Better Marine International Ltd v. Zhong Shan Co Ltd
Read the full judgment text of HCA 958/2014 on BabelCite. This High Court CFI judgment was delivered on 30 November 2016.
1. This is a dispute over the commission to be paid to the plaintiff by the defendant arising out of a ship brokerage contract between the parties and at varying stages, their respective associated companies.
Cites 1 case
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HCA 958/2014 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 958 of 2014 __________________
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__________________ J U D G M E N T __________________ 1.This is a dispute over the commission to be paid to the plaintiff by the defendant arising out of a ship brokerage contract between the parties and at varying stages, their respective associated companies. 2.It is far less complicated than the pleadings from both parties appear to make out. However the opening skeleton submission by the plaintiff’s counsel has come to terms with the pleadings and set out the case in simpler terms. Its outcome is determined by oral evidence from the respective servants or agents of the parties, supplemented by some significant documents and a few incontrovertible facts. 3.The argument is over the liability to pay the second instalment of the commission, the first instalment of 20% of the commission having been paid in accordance with the terms of a commission agreement. The balance of 80% was to be paid after the tonnage of the shipbuilding had been assessed following completion of the ship‑building contract. 4.The plaintiff company is a ship brokerage owned or controlled by a Mr Ren. I will refer to it as Better Marine. 5.There is another company associated with it known, for short, as Beijing Better Marine, which Mr Ren also effectively controls. 6.The defendant company, owned and/or controlled by a Mr Yang Dawei, is also a subsidiary of Jiangsu Overseas Group of which Mr Yang is also the Chairman of its Board of Directors, and a Mr Cai is a director. 7.There is also another subsidiary of Jiangsu Overseas called Jiangsu Overseas Corporation International Technical Engineering Co Ltd (Jiangsu International for short) whose business is shipbuilding. Amongst its employees are a Ms Lin (General Manager), Mr Luo, manager of its Ship Engineering Dept from September 2007 to September 2008, and a Mr Zhang who was the Project Manager of that department, from July 2008, as Mr Luo’s successor. 8.The defendant attempted to suggest that it was not a subsidiary of the Jiangsu Overseas Group or controlled by it but was a wholly separate entity. This was really a form of subterfuge in order to try and be consistent with the defence, which itself soon proved to be a sham. 9.The agreed diagram showing the corporate structure of these Jiangsu businesses, effectively under the overall direction and responsibility of the Jiangsu provincial government, made it clear that the defence and the contended for nature of Zhong Shan Company Limited, a company incorporated in Hong Kong, was a fiction. 10.Jiangsu Overseas appears to be the holding company with Jiangsu International as its subsidiary and Zhong Shan in a similar capacity. Although the manoeuvrings of these companies in relation to the ship‑building contract with Concordia, and the commission agreement with the plaintiff, resembled a form of corporate musical chairs, it was apparent that Zhong Shan’s role was principally, though not exclusively, that of a financial facilitator. 11.The common factor in all the Jiangsu companies, and the defendant company, was Mr Yang Dawei to whom I referred a little earlier. He was the Legal Representative and Chairman of the Board of Directors of Jiangsu Overseas. He was the Chairman of the Board of Jiangsu International. He was also Chairman of the Board of Zhong Shan and its principal shareholder holding 96% of the equity, with Mr Cai Fei Yun holding the remaining 4% [See Exhibit P1]. 12.If there remained an iota of doubt as to the real position of Zhong Shan in this little corporate empire ultimately controlled by the Jiangsu provincial government, it is consigned to irrelevance by the website of Jiangsu Overseas Group, the text of which is worth repeating for its comprehensive statement about Zhong Shan:
13.Although I have only dealt with Mr Yang Dawei as the common feature of all these companies, one other person’s position needs to be highlighted in the corporate picture and that is the manager, Madam Lin Min, who is also described as the Legal Representative of Jiangsu Overseas, and was the personality who delivered an important address published on 11 January 2008 to celebrate the 5th birthday of JOC International Technical Engineering Co Ltd. She was also the General Manager and a director, probably the No 2 in the hierarchy. She is an assertive and dogmatic lady and it was easy for me to see, having heard her evidence and that of Mr Luo, how there may well have been a clash of personalities. 14.I am quite satisfied that she gave instructions to Mr Cai Fei, the No 2 director of Zhong Shan, as to what he should do, and that she signed documents on behalf of Zhong Shan, well‑knowing what she was doing, not caring whether or not she had the requisite authority to do so. Within the group which included Zhong Shan I am sure that she considered that her powerful position entitled her to control such matters. I am equally sure that in view of the way that these companies operated within the group that each was accustomed to being controlled in such a way as to service the requirements of others in the group. 15.Mr Yang Dawei, the common feature as Chairman of all the Boards within the group, was not called to give evidence even though he is still involved with one or more of the companies. THE PLAINTIFF’S CASE Preliminary oral agreements 16.These started in early 2008. The first was been referred to as the Nanjing East agreement. A Mr Yang Yue on behalf of Nanjing East agreed with Mr Ren of the Beijing Better Marine, a subsidiary of the plaintiff, the following:
17.At about the same time as this preliminary agreement was a supplemental agreement, as I term it, by which Jiangsu Overseas through Mr Luo, its manager of the Ship Building Engineering Department, became Nanjing East’s partner in the project, and thus also liable for the commission to be paid, in accepting the terms of the original oral agreement. Jiangsu Overseas agreed to send the commission to the plaintiff’s foreign currency accounts. The shipbuilding project 18.The actual marine building contract was facilitated by the plaintiff and/or its subsidiary Beijing Better Marine (through Mr Ren their owner). Jiangsu International, and Nanjing East were the anticipated builders/sellers and Concordia was the buyer. 19.Then Jiangsu International signed the contract in the name of Jiangsu Overseas — the former is the subsidiary of the latter. 20.The principal terms were:
On the 20 March 2008 at the request of Jiangsu Overseas the contracting party (with Nanjing East) reverted to Jiangsu International. Mr Ren was asked by Mr Luo of Jiangsu to draft a commission agreement. 21.On the 21 March Mr Ren forwarded what has been described as the first commission agreement to Jiangsu International and Nanjing East. The first written commission agreement 22.The terms were as follows:
23.The plaintiff also relies upon an implied term that the total commission at the rate of €50 per tonne (as provided for in the commission agreement) would be adjusted according to the final agreed tonnage, but at the same rate. This was part of the oral agreement with Mr Yang Yue (see §8(3)). 24.In my judgment it is clear from the terms of this first agreement, read with the shipbuilding contract (with Concordia) itself, that the commission rate would be €50 per tonne whatever the final tonnage turned out to be. The first provisional contract price was €18,900,000 at €1.26 per kilogram. The total price would vary if the total tonnage varied, one way or the other, after delivery of the ship units. The same applies to the total of the commission due to the plaintiff. It is important to note that the amount of the commission and was always based on a tonnage figure, and was not a fixed total of commission. If the latter were to be the case there is an inconsistency between the written commission agreement and the preceding oral agreements, or discussions, however they are to be reviewed. 25.Mr Luo of Jiangsu International and Mr Yang of Nanjing East confirmed their acceptance of the terms of the first written commission agreement by telephone and Mr Ren sent three signed copies by courier to Mr Luo for signature and for him to courier to Mr Yang for his signature as well. The second written commission agreement 26.In March 2008 there was another change to the parties to the Shipbuilding contract with the defendant (Zhong Shan) replacing Jiangsu International as the new seller of the ship units to Concordia. This was effected by way of an Addendum to the shipping contract. The sellers were now Zhong Shan, the subsidiary of Jiangsu Overseas, and Jiangsu International as the original seller. The change was simply within the corporate structure of Jiangsu Overseas — one of its subsidiaries for another. But Concordia insisted that Jiangsu International remained liable under the contract as well as Zhong Shan. 27.The next stage, also in March 2008, was an amendment to the first commission agreement, whereby the defendant also become a party to that agreement to pay commission to the plaintiff. Those liable were now Jiangsu International and the defendant. Nanjing East appeared to have dropped out. There was a separate agreement between Jiangsu International and Nanjing East which relieved the latter of any liability to pay commission. 28.Again it was left to Mr Ren to deal with the mechanics and he sent the revised draft to Mr Luo by e‑mail. Another development ensued with Mr Luo (of Jiangsu Overseas) informing Mr Ren (of the plaintiff) that the defendant was now solely responsible for paying the commission. He asked for the invoice for the commission (first instalment) to be sent to the defendant, the reason put forward being that Jiangsu was in financial difficulties. The revised commission agreement was also sent at Mr Luo’s request to Ms Lin Min of Jiangsu International. In fact the invoice was sent to Mr Luo and she approved it. 29.On 23 June 2008 the defendant received the first payment from Concordia in respect of the shipbuilding contract. In early July Mr Luo asked Mr Ren of the plaintiff to courier the first invoice for commission to Mr Cai a director of the defendant. Shortly thereafter €150,000 was sent by the defendant to the plaintiff (on or about 10 July 2008) 30.The shipping contract was not completed until late December 2009 or early 2010 when the balance was paid by Concordia to the defendant. 31.Thereafter on a succession of occasions the plaintiff sent the invoice for the balance of the commission due, to the defendant and to other linked companies of the Jiangsu Group. Then the plaintiff’s solicitors took up the matters. 32.The plaintiff’s claim is thus a straight forward one under the commission agreement. The shipping contract has been paid by Concordia. The agreement was that the plaintiff would be paid commission at the rate of €50 per ton. It received from the defendant 20% of that commission based on an estimate of the tonnage to be provided under the main contract. Once the contract had been completed there was an agreed tonnage somewhat in excess of the estimate. The balance of the commission due was therefore €683,850 (as opposed to €600,000 based on the original estimate). The defendant failed to pay this and consistently ignored all the demands and failed to provide any sort of explanation until proceedings were commenced in 2014. It is difficult, even at this stage, to see what possible explanation there could be for this default. The pleaded defence 33.This pleading, “padded out” to 14 pages of largely irrelevant and repetitious material and riddled with contradictions, denies, amongst other things, any knowledge of preliminary negotiations and/or agreements as to the commission payable to the plaintiff. 34.Amongst all this verbiage there appears to be a contention that the defendant’s involvement in this ship‑brokerage commission transaction relating to the building of 17 hulls and one vessel for Concordia, was solely as agent for Jiangsu International and that the plaintiff either knew or ought to have known this. 35.The defence agrees that the defendant signed Addendum I to the shipbuilding contract. It adds that if the defendant could not fulfill its obligations under the contract, Jiangsu International would meet them. It agrees that Jiangsu International assigned the shipbuilding contract to the defendant. From this it is clear that the latter assumed prime liability under the contract whatever its understanding may or may not have been that it was simply being used as the contracting party to obtain financial facilities or loans in Hong Kong. That is irrelevant to liability under the contract. 36.The payment of the first instalment of the shipbuilding contract is admitted but it is also pleaded that the defendant was “merely” acting as the agent for Jiangsu International and that the payment of the first instalment of the commission was equally on an agency basis on Jiangsu International’s behalf, and it also forwarded the balance of the money to Jiangsu International. 37.That effectively is the gist or relevant content of the pleaded case. THE EVIDENCE AND THE PERSONALITIES The plaintiff’s case 38.Mr Ren was a forthright sensible witness who gave his evidence in a balanced and direct manner. He gave the impression of being a reliable and honest businessman who had conducted matters in a trusting fashion. 39.He was supported by Mr Yang Yue of Nanjing East who introduced Mr Ren to Mr Luo of Jiangsu International. The commission arrangement and the basis of it was in accordance with the plaintiff’s pleaded case and was a factor taken into account when the price for the ship‑building contract was quoted. The commission agreement was not something that could be changed by the seller (i.e. the ship‑builder/supplier) at will. It was part of the overall financial picture. 40.Implicit in his evidence, and more particularly that of Mr Luo, was the obvious fact that if there was no agreement on the commission to be paid to the broker then there would be no ship‑building contract or business for Nanjing East or Jiangsu International or the Jiangsu Overseas Group. In the event Nanjing East ceased to be involved in the commission agreement when the defendant came into the picture. 41.An analysis of Mr Luo’s evidence is conclusive in this dispute. Formerly employed by Jiangsu International (until September of 2008 or thereabouts) he gave as his explanation for leaving their employ as, in effect, a clash between himself and Madam Lin Min, the General Manager and his superior in the hierarchy. 42.He was clearly a man of some experience in the ship‑building industry. I found him to be an honest witness who was truthful and realistic concerning Madam Lin Min’s role in this matter. She was of course the person to whom he would report and be responsible for carrying out her decisions. Equally clearly he was the person directly involved in the ship‑building project and the commission arrangement. 43.He put her in the picture concerning both aspects and asserted that he had made it clear that the commission to be paid was €50 per tonne and although at the outset there was a tentative figure of 150,000 tonnes for the project, and €750,000 for the total commission neither was rigidly fixed as the overall tonnage might well be exceeded, as was commonplace in the industry, and accordingly the commission would be adjusted to meet this. 44.He said that Madam Lin agreed the adjusted commission agreement. The fact that the agreement was not signed by Jiangsu International and/or Zhong Shan was, in fact, immaterial: she had orally agreed the terms, and said she would contact Mr Ren to get him to send her a signed copy of the agreement, which he did. When Mr Luo made efforts to get her to sign the agreement, she made it appear as if she was too busy to deal with it immediately, saying words to the effect of “wait until I am available.’’ 45.As far as Mr Luo was concerned there was acceptance and approval by Jiangsu International and Zhong Shan despite the absence of a signature on their behalf, and, tellingly in any event the first instalment of €150,000 was paid by Zhong Shan, the defendant on Madam Lin Min’s instructions alter the defendant had received the first payment from Concordia under the ship‑building contract. Mr Ren of course had been invited to render the first invoice in accordance with the terms of the commission agreements. 46.Although the written agreement did not specify the rate per tonne or the fact that the total commission would be based on the final assessed total tonnage, Mr Luo explained this to Madam Lin and she indicated that such was in order. The omission from the agreement of the full formula for the calculation of the ultimate amount of the commission which the Plaintiff was to receive was an oversight which did not affect the express or implied terms. 47.Efforts were made in cross‑examination to discredit Mr Luo based on the circumstances of his leaving Jiangsu International with some vague suggestion of business links with Mr Ren of the plaintiff. They were baseless. His evidence also made commercial sense and ordinary common sense. As I will make clear, wherever there was conflict between his evidence and that of Madam Lin, I accepted his version as the correct one. The defendant’s case 48.The statement of Mr Cai Fei, a director/shareholder of the defendant, lends no strength to the defendant’s case. 49.He speaks of the defendant and Jiangsu International being connected companies and then in a significant sentence repeats what Mr Anthony Zhang Yang said:
50.It may well have been the case that the defendant was being used as a vehicle for Jiangsu International for financial reasons but its status was a party to the contract for the marine vessels, on a consensual basis. The reference to Concordia’s relationship with the defendant — “seldom had contact with Zhong Shan” — in no way weakens Zhong Shan’s position or liability as a party to the contract with Concordia. 51.Although he accepts that the plaintiff sent invoices directly to the defendant at no stage did he suggest that he, or anyone on behalf of the defendant, or Zhong Shan itself was not the appropriate recipient of the demands for payment of the 2nd invoice — and this was over a period of more than 2½ years. His oral evidence was more instructive. 52.Mr Cai Fei gave me the impression of being distinctly uncomfortable giving evidence on behalf of the defendant company and particularly when attempting to convey the semblance of the company as wholly independent of any of the Jiangsu Group, and merely acting as an agent for payments received and made on behalf of it. 53.His main difficulty was that throughout he acted on the instructions of Jiangsu International through Mr Luo and Madam Lin Min who clearly felt empowered and entitled to sign documents on behalf of Zhong Shan. 54.He had to concede that he had misled (and may have defrauded) the HSBC Bank in applying for financial funding for the company in respect of the ship‑building contract with Concordia. He confirmed that had he declared that Zhong Shan was merely a financial facility agent for the sellers/ship builders, and not in reality a party to the contract with full liability under it, the bank would not have provided the funding necessary. 55.He sought to maintain the fiction that the defendant merely acted as an agent but had to agree that, on the ship‑building contract, as on the commission agreements, it had become a principal party and at no stage had any notification been given to Concordia or to the plaintiff that it was a mere agent acting for an identified principal. 56.The text of the website which is cited earlier, advertises Zhong Shan as a subsidiary with a diverse range of business activities supporting its involvement as a principal in the ship‑building contract with Concordia, and the commission agreement with the plaintiff. 57.He seemed to feel resentful of having Madam Lin Min giving directions as to what the defendant should do, but he nonetheless complied with her instructions. Thus he paid the first instalment of the commission due to the plaintiff on being provided with a copy of the plaintiff’s invoice with Madam Lin Min’s clear instructions on the top of the invoice faxed through to him:
and signed and dated by her as 1 July 2008. 58.In due course when the 2nd invoice for the commission payment arrived, Concordia having made the final payment under the contract, Mr Cai contacted Jiangsu International through Mr Anthony Zhang, who happened to have taken over Mr Luo’s position, by e‑mail (3 March 2010):
To this Mr Zhang had responded:
59.The document referred to included a letter from Mr Ren of the plaintiff pointing out that the payment of the balance of the commission was now overdue, that the final tonnage was 16,677 tonnes, that the total commission was €833,850 at €50 per tonne, and therefore the balance due was €683,850. The end of the letter said:
60.Mr Cai and Zhong Shan did as it was told by Jiangsu International. It did not pay. It did ignore the requests. It never wrote a reply or explanation or objection at any stage. As we shall see, neither did Jiangsu International. 61.Madam Lin Min was a difficult and dogmatic witness in that she was frequently evasive, thus necessitating the repeating of material questions several times before an answer, not always the relevant one, could be elicited. She seemed to be more concerned with trying to defend her actions than concentrating on material matters. I was quite satisfied long before the end of her evidence that she had decided, for her own reasons, whatever they may have been, that she was determined that the plaintiff should not receive its second instalment of commission. 62.She had decided that there was no agreement as alleged in respect of the amount of the commission, the instalment provisions, or the tonnage basis. She had fixed in her mind that only the sum of €150,000 would be paid, and that represented the proper amount payable in the nature of the business concerned. Furthermore it was no concern of the defendant which was merely an agent to do the bidding of Jiangsu International of which she was the General Manager. 63.The effort of Madam Lin Min to suggest that there were shortcomings in the services which she alleged that the plaintiff was obliged to provide in respect of the main contract with Concordia was an alter thought, unsustainable and reeking of dishonesty. The plaintiff had done all that was required. It was never suggested to it or to Mr Ren that it had failed in its facilitating actions in any respect. 64.The written statement of Mr Anthony Zhang Yang, an employee of Jiangsu International, confirmed that the shipbuilding contract with Concordia was assigned to the defendant by Addendum I in order to benefit from loans and fianancial facilities available to the defendant. 65.He accepts that the defendant received from Concordia the first payment under the shipbuilding contract and that Jiangsu International instructed the defendant to pay the first instalment of the commission (€150,000) to Better Marine but adds “for the sake of convenience” whatever that may mean. 66.He denies that Jiangsu International reached any agreement with Better Marine concerning the commission. Mr Zhang’s oral evidence did not take the matter any further. The plaintiff’s application to amend the Statement of Claim 67.This came late in the day at the end of the plaintiff’s case. In my view the proposed amendments were essentially cosmetic — a case of dotting the ‘i’s, and crossing the ‘t’s — but Miss Catrina Lam for the plaintiff felt that in view of the cross‑examination of her witnesses and the state of the documents, she ought to put on record some wider clarification. 68.Although I felt that the state of her pleadings was comprehensive enough, and that the defendant’s problems were virtually insuperable on the documents alone, ignoring for the moment the commercially sound sense of the plaintiff’s case, I decided to allow them. They could not cause any prejudice to the defendant and certainly there was no element of surprise. 69.Nonetheless, as was to be expected in this case, Mr Gary Lam for the defendant opposed the application because he said he had his “instructions to do so”. The opposition was unwarranted and unrealistic. 70.I gave Mr Lam leave to amend his defence if he so desired and although the plaintiff had provided for costs to be to the defendant, I decided that there should be no order as to costs for the reasons that follow. 71.The proposed amendments could not sensibly be opposed. Strictly speaking they were not necessary but I had some sympathy with Ms Catrina Lam in her concern to ensure that her pleaded case was watertight. There was in any event no need for Mr Gary Lam to indulge in any amendments to the defence. It is difficult to see how he could graft onto the existing defence anymore “denials” — it would have needed complete re‑casting to turn it into an acceptable pleading. Furthermore a “no costs” order could be regarded as generous to the defence. Finally, and this should be noted on a broad front, it is unnecessary, even wasteful to take out a formal application to amend pleadings in the course of a trial. It is part of the oral nature of a trial though of course to be supported by a written version of the proposed amendments. 72.Since that matter was decided the defendant’s solicitors have written to the court raising some complaint about the costs order that I made. The complaint was without substance or justification and proceeded from a degree of ignorance of what was decided. CONCLUSION AND FINDINGS 73.There was a clear oral agreement between Mr Ren, the broker and Mr Luo, the ship engineering department manager of Jiangsu International, as to the commission to be paid for referring to the shipbuilding companies (including Nanjing East in the first instance) the shipping project for 17 vessels and a mother vessel/pontoon for the Dutch company Concordia. 74.Madam Lin Min as General Manager of Jiangsu International (whose business was diverse and not confined to shipbuilding) was Mr Luo’s supervisor but I am satisfied that Mr Luo acted with the company’s authority and her approval, and in view of his position and experience it was entirely appropriate that he would be involved in the negotiations that took place. Madam Lin Min was not so involved, though of course her overall position was such that her approval was required. I am satisfied that she gave her approval orally and/or by her actions, to the commission agreements which resulted, for as long as Mr Luo was with Jiangsu International, and by her inaction and failure ever to inform the plaintiff that the commission agreement was to be ignored—nor did she ever give any reason for her later change of approach. 75.Accepting Mr Luo’s evidence in support of the plaintiff which is consistent with all the documentation relating to the commission agreement, and the ship‑building contract, I am satisfied that the commission to be paid was €50 per tonne and that the estimate of the tonnage, initially 150,000 tonnes, was subject to the final agreed tonnage of the vessels to be built, when they were complete and handed over. This contingency was entirely consistent with business practice in the trade as well as being proper commercial sense. This was to be paid in two instalments, as already identified earlier from the documents, at the beginning of the shipbuilding contract, and at the end after final payment by Concordia. Madam Lin’s arbitrary assessment of what she thought was an appropriate rate of commission within the industry was a post‑facto attempt at self‑justification and did not make sense. 76.The ship building contract was itself made subject to various changes to the selling parties, to which of course Concordia had to agree, with the defendant being made the ultimate responsible seller as the ‘new seller’, but with Concordia very sensibly ensuring that Jiangsu International, though described as the “original seller”, nonetheless remained liable under the contract for any default or breach. This was accomplished by a series of addenda with Madam Lin Min’s signature on the material documents on behalf of Zhong Shan (the defendant). The defendant was unarguably declared to be a principal in the contract. No question of agency can possibly arise. Any attempt by the defendant or Jiangsu International in relation to that contract to argue otherwise would constitute an attempted fraud upon Concordia and it was clear from Concordia’s requirements that it was alert to any possible muddying of the waters in relation to liability under the contract. 77.An identical situation arose in relation to the commission agreement whereby the defendant replaced Jiangsu International as the company liable as principal, and therefore as payer under the agreement. That was what Mr Luo believed the position to be, even though he acknowledged that he had omitted to state in the fullest terms the formula for calculating the commission due. He believed and I am satisfied that he was right to do so, that the omission was not crucial. It was accepted within the business and as a matter of commonsense, that those full terms applied by implication and had in any event been agreed orally. 78.He believed and was led to believe by Madam Lin Min, that the commission agreement was in order and would be signed. It was not of material significance in any event because the 1st instalment was paid on the strength of the plaintiff’s invoice to Zhong Shan. There was no oral or written notice to the plaintiff or Mr Ren of Madam Lin’s idiosyncratic approach to the matter of commission over a period of 2½ years. 79.When the plaintiff sent the 2nd invoice, Zhong Shan, on enquiring of Jiangsu (Madam Lin Min) what it should do with it, was told on her instruction or direction via Anthony Zhang that the defendant should ignore it. It certainly had her “fingerprints” all over it. Even Mr Ren’s courteous inquiry:
was ignored. Little did he know of the plot to deprive him of any more commission. 80.I anticipate that if Madam Lin had said or written to the plaintiff to the effect that the defendant was merely an agent of Jiangsu the plaintiff and/or Mr Ren would have replied unequivocally that the agreement made it clear that the defendant was a principal under the agreement. But that is somewhat hypothetical—she never did so, at any stage. 81.Although Jiangsu International may well have regarded the defendant as its financial facilitator, and was controlled in all material respects by it, its usefulness as such was indicated by its existence as a Hong Kong company with Hong Kong banking facilities for the funding of the business projects of the Jiangsu Group or any of its subsidiaries. As indicated earlier and admitted by Mr Cai that involved a subterfuge at least and a clear deceit in my judgment by the defendant upon the bank. 82.The defendant was the principal in the commission agreement just as it was a principal in the ship‑building contract. Neither the defendant nor Jiangsu International nor any individual within those corporations took any step to notify the plaintiff ( or Concordia for that matter) that the defendant was simply acting as an agent and had no liability under agreements. Any attempt to suggest that Mr Ren or the plaintiff ought to have known that the defendant was an agent is nonsensical. Every fact and document is against such a contention. Given the deception practised on the bank the principal of “ex turpi causa” comes into play if needed. 83.It is quite clear, in my judgment, that there was a deliberate decision by the defendant, orchestrated by Jiangsu International and/or Jiangsu Overseas, not to pay Mr Ren or his company the balance of the commission due to him or it. Madam Lin Min, a powerful personality within the mainland company or group, was behind this decision. She was personally involved throughout, manipulating the defendant company. 84.Whether it was a conspiracy involving two or more persons, employees of Jiangsu International and/or the defendant, or Madam Lin Min’s own dishonest attempt to avoid the liability to pay the commission, does not matter. It was decided, probably by Madam Lin Min, to devise some spurious defence to try and justify the decision not to pay the 2nd instalment of the commission. 85.This picture was readily apparent from the outset of this case based on the facts, the documentary evidence and straightforward commercial and commonsense, as I pointed out to defence counsel on two occasions in the vain hope that the defence case would acknowledge some reality. 86.The trial as a consequence, took up five working days with the sustained ability and patience in particular of the Court Interpreter, Madam Janet Woo Kit Fong, who must have found it very trying to assist Madam Lin Min with her evidence, as she attempted to keep some control over that witness. For her professional expertise we were all grateful. This duration used up valuable court time which could have been applied to cases of substance, and there was, of course, the not‑inconsiderable cost of the facilities of “Live Note”. 87.There will be judgment for the plaintiff for the sum of €683,850 (or its Hong Kong dollar equivalent at the option of the plaintiff based on the rate of exchange at 10 March 2010) with interest thereon at the rate of 1% above prime rate from the date of the second invoice until judgment and thereafter at the judgment rate. The defendant will also pay the plaintiff’s costs to be taxed if not agreed. Document bundles 88.Practitioners are persisting in providing documents bundled on a haphazard basis with little if any thought applied to what documents are actually relevant to the issues. It is the duty of the solicitor in charge of the case and the counsel instructed to ensure that this does not happen. I suspect that the copying of and preparation of bundles are carried out on the basis of generating costs. 89.Often bundles are overloaded so that the ring binders break down. That simply adds to the menial tasks of the judge. In this case there were far too many documents copied and too many overloaded bundles as a consequence. 90.There have been many and frequent judicial directions and reminders about bundles of documents and their contents. Stringent costs orders are called for on taxation.
Ms Catrina Lam and Ms Cherry Xu, instructed by DLA Piper Hong Kong, for the Plaintiff Mr Lam Chin Ching Gary, instructed by Christine M Koo & Ip, for the Defendant | |||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under HCA 958/2014