XCHRX COLUMBIA EXPRESS LTD. AND ANOTEHR v. JOLLY FIRST CAPITAL LTD. AND ANOTHER

HCA 5360/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 5360 OF 2000

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REASONS FOR DECISION

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1. This is an appeal by the Defendants against the order of Master Yuen who refused to order the 2 actions, namely HC Actions No.5360 and 9003 of 2000 to be tried at the same time by the same judge.

2. HC Action 5360 was commenced in May 2000 in which the Plaintiff Wong Wei Ping, Martin (Martin Wong) seeks to recover a loan of $1.5 million from the Defendant, Jolly First Capital Ltd. (Jolly First)

3. HC Action 9003 was initiated in September 2000 in which the 1st Plaintiff, Columbia Express Ltd and Martin Wong claim against Jolly First Capital Ltd and Betty Wong, formerly trading as Jolly Stock Investment Co. (Jolly Stock), for the return of about 50,000 shares in Wing Lung Bank Ltd and 110,000 shares in Liu Chong Hing Investment Ltd as well as the declared dividends therefrom. Of the 110,000 shares in Liu Chong Hing Investment Ltd, 60,000 shares were said to belong to Columbia and 50,000 to Martin Wong.

4. Betty Wong was the sole proprietor of Jolly Stock which ceased business at 1993 and she was a major shareholder and director of Jolly First which commenced business in the same year. Jolly First and Jolly Stock were both in the stock broking business.

5. There is no dispute that the matters giving rise to the two actions were in fact conducted by Martin Wong and Wang Pei Yung, Peter (Peter Wang).

6. Peter Wang is the elder brother of Betty Wong. He was the Manager of Jolly Stock and a Director of Jolly First. He was in charge of the day to day running of the stock broking business. He disappeared in March 2000.

7. Upon checking the company record, it was found out that 50,000 and 60,000 shares of Liu Chong Hing Investment Ltd were purchased by Martin Wong and Columbia respectively and the share certificates had been delivered to them in 1994.

8. There is no record of the 50,000 Wing Lung Bank shares or the loan of $1.5 million although $1.5 million was in fact received in October 1997 for credit into the share trading account of Peter Wang.

9. Jolly First therefore contends that the $1.5 million could only be a personal loan to Peter Wang.

10. Subsequent to the hearing before Master Yuen, Peter Wang had now been located.

11. According to Peter Wang, there were in fact substantial financial dealings between himself and Martin Wong and that such dealings were personal dealings between them.

12. In particular, the loan of $1.5 million was a personal loan and the Wing Lung Bank Shares were delivered by Martin Wong to Peter Wang as security for a loan in 1990/1991. The Liu Chong Hing Investment Co. shares were said to have been delivered to Peter Wang for deposit into his account for the receipt of dividends and bonus shares and thus were also personal dealings between Martin Wong and Peter Wang not involving Jolly First.

13. Mr Siu, on behalf of the Plaintiff, objects to such evidence when Peter Wang had not himself filed any affirmation but instead introduced such evidence through the solicitor for the Defendants. I accept that there may be some defects in the way in which the Defendants chose to deal with the matter.

14. I did not wish to speculate as to why Peter Wang chose not to file an affirmation himself pertaining to the matter that I had indicated. But for the purpose of the present proceedings particularly in the light of an order made by the court, by consent, allowing the Defendants to amend the defence to give effect to the purported evidence of Peter Wang, it is quite impractical not to take into consideration the evidence of Peter Wang.

15. Despite the observation by Mr. Siu, in my view, for all intent and purpose, the Plaintiffs in both actions are in fact identical as Martin Wong is a director and controlling shareholder of Columbia. It would appear that he alone runs the business of Columbia and so far as the shares dealings in question are concerned, there can be no dispute that he was at all material time acting on behalf of Columbia.

16. Jolly First was of course initially the only Defendant in both actions although Jolly Stock was subsequently ordered to be joined in HC Action 9003 of 2000 as the Wing Lung Bank shares were deposited with Jolly Stock in 1989.

17. There is also no dispute that there are common witnesses in both actions. Indeed the material and crucial witnesses in both actions are probably identical.

18. The principal witnesses in both actions will of course be Martin Wong and Peter Wang and on the pleadings in both actions, I am firmly of the view that the credibilities of Martin Wong and Peter Wang would be crucial. As I have observed in the course of counsel's submissions it would indeed be most embarrassing if different judges were to come to different conclusions on their credibilities.

19. Mr Siu complains on behalf of the Plaintiffs about the possible delay to the first action No. 5360 of 2000 if the two actions were to be tried at the same time.

20. If I may say so, the delay, if any, is initially caused by the decision to institute two actions instead of one.

21. Such delay could also have been avoided if the two actions were commenced at the same time and/or pursued with similar degree of diligence.

22. In this regard, I fully adopt Mr Tang's observation that despite the different causes of actions, the claims in respect of the shares and the loan should have been pursued in one action to save time and costs.

23. In any event, if the two actions were to be attended to diligently, the delay, in my view, would not be substantial particularly if the cases are to be put in the fixture list which has a waiting time of some 8 months. Whatever outstanding matters that need to be attended to could have been attended to in such period of time in preparing for the cases to be listed for trial.

24. There are, in my view, common questions of law and fact. The matters giving rise to the claim arose out of series of transactions between Martin Wong and Peter Wang over a substantial period of time. It will indeed be a significant waste of time if the witnesses are to be expected to try to compartmentalise their evidence in order to suit the different issues involved in the two cases.

25. The joinder of the actions, in my view, will no doubt save significant time and money. It will also avoid the possibility of conflicting finding of facts.

26. I do not wish to speculate the impact of the availability of Peter Wang as a witness on the decision of the learned Master. But in my view, if the learned Master was aware of the fact that Peter Wang had been located and the nature of his evidence, the learned Master might well have come to a different conclusion.

27. In the light of the earlier findings by this court, the appeal must be allowed. The decision of Master is set aside and I order that the two actions are to be tried by the same judge and at the same time in a manner to be determined by the trial judge.