XCHRX NEC HONGKONG LTD. v. THE INDUSTRIAL AND COMMERCIAL BANK OF CHINA AND ANOTHER

HCA855/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.855 OF 2000

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J U D G M E N T

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1. The plaintiff, NEC HongKong Limited ("NEC"), appeals from Master Wong's Order made on 26 May 2000, allowing the application by Gaoming Light Industrial Products Import & Export Company of Guangdong ("Gaoming") to be joined as a 2nd defendant in this action.

2. In this action, NEC is suing the Industrial and Commercial Bank of China ("ICBC") on two Letters of Credit totalling US$1,038,000. The two Letters of Credit were issued by ICBC upon the application of Gaoming. These two Letters of Credit were purportedly for the payment of goods sold to Gaoming by NEC. A dispute has arisen between Gaoming and NEC in respect of that sale in that Gaoming alleges that it has never received the goods from NEC and that the cargo receipts in respect of those goods presented to ICBC for the payment or negotiation of the two Letters of Credit were forgeries.

3. Gaoming has started an action - HCA 3629/2000 - against NEC in this respect.

4. Coming back to the present case, the defence put forward by ICBC in respect of NEC's claim against it concerning the two Letters of Credit involves the same issues as has been raised in HCA 3629/2000 by Gaoming. Clearly the issues involved in these two actions are very much the same if not identical. On that score alone, Gaoming would be entitled to be joined as a party to this action since it would be only appropriate that Gaoming be the one to run the defence to the claim of NEC rather than to let ICBC do so for it.

5. The first two points taken by NEC that firstly, it has no claim against Gaoming and secondly, Gaoming does not have sufficient interest in this action are wholly without merits. Gaoming is the party who will ultimately have to pay for the L/C amounts if NEC succeeds.

6. Mr Lam, for NEC, takes the further point that there will be multiplicity of action if Gaoming is allowed to intervene. I have no doubt that the two actions will have to be consolidated for them to be properly disposed of. Mr Coleman for Gaoming has indicated that Gaoming has already taken such steps, not only to consolidate the two actions but also to transfer it to the Commercial List. By so doing, any multiplicity of action can and will be avoided.

7. Lastly, NEC submits that the case put up by Gaoming is incapable of belief. Having been taken through some of the documents by Mr Lam, I can only say that the issues involved are by no means simple or straightforward. I am not prepared to hold a mini-trial on affidavit in this matter and the merits can and should only be dealt with by a trial judge after hearing evidence and cross-examination in the matter.

8. Accordingly, I am satisfied that this is a proper case coming within Order 15, rule 6(2)(b)(ii) and that NEC's appeal is therefore dismissed and the order of Master Wong made on 26 May 2000 is to stand.

[Submissions on Costs]

9. This appeal is, as already indicated in my judgment, wholly without merits and quite unnecessary. Costs of this appeal to be taxed and paid forthwith by NEC to the 1st and 2nd defendants.