Huang Li v. Hady Hartanto and Others

HCA 2322/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2322 OF 2014

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DECISION

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Introduction

1.By a summons, dated 8 January 2015, the 1^st defendant applied for a stay of these proceedings on the ground of forum non conveniens.  Alternatively, if the proceedings are not stayed, the 1^st defendant seeks an extension of time of 28 days in which to file its defence.  By a summons, dated 1 September 2015, the 2^nd defendant applied for a stay of these proceedings on the ground of forum non conveniens.  Alternatively, if the proceedings are not stayed, the 2^nd defendant seeks an extension of time of 28 days in which to file its defence.

Background

2.The plaintiff and the 1^st defendant are Hong Kong permanent residents.  The 2^nd defendant is a limited company incorporated in the British Virgin Islands.  The 3^rd defendant is a limited company incorporated in Singapore.

3.The plaintiff alleges that, in January 2011, at an hotel in Shenzhen, the 1^st defendant made the following representations to the plaintiff:

(1)  The 1^st defendant was willing to sell shares in the 3^rd defendant at 6 Singapore cents each.  The total price would be HK$10,000,000;

(2)  The 1^st defendant would ensure that the shares would be transferred from Singapore to the plaintiff’s share depository account with Bank of China in Hong Kong;

(3)  The 1^st defendant would buy the shares back from the plaintiff if the share price fell below 6 Singapore cents; and

(4)  If the price rose above 6 Singapore cents and the plaintiff made a profit by selling the shares within three years of the purchase, the plaintiff would share 10% of the profit with the 1^st defendant.

4.The plaintiff claims that, in reliance on the representation, it provided the 1^st defendant with:

(1)  A share depository account with Bank of China, Hong Kong; and

(2)  A cheque for HK$10,000,000 payable to the 3^rd defendant, which was paid into the 3^rd defendant’s bank account in Hong Kong on 25 January 2011.

5.The plaintiff alleges that these dealings were an oral agreement between the plaintiff and the 1^st defendant for the purchase of shares in the 3^rd defendant for HK$10,000,000.

6.Thereafter, the plaintiff repeatedly asked the 1^st defendant to transfer the shares.  In March 2011, the plaintiff went to the 1^st defendant’s office in Wanchai where, the 1^st defendant made further representations, as a result of which a sale and purchase agreement (“the Agreement”) was entered into between the plaintiff and the 2^nd defendant, backdated to 28 January 2011.

7.Clause 12 of the Agreement provides:

“ This Agreement shall be governed by and construed in accordance with the law of Singapore and the Parties agree to be subject to the non-exclusive jurisdiction of the Courts in Singapore.”

8.The plaintiff alleges that the shares have never been transferred to her.  Hence, these proceedings, by which the plaintiff alleges, inter alia, misrepresentation on the part of the 1^st defendant and breach of the Agreement on the part of the 2^nd defendant.  The plaintiff claims, inter alia, a declaration that the Agreement has been rescinded, a declaration that the 3^rd defendant holds HK$10,000,000 on trust for the plaintiff, an order requiring the defendants to return HK$10,000,000, an account and tracing.

9.The plaintiff has obtained a worldwide Mareva injunction against the 1^st and 2^nd defendants.  On 8 December 2014, the 3^rd defendant filed a Defence.

10.Of course, the 1^st and 2^nd defendants have not filed Defences but neither have they provided any indication of their respective defences.  In an affirmation, save that the 1^st defendant states that attempts to transfer the shares to the plaintiff’s share depository account have failed because of “technical problems”, he states only that the plaintiff’s claim is denied and the plaintiff is put to strict proof.  The 1^st defendant states also that the failure to transfer the shares is a problem of the plaintiff’s own making because she did not provide the 1^st defendant with an alternative account maintained with the Central Depository (Pte) Limited of Singapore (“CDP”) in which to deposit the shares.

11.From the Statement of Claim alone it would appear the issues will be:

(1)  Whether the 1^st defendant made representations in order to induce the plaintiff to buy shares in the 3^rd defendant for HK$10,000,000 and made representations in order to induce the plaintiff to sign the Agreement;

(2)  Whether the 1^st defendant had sufficient control of the purchase money such that he is liable as a constructive trustee;

(3)  Whether the 1^st defendant had sufficient control of the 3^rd defendant such that the 3^rd defendant is liable as a constructive trustee of the purchase money; and

(4)  Whether the 2^nd defendant is in breach of the Agreement by failing to transfer the shares.

The applicable principle

12.In SPH v SA (2014) 17 HKCFAR 364 at §51, the Court of Final Appeal reaffirmed that the principles laid down in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 apply in Hong Kong in respect of an application on the basis of forum non conveniens:

“ 1. The single question to be decided is whether there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of an action i.e. in which the action may be tried more suitably for the interests of all the parties and the ends of justice?

2. In order to answer this question,the applicant for the stay has to establish that first, Hong Kong is not the natural or appropriate forum (‘appropriate’ in this context means the forum has the most real and substantial connection with the action) and second, there is another available forum which is clearly or distinctly more appropriate than Hong Kong. Failure by the applicant to establish these two matters at this stage is fatal.

3. If the applicant is able to establish both of these matters, then the plaintiff in the Hong Kong proceedings has to show that he will be deprived of a legitimate personal or juridical advantage if the action is tried in a forum other than Hong Kong.

4.  If the plaintiff is able to establish this, the court will have to balance the advantages of the alternative forum with the disadvantages that the plaintiff may suffer. Deprivation of one or more personal advantages will not necessarily be fatal to the applicant for the stay if he is able to establish to the court’s satisfaction that substantial justice will be done in the available appropriate forum.”

Submissions

13.The 2^nd defendant asserts that Singapore is clearly the more appropriate forum based on the following submissions:

(1)  Although Clause 12, which is a non-exclusive jurisdiction clause, is not a conclusive factor, the exact weight which ought to be given to it must depend on the circumstances of the case, in particular, as compared to or in the light of the existence and weight of other factors which connect these proceedings with Singapore.  Nevertheless, it should be given considerable weight and regarded as a significant or persuasive connecting factor;

(2)  Even assuming that both the plaintiff and the 2^nd defendant are residing in Hong Kong, the parties’ residence, by itself, does not bear much weight.  There are other more relevant and important factors, such as the location of witnesses or enforcement of the judgment;

(3)  The Agreement has a much closer connection with Singapore than with Hong Kong, clearly pointing to Singapore as being the more appropriate forum:

(a) Its subject is shares in a Singapore listed company;

(b) The purchase price is in Singapore dollars;

(c) The price was to be paid by a banker’s draft or cashier order drawn on a bank in Singapore in favour of the 2^nd defendant or in another manner as agreed;

(d) On completion the 2^nd defendant shall deliver to the plaintiff a CDP Form 4.2 to transfer the shares in the 2^nd defendant’s securities account with CDP to the plaintiff’s securities account maintained with CDP;

(e) The share buy back shall take place at the 3^rd defendant’s registered office in Singapore or such other place as the parties agree and payment shall be by banker’s draft or cashier order drawn on a bank in Singapore;

(f) Any profits to be shared shall be paid by banker’s draft or cashier order drawn on a bank in Singapore;

(g) The parties chose Singaporean law as the governing law and the Singapore courts as the forum to resolve any disputes arising out of the Agreement;

(4)  If these proceedings continue in Hong Kong, there will be costs of adducing expert evidence of Singapore law and a higher risk that the Hong Kong court may make an error regarding Singapore law, whereas no such expert evidence would be required in Singapore.  In this regard the 1^st defendant asserted in an affirmation that witnesses from Singapore would have to be called to give evidence on issues such as whether, and if so, how the shares in a Singaporean listed company can be transferred to the Hong Kong Bank of China Share Depository Account and that the share transfer procedures under Singaporean law and listing rules would have to be examined in detail.  All of which, the 1^st defendant stated, would require factual and potentially expert witnesses from Singapore and this will be costly, such that the Singapore court would be the most convenient and appropriate forum;

(5)  There will be fact witnesses from Hong Kong and there may be fact witnesses from Singapore to explain the transfer procedure for shares in Singaporean companies.  The location of potential witnesses does not point clearly to either Hong Kong or Singapore as the appropriate forum;

(6)  The plaintiff has applied in Singapore for an injunction prohibiting disposal of the defendants’ assets in Singapore.  This application has been adjourned to a date to be fixed.  Hence, on her own case, it is more useful for the plaintiff to take action in Singapore.  If the action proceeds in Singapore, it will save the plaintiff the trouble to apply for recognition and enforcement of a Hong Kong judgment in Singapore and there is no evidence as to the law and procedure in Singapore in this respect; and

(7)  The injunction application is such that there will be a multiplicity of proceedings.

14.The 2^nd defendant submitted that Clause 12 is a crucial factor which tilts the balance in favour of Singapore.  The Agreement was specifically drafted for this deal.  Both parties agreed to clause 12, each knowing that he or she did not reside in Singapore and that the price for the shares had been paid in Hong Kong dollars in Hong Kong.  Notwithstanding this connection with Hong Kong, Singapore is the only forum mentioned expressly.

15.The plaintiff submitted that Hong Kong has the most real and substantial connection with the residence or operation of each party:

(1)  The plaintiff and 1^st defendant are residents in Hong Kong.  The plaintiff’s son, a witness, is also a Hong Kong resident;

(2)  Although the 2^nd defendant is a BVI company, its directing mind (the 1^st defendant) is in Hong Kong;

(3)  All defendants appear to share and use a Wanchai office as a place of business;

(4)  Both the 2^nd and 3^rd defendants maintain bank accounts in Hong Kong from which the whereabouts of the HK$10,000,000 paid by the plaintiff could be tracked;

(5)  The 2^nd defendant used the Wanchai office as its address for receiving notices; and

(6)  The 3^rd defendant has filed a defence, thereby submitting to the jurisdiction.

16.The plaintiff submitted that most of the evidence originated in and most of the 1^st defendant’s alleged misdeeds occurred in Hong Kong:

(1)   One of the witnesses, who the plaintiff alleges was present at the time the 1^st defendant made the first alleged misrepresentation, holds a position in Macquarie Capital (Hong Kong) Limited;

(2)  The cheque for HK$10,000,000 drawn by the plaintiff on her account with Chiyu Bank in Hong Kong to pay for the shares was deposited into the 3^rd defendant’s account with HSBC in Hong Kong;

(3)  The plaintiff signed the Agreement in the Wanchai office;

(4)  The 1^st defendant managed the 3^rd defendant’s office at the same Wanchai address in Hong Kong.  At the material time, in handling the 3^rd defendant’s money in Hong Kong, documents were maintained by the 3^rd defendant’s management in Hong Kong comprising of the 1^st defendant and his sister;

(5)  At all material times, the 1^st defendant was the director and 19.7% shareholder of Niaga Finance Co Ltd, which is a money lender based in Hong Kong in which the 3^rd defendant kept cash.  The 3^rd defendant’s accounts with Niaga were operated upon instructions from the 1^st defendant, his sister or a personal assistant.  The 3^rd defendant’s money with Niaga was treated on a collective basis with that under the 1^st defendant’s account with Niaga;

(6)  In relation to the trial issues as to whether the 1^st defendant and/or the 3^rd defendant are liable as constructive trustees for the HK$10,000,000 paid by the plaintiff (and deposited into the 3^rd defendant’s HSBC account in Hong Kong), it is noteworthy that in a report prepared by EY, entitled “Factual investigation into certain matters of Next-Generation Satellite Communications Limited”, dated 31 October 2014, EY stated:

“ Funds with Niaga Finance belonging to [the 3^rd defendant] were transferred to the personal account of [the plaintiff] with Niaga Finance on several instances, none of which were recorded in the [3^rd defendant’s] books ….”

(7)  The documents available to EY for consideration were incomplete.  There are likely to be applications for discovery and/or calling witnesses from Niaga Finance in Hong Kong to account for the HK$10,000,000 deposited into the 3^rd defendant’s HSBC account, which are also likely to be traced to the 1^st defendant’s and/or the 3^rd defendant’s accounts with Niaga; and

(8)  In several of the promises to refund the plaintiff, the 1^st defendant made it clear that he would return to Hong Kong to settle with the plaintiff.

17.The plaintiff also submitted that further and substantive discovery and, in due course, enforcement action is likely to be made due to the transfer of HK$10,000,000 into various accounts in Hong Kong:

(1)  After the plaintiff issued the cheque for HK$10,000,000 to the 3^rd defendant, two tranches in the respective sums of HK$4,902,400 and HK$3,099,575.61 were transferred to the 2^nd defendant by two cheques;

(2)  One tranche in the sum of HK$1,023,320.87 was transferred back to a Ms Tjoa Kian Hwil, who is believed to be the 1^st defendant’s wife;

(3)  The 1^st defendant signed and authorized the three cheques and transfers to the 2^nd defendant;

(4)  All three tranches were transferred back to the 3^rd defendant, two of which were deposited into the 3^rd defendant’s account with Niaga Finance;

(5)  There is a remaining sum of HK$974,703.52 initially paid into the 3^rd defendant’s account still unaccounted for and which requires further discovery of documents in Hong Kong; and

(6)  As the 1^st defendant was the director of and a shareholder in Niaga Finance and the 3^rd defendant’s funds in its account with Niaga were transferred to the 1^st defendant’s account with Niaga Finance in Hong Kong, substantial discovery of documents and/or the calling of witnesses from Niaga Finance in Hong Kong will be necessary to trace the HK$10,000,000.

18.In respect of the discovery point, tracing may arise from the plaintiff’s case set out in paragraphs 25 to 27 of the Statement of Claim and its claim for a declaration that the 1^st and 3^rd defendants are liable to it as constructive trustees in the event that the HK$10,000,000 had been paid to third parties.  In this regard, the defendant referred me to the Decision of Madam Recorder Linda Chan SC in this action by which she discharged an ex parte Mareva injunction which the plaintiff had obtained against the 3^rd defendant.  In her Decision Madam Recorder, although determining that it was not necessary to consider whether the plaintiff had a good arguable case against the 3^rd defendant, observed (at paras 40 to 43) that it seemed that the plaintiff did not have a good arguable case against the 3^rd defendant in respect of its case of constructive trust.

19.Notwithstanding Madam Recorder’s views, which were expressed in the context of an application to discharge a Mareva injunction, the question of constructive trust remains an issue such that discovery in respect of that issue may be required.

20.The plaintiff also submitted that the issues at trial are unlikely to involve evidence relating to Singapore listing rules because the alleged failure to maintain a CDP account is not an issue regarding the listing rules but an issue as to whether the plaintiff is in breach of Clause 3.2.1 of the Agreement which breach entitled the 2^nd defendant to repudiate the Agreement.

21.As for the point that the governing law is Singapore law, the plaintiff referred me to the following:

(1)  Hong Kong Civil Procedure 2017, Vol 1, para 11/1/10VA, describes the standard of proving substantial difference between Hong Kong law and Singapore law as follows:

“ … If a case raises, say, a single issue of Singapore contract law, the Hong Kong court may require a lot to convince it that the relevant law is substantially different from Hong Kong law and that it is not able to deal with the issue satisfactorily.”

(2)  In Lim Yi Shenn v Wong Yuen Yee [2012] 3 HKLRD 505, Recorder Horace Wong SC dismissed an appeal against a Master’s refusal of the defendant’s application for security for costs against the plaintiff, ordinarily resident in Singapore, and stated:

“ 65. I have also taken into account the fact that Singapore is an English-speaking country and there is not going to be any language difficulties in communicating with Singapore lawyers instructed to pursue enforcement in that jurisdiction. I also take judicial notice that Singapore has a common law system and the present case is not a case whereby enforcement would have to be taken in a country with a legal system that is wholly foreign to a Hong Kong defendant. …”

22.The plaintiff submitted there will be a loss of juridical advantage to it if the Hong Kong proceedings are stayed:

(1)  The plaintiff will be deprived of a cause of action commenced in Hong Kong, in which the 3^rd defendant has submitted to the jurisdiction by filing a Defence;

(2)  The plaintiff has obtained a worldwide Mareva injunction, which is still in force against the 1^st and 2^nd defendants; and

(3)  Any application for discovery of documents and calling of witnesses from Niaga Finance in Hong Kong will have to be made out of the jurisdiction of Singapore under letters of request, which will be disproportionately cumbersome and costly.

The non-exclusive jurisdiction clause

23.The 2^nd defendant relied heavily on Clause 12.  Indeed, the 1^st defendant argued for its consideration in one affirmation and repeated the same arguments in another.

24.The effect of a non-exclusive jurisdiction clause was considered in the context of an Order 11 application by the Court of Appeal in Noble Power Investments Ltd v Nissei Stomach Tokyo Co Ltd [2008] 5 HKLRD 631.  In that case, the subject agreement provided that the parties submitted to the non-exclusive jurisdiction of the Hong Kong courts.  The plaintiff obtained ex parte leave to serve the writ on the defendant out of the jurisdiction and in Japan.  The defendant successfully applied to have that order set aside.  A Recorder, approaching the defendant’s application on the basis of forum non conveniens, weighed up the connecting factors and held that Japan was the more appropriate forum to determine the case.  The Court of Appeal allowed the plaintiff’s appeal, holding that this was not the correct approach when there existed a non-exclusive jurisdiction clause and proceedings were instituted in the very forum to which the parties had agreed to submit.  At §§31 and 32, Ma CJHC (as he then was) stated:

“ 31. In considering the effect of a non-exclusive jurisdiction clause, it is critical to recognize that there are differences in approach depending upon where proceedings have been instituted. Where proceedings are instituted in the named forum (to which the parties have agreed to submit), the party who seeks a stay or otherwise to contest the jurisdiction or appropriateness of that forum, has a very heavy burden to discharge, since that party has by definition agreed contractually to submit to the jurisdiction. In other words, he is seeking to avoid a forum to which he has, by contract, agreed to submit. …

32.  Where, however, proceedings are instituted in a forum other than the identified one, an altogether different approach may be required.  Here, much depends on the precise wording of the clause in the question.  If the other forum is one to which the parties have also agreed to submit in the event of their being sued, it may be that there is little difference between the two situations.  Where, however (as is more common) the other forum is merely one in which proceedings can be instituted without any obligation on the party sued actually to submit to that forum, the approach is different.  The party who then seeks to contest the jurisdiction or appropriateness of that forum is in a better position so to do (compared with the situation articulated in the previous paragraph) simply because he would not be seeking to avoid a forum to which he has contractually agreed to submit.”

25.An example is given in §33(3):

“ A sues B in Hong Kong. Again, Hong Kong is not named as the non-exclusive jurisdiction but the courts of Japan are. However, this time the parties have not agreed to submit to any jurisdiction other than the Japanese courts. In other words, while the parties have agreed to submit to Japanese jurisdiction in the event that they are sued there, and while they have also agreed that they are at liberty to institute proceedings in a jurisdiction other than Japan, no positive obligation exists for a party to submit to any jurisdiction other than Japan. Here, the burden on B is less heavy.”

26.And at §42:

“ … As I have said, different considerations may well apply in the type of situation identified in para.33(3). In this situation (wherein the parties have not agreed actually to submit to the relevant jurisdiction), the existence of a non-exclusive jurisdiction clause may well carry far less weight, and cannot be treated in the same manner as where the parties have agreed to submit to a named forum. …”

27.The present situation is the type of situation identified in paragraph 33(3).  Hong Kong is not a jurisdiction to which the parties have agreed to submit.  Hence, I shall approach the application on the basis of forum non conveniens.  Then comes the question as to what weight I should give to Clause 12.

28.The weight to be given to a non-exclusive jurisdiction clause in circumstances in which the plaintiff commences proceedings in Hong Kong notwithstanding a non-exclusive jurisdiction clause nominating another jurisdiction was considered by Stone J in T & K Electronics Ltd v The Tai Ping Insurance Co Ltd [1997] 3 HKC 330.  In that case, the agreement was stated to be “subject to English Jurisdiction.”  Stone J declined to follow Cresswell J’s approach in The Rothnie [1996] 2 Lloyd’s Rep 206, relied on in that case by the defendant’s counsel for the proposition that a non-exclusive jurisdiction clause created a strong prima facie case that English jurisdiction was appropriate, such that the legal burden of proof shifted to the plaintiff to show that there were special circumstances by reason of which justice required that the trial should nevertheless take place in another jurisdiction.  At pp 336H – 337E, Stone J stated:

“ … With great respect to the learned judge in The Rothnie, in my view it does not assist to embark upon a Spiliada type of analysis in terms of a shifting legal burden of proof, indeed such a course seems to me to be an inappropriate approach and one with which I am unable to agree. The ineluctable starting point in any discretionary stay argument not involving an exclusive foreign jurisdiction clause is that jurisdiction has been established as of right; it is therefore for the defendant, who seeks to invoke the discretion of the court, who must discharge the burden upon it to persuade the court to grant a stay of proceedings. And, as is the situation in the present case, the existence or otherwise of a non-exclusive jurisdiction clause is simply one factor to be placed into the discretionary ‘mix’, so to speak. In my judgment, to arrogate the effect now suggested to a non-exclusive jurisdiction clause would be to elevate such clause to the level of its exclusive counterpart, which in my view is unwarranted in principle or on the authorities …; indeed, to take the example of the present proceedings, it would be distinctly odd, given the abundance of ‘connecting factors’ with Hong Kong, if the mere presence of such a non-exclusive jurisdiction clause in itself produced a shift of the legal burden of proof to the detriment of a plaintiff who, as in this case, is able to invoke the jurisdiction of this court as of right.

To the contrary, probably the proper analysis, …, is that the existence of the non-exclusive jurisdiction clause is a relevant factor in the evaluation of the jurisdiction with which the action has its most real and substantial connection, albeit I respectfully differ from the characterisation that such a clause constituted a ‘very strong’ factor, …; it seems to me that such a non-exclusive clause is simply an element within the factual matrix upon which the court is asked to take a view in each case. …”

29.In Peregrine Fixed Income Ltd v JP Morgan Chase Bank [2005] 3 HKLRD 1, New York law governed the agreement and the parties agreed to submit to the jurisdiction of a named New York court. Although Stone J considered in T & K Electronics that a non-exclusive jurisdiction clause was not a very strong factor, he stated at §§50 to 54:

“ 50. As to the non-exclusive jurisdiction clause, Mr Smith cited an earlier decision of this Court, in [T & K Electronics], in which the Court expressed the view that in any discretionary stay argument not involving an exclusive jurisdiction clause, and where jurisdiction has been established as of right, that ‘such a non-exclusive jurisdiction clause is simply an element within the factual matrix upon which the court is asked to take a view in each case’.

51.  Mr Shieh did not, I think, take issue with this proposition in itself, but maintained that a non-exclusive jurisdiction clause is nevertheless entitled to be treated with ‘considerable weight’ in support of an fnc stay, citing in this regard a number of English cases ….”

52.  It is clear that, in contrast to the effect of an exclusive jurisdiction clause, a non-exclusive jurisdiction clause does not change the burden, which remains on the defendant, but equally the presence of such a clause is not something to which little weight should be attached in forming a conclusion as to the appropriateness of the foreign forum to which the action is sought to be stayed.  The clause in this case represents a contractual agreement by the plaintiff to submit to the jurisdiction of the New York court should an action be brought against it in New York, and to that degree the parties must be taken to have recognised that New York cannot be characterised as other than an appropriate forum.  As Mr Shieh emphasized, the fact that [the plaintiff] did envisage proceedings being brought in New York and did expressly waive any objection to that forum must be persuasive factors for the court to take into account in considering the discretionary ‘mix’.

…

54.  …, in my view there can be no doubt but that the existence of the non-exclusive jurisdiction clause,coupled with the express choice of law provision as to the applicability of New York law as the governing law of the ISDA Master Agreement, constitute significant connecting factors which point in favour of the US District Court for the Southern District of New York as the natural and appropriate forum for the resolution of this dispute.”

30.In The “Rothnie” Gibraltar was the named jurisdiction and the parties agreed that the agreement should be governed by and construed in accordance with the laws of Gibraltar.  Cresswell J concluded, at p 211:

“ [The non-exclusive jurisdiction clause] creates a strong prima facie case that that jurisdiction is an appropriate one. Accordingly, the burden shifts to the plaintiffs to show that there are special circumstances by reason of which justice requires that the trial should nevertheless take place in England. If I am wrong about the burden shifting, in the alternative the non-exclusive jurisdiction clause is a very strong factor for the purposes of [identifying the appropriate jurisdiction].”

31.The defendants’ counsel referred me to a passage in the judgment of Norris J in Winnetka Trading Corporation v Bank Julius Baer International Ltd & anor [2009] Bus LR 1006 at para 19:

“ It is not possible to identify in the evidence before me any such overwhelming or compelling reasons. One reason is advanced to which I will refer next but subject to that there are no compelling reasons for suggesting that Winnetka is at liberty to depart from the jurisdiction of first choice, namely Guernsey.”

32.The defendants’ counsel submitted that, although the Hong Kong authorities are against adopting the English approach of shifting the legal burden or treating a non-exclusive jurisdiction clause as a “very strong” factor,nonetheless, the description of “jurisdiction of first choice” is significant.  A non-exclusive jurisdiction clause which names only one jurisdiction implies that, while the parties have not ruled out that proceedings may be brought in another forum, the named one is the only jurisdiction that they have agreed is appropriate and convenient. Put another way, they have not agreed that any other forum is appropriate or convenient.  Whilst not the parties only choice, it is their first choice. Counsel submitted that this reinforces that a non-exclusive jurisdiction clause must be given considerable weight and is a persuasive and significant connecting factor.

33.The defendants’ counsel drew my attention to the observation of French J (as he then was) in the Australian case of Green v Australian Industrial Investment Ltd & ors (1989) 25 FCR 532 at p 543 that a non‑exclusive jurisdiction clause “may be a powerful factor in favour of the grant of a stay”.

34.The plaintiff’s counsel submitted that a non-exclusive jurisdiction clause is regarded merely as one of the factors to be weighed in the scale in an application for a stay on the ground of forum non conveniens relying on Ma CJHC (as he then was) in Noble Power at §§38 and 39.  For completeness, I shall set out paras 37 – 39:

“ 37. Thus analyzed, in the situation referred to in para.33(1), the effect of a non-exclusive jurisdiction clause in terms of a challenge to the appropriateness of a forum, is in practice the same as an exclusive jurisdiction clause. Where an exclusive jurisdiction clause exists, a party who seeks a stay brought in breach of that agreement to refer disputes to a named forum, will have to show strong cause: ….

38. This approach is to be contrasted with the approach of the courts in applications for stay based on forum non conveniens. Where an application is made to stay proceedings on this basis, the test is to enquire whether there exists another available forum which is clearly or distinctly more appropriate than the forum in which the proceedings are sought to be stayed and in which the case may be tried more suitably for the interests of all the parties and for the ends of justice: ….

39. The search for connecting factors … or the lack of connecting factors was exactly the approach adopted by the learned Recorder in the present case. It is fair to say that he regarded the correct approach as being one of weighing up the various factors to arrive at a view on the appropriate forum. In other words, he approached this case on the basis of forum non conveniens. The existence of the non-exclusive jurisdiction clause was regarded merely as one of the factors to be weighed in the scales.

40.  With respect, this was not the correct approach when there existed a non-exclusive jurisdiction clause, and proceedings were instituted in the very forum to which the parties had agreed to submit. …”

35.This passage does not assist the plaintiff because the Chief Judge was not addressing how much weight should be accorded a non‑exclusive jurisdiction clause when an application is approached on the basis of forum non conveniens; he was addressing the approach adopted by the Recorder, ie, notwithstanding that the action had been brought in the named jurisdiction, the Recorder incorrectly proceeded on the basis of forum non conveniens such that he incorrectly regarded the non-exclusive jurisdiction clause as merely one factor.

36.The plaintiff’s counsel also relied upon a holding of Ng J in Re Jin Hui 588 unreported, HCAJ 139/2014, 17 March 2016, at para 22:

“ 22. In other words, Clause 2 is merely a non-exclusive jurisdiction clause, the effect of which is that the parties have agreed to submit to the jurisdiction of any PRC Court if an action is brought against it in that Court:…. If so, the proper approach of the court in deciding whether to stay the present proceedings is to apply the principles of forum non conveniens: ‌….”

37.This passage does not assist the plaintiff because the context of paragraph 22 is that the defendants were arguing that Clause 2 was an exclusive jurisdiction clause, whereas the plaintiff argued that it was a non‑exclusive jurisdiction clause.  Ng J resolved that dispute in the plaintiff’s favour in paragraph 22.  It is in that context that Ng J stated that “Clause 2 is merely a non-exclusive jurisdiction clause”.  No submissions were addressed in that case as to the weight of Clause 2.

38.I do not think it appropriate to treat Clause 12 as “merely” one of the factors to be weighed.  Although the plaintiff is entitled to bring proceedings against the 2^nd defendant in Hong Kong as of right for the reason that she is resident in Hong Kong and although Singapore is not the parties’ exclusive choice, the parties agreed that the Agreement shall be governed by Singapore law and to nominate Singapore expressly as a jurisdiction to which they would submit.  I consider Clause 12 and the agreed governing law and nominated jurisdiction to be factors, which are significant connecting factors, pointing in favour of Singapore as the natural and appropriate forum for the resolution of this dispute.

39.The parties disagree as to whether there was negotiation in respect of the Agreement but, nevertheless, there was agreement regarding Singapore and, to that extent, the parties must be taken to have recognized Singapore as an appropriate forum.

Other factors

40.As for the other competing factors, which each party argues are connecting factors, at this stage of proceedings it is possible to take only a provisional view but, taking a broad view, notwithstanding the significance of Clause 12, there are other factors which tilt the balance in favour of Hong Kong as the more appropriate forum.

41.In particular, the plaintiff has brought this action in Hong Kong as of right.  Both she and the 1^st defendant are residents of Hong Kong.  The witnesses who can be identified at this stage are Hong Kong residents.  The second alleged representations were made in Wanchai. The money was paid into a Hong Kong bank account and monies were paid out of that account.  Any tracing exercise is likely to take place in Hong Kong.  This is a cause of action which arose in Hong Kong with its subject money trail, at least as far as identified at this stage, beginning in Hong Kong.  Moreover, the 3^rd defendant has submitted to Hong Kong’s jurisdiction.  In my view, these are more significant factors in the context of this case than those relied upon by the 2^nd defendant and set out in paragraph 13(3) above.

42.With regard to any need to consider Singapore law, in the absence of any particulars of his defence, the 1^st defendant made only bare assertions that evidence of Singapore law was required without providing any indication of the nature of such evidence in the context of the issues which may arise.  Hence, I am not persuaded that there would be any difficulty with Singapore law if the trial was held in Hong Kong or that any need for expert evidence regarding Singapore law would create any difficulties or unreasonable costs.

43.Regarding the 2^nd defendant’s counsel’s submission that the plaintiff will be saved the trouble of enforcement in Singapore, I do not consider it is for the court to stay an action taken as of right on the ground that the court considers it would save a plaintiff the trouble of enforcement elsewhere.

44.As for the submission that will be concurrent proceedings, a multiplicity of proceedings is not itself a material factor in an application on the ground of forum non conveniens unless the bringing of the second action, while the foreign action is proceeding, may cause an unusual hardship to the defendant.  See:  Nan Tung Bank Ltd, Zhu Hai v Wangfoong Transportation Ltd [1999] 2 HKC 606.  No evidence of unusual hardship was raised in the defendants’ affirmations.

45.Accordingly, the 2^nd defendant has failed to establish that Hong Kong is not the appropriate forum and that Singapore is clearly or distinctly more appropriate than Hong Kong.  Its application fails and must be dismissed.

46.The 1^st defendant is not a party to the Agreement and, so, Clause 12 does not assist the 1^st defendant. In any event, the factors which indicate Hong Kong to be the appropriate forum in respect of the 2^nd defendant, do so in respect of the 1^st defendant.  Moreover, it would not be desirable to stay the action in respect of the 1^st defendant only. For these reasons the 1^st defendant’s application fails and must be dismissed.

47.As to costs, I make a costs order nisi that the 1^st and 2^nd defendants pay the plaintiff’s costs of their respective summons, to be taxed if not agreed.

Mr Raymond Leung SC, leading Mr Eric Tsoi, instructed by Adrian Yeung & Cheng, for the plaintiff

Mr Paul Lam SC, leading Ms Kay Seto, instructed by Y C Lee, Pang, Kwok & Ip, for the 1^st and 2^nd defendants