FULLHOUSE TRADING CO LTD v. NOBLEGAIN LTD

HCA 5207/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 5207 OF 1999

____________

_______________

D E C I S I O N

_______________

1.  This is the Defendant’s appeal against the order of Master Barnes dated 15 February 2000 whereby she entered final judgment in the Plaintiff’s favour pursuant to RHC O.14 r.1.

2.  The Plaintiff brings this action against the Defendant for the price of goods sold/services rendered. The total amount claimed is HK$5,140,391.33. HK$1 million of that claim is based on a dishonoured cheque drawn by the Defendant.

3.  A total of about 15 to 20 affirmations were filed by the parties in this appeal (most were filed subsequent to the hearing before the Master). The relevant pleadings, summonses, affirmations and exhibits consist of 6 lever-arch files.

The lines of defence advanced by the Defendant in this appeal include the following:-

(a) in relation to the overall claim of about $5.14 million, the Defendant denies that the goods/services were in fact supplied and alleges that its chop was wrongfully applied to the relevant documents. The Plaintiff was either a party to this “sham” or at least has knowledge of it;

(b) in relation to the claim based on the said cheque, the aforesaid defence is also relied upon and thus:-

(1) there was no consideration in support of the cheque;

(2) further or alternatively, the cheque was obtained by fraudulent misrepresentation which the Plaintiff was either a party to or (at least) has knowledge of;

(c) in any event, the Defendant has a substantial counterclaim against the Plaintiff for the following wrongful acts:-

(1) a conspiracy with the Defendant’s director (or, according to the Plaintiff, a former director) Mr Raymond Mak and 14 other former staff of the Defendant to injure the Defendant by attempting to bring down the Defendant’s business;

(2) alternatively, the Plaintiff knowingly procured or assisted Mr Raymond Mak and the 14 other staff to do so by breaching their contracts with the Defendant.

4.  The defence further contends that in any event, by reason of the special circumstances put forward in the affirmation evidence, there is otherwise a good reason for this action to be tried so that the factual disputes raised herein could be fully investigated.

5.  In short, I agree with the arguments advanced by the defence that triable issues of fact have been raised. For this reason, the Defendant should be given leave to defend this action. Since this action is yet to be tried, it is inappropriate for me to go into the details of the matters in issue between the parties. I shall therefore only make the following observations.

It is undisputed that several things took place in March, 1999:-

(a) Mr Raymond Mak and 14 of the Defendant’s staff left the Defendant’s employment together in about March 1999 (according to the Defendant, there are documents which show that at least some of them could have started to work for the Plaintiff since about January 1999);

(b) after they left the Defendant’s employment, they started to work at the Plaintiff’s premises and/or for the Plaintiff;

(c) the same firm of solicitors sent to the Defendant demand letters on behalf of the Plaintiff and 2 of the Defendant’s suppliers in March 1999;

(d) the Writ of Summons herein was issued and served on the Defendant in March 1999.

6.  In these circumstances, I agree with the Defendant that there is a triable question (among other issues) of whether there was a conspiracy involving the Plaintiff to injure the Defendant (as aforesaid).

7.  For the above reasons, I disagree with the learned Master. The appeal is allowed and the Defendant is given unconditional leave to defend.

[Submissions on costs]

8.  As I observed earlier, the facts in this action are rather unusual. The Defendant has argued (among other things) that there appears to have been a “concerted” attempt to injure it in March 1999.

9.  In view of the undisputed circumstances referred to above, I consider there is reasonable ground for this argument to be raised. Further, this is an argument which the Plaintiff ought to have known of before the O.14 application was taken out. For this reason, I consider that the costs of the appeal should be paid by the Plaintiff to the Defendant. Because Mr Wong for the Defendant has fairly conceded that the costs of the application before the learned Master should be in the cause of this action, I will make an order regarding those costs in accordance with his concession.

Ms Patricia C M Wong, instructed by Messrs C D Kan & Co., for the Plaintiff

Mr Wong Chi Yuen, of Messrs Cheung, Tong & Rosa, for the Defendant