particulars sought under Request 10 are irrelevant. As for Request 11, paragraph 14 of the ASOC has pleaded that the carpark was unlet and remained vacant since November 1989. The cause and circumstances for Greenhill not receiving rental income are therefore apparent. Requests 11.1.1 and 11.1.2 are unnecessary. In view of the subsequent plea in the ASOC of the litigation between MWLS and Greenhill, Requests 11.1.3 and 11.1.4 are relevant and are allowed.

(5) Request 13.2 : paragraph 17 of ASOC

The effect of paragraph 17 of the ASOC is that the wealth and resources milked are the major assets beneficially owned by the extended Lee family or family companies that had been injected into PEL. These major assets are also set out. Request 13.2 is therefore not necessary and disallowed.

(6) Requests 14.2, 14.3 and 14.5 : paragraph 18 of ASOC

Requests 14.2 and 14.3 do not arise from paragraph 18 of the ASOC which clearly states the Grand Design to be "his", meaning ST Lee's Grand Design. Similarly, Request 14.5 pleads the intention of ST Lee in connection with the Grand Design. Request 14.5 is unnecessary, especially having regard to Request 14.4, which the plaintiffs have agreed to provide. These requests are disallowed.

(7) Requests 15, 16 and 17 : paragraph 19 of ASOC

The first part of paragraph 19 of the ASOC is pleading the perception or assessment of ST Lee as to the chances of acquiring Nos.5 and 7 Blue Pool Road. Request 15.1 does not arise from this part of the pleading. Similarly, Requests 15.2 and 16 do not arise out of it since what is pleaded is the perception and assessment of the situation. Request 15 and 16 are disallowed.

As to Request 17, Request 17.3 is a proper request and is allowed. Even though the 2nd and 5th defendants had pleaded extensively with regard to the proceedings identified in paragraphs 19(1) to (4), 20(1), (2) and 21 of the ASOC, for the purpose of properly identifying the issues between the parties, Request 17.3 should be answered. Requests 17.8 and 17.9 are also proper requests and are allowed. They are relevant and material particulars of the confrontational strategy alleged. The remaining requests under Request 17 are in my view either irrelevant, unnecessary or do not arise from the pleading. There is no necessary correlation between the entitlement of PEL to retain dividends and/or to refuse registration of transfer of shares and the confrontational strategy alleged in paragraph 19 of the ASOC. There is also no averment that PEL was compelled by the Court to pay dividends or to register the transfer of shares. Requests 17.1, 17.2, 17.4 to 17.7, 17.10 to 17.13 are disallowed.

(8) Requests 18 and 19 : paragraph 20 of ASOC

For the reasons given in disallowing Requests 17.4 to 17.7, these Requests are also disallowed for being irrelevant and unnecessary.

(9) Requests 20.1, 20.6 to 20.9 : paragraph 21 of ASOC

Request 20.1 is a proper request and is allowed. As to Requests 20.6 to 20.9, for similar reasons given in disallowing Requests 17.4 to 17.7, these Requests are irrelevant and unnecessary. They are disallowed.

(10) Request 21 : paragraph 22 of ASOC

This is a proper request for clarification. It is allowed.

(11) Requests 24.2 and 24.3 : paragraph 25 of ASOC

Paragraph 25, especially when read in the context of the letter of Messrs Masons pleaded in paragraph 24, plainly avers that Greenhill did not want to receive shares and would only receive cash for the sale of No.7 of Blue Pool Road. It is not pleaded that it could not choose to take shares. Requests 24.2 and 24.3 do not arise from the pleading and are disallowed.

(12) Request 26 : paragraph 14 of ASOC

Request 26.1 to the extent that it asks whether the conspiracy was alleged to be pursuant to some agreement is a proper one is allowed. It follows that Request 26.2 is also allowed. The sub-requests under Request 26.1, i.,e. 26.1.1 to 26.1.5, they are inappropriate in the context of a conspiratorial agreement. They are disallowed.

(13) Requests 31.1.2 and 32.2 to 32.4 : paragraph 42(3) of ASOC

Given that Request 17.8 and 17.9 have been allowed, Request 31.1.2 should no longer be necessary. It is disallowed.

As to Request 32, Request 32.2 is a proper request and is allowed. The other requests , being Requests 32.3 and 32.4 are unnecessary and do not properly arise from the pleading. They are disallowed.

(14) Requests 33.3 and 34 : paragraph 42(4) of ASOC

Request 33.3 is misconceived. Paragraph 42(4) of the ASOC does not plead any force or coercion. Likewise, Request 34 does not arise out of paragraph 42(4), which pleads that under the Global Settlement, the CC Lee Branch and TY Lee were paid in cash only. These requests are disallowed.

(15) Requests 36.2 and 36.3 : paragraph 42(5) of ASOC

These Requests do not arise out of paragraph 42(5) of the ASOC, which does not plead any agreement or arrangement to vote the shares as a block. The requests are disallowed.

(16) Request 53 : paragraph 43(3) of ASOC

Paragraph 43(3) of the ASOC is pleading the consequences of adopting the Chosen Method of valuation and not on the method of valuation that should be adopted. Request 53 is inappropriate and is disallowed.

(17) Requests 55.5 and 55.6 : paragraph 43(5) of ASOC

These requests do not arise out of paragraph 43(5) of the ASOC. They are disallowed.

(18) Request 60.2 : paragraph 43(9) of ASOC

At the hearing, Mr Coleman clarifies that the request is confined to assumption relating to dividend payment. On that basis, I will allow it.

(19) Requests 61.1 to 61.3 : paragraph 43(10) of ASOC

The plaintiffs have agreed to provide the particulars to Request 61.4. That should be sufficient particular for this plea. Requests 61.1 to 61.3 are disallowed.

(20) Request 66.4 : paragraph 43(14) of ASOC

This request is both unnecessary and borders on asking for arguments. It is disallowed.

(21) Request 69.3 : paragraph 44(4) of ASOC

This request relates to the details of the increase in the UK property portfolio and the calculations for it. The plaintiffs have indicated that they are unable to provide the details sought at this stage but will provide them by way of expert report later. This, in my view, is acceptable. No order will be made on this request.

(22) Request 70 : paragraph 44(6) of ASOC

This request is unnecessary as the particulars sought are apparent form paragraphs 44(1) to (5). Paragraph 44(6) is merely a conclusion drawn upon paragraphs 44(1) to (5). The request is disallowed.

To conclude on the 2nd, 3rd and 5th defendants' summons, particulars will be ordered for Requests 11.1.3, 11.1.4, 17.3, 17.8, 17.9, 20.1, 21, 26.1, 26.2 (confined to the opening part), 32.2 and 60.2 (confined to in connection with dividend payment).

The 4th defendant's Requests

(1) Request 6 : paragraph 13 of ASOC

The shareholding of the C.C. Lee Branch in Greenhill is irrelevant to the issues to be determined herein. This request, being irrelevant, is disallowed.

(2) Request 13(a) : paragraph 17 of ASOC

This is a proper request and is allowed.

(3) Requests 16 to 17, 19(a) and (b) and 21(a) : paragraphs 19, 22 and 23 of ASOC

These requests all relate to dates which are irrelevant to the issues to be determined. They are disallowed.

(4) Request 20 : paragraph 22 of ASOC

The request is not necessary as the particulars sought have already been pleaded in paragraph 7 of the ASOC. It is disallowed.

(5) Requests 25(a) and (b) : paragraph 25 of ASOC

Paragraph 25 of the ASOC pleads the knowledge of the directors of PEL with regard to Greenhill's desire to receive cash for the sale of No.7 Blue Pool Road. Requests 25(a) and (b) do not arise out of the pleading and are disallowed.

(6) Request 26 : paragraph 26 of ASOC

The request is irrelevant since the matters pleaded, which relate to the 2nd defendant, has been admitted by the 2nd defendant. It is disallowed.

(7) Request 28 : paragraph 26(2) of ASOC

The question of the alias of Lee Cheong Yee is irrelevant to the issues to be determined in this action. It is disallowed.

(8) Requests 30, 31 and 32 : paragraph 33 of ASOC

The negotiations on the sale of Blue Pool Road are irrelevant to the issues in this action. Request 30 is disallowed. What is pleaded in paragraph 33 of the ASOC is that the prices for acquiring the Blue Pool Road properties were agreed. The eventual agreements are pleaded in paragraphs 35 and 36 of ASOC. Requests 31 and 32 are unnecessary and also irrelevant to the issues to be determined in this action. They are disallowed.

(9) Request 34 : paragraph 39 of ASOC

The plaintiffs' complaint herein is not the sales of the Blue Pool Road properties nor the terms of the settlement relating to them. There is also no complaint against the allotment of shares to the 2nd and 3rd defendants per se. The nub of the plaintiffs' case is that the shares allotted to them, by way of distribution in MWLS of the sale proceeds of No.5 Blue Pool Road, are at an undervalue. Seen in this light, Request 34 is both unnecessary and irrelevant. It is disallowed.

(10) Request 60 : paragraph 42(13) of ASOC

The date as requested for is irrelevant to the issues herein. It is disallowed.

(11) Request 62 : paragraph 43(3) of ASOC

For the reasons given in connection with Request 53 of the 2nd and 5th defendants' Requests, this request is disallowed.

(12) Request 63 : paragraph 43(4) of ASOC

This request does not arise out of the pleading. In any event, this request is unnecessary given that the plaintiffs will be providing particulars to Request 54 of the 2nd and 5th defendants. This request is disallowed.

(13) Request 79 : paragraph 47 of ASOC

Paragraph 47 of the ASOC expressly pleads that the 4th defendant, since his appointment to the Board on 30 March 1995, owed the fiduciary duties set out therein. Request 79 is unnecessary and is disallowed.

(14) Requests 80 to 83 : paragraphs 47(2) and 47(3) of ASOC

These paragraphs in the ASOC plead the legal principles as to the duties of directors. They are general statements of the law. The requests are inappropriate and disallowed.

(15) Request 84 : paragraph 48 of ASOC

The formulation of paragraph 48 is in a commonly adopted form. There is no ambiguity. The request is disallowed.

(16) Request 86 : paragraph 48(1) of ASOC

Paragraph 48 of the ASOC is pleading the breach of duties on the part of the 2nd to 5th defendants. The particulars supporting the plea of misrepresentation in paragraph 48(1) of the ASOC had previously been set out under paragraphs 28 to 32, 41(13) and (14) of the same. Request 86 is therefore unnecessary and is disallowed.

(17) Request 91 : paragraph 50 of ASOC

For the purpose of greater clarity, this request is allowed.

(18) Request 92 : paragraph 50 of ASOC

This request seeks the quantum of loss. The plaintiffs contend that this is a matter for expert report. Even though the loss and damage is pleaded as special damage, it is permissible for the plaintiffs to set out the heads of loss or damage without attaching a figure to it leaving it for assessment by the court at the trial. No order is made on this request.

In summary, on the 4th defendant's summons, particulars will be ordered under Requests 13(a) and 91.

The 6th defendant's Requests

(1) Requests 36 and 37 : paragraphs 43(3) and (4) of ASOC

With the plaintiffs agreeing to provide particulars along the line requested by the 2nd, 3rd and 5th defendants under Requests 52 and 54 of the latters' Request, these are not pursued.

(2) Request 41 : paragraph 43(7) of ASOC

This request is similar to Request 58 of the 2nd, 3rd and 5th defendants and Request 66 of the 4th defendant, which the plaintiffs have agreed to supply. That being the case, this request should be allowed.

(3) Request 54 : paragraph 48(1) of ASOC

This request is in almost identical term to Request 86 of the 4th defendant. For reasons given in connection with the latter, this request is disallowed.

(4) Request 55 : paragraph 48(2) of ASOC

This request is in similar term to Request 87 of the 4th defendant which the plaintiffs have agreed to provide. In the circumstances, this request is allowed.

(5) Requests 61 and 62 : paragraph 50 of ASOC

These requests are identical to Requests 61 and 62 of the 4th defendant's Request. For the reasons given in connection with the latter, Request 61 is allowed, but Request 62 is disallowed.

Hence on the 6th defendant's summons, Particulars will be ordered under Requests 41, 55 and 61.