FUNG TIN YAU v. FUNG TIN SHING AND OTHERS

HCCW 170/2016, HCCW 171/2016,
HCCW 172/2016, HCA 2225/2016
HCA 2078/2017, HCA 2998/2017,
HCA 2999/2017, HCA 3000/2017,
HCA 133/2018, HCA 136/2018,
HCA 1291/2018
(Consolidated)

[2020] HKCFI 379

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING‑UP) PROCEEDINGS NO 170 OF 2016

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING‑UP) PROCEEDINGS NO 171 OF 2016

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING‑UP) PROCEEDINGS NO 172 OF 2016

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2225 OF 2016

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2078 OF 2017

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2998 OF 2017

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2999 OF 2017

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 3000 OF 2017

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 133 OF 2018

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 136 OF 2018

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1291 OF 2018

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DECISION

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Introduction

1.  On 23 January 2020, I handed down my Decisions on the 3 Sets of Appeals ^[1] (the “Appeal Decisions” ^[2]).  This Decision will have to be read in conjunction with the Appeal Decisions.  Except otherwise stated, the terms I use here are also the same as those used and defined in the Appeal Decisions.

2.  On 19 December 2019, the parties came before me in respect of 2 further matters:

(a)     Summons (the “Direction Summons”) taken out by Madam Lai, Andy, Jenny, Wing Yan, Wing Yin, Great Anchor, Maxfortune, Premium, Wyse and Samdor ^[3] (collectively called in this Decision the “Applying Respondents”) against TY (called in this Decision the “Petitioner”) for certain directions consequential upon the consolidation of the 11 Actions ordered by Harris J.  The main dispute between the parties goes to whether a set of consolidated pleadings should be ordered; and

(b)     Another Summons dated 26 September 2019 (the “Costs Summons”) taken out by Andy and Jenny as the 1^st and 2^nd Respondents in HCCW 170‑172 and Great Anchor, Maxfortune and Premium as the 3^rd Respondent in HCCW 170‑172 respectively for the payment out of certain Sanction Payment, with costs of the application to them.

The Direction Summons

3.  I have in Yong Li Investments Ltd v Lee Sing Leung Robin [2018] HKCFI 1711 discussed the relevant factors and considerations in deciding whether upon consolidation a set of consolidated pleadings should be ordered. In short, the wide discretion of the Court is engaged.  In deciding how that discretion is to be exercised, all facts and circumstances will have to be considered.  The underlying objectives set out in Order 1A, rule 1 should be taken into account, as should the Court’s duties to manage cases as set out in Order 1A, rule 4.  Of relevance is whether the ordering of consolidated pleadings will be conducive towards the saving of time and costs.

4.  I have in the Appeal Decisions set out in detail the facts relevant to the 11 Actions.  I have also set out therein parties’ main pleaded cases.  I will adopt but will not repeat them.

5.  The 11 Actions share the same factual background.  They hence also share some potentially complicated factual disputes, eg the contents of Fung Senior’s Wishes and their implementation, Fung Senior’s Trust Arrangement, the Consensus vs Withdrawal / Wyse Agreements dichotomy, and the reasons for the withdrawal of funds from the corporate parties (to name a few).

6.  The 11 Actions also share some common legal issues, the law relating to the assumption or importing of fiduciary duties being one.

7.  At the moment, there are before the Court multiple sets of pleadings. Their contents partially overlap. Cross‑referencing them to ascertain what parties have pleaded what in which proceedings can be a bit of a pain.  I have had a taste of that when drafting the Appeal Decisions.

8.  Important in my mind is that at this stage, pleadings have not been closed in respect of all the 11 sets of pleadings.  In particular, upon my dismissal of the 3 Sets of Appeals, further pleadings will likely be served by some of the Applying Respondents (in particular, Reply and Defence to Counterclaim in HCA 2078, Defences in HCA 133 & 136, and Replies in HCA 2998‑3000).  If a consolidated set of pleadings is to be ordered, this is going to be the opportune time.

9.  In my view, having a set of consolidated pleadings in the circumstances of these proceedings will help to define and crystalize the issues, weed out duplications in the existing pleadings, assist parties to focus upon the main issues, be useful for the preparation of witness statements, and ultimately be important when it comes to the presentation and adjudication of the consolidated action in court.  Potentially, a lot of time and costs will be saved.  Judicial resources will also be better employed.

10.  Mr Dawes on behalf of the Petitioner expresses in his written submissions “grave reservations” on the ordering of consolidated pleadings:

(a)     He submits firstly ^[4] that it will create an unmanageable task for the pleader.  I do not accept that.  I am quite certain that the parties and their pleaders can comb through the multiple sets of pleadings now before the court, weed out duplications, and plead the relevant facts as required by the Rules so as to properly frame the issues.  The bottom line is this, if it were a difficult task for the parties to come up with a set of consolidated pleadings, it would down the road be an even more difficult task for the trial judge to sift through the scattered pleadings when trying the case.  I repeat what I have said above, that this is the opportune time to tidy up the pleadings;

(b)     Next ^[5], Mr Dawes points to the different capacities in which the Petitioner is suing and being sued and submits that having a consolidated pleadings would be confusing.  I do not agree.  The perceived confusion may just be a matter of nomenclature, and can in my view be addressed without much difficulties;

(c)     Next ^[6], Mr Dawes submits that it is unlikely that having consolidated pleadings would save any time and costs.  He submits that the better course would be for the Court to consider ordering the filing of agreed set of facts and agreed issues, as contemplated by Au‑Yeung J in Mass Ocean International Ltd v Trinity Holdings (Hong Kong) Ltd & Ors [2019] HKCFI 2323 §§27-29;

(d)     Given the matter which I have discussed in §§5 to 9 above, I do not agree that the ordering of consolidated pleadings will not be conducive towards the saving of costs and time.  Further, having consolidated pleadings is not inconsistent with any future ordering of the filing of agreed facts and issues, which this Court may still do down the road.

11.  In the circumstances, I order the filing of a consolidated set of pleadings and give the directions sought in §§1(a) to (d) of the Direction Summons.  For the avoidance of doubt, I state also that:

(a)     this Order for the filing of consolidated pleadings relieves the Appellants in the 3 Sets of Appeals from filing, as a result of my Appeal Decisions, any pleadings which they are entitled under the Rules to file and which they otherwise would choose to file.  Any such pleadings which they otherwise would file can be incorporated into their Consolidated Defence and Counterclaim envisaged by §1(b) of the Direction Summons; and

(b)     As I have observed in Yong Li Investments, the ordering of consolidated pleadings does not give the parties carte blanche to change their cases or amend their pleadings in ways which they otherwise would need leave for.  The same apply here, save the contents of any pleadings which any of the Appellants in the 3 Sets of Appeal could and would file as a result of the Appeal Decisions but for this Order (and see the clarifications I have made in §11(a) immediately above).

12.  The balance of the Direction Summons is not controversial. 

13.  I accordingly make an Order in terms of the Direction Summons.

14.  I make a costs order nisi that the Petitioner shall bear the costs of the Direction Summons to be taxed if not agreed.  Any party who seeks summary assessment or any variation should file their submissions within 21 days from the date hereof, submissions in opposition within 14 days of receipt, and in reply another 14 days upon receipt.

The Costs Summons

15.  It was, and should have remained to be, a very trivial matter involving the payment of requested costs in the sum of HK$1,040 for a consent summons so that certain sums which Andy and Jenny as the Respondents in HCCW 170‑172 had paid into court could be paid out to them.  At §15 of his submissions, Mr Dawes indicates that the Petitioner is, acting in a pragmatic spirit and to avoid further unnecessary argument, willing to consent to an order in terms of §1 of the Costs Summons.  Having considered the facts placed before me by Mr Tang, I agree that the Costs Summons was necessitated by the stance that the Petitioner had adopted.  I therefore make an order in terms of §1 of the Costs Summons, and order further that the costs of the application be borne by him (§2 of the Costs Summons).