XCHRX FONG LAI KUEN v. HOLIDAY RESORTS HOLDING LTD. AND OTHERS

HCMP 1530/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1530 OF 1998

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(Consolidated)

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J U D G M E N T

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1. This is the Plaintiff's appeal against the Order of Master C. Chan (as he then was) dated 8 September, 1999 whereby the learned Master ordered this action("the second action in time") to be consolidated with HCMP 1530/98 ("the first action in time").

2. In the first action in time, the Plaintiff alleges in essence (a) the Plaintiff is a shareholder of D1 therein and (b) the nine Defendants' purported appointments as D1's directors were invalid. The Plaintiff asks for a declaration to such effect and an injunction enjoining them from purporting to act as such.

3. In the second action in time, the same Plaintiff alleges that a resolution purportedly passed at a general meeting held on 21 May, 1998 approving the allotment of shares to the Defendants therein was invalid. The alleged invalidity arose from (a) the aforesaid invalid appointment of D1's directors; (b) no meeting having in fact been held; and (c) a wrongful rejection of proxy forms. It is therefore apparent that more issues are involved in the second action in time than the first action in time.

4. Mr Lam for the Plaintiff argued that the second action in time ought to be stayed until after the determination of the first action in time on the ground that if the first action in time were determined in the Plaintiff's favour, there will be no need to consider the further issues in the second action in time. Only if the decision in the first action in time were in the Defendants' favour will it be necessary to deal with the second action in time.

5. It is common ground that the Defendants in the two actions are not entirely the same. The following Defendants are common to both actions :-

Defendant No. in MP 1530	Defendant No. in MP 5458
D1	D1
D2	D16
D3	D2
D7	D17
D9	D18

6. D3 to D15 in the second action in time are not Defendants in the first action in time. The Defendants in these two actions are not represented by the same firm of solicitors. Some of the Defendants in the second action in time act in person and were absent at the hearing of the appeal.

7. By reason of these matters, Mr Fung for D8 (in the first action in time) argued that even if the first action in time were decided in the Plaintiff's favour, this decision will not be binding on those Defendants in the second action in time who are not Defendants in the first action in time.

8. Further to Mr Fung's argument, it is possible that, in relation to the issue common to both actions (namely, invalid appointments), further or other evidence may be adduced or arguments advanced by the "uncommon" Defendants in the second action in time. Should the second action in time be stayed and tried after the determination of the first action in time, the additional evidence or arguments may find favour with the Court trying the second action in time. This may result in inconsistent results in the two actions.

9. Realising the difficulties posed by the above two matters, Mr Lam advanced an alternative argument that the part of the two actions relating to the common issues be consolidated. I am prepared to proceed on the basis that such a course is within the Court's discretion. However, I do not consider that time or costs will be saved by ordering such a partial consolidation. On the contrary, I consider a complete consolidation to be more efficient.

10. Mr Lam argued that the first action in time is ready for trial and if a consolidation is ordered, this may hinder its progress because quite a number of procedural steps in the second action in time are still outstanding. While that may be true, there is likely to be the same delay even if a partial consolidation is ordered.

11. For the above reasons, I consider that the learned Master was correct. The appeal is therefore dismissed.

12. Pursuant to R.H.C. Ord. 42 r. 5B(6), I make a costs order nisi that costs of the appeal be paid by the Plaintiff to the Defendants.