TO KAN CHI AND OTHERS v. TO KIN WAH AND ANOTHER

HCMP509/2002 & HCA1603/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 509 OF 2002

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(HEARD TOGETHER)

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REASONS FOR JUDGMENT

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1. In my judgment on 29 September 2005 I have given an order that To Kin Wah under HCMP509/2002 could be paid in respect of its costs incurred therein up to the time of discovery from the Funds of the Tong Tsing Wan Kun (I refer to this judgment for the background to these 2 cases before me now and would not repeat them here).  This decision was upheld by the Court of Appeal on 7 March 2007.  In the meantime there are other applications which have been adjourned to 6 March 2008 for arguments and filing of affidavits in the meantime.  They are six summonses taken out by To Kin Wah as follows :

“	Date	HCA No.“1603” of 2004	HCMP No.“509” of 2002
	18/11/2004	(1)  For consolidation with HCMP No.509 of 2002 pursuant to O 4 r 9 RHC	(2)  For consolidation with HCA No.1603 of 2004 pursuant to O 4 r 9 RHC
	17/05/2005	(3)  For general directions
	23/05/2005	(4)  For leave to amend the Statement of Claim
	23/05/2005	For an order that (a) To Kin Wah and his infant son be indemnified in respect of costs out of the assets of the Tso and the Tong (“the Funds”); and (b) there be interim payments to To Kin Wah on account of such costs out of the Funds
	10/10/2007		(6)  For cross-examining Albert Wong	”

2. There are 2 more applications made by the managers and 3 by To Kin Wah and they were scheduled to be heard on 7 March 2008 as follows :

(A) Summons taken out by the Managers :

“	Date	HCMP No.509 of 2002
	28/09/2007	(1)  For release of 3,310,238 from the Funds for Tong’s legal costs incurred and to be incurred for the benefit and interest of the Tong
	10/10/2007	(2)  For release of 520,000 from the Funds for Tong’s operational costs and expenses	”

(B) Summonses taken out by To Kin Wah :

“	Date	HCA No.1603 of 2004	HCMP No.509 of 2002
	27/12/2007	(3)  For production and inspection of Tso’s account	(4)  For production and inspection of Tong’s accounts
	14/01/2008		(5)  For an order that To Kin Wah’s costs in HCAL No. 105 of 2002, CACV No. 444 of 2002 CACV No. 358 of 2004 and FAMV No. 9 of 2006 and costs incurred by Court orders to be paid out from the Funds	”

3. I have made my decisions on all these applications before me on 6 March 2008 after reading all the written submissions of the parties.  The followings are my reasons therefor.

Consolidation

4. No.509/2002 is concerned with the managers’ application for the release of the Funds to the managers by their originating summons dated 5 February 2002.  

5. However No.1603/2004 is concerned with the allegations of To Kin Wah against the managers as to their appointment as managers of the Tong at the meeting of 13 May 2001 and the ratification at the meeting on 27 June 2004.  There are allegations that the notice of meeting dated 11 June 2004 is misleading and therefore invalid and the subsidiary question as to whether the managers are fit and proper persons to be so appointed.  

6. There were other questions to be decided such as :

(i)  Whether the managers should be restrained from acting as managers of the Tong?

(ii)  Whether the assets of the Tong and Tso should be administered by the court?

(iii)    Whether a judicial trustee should be appointed to take into safe custody and assets of the Tong and the (To Ka Yi Tso) Tso and administer them under the direction of the court?

(iv)    Whether there should be a scheme for the application of the Tong’s assets for its primary and secondary purposes?

These questions were raised in the proposed amended statement of claim. 

7. It can be seen that there is no common question of law or fact arises in these two sets of proceedings. 

8. Further the parties of the two sets of proceedings are quite different.  In No.509/2002, the plaintiffs are the managers of the Tong whereas in No.1603/2004, the managers were sued in their personal capacities and not as managers of the Tong or the Tso.

9. Thus the two proceedings with different parties, issues and rights to relief being claimed by the managers or To Kin Wah do not arise from the same or same series of transactions.  

10. Order 4, rule 9 of the Rules of the High Court provides :

“(1) Where two or more causes or matters are pending, then, if it appears to the Court-

(a)   that some common question of law or fact arises in both or all of them, or

(b)   that the rights to relief claimed therein are in respect of or arise out of the same transaction or series of transactions, or

(c)   that for some other reason it is desirable to make an order under this rule,

the Court may order those causes or matters to be consolidated on such terms as it thinks just or may order them to be tried at the same time, or one immediately after another, or may order any of them to be stayed until after the determination of any other of them.”

Accordingly, the applications of To Kin Wah do not fall within any of the three situations as stated in (a), (b) or (c) above.  

Amendments

11. In the first place, To Kin Wah is seeking a representative order for him to act and represent members of the Tong and Tso except the three managers. 

12. Further he would like to join the managers in their following additional capacities :

(i)    in their personal capacities as members of the Tso;

(ii)  in their personal capacities as members of the Tong;

(iii)    in their capacity as managers of the Tso.

This is in addition to the fact that the managers are further being sued as managers of the Tong. 

13. Further there were the addition of at least three new causes of action against the managers, namely :

(i)    as managers of the Tong, failing to control or apply the Funds for the primary or secondary purposes (paragraphs 36-42);

(ii)  as managers of the Tso, failing to apply money under their control for the purpose of the Tso or in accordance with the wishes of Tso’s members (paragraph 43); and

(iii)    as managers of the Tong and Tso, misapplication of the Funds, failing to maintain accounts and denying inspection of accounts by members of the Tso and the Tong (paragraphs 44-46).

14. To Kin Wah also asks for 4 new orders in the prayer as follows :

(i)    orders for administration of the assets of the Tong and the Tso by the court (paragraph 2A);

(ii)  orders for the appointment of fit and proper persons to be the managers and trustees of the assets of the Tong and the Tso (paragraph 2C);

(iii)    orders for the appointment of a judicial trustee to take into safe custody the assets of the Tong and the Tso and administer them under the direction of the court (paragraph 2D); and

(iv)    orders for a scheme for the application of the assets of the Tong for its primary and secondary purposes (paragraph 2E).

15. To recapitulate, HCAL105/2002 (“HCAL105”) was heard before Tang JA (as he then was) and there were substantial overlapping with the allegations made therein with HCA1603/2004 (“HCA1603”) which had been issued shortly before HCAL105.  HCAL105 was based on the validity of the district officer’s registration of the managers as managers of the Tong.  The only issue that had been reserved by To Kin Wah to be decided in HCA1603 was whether or not unanimity is required for the Tong to act in appointing its managers.

16. The challenge on the validity of the appointment of the managers have failed in the judicial review proceedings all the way to the Court of Final Appeal.  Mr Chan Chi Hung, SC who appeared with Ms Shannon Leung for the managers submitted that the present attack in this amendment is an abuse of the process of the court.  They relied on the case of Johnson v. Gore Wood & Co. (a firm) [2001] 2 WLR 72.  In that case the plaintiff conducted his affairs through a number of companies including W Limited, for which the defendants acted as solicitors.  W Limited eventually sued the defendants for negligence.  Before the trial the plaintiff indicated that he also had a personal claim against the defendants.  The House of Lords eventually decided that there should be finality of litigation and the defendants should not be vexed twice; but that whether an action was an abuse of process of court should be judged broadly on the merits taking account of all the public and private interests involved and all the facts of the case, the crucial question being whether the plaintiff was in all the circumstances misusing or abusing the process of the court.

17. In that case it was decided that, in all the circumstances, the plaintiff’s action was not abusive.  The plaintiff was in principle entitled to recover in respect of any loss that he himself suffered that was not merely a reflection of the loss suffered by W Limited.  But damages for breach of contract could not generally include damages for mental distress and the plaintiff’s claim for damages for mental distress and anxiety should be struck out; and that his claim for aggravated damages should also be struck out. 

18. In light of the aforesaid House of Lord’s decision I shall now consider the particular amendments in detail. 

Representative order

19. To Kin Wah claimed to represent all members of the Tong and/or Tso.  However he was not selected by any significant number of members provided by Tso and/or Tong to represent them.  In fact on the evidence he is acting contrary to the wishes of a number of members of the Tong and the Funds are depleted as a result of his challenge.  The common interest of the Tong’s member is to distribute the balance of the Funds after setting aside $50 million for maintaining the temple Tsing Wan Kun.  Now To Kin Wah is conducting hostile litigation in the action herein adverse to the interest of the overwhelming majority of the members of the Tong.  There is therefore no interest that is common amongst To Kin Wah and those members of the Tong and Tso that he now seeks to represent as evidenced by the resolutions signed by the members of the Tong at TKC-1 to the affirmation of To Kam Chau filed under 509 dated 19 August 2005.

20. This is similar to the case of Morgan Brewery Co. v. Crosskill [1902] 1 Ch 398.  The plaintiff company therein issued an originating summons with reference to a proposed issue of preference shares, and made S the sole defendant as “a holder of preference shares issued by plaintiff company, sued on behalf of himself and all the other holders of similar preference shares”.  Buckley J declined to appoint S, or any other person, to represent the class of preference shareholders until a meeting had been called of such class and some person was nominated to represent them.

21. To Kin Wah therefore has not made out a case for any representative order within any provision of Order 15, rule 12(1) or rule 13(1).

Administration Order

22. To Kin Wah asked for an order for administration of the asset of the Tong and Tso by the court.  However To Kin Wah’s challenge to the Managers’ appointment has already failed in the judicial review action as aforesaid.  Unless and until his challenge herein under HCA1603/2004 is in his favour or there is something worth pursuing as a result of the auditing by Deloitte (which shall be considered herein below), there is no basis for the appointment of other persons to be managers or trustees of the Tong’s or Tso’s assets.  Accordingly there is also no basis for any scheme to be devised for the application of such assets. 

23. To Kin Wah’s allegations as a result of Deloitte’s report was answered by To Kan Chi in his 9^th Affirmation dated 13 November 2007.  In respect of the $15 million paid to To Wing On from the Tso’s fund for the use of future litigation in respect of CACV444/2004 as referred to in a minutes of the members’ meeting on 25 July 2003, the managers’ solicitors had already written to To Wing On and enquired with the expenditure incurred thereunder.  To Wing On’s solicitors replied by a letter dated 15 February 2005 and relied on certain loan agreements.  The managers had already commenced HCMP368/2008 for directions of the court as to whether to sue To Wing On or whether the Tso should regard itself as being bound by the loan agreement.  In short, the managers have already taken action to pursue all items of expenditure under this $15 million. 

Managers of the Tso

24. In respect of To Kin Wah’s allegation that the managers of the Tso had not applied Tso’s moneys “for the purposes of the Tso” and “in accordance with the wishes of its members” as pleaded in paragraph 43 of the draft amended statement of claim, there was no particulars as to how the managers are alleged to have failed to apply the moneys for such purposes. 

25. In any event the allegations against the managers as the Tso’s managers should be separate and distinct from litigation involving the managers for the Tong under HCA1603/2004.  The allegation against managers of Tso also, being the same three persons, were not made out in terms of particulars. 

26. In the proposed amendment, To Kin Wah wanted to join the managers in their capacity as the Tso’s managers with new causes of action against them under HCA1603/2004.  This however is not within the provision of Order 15, rule 4 in that :

(1) the main issues in HCA1603/2004 are the validity of :

(a)  the managers’ appointment on 13 May 2001; and

(b) the ratification of their appointment on 27 June 2004 in accordance with Chinese customary law;

(2) the validity of the managers’ appointment as Tso’s managers has not been challenged at all;

(3) it is undisputed that the Tso and Tong are different and distinct entities and they are holding separate and distinct properties and funds. 

The alleged misapplication of funds or neglect of duty by the Tso’s managers on the one hand and the Tong’s managers on the other can hardly be said to be in respect of or arising out of the same transaction or same series of transactions. 

27. Thus a joinder of the Tso’s managers as additional parties and their alleged misapplication of Tso’s assets as new causes of action in HCA1603/2004 would just delay the trial or is otherwise inappropriate and inconvenience as submitted by counsel for the managers. 

Other Funds of $2.42 million

28. In respect of the other funds of money to the total amount of $2.42 million, To Kan Chi explained that the actual figure is $1.92 million, i.e. $0.5 million less.  In respect of these five sums paid to To Wing On, again the managers of Tong are still in the process of pursuing To Wing On for receipts and accounts of the expenditure which was meant to be paid to Messrs Dominic Lai, the previous solicitors for the managers. 

29. Lastly the prayer for the appointment of fit and proper persons to be the managers and trustees of the assets of the Tong and the Tso by the court is not viable because only members of the Tso and Tong can appoint their managers pursuant to section 15 of the New Territories Ordinance.  This is also supported by the cases of :

(a)  Li Tang Shi v. AG [1969] HKLR 367 at 382;

(b) Chan Choy Fong v. Secretary for Home Affairs [1997] 4 HKC 122 at 128C;

(c) Paragraph 285.061 of Halsbury’s Laws of Hong Kong. 

30. Further only the District Office may cancel the managers’ appointment under the aforesaid section 15 but not the court.  The powers of the managers are provided in section 15 and a trustee appointed by the court cannot exercise the power under this section : see also para 400.002 of Halsbury’s Laws of Hong Kong. 

31. The situation is quite different in HCMP509/2002 when the proposed distribution in an action commenced by the managers was challenged by To Kin Wah.  Under HCA1603/2004 To Kin Wah also made extensive allegations against the managers concerning :

(1) the validity of the managers’ appointment;

(2) allegations that the managers are not fit and proper persons to be managers;

(3) alleged breaches of trust and misapplication of trust assets by the managers. 

32. By a letter dated 22 November 2001, To Kin Wah and his father complained about the managers’ appointment as managers.  They suggested that the 5 representatives should be the managers and not the present managers.  However in dismissing To Kin Wah’s judicial review application under HCAL105/2004, Tang JA (as he then was) refereed to this letter dated 22 November 2001 and observed in paragraph 3 of his judgment :

“… underlying this proceeding is the fight for the control over the considerable funds of Tsing Wan Kun.” 

This is the real motive behind the challenge to the managers’ appointment.  As observed by Rogers VP in Re Estate of Cheung Kung Hai, at paragraph 51 :

“… Not only is it hostile it would appear to have all the attributes of a legal war of attrition.  Nothing could be clearer than from these proceedings themselves without having regards to the plethora of litigation which has taken place between the parties. …”

33. Thus, unless the trust in question is a special trust like the pension fund in McDonald v. Horn, and thus could be regarded as analogous to the shareholder’s interest in a company’s asset which then would entitle the court to apply the special rule for pre-emptive costs for a minority shareholder’s derivative action developed in Wallersteiner v. Moir (No. 2) as I have said in my previous judgment, the claimant beneficiary in hostile proceedings will have to litigate at his own risk of costs. 

34. A beneficiary of the Tong and/or Tso is not a joint legal owner of the trust assets, which he cannot sever or demand a partition, but just an interest which ceases on his death instead of the devolving onto his personal representative, i.e. a life interest only. 

35. Finally unless the trial judge is satisfied after trial that the costs of all parties including To Kin Wah should come out from the Funds, it cannot generally be right to make such an order at this stage and reserve the trial judge function.  At this stage the evidence before this court cannot support a pre-emptive costs order for To Kin Wah. 

36. As Hoffmann LJ (as he then was) said in McDonald v. Horn at 696F-697B :

“… In cases in which it is not clear that the judge would be bound to make an order in favour of the applicant, the court is very reluctant to make a prospective order.  I refused to make one in favour of a representative defendant in In re Charge Card Services Ltd. [1986] B.C.L.C. 316 because, although the proceedings had been commenced by a liquidator, he opposed the making of a pre-emptive order and it was not at all clear whether the judge at the hearing of the originating summons would regard the case as falling within Kekewich J’s first category or as hostile litigation of an interpleader kind.  In the event this caution seems to have been justified, because in In re Westdock Realisations Ltd. [1988] B.C.L.C. 354 Sir Nicolas Browne-Wilkinson V.-C reported that the judge at the trial of In re Charge Card Services Ltd. had ordered the representative defendant to pay the costs.  In In re Westdock Realisations Ltd. itself, the Vice-Chancellor said of an application for a pre-emptive order, at p. 359 :

   ‘Unless satisfied that after trial a judge would be likely to make an order that the costs of all parties are to come out of the fund it cannot in general be right to make such an order at this stage.’

   I respectfully agree.  In fact, I would be inclined to put the matter rather more strongly.  I think that before granting a pre-emptive application in ordinary trust litigation or proceedings concerning the ownership of a fund held by a trustee or other fiduciary, the judge must be satisfied that the judge at the trial could properly exercise his discretion only by ordering the applicant’s costs to be paid out of the fund.  Otherwise the order may indeed fetter the judge’s discretion under Ord. 62, r. 3(3).”

Further summonses

37. There are five summonses scheduled to be heard on 7 March 2008.  Two were taken out by the managers and three by To Kin Wah as aforesaid in paragraph 2 herein.  I shall deal with the three summonses taken out by To Kin Wah first.

Accounts

38. The application for production and inspection of the Tong’s and Tso’s accounts were issued on 27 December 2007 and served some time after 3 p.m. on the solicitors for the managers.  The date of hearing was stated as 7 January 2008, to be heard with other applications scheduled on that day.  A number of serious allegations were made against the managers and the managers’ request for an adjournment was rejected by To Kin Wah.  This is an indication of To Kin Wah’s attitude in these proceedings.  In fact in both sets of proceedings To Kin Wah had sufficient time and opportunity to inspect those accounts as produced by the managers. 

39. Under HCA1603/2004, To Kin Wah asked to inspect the accounts of the Tso relating to $15 million paid to To Wing On.  An order was made by me way back on 23 August 2005.  On 22 September 2005 To Kin Wah was produced with the Tso’s cashbook for inspection.  He then took out another summons on 22 October 2005 for inspection of bank statements and supporting vouchers of the Tso for the period from 12 February 1998 to 22 October 2005.  An order to that effect was made by me on 28 October 2005.  On 11 November 2005 there was an inspection of the Tso’s accounts by To Kin Wah, and he was produced with bank statements, cheque stubs and various vouchers, cheques, receipts given by To Wing On and a letter from the managers to the Bank of China.  For two years To Kin Wah did not raise this issue again until 27 December 2007 as aforesaid.  But To Kin Wah still made the allegations in his 3^rd Affirmation filed on 28 December 2007 under HCA1603/2004 saying that he was only produced with vouchers and that the managers did not produce the relevant accounts of the Tso.  This is blatantly incorrect. 

40. In fact To Kin Wah himself produced the cashbook of the Tso in his 2^nd Affirmation on 26 October 2005 as “TKW-71”.  That was produced to him on 29 September 2005.  On 11 November 2005 he was again produced with the relevant bank statements, cheque stubs, vouchers, cheques, receipts and letter to the Bank of China.  His accountant’s letter of 25 November 2005 admitted the same.  He even exhibited the same in his 15^th Affirmation dated 2 March 2006 under HCMP509/2002 as “TKW-73”.

41. Under HCMP509/2002, To Kan Chi in his 9^th Affirmation dated 13 November 2007 and paragraphs 11-26 explained the Tso’s moneys commented on by Deloitte’s report.  In particular, paragraph 12 explained the $15 million paid to To Wing On and the further action of the managers pursuing To Wing On as aforesaid thereafter. 

42. I therefore agree with the submissions of counsel for the managers that there should not be duplication of work and costs when there is already a Deloitte’s report as ordered by this court.  Fees incurred by To Kin Wah or his accountants employed by him might have to be paid by the Funds of the Tong in view of my pre-emptive costs order under HCMP509/2002.

43. In any event the accounts and documents as requested by To Kin Wah in his summons of 27 December 2007 have already been provided to him and his application for the same should therefore be dismissed under HCA1603/2004.

44. Under HCMP509/2002, To Kin Wah asked for inspection of account records relating to the sum of $1.92 million paid to To Wing On.  This has already been explained hereinbefore.  The same had also been inspected by To Kin Wah as confirmed by Tong’s accountants Hopkins by their letter of 3 January 2007.  To Kin Wah himself had also exhibited the same in his Affirmation of 16 August 2005 under HCMP509/2002. 

45. To Kin Wah eventually argued that even Deloitte stated that there was insufficient information and they could not assess whether any provision is required in respect of $2.42 million due from To Wing On.  That was in paragraph 7 of To Kin Wah’s 25^th Affirmation.  To Kin Wah further made another accusation in his 25^th Affirmation that To Kan Chi did not account for $1.92 million in his 9^th Affirmation and they had not complied with the order of production and inspection dated 15 October 2007.  In fact To Kan Chi in his 9^th Affirmation has explained the circumstances under which the sum was paid and that their solicitors, Messrs Cheung & Choy, had already written to To Wing On to enquire with him about the sum.  The managers therefore have had already complied with my order of 15 October 2007 and my previous order of 17 December 2002 by providing To Kin Wah with the relevant account records.

46. Since the documents requested in To Kin Wah’s application have already been inspected by him, his application under HCMP509/2002 should also be dismissed.

For payment out for costs in JR proceedings

47. To Kin Wah, by his summons of 14 January 2008 (i.e. Summons No.(5)), asked for his costs in the JR proceedings and costs incurred by court orders to be paid out from the Funds.  The judicial review proceedings are clearly hostile litigation and Tang JA (as he then was) said : “underlying this proceeding is the fight for the control over the considerable funds of Tsing Wan Kun” in paragraph 3 of his judgment of 27 August 2004 as aforesaid.

48. Thus the application does not come within category 3 of Re Buckton nor is the Tso and Tong a special form of trust within Mcdonald v. Horn. 

49. I find this application a bit preposterous since Tang JA in his judgment and the Court of Appeal thereafter together with the Court of Final Appeal refusing leave to To Kin Wah, had already been seized of the matter and made costs order against him.  In the first place To Kin Wah did not seek any direction or permission from the court before he commenced the judicial review proceedings.  He did not ask for costs from the trial judge or the Court of Appeal to award him costs to be paid out of the Funds.  Thus this court not being seized of the trial or the appeal, cannot grant such an order which could only be made by the trial judge and the Court of Appeal in the proper exercise of his/their discretion.

50. Further, To Kin Wah himself had always said that : “To Kin Wah fought the judicial review proceedings by using his own resources” in his submission for hearing on 19 November 2004 under HCMP509/2002 at p.29 of TKC-3.

51. There is absolutely no merit in To Kin Wah’s application for payment out stated in his Summons No.(5) hereinbefore and the same should be dismissed.

52. I must say that all these applications of To Kin Wah are disingenuous.  They are groundless and tediously made.  The only matter to be litigated in HCMP509/2002 is whether the managers are entitled to have the payment out in full for distribution.

53. The other matter is under HCA1603/2004 whether To Kin Wah could challenge the appointment of the managers of the Tong as aforesaid.

The manager’s applications

54. In the applications between the parties the only outstanding summonses are (1) and (2) of the managers for $3,310,238 from the Funds for the Tong’s legal costs incurred and to be incurred for the benefit and interest of the Tong.  There is, under (2), an application for release of $520,000 from the Funds for the Tong’s operational costs and expenses.  An interim payment of $120,000 has been made and therefore the only outstanding sum asked for is $400,000.

55. Under (1), the outstanding sum is $3.19 million odd after certain interim payments have been made.  In fact the applications were made on 28 September and 10 October 2007 and were scheduled to be heard on 15 October 2007.  In the late afternoon of 12 October 2007, Friday, To Kin Wah filed his last minute affirmation to oppose the application.  Whereupon on 15 October 2007 this court allowed an interim payment of $2.59 million to the managers and adjourned the two summonses and scheduled to be heard on 7 March 2008 as aforesaid.

56. To Kin Wah’s 1^st ground of opposition is that the Tong has sufficient fund.  A similar objection was raised before this court on the previous application dated 5 February 2007 when the managers applied for $10 million to be released to satisfy an interim payment to Messrs Miller Peart.  After hearing arguments I allow the payment out of $10 million.

57. The same kind of opposition was made.  To Kin Wah mentioned that $449,300 had been paid by the Tso.  Such sum was in fact lent from the Tso to Tong in March 2004 when the Tong urgently needed money to repair its office as explained in paragraph 31 of the 6^th Affirmation of To Kan Chi dated 29 January 2007.  This is irrelevant to the managers’ current payment out application.  However To Kin Wah still relied on this irrelevant matter as a ground to oppose the plaintiff’s application for payment out.

58. In respect of the other allegation that the Tso has funds which are in the hands of To Wing On, it has been covered hereinbefore in respect of the two sums of $15 million and $1.92 million which the managers are still in the course of pursuing against To Wing On.

59. In sum, there is no valid ground of opposition I therefore order in terms of Summonses Nos. (1) and (2) of the managers of payment out.

The application to cross-examine Albert Wong

60. Albert Wong is the chairman of the committee appointed by the court on 17 December 2002 in respect of the refurbishment of Tsing Wan Kun.  He was ordered by this court to file an affirmation as to the progress of the works.  That was my order of 12 March 2007.  In his 3^rd Affirmation filed on 10 May 2007 at 11:35 a.m. he tried to answer those questions raised by To Kin Wah’s previous solicitors by their letter stated 11 April and 12 October 2005. 

61. In fact before this 3^rd Affirmation of Mr Wong was served on To Kin Wah’s present solicitors, they wrote to Mr Wong’s solicitors on 11 May 2007 and stated that by 5 p.m. that day they would immediately issue a summons to enforce the order against Mr Wong without further notice.

62. After the aforesaid affidavit was duly served, To Kin Wah’s solicitors further wrote on 17 May 2007 and indicated that they would apply for cross-examination of Mr Wong on his 1^st, 2^nd and 3^rd Affirmations.  Whereupon Mr Wong’s solicitors wrote on 23 May 2007 and stated that their client is not party to the proceedings under HCMP509/2002.  They asked for the jurisdictional basis for and their justification of the cross-examination. 

63. However To Kin Wah’s solicitors Littlewoods did not answer these queries and just stated in their letter 19 July 2007 that To Kin Wah was being financed from the Funds of the Tong and they would be represented at their application by overseas counsel.  If To Kin Wah’s application should succeed, Albert Wong may be made liable for the costs incurred and therefore they would like him to confirm within the next seven days that he would offer himself for cross-examination.  This I must say was an unwarranted demand with a threat.

64. A summons was issued on 10 October 2007 and was not supported by any affirmation.  This does not even set out the relevant jurisdiction of the court and the purpose and scope of cross-examination were not stated.  Instead, by late afternoon of 4 March 2008, two bundles of documents were served on Mr Wong’s solicitors and stated that it would be for the purpose of the hearing on 6 March 2008.  Those documents apparently did not concern with Mr Wong.  They comprised the 10^th Affirmation of To Kan Chi for the hearing To Kan Chi in one box file, continuation of chronology and a core bundle of To Kin Wah since 10 October 2007 in another box file.  Mr Wong’s solicitors did not even have a clue as to how this would be related to To Kin Wah’s summons for cross-examination.  They raised the jurisdictional basis of their application again in their letter of 4 March 2008.  It again was not answered by To Kin Wah’s solicitors.

65. I entirely agree with Mr Kent Yee, counsel for Mr Wong that To Kin Wah’s application herein should be dismissed with costs to Mr Wong.

Conclusion

66. In respect of all the applications before me, I have concluded as follows :

Date	HCA No.1603 of 2004	HCMP No.509 of 2002
18/11/2004	(1)  For consolidation with HCMP No.509 of 2002 pursuant to O 4 r 9 RHC   Dismissed	(2)  For consolidation with HCA No.1603 of 2004 pursuant to O4 r 9 RHC   Dismissed
17/05/2005	(3)  For general directions   BY CONSENT O.I.T. as in paragraph 68
23/05/2005	(4)  For leave to amend the Statement of Claim   Dismissed
23/05/2005	(5)  For an order that (a) To Kin Wah and his infant son be indemnified in respect of costs out of the assets of the Tso and the Tong (“the Funds”) and that (b) there be interim payments to To Kin Wah on account of such costs out of the Funds   Dismissed
10/10/2007		(6)  For cross-examining Albert Wong Dismissed

A.    Summons taken out by the Managers :

Date	HCMP No.509 of 2002
28/09/2007	(1)  For release of 3,310,238 from the Funds for Tong’s legal costs incurred and to be incurred for the benefit and interest of the Tong   O.I.T. for $3.2 million
10/10/2007	(2)  For release of 520,000 from the Funds for Tong’s operational costs and expenses   O.I.T. for $400,000

B.    Summonses taken out by To Kin Wah :

Date	HCA No.1603 of 2004	HCMP No.509 of 2002
27/12/2007	(3)  For production and inspection of Tso’s account   Dismissed	(4)  For production and inspection of Tong’s accounts   Dismissed
14/01/2008		(5)  For an order that To Kin Wah’s costs in HCAL No. 105 of 2002, CACV No. 444 of 2002 CACV No. 358 of 2004 and FAMV No. 9 of 2006 and costs incurred by Court orders to be paid out from the Funds   Dismissed

67. The parties in these two sets of proceedings has agreed for the following directions, namely :

HCA1603/2004

68. (1)  The parties shall exchange a list of document within 28 days hereof and there shall be inspection of documents within 14 days thereafter. 

(2)  The parties shall exchange witnesses’ statements within 42 days thereafter.  

(3) Thereafter the parties shall exchange their experts’ evidence within two months thereafter and for the time being each party shall have one expert only.

HCMP509/202

69. The managers shall file and serve an affirmation in response within 21 days thereof.  

Costs

70. For the dismissal of the applications of To Kin Wah, and the order two applications of the managers in which I have ordered in terms as aforesaid, there shall be costs awarded to the managers against To Kin Wah with a certificate for two counsel to be taxed if not agreed on trustee basis only.  The order of costs under HCMP509/2002 shall be paid from the Funds of the Tong.  However the costs orders under HCA1603/2004 shall be paid by To Kin Wah personally.

Extended time of appeal

71. I have further extended the time for appeal against my aforesaid decisions to 14 days after handing down of my written judgment herein.

One further summons

72. This left me with only one outstanding matter and that is the application of To Kin Wah on 4 March 2008, i.e. two days before the hearing on 6 March 2008 there is an application for payment out of $500,000 for the 2^nd plaintiffs in HCMP562/1992 and 2084/1994 on account of their costs.  By consent the managers are given 21 days to file and serve their affirmation in reply and the matter shall be adjourned for argument on a date to be fixed in consultation with counsel’s diaries with three hours reserved.