Chen Hongqing v. Liu Yiu Keung Stephen and Others
Read the full judgment text of HCA 1699/2019 on BabelCite. This High Court CFI judgment was delivered on 23 February 2021.
1. I will in this Decision refer to the plaintiff as Chen HQ , and the existing defendants as D1 to D5 respectively.
Cited by 18 cases · Cites 13 cases
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HCA 1699/2019 [2021] HKCFI 440 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 1699 OF 2019 ______________
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________________ D E C I S I O N ________________ 1.I will in this Decision refer to the plaintiff as Chen HQ, and the existing defendants as D1 to D5 respectively. 2.There are two Summonses before the Court:
3.Mr Paul Lam SC leading Mr Vincent Lung and Ms Astina Au appeared for Chen HQ. Mr Jose Maurellet SC leading Mr Alexander Tang and Mr Kevin Lau appeared for the Employee Interveners. They also act for D4 and D5. Mr Anson Wong SC leading Mr Ross Li appeared for Jinan Group. The EI Summons 4.I deal with the EI Summons first. 5.Mr Lam for Chen HQ does not oppose the same. 6.D1 to D3 are neutral to the application. They have sought and been granted leave to be excused from the present hearing. 7.Jinan Group consents to the Employee Interveners being joined[1]. 8.I grant leave for the Employee Interveners to be joined as defendants to this action. They will be assigned the appropriate defendant numbers. I also, in terms of §2 of the EI Summons, direct that the Writ of Summons herein be amended accordingly, and that the Employee Interveners be at liberty to acknowledge service thereof. The Rules of the High Court should be followed for the further conduct of the proceedings. 9.I order that costs be in the cause, to be taxed if not agreed. On the costs of the Employee Interveners, I allow a certificate only for 2 counsel. The Jinan Summons 10.This is another action involving the Shanshui Group of companies (the “CSC Group”). 11.These matters have a complicated history. For background I refer to G Lam J’s judgment in HCA 1661, 1766, 2191/2014 and HCA 623, 939, 1564/2015 (Consolidated) dated 31 January 2018[2] (the “Trust Actions”, and the “Trust Actions Judgment”) and G Lam J’s Decision in the Trust Actions also dated 31 January 2018 discharging the receivers appointed in those Actions[3](the “EY Receivers”, and “Trust Actions Discharge Decision”). I refer also to my “Jurisdiction Decision” handed down on 30 August 2019 in HCA 2648/2017[4], and my Decision in the present action given on 31 October 2019 when the CHQ Injunction Summons first came before me[5]. Unless specified otherwise, I also use the same terms as used in those Judgments and Decisions. 12.I recite below the core events so that this Decision may be read in context. 13.On 25 September 2017, Chen HQ filed a summons for leave to be joined as an intervener or as an additional defendant to the Trust Actions. 14.By his Decision of 10 November 2017, G Lam J refused that application. 15.After that refusal, Chen HQ on 17 November 2017 commenced HCA 2648/2017 (“HCA 2648”). 16.In February 2018, Jinan Group successfully applied to be joined in HCA 2648 as an additional defendant. 17.On 21 March 2018 and 26 April 2018, the SHDs and the Jinan Group respectively took out an application for jurisdiction challenge in HCA 2648. 18.On 30 August 2019, this Court handed down the Jurisdiction Decision and ruled in favour of the jurisdiction challenge. Chen HQ has subsequently sought leave to appeal against that decision. 19.On 13 September 2019 Chen HQ commenced the present action. At that stage, D1 to D3 herein were the only defendants. In the Indorsement of Claim, Chen HQ:
20.On 4 October 2019, Chen HQ took out the CHQ Injunction Summons. He seeks thereby an injunction restraining D1 to D3 from dealing with the CSI Shares concerned. 21.On 31 October 2019, the CHQ Injunction Summons first came before me. Having heard leading counsel for parties, I refused Chen HC’s application for interim-interim relief. 22.The substantial hearing of the CHQ Injunction Summons has subsequently been vacated due to the COVID‑19 pandemic. I have ordered paper disposal instead. 23.In the meantime, and as summarized by Mr Wong:
The applicable principles on joinder 24.The Rules of the High Court that are relevant to this application are Order 15, rule 6(2)(b)(i) and (ii), that:
25.The wordings of Order 15, rule 6(2)(b) are wide. I highlight the fact that Limb 1 refers to “all matters in dispute in the cause or matter”, and Limb 2 refers to “a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter”. 26.Relying on Securities and Futures Commission v Mo Shau Wah [2018] HKCFI 596 at §§20-21 and Man Whi Chung v Man Ping Nam [2003] 1 HKC 549 at §§14-22 and the authorities cited therein, Mr Wong submits, which I accept, that:
27.Mr Lam does not dispute those principles. Any difference between him and Mr Wong is more a matter of emphasis than substance. What Mr Lam highlights is that whilst the Court will not at the joinder stage engage itself in a scrutiny of merits or an adjudication of facts, it does not mean that the Court would take an intervener’s assertion of sufficiency of interest at face value and ignore any obvious legal impediments to its claim. He further submits that it will disallow a joinder application if it is “plain and obvious” that there can be no claim between the original parties and the party proposed to be joined. He relies by way of illustration on Yeung Pui Ying Anna v Day & Chan (a firm) & Ors, unrep, CACV 67/2010, 20 July 2010, wherein the Court of Appeal, having approached the matter “as though it had been an application to strike out”, held that the plaintiff’s application to join the 2nd defendant should be refused as the plaintiff’s intended claim against him had been time‑barred. 28.Mr Lam’s submissions are in my view not controversial. It stands to reason that the Court will not exercise its discretion in favour of joinder if it is plain and obvious that the joinder of the proposed intervener would be pointless and futile. This is not unlike the approach which the Court adopts when approaching an application for amendment of pleadings. 29.I apply the above when considering the Jinan Summons. Mr Wong’s submissions in summary 30.Mr Wong’s submissions may be summarized as follows:
Mr Lam’s submissions in summary 31.In the course of the hearing, Mr Lam helpfully reduced his submissions to two main points (the second one being his fallback position), that:
Discussion 32.The fundamental difference between Mr Wong and Mr Lam when approaching the Jinan Summons is their characterization of the nature of the present action:
33.On the characterization of the present action, I do not accept Mr Lam’s submissions. The Ruzhou Judgments are the basis on which Chen HQ is seeking the declaration that D1 to D3 have been holding the Subject Shares on trust for him. Whilst that is so, he is ultimately seeking to get hold of the Subject Shares. In my view, it is unrealistic and unduly technical to stop at the Ruzhou Judgments and call them the subject matters or the “cause or matter” of the present action. 34.Characterizing the Ruzhou Judgments as the subject matter or the “cause or matter” leads to some very strained arguments. In developing his submissions, Mr Lam relies very heavily on what he described as Jinan Group’s deliberate decision not to participate in the Ruzhou Proceedings. He submits that that point goes to the issue as to whether Jinan Group has sufficient interest to be joined, as opposed to the exercise of any residual discretion which this Court may otherwise have[13]. Mr Lam further submits, upon my invitation for clarification, that if that point is taken out of the equation (eg by assuming that Jinan Group in fact had had no knowledge of the Ruzhou Proceedings), he would not be able to make good his objection. But in my view, Jinan Group either has or does not have sufficient interest to be joined. That issue should not be dependent upon Jinan Group’s knowledge of the Ruzhou Proceedings or the reasons for its decision not to participate[14]. 35.Characterizing the Ruzhou Judgments as the subject matter or the “cause or matter” leads further to some very technical legal arguments which are in my view, and with respect, hardly necessary. At §43 of his written submissions, Mr Lam submits that Jinan Group’s reliance on the Tianqiao Proceedings and Tianqiao Judgments raises the important legal question as to how the Hong Kong Courts should approach two inconsistent foreign judgments. He then refers the Court to Showlag v Mansour [1995] 1 AC 431. It was a case from the Judicial Committee of the Privy Council on how the Courts should approach two conflicting decisions from two different sovereign states (namely England and Egypt in that case). Mr Lam submits that primarily on res judicata considerations, the Privy Council held that the earlier of the conflicting judgments should be recognised. Mr Lam then further develops (a) the point that the Showlag principle is subject to the exception of estoppel, and (b) the issue as to whether Jinan Group can invoke and rely on the doctrine of “cross‑estoppel”[15]. 36.To start with, there are practical difficulties in applying the Showlag principle to the present case. Potentially, the Court will be concerned with quite a number of Ruzhou Judgments and Tianqiao Judgments. It is not a straightforward case of looking at the dates of only two judgments. 37.Secondly, Showlag concerned conflicting judgments from two sovereign states. I have reservations as to whether it has application to the facts of this case, which involve conflicting decisions from two local People’s Courts both in the Mainland. 38.Further, as submitted by Mr Wong, Showlag related to two judgments between the same parties. But in the present case, Chen HQ chose not to sue Jinan Group in the Ruzhou Proceedings. Mr Lam is in effect submitting that because Jinan Group chose not to apply to be joined in the Ruzhou Proceedings, it has somehow become disentitled to being joined in the present action. That is quite an extension of the Showlag principle which is, as submitted by Mr Wong, not supported by authority. 39.All these are potentially complicated matter which takes this case out of those “plain and obvious” ones which may justify a scrutiny of merits or an adjudication of facts at this stage. 40.But most importantly, I am not satisfied that those legal principles and considerations are engaged. They are only perceived to be engaged upon Mr Lam’s characterization of the Ruzhou Judgments as the subject matter or “cause or matter”. 41.In any event, even if the Ruzhou Judgments may technically be regarded as the subject matter or “cause or matter”, one should not lose sight of the wide wordings under Limb 1 and Limb 2. The main considerations are to “ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon” (Limb 1), and whether there “may exist a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter” (Limb 2). Focusing only upon the “cause or matter” is in my view not justified, and is contrary to the liberal approach which should be given to both Limbs. 42.Further, as the authorities discussed above clearly suggest, for an intervener to be joined, there does not even need to exist a cause of action between him and the existing parties. It is sufficient if his rights against or liabilities to any party to the action in respect of the subject matter of the action will be directly affected by any order which may be made in the action. 43.In the present case, given the Jinan Group SPAs, the Tianqiao Judgments, and the rival and competing claims Jinan Group as in respect of the Subject Shares, I am of the view that Jinan Group has clearly made out a case for it to be joined. 44.For completeness, I mention that Mr Lam refers this Court to the reasons given by G Lam J for refusing Chen HQ’s application to be joined in the Trust Actions, and submits that for similar reasons, Jinan Group should not be permitted to be joined. I accept Mr Wong’s submissions in this regard that the 2 applications are very different. In Chen HQ’s case, his interests in the Trust Actions were contingent upon G Lam J’s findings in the Trust Actions. In the present case, Jinan Group’s alleged interests in the Subject Shares are not. Further, the application for joinder was made by Chen HQ at a very late, shortly before the trial of the Trust Actions was due to commence. This is not the case here. 45.In respect of Mr Lam’s fallback position, I note that there is no guarantee that the SPC will give the guidance sought, and if so when. I see no basis to adjourn the Jinan Summons pending such an uncertain event. I accept Mr Wong’s submission in this regard that for case‑management reasons, it is much more desirable to adjudicate on the Jinan Summons first, allow the joinder sought should this Court so rule, and consider a disjoinder should there be a change of circumstances in the future. Conclusion and disposition 46.For the reasons set out above, I allow the Jinan Summons. I make the following Orders:
47.In so far as costs are concerned, Jinan Group at §5 of the Jinan Summons seeks an order that the costs of and occasioned by this application be reserved. I make a costs order nisi to that effect. Any party who seeks any variation is given liberty to write in, in which case I will give directions on the further conduct of the matter.
Mr Paul Lam SC, leading Mr Vincent Lung and Ms Astina Au, instructed by Gallant, for the Plaintiff Mr José-Antonio Maurellet SC, leading Mr Alexander Tang and Mr Kevin Lau, instructed by Stephenson Harwood, for the 4th to 1168th Defendants Mr Anson Wong SC, leading Mr Ross Li, instructed by Linklaters, for the Intended Intervener P C Woo & Co, for the 1st to 3rd Defendants, attendance was excused [1] See letter of 29 December 2020 of Linklaters, solicitors for Jinan Group (Appendix C to Mr Maurellet’s written submissions). [6] which I will refer to for ease of reference as “Limb 1”. [7] which I will refer to for ease of reference as “Limb 2”. [8] See alsoLin Man Yuan v Kin Ming Holdings Ltd [2012] 3 HKLRD 550 per Deputy Judge Mimmie Chan (as she then was) at §15 cited in support at §21(a) of Mo Shau Wah. [9] §20 of Man Whi Chung, citing Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52, per Lord Diplock at 56. [10] §21 of Man Whi Chung, citing Wong Chun Loong Tony v Ada Ltd [1991] HKC 86. [11] §21 of Man Whi Chung, citing Wong Chun Loong Tony v Ada Ltd [1991] HKC 86, and Wing Mou Construction Co Ltd (in Liquidation) v Cosmic Insurance Corporation Ltd, unrep, HCCT 40/2001, 6 June 2002, per Ma J (as he then was) at §15(2). [12] §23 of Man Whi Chung, citing Yu Cho Wah v Ho Chi Kwong Michael [1999] 3 HKC 68. [13] ie any residual discretion to refuse joinder despite sufficiency of interest. Mr Lam has in fact fairly accepted that if this Court is satisfied with the sufficiency of Jinan Group interest to be joined, there is little basis for this Court to refuse joinder on any discretionary consideration. [14] For the avoidance of doubt, I record that there are disputes are to why Jinan Group did not participate in the Ruzhou Proceedings. I am not making any adjudication on the same. I do not see any need to at this stage. [15] §50 of his written submissions. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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