PACIFIC ELECTRIC WIRE & CABLE CO LTD v. GOLD GLOBAL LTD AND OTHERS

FAMV No. 28 of 2009

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 28 OF 2009 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL

FROM CACV NO. 208 OF 2008)

_____________________

Between

_____________________

FAMV No. 29 of 2009

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 29 OF 2009 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL

FROM CACV NO. 210 OF 2008)

_____________________

Between

_____________________

FAMV No. 30 of 2009

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

 MISCELLANEOUS PROCEEDINGS NO. 30 OF 2009 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL

FROM CACV NO. 211 OF 2008)

_____________________

Between

_____________________

FAMV No. 31 of 2009

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 31 OF 2009 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL

FROM CACV NO. 212 OF 2008)

_____________________

Between

_____________________

FAMV No. 32 of 2009

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 32 OF 2009 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL

FROM CACV NO. 351 OF 2008)

_____________________

Between

_____________________

FAMV No. 33 of 2009

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 33 OF 2009 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL

FROM CACV NO. 352 OF 2008)

_____________________

Between

_____________________

_______________________

D E T E R M I N A T I O N

_______________________

Mr Justice Ribeiro PJ:

1.  On 18 January 2008, Saunders J gave summary judgment under Order 14 in favour of the plaintiff (the present applicant) in three actions.[1]  The plaintiff alleges that three of the defendants (Mr Hu Hung Chiu, Mr Tung Yu Jeh and Mr Sun Tao Tsun, together “Hu, Tung and Sun”), who were at the time executive directors of the plaintiff (then a Taiwanese company listed in Taipei), acting in breach of fiduciary duty, acquired substantial assets in Hong Kong using the plaintiff’s funds or funds raised on the plaintiff’s credit and, using a hidden corporate structure, concealed those assets from the plaintiff’s board and shareholders. 

2.  The defendants sued, apart from Hu, Tung and Sun, include other individuals who are said to have knowingly assisted Hu, Tung and Sun in their alleged breaches of fiduciary duty, as well as the companies holding the acquired assets or the proceeds of sale where sales have occurred.  I will refer to those companies as “the corporate defendants”.  The Order 14 proceedings are brought only against the corporate defendants.

3.  The corporate defendants' appeal to the Court of Appeal[2] was allowed.  Saunders J’s judgment was set aside on the basis that there was no jurisdiction to grant summary judgment since Order 14 r 1(2)(b) excludes from its ambit “an action which includes a claim by the plaintiff based on an allegation of fraud.”  Rogers VP held that in the present case, the plaintiff’s claim for a proprietary remedy against assets traced into the hands of the corporate defendants necessarily involves allegations of fraud against Hu, Tung and Sun such as to exclude Order 14.  In refusing leave to appeal,[3] Rogers VP also expressed the view that this is factually not a case fit for Order 14.

4.  Mr Anthony Neoh SC, appearing with Ms Barbara Wong for the plaintiff, seeks leave to appeal on the principal basis that the Court of Appeal erred in considering the fraud exception engaged, contending that on authority, Order 14 r 1(2)(b) is only applicable where the claim involves an allegation of fraud in the sense of deceit as explained in Derry v Peek[4], and then only where the plaintiff’s action is a common law action for deceit.  The scope of the fraud exception, he submits, raises a question of sufficient public and general importance to merit the grant of leave.

5.  We consider that question reasonably arguable and of importance.  It may be that in some other case, it would justify the grant of leave.  However, having heard the parties on the questions which divide them on the merits, despite the attractive submissions made by Mr Neoh SC to the contrary, we are of the view that sufficiently triable issues exist regarding the plaintiff’s claim against the corporate defendants to make this a case unsuitable to be dealt with under Order 14.  It is unnecessary and undesirable for us to go into any detail in relation to those issues. 

6.  Leave to appeal is also sought in respect of the Court of Appeal’s order that the plaintiff should pay the costs of the corporate defendants including costs representing expenses incurred as a result of the appointment of receivers in this case.  Such receivers were appointed by Saunders J upon his granting summary judgment and the Court of Appeal obviously considered those expenses inherent in the judgment which it was overturning.  It was exercising its discretion as to costs in that peculiar context and in our view no question of great general or public importance meriting leave to appeal arises.

7.  Accordingly, we dismiss the application for leave to appeal and make an order nisi that the applicant pay the costs thereof to the respondents.  Any submissions on costs should be lodged and served in writing within 14 days of the date of this Determination, in default of which, the costs order shall stand as an order absolute without further order.