UPPLAN CO LTD v. LI HO MING AND ANOTHER

HCA 1915/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1915 OF 2009

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J U D G M E N T

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Introduction

1.  This is about the summons taken out on 4 November 2016 by Upplan Company Limited (“Upplan”) that the hearing of the Discovery Summons dated 11 January 2012 taken out by the Joint and Several Receivers (“the Receivers”) be adjourned to after the trial of the claim and counterclaim and the determination of the issue of liabilities between the parties (“the main action”).

2.  I note that the main action has not been set down for trial.  However, both Mr Chong, counsel for Upplan, and Mr Lin, counsel for Li Hon Ming (“Virginia”),[1] confirm that their respective clients are willing and ready to proceed with the trial.

3.  That said, Mr Chong perceives a difficulty in that there has been a court order[2] directing that the second case management conference of the main action be fixed “immediately after” the disposal of the Discovery Summons.  Mr Chong takes this to mean that unless the aforesaid direction/timetable is varied, the trial of the main action cannot proceed further until after the disposal of the Discovery Summons.  It is fair to say that at the time when the previous direction/timetable was made, everybody thought that the Discovery Summons would be disposed of shortly.

4.  Now that the Discovery Summons has been outstanding for five years, Upplan’s present application, it is submitted, is to remove that perceived obstacle so that the trial can be proceeded with without further delay.  All counsel before me, namely Mr Chong, Mr Lin and Ms Seto, counsel for the Receivers, agree that the trial of main action would not depend on the result of the Discovery Summons.  As such, there is in fact no necessity for the hearing of the Discovery Summons to be adjourned pending the outcome of the main action.  In my view, it will serve the purpose if an order is made that the trial of the main action be proceeded with without regard to the Discovery Summons.  All parties agree that the court has the power to make that order which is a case‑management decision: see Order 25, rule 1B, Rules of the High Court, Cap 4A. 

5.  The remaining issue is the costs of the present application.  Before I deal with that, it would be pertinent for me to recount how the Discovery Summons came about.

The discovery summons

6.  By way of background, the case in brief is about a money changing business of Upplan conducted in the name of “Florida Money Exchange” in respect of which the Receivers were appointed by the court by consent.

7.  The Receivers took out the Discovery Summons asking that an order be made against Virginia for production of documents and provision of information to them so that they could carry out the duty that the court had asked them to perform, namely, to ensure the continual operation of Upplan’s business as a money exchanger pending the final determination of the main action or until further order.

8.  The Discovery Summons was last heard before Au J on 20 June 2012.  After that, it was adjourned part‑heard for the Receivers to file a further affirmation.  However, that was not done and the matter has since become “dormant”.  The reason given by the Receivers is financial.  Although the Consent Order provides that the costs of the Receivers be paid out of the assets of Upplan, the latter simply does not have sufficient assets and the Receivers have already run out of funds.

The nature of the hearing before the court

9.  Now, the court is told that the money changing business has long ceased.  As a result, the Receivers are no longer interested in obtaining the order they sought.  In fact, there is an affirmation from the Receivers saying that they are prepared to withdraw the Discovery Summons on the condition that their fees are provided for.  However, there is no formal application from the Receivers that the Discovery Summons be either resumed or withdrawn.  As regards Upplan’s present application that the hearing of the Discovery Summons be adjourned until after the trial of the main action, Ms Seto informs that the Receivers take a neutral stand.

10.  On the other hand, although Virginia queries whether the Receivers had the standing to take out the Discovery Summons in the first place, there is in fact no application either from her or her company Rainbow (the 2^nd defendant by Original Action) that the Discovery Summons be dismissed.

11.  Therefore, the hearing before me is not a continuation of the part‑heard hearing before Au J back in June 2012.  The only application before me is the one from Upplan that the hearing of the Discovery Summons be adjourned.  However, technically speaking Upplan is not even a party to the Discovery Summons, save and except, perhaps, as to the question of the Receivers’ costs thereof.

Order

12.  In any event, as aforesaid all parties now agree that the trial be proceeded with as soon as possible.  In the circumstances, I order that the trial of the main action be proceeded with whether or not the Discovery Summons has been disposed of.  The direction/timetable given at paragraph 1 of the Court Order made on 27 June 2012 is hereby varied to this extent.  I note that the Consent Order made on 5 May 2010 has already provided for a speedy trial.

Costs

13.  The court has heard extensive submissions from counsel on the issue of costs. 

14.  Given the present common stance of the parties that the main action should move forward, the matter about variation of its timetable is just a case management issue.  I note also that no milestone dates have been set.  Therefore, had Upplan simply asked for the variation of the timetable instead of seeking adjournment of the hearing of the Receivers’ Discovery Summons, it is likely that the matter could have been dealt with by solicitors before a master.  In which case, the Receivers would not even have to be involved.

15.  On the other hand, the solicitors acting for Upplan had as early as 13 September 2016 written to the Receivers and the solicitors acting for the defendants (by Original Action) sounding out their proposal for expediting the trial and asked for the defendants’ comments.  However, Upplan did not have the courtesy of a reply from the defendants.  Had the solicitors acting for the defendants responded to the proposal and sorted out the differences, the present hearing might not have been necessary.  As regards Mr Lin’s written submission filed for the present hearing, much was said criticising the Receivers and its aim was to ask for the dismissal of the Receivers’ Discovery Summons.  However, as I have mentioned earlier, the hearing before me is just not an adjourned hearing of that summons.  Very little was said in Mr Lin’s written submission about Upplan’s present application save that it is “misconceived and should be dismissed”.  No proposal was put forward by Mr Lin in his written submission as to how the main action should be proceeded with.

16.  In all the circumstances, I exercise my discretion and make no order as to costs between the plaintiff and the defence as regards the present application.

17.  Turning to the Receivers’ costs for the present application, Mr Chong accepts that it should be borne by Upplan.  Contrary to Mr Chong’s assertion, based on the material before me neither Virginia nor her company Rainbow had agreed to pay the Receivers’ costs themselves.  Moreover, I can see no reasons why the defendants should be asked to share the Receivers’ costs in the present application.    

18.  Therefore, I order that Upplan pay the Receivers’ costs (with counsel certificate), to be taxed, if not agreed.