POWER FORWARD FINANCE LTD. v. COLLECTIONS INTERNATIONAL LTD.

HCMP5451/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.5451 OF 2001

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J U D G M E N T

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1. This is the appeal by the defendant from an order by the master whereby the master ordered that the Originating Summons be heard with half day reserved and that inter parte application for the question of cross-examination of the deponents filed by the parties in relation to this disputed Originating Summons to be determined.

2. The appeal is brought because the defendant contends that the dispute between the parties involves substantial factual issues and the only proper way to resolve it is in usual way that is under the writ form and with a full trial after the pleadings have been exchanged and discovery has also been exchanged.

3. The plaintiff relies on an Originating Summons for enforcement of a share mortgage by the defendant to the plaintiff in relation to the defendant's ownership of 50% share in a PRC company, the underline assets of which was a property in China. I think it is fair to say, reading the materials presented to the court, that there is a substantial dispute of fact on a large number of areas as to, for example, whether there was a genuine sale and purchase agreement, about how the unusual terms in that agreement came to be made, about the genuineness of the subsequent addendum to the sale and purchase agreement and about the valuation of the company which in turn involves questions of fact as to the valuation of the underline property as well as what might have been debts of the company.

4. I think the large number of disputes of fact inevitably point to the Originating Summons procedure not being appropriate. Mr Ng, counsel for the plaintiff, in his understated submissions points out to the court that many of the disputes of fact can be resolved under the umbrella of the Originating Summons by appropriate orders of cross-examination, list of issues, orders, directions as to list of issues as well as appropriate orders of discovery. He refers to the urgency of the matter in that under the supplementary agreement there was a deadline of 30 June for the completion of the sale by the plaintiff to Zamora Associates Ltd.

5. I can understand his client's anxiety for a speedy resolution of the matter, but nevertheless it seems to me, having regard to the large issues of fact and the proper management of the case, that the writ form should be followed. I therefore order that the Originating Summons should be converted into a writ and that pleadings should be exchanged with a tight time-table so that the trial can come on as quickly as possible. I will now hear the parties as to the appropriate directions that should be given for this purpose. The appeal accordingly is allowed and I would hear the parties also on the matter of costs.