Beijing Songxianghu Architectural Decoration Engineering Co., Ltd v. Kitty Kam also known as Wang Yuzhi

HCA 1289/2022

[2024] HKCFI 1944

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1289 OF 2022

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REASONS FOR DECISION

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1.On 30 May 2024, at the conclusion of the respective hearings, I dismissed with costs

a.  the Defendant’s summons dated 23 May 2024 seeking an order, among others, that the hearing of the Defendant’s striking out application on 30 May 2024 be closed to the public (“the Confidentiality Application”); and

b.  the Defendant’s summons dated 20 November 2023 seeking an order to strike out the Plaintiff’s Statement of Claim and to dismiss the Plaintiff’s claim herein (“the Striking Out Application”).

2.The respective Reasons for Decision were handed down on 19 June 2024. Herein below, I will refer to my said decisions respectively as “the Confidentiality Decision” and “the Striking Out Decision” and together “the 2 Decision”, and the Reasons respectively as “the Confidentiality Reasons” and “the Striking Out Reasons” and together “the 2 Reasons”. I will continue to adopt here the abbreviations used in the 2 Reasons.

3.By summons taken out on 13 June 2024, Kam applies for leave to appeal against the 2 Decisions on the grounds set out in the draft Notice of Appeal annexed thereto. The draft Notice of Appeal sets out 14 grounds altogether, 12 in respect of the Striking Out Decision and 2 in respect of the Confidentiality Decision. As the leave summons was taken out before the 2 Reasons were handed down, the summons further asked for leave to submit a fresh draft Notice of Appeal after the 2 Reasons were handed down, but no such fresh draft has been submitted.

4.At the conclusion of the hearing of the leave Summons, I refused to give leave to appeal and ordered costs be paid by Kam to the Plaintiff to be taxed on indemnity basis which I then summarily assessed at HK$214,000.

5.These are my reasons.

Refusing leave to appeal against the Confidentiality Decision

6.In the skeleton submissions lodged on 15 July 2024 by Mr Lee (who did not appear for Kam in the Confidentiality Application and the Striking Out Application) on behalf of Kam (“Kam’s Skeleton”), it was stated that now all but Ground 2(2) and Ground 5 were no longer pursued. There was also no submission made in support of Grounds 14 and 15, which were stated to be the Grounds of appeal against the Confidentiality Decision. The above notwithstanding, Kam’s Skeleton made no express mention about abandoning the application for leave to appeal against the Confidentially Decision.

7.Upon enquiry by this Court at the hearing, Mr Lee said that the application for leave to appeal against the Confidentiality Decision was in fact not abandoned and that his instruction was to seek orally at the hearing an adjournment of the hearing for leave to appeal against the Confidentiality Decision for the same to be heard together at the hearing before this Court on 6 August 2024, which will be the hearing of the application by Kam for an order to keep the Confidentiality Reasons from being published or made available to the public.

8.Ms Ho, counsel for the Plaintiff, duly objected. Without calling on Ms Ho, I refused the application for the adjournment as (a) it was made unduly late and without any explanation for the lateness, and (b) the so-called reason that the leave application could or should be conveniently dealt with together with the other application was clearly untenable as the nature and issues of these 2 applications were completely different in that whether a written decision should be made public or be published depended on an established set of principles which did not concern with whether the decision was considered by a party to be correct or not.

9.Mr Lee then made no submission in support for leave to appeal against the Confidentiality Decision. I thus formally refused Kam’s application for such leave.

Refusing leave to appeal against the Striking Out Decision

10.By Ground 2(2) and Ground 5, Kam complains :

“ (2) The Learner Judge erred in not determining and finding that the undisputed Cayman Island Law was such that the Plaintiff must have acquired interest in the LP as an indisputable fact, particularly in light of the Plaintiff’s failure to address an answer to the contrary.”

“ 5. The Learner Judge erred in taking into account irrelevant matters in reaching his decision to dismiss the Striking Out Application, including but not limited to considering provisions in the Partnership Agreement pertaining to a contractual claim which had not been pleaded nor pursued by the Plaintiff.”

11.While those being the 2 Grounds and with due respect to Mr Lee, he did not address in Kam’s Skeleton the 2 Grounds as such, but went on to make (in §7 to §30) various arguments contending for the merits of the “Contractual Fulfilment Point”, and contending how the point was “unanswerable”, and how the falsity of the representations alleged by the Plaintiff was not shown and such. “Contractual Fulfilment Point” was a phrase I coined in the Striking Out Reasons (§10) to conveniently denote the central argument advanced by Kam for the striking out, which boiled down to this : that once it was established that the Plaintiff has acquired an interest as a limited partner in SSI, the Plaintiff’s present case must fail.

12.I therefore accept Ms Ho’s submission that by Kam’s Skeleton, Kam was not contending in support of Grounds 2(2) and 5, but was advancing a mix of completely new arguments and a rehash of Kam’s arguments raised in the Striking Out Application that have nothing to do the 2 Grounds, and that Kam was in fact attempting to re-argue the striking out.

13.Ground 2(2) complained that this Court erred and ought to have determined and found in Kam’s favour in the Striking Out Application that the Plaintiff had indeed acquired an interest as a limited partner in SSI.

14.The 2 premises stated in Ground 2(2) supporting such a finding ought to have been made were (a) “in light of the Plaintiff’s failure to address an answer to the contrary”, and (b) the acquisition of such interest under undisputed Cayman Island Law was “an undisputable fact”.

15.As I set out in §40 of the Striking Out Decision, these 2 premises were arguments advanced by Kam.

16.In §40 to §49 of the Striking Out Reasons, I summarized Kam’s submissions and the Plaintiff’s expert’s opinion disputing the matter (namely §78 to §86 of Conyers 2^nd at Trial Bundles B7/1426 -1428), I then came to a view that the relevant law was indeed undisputed by the parties but its application on the facts and the conclusion were disputed. I then rejected Kam’s claim that her own expert’s view was regarded as definitive and stated my reasons and conclusion that the issue is a matter for trial and could not be determined in Kam’s favour in the Striking Out Application.

17.Thus, the Plaintiff in fact “has addressed an answer” and not failed to do so as asserted in Ground 2(2), and that the acquisition of the interest was only asserted by Kam to be “indisputable” but found by me to be otherwise.

18.Such assertion is now repeated in §20 of Kam’s Skeleton. There, the only material cited in support that the acquisition was “indisputable” was Kam’s own expert opinion, namely Walkers 1^st §§4.6-4.8. It is completely untenable and unreasonable for Kam to claim it is “indisputable” by merely referring to her own expert and ignoring the Plaintiff’s.

19.The other matter argued by Kam making the matter “indisputable” was that this Court should not consider the 2022 Maples Register at all, which was said to be precluded by pleading, nor should this Court give weight to it.

20.Conyers cited section 29(1) and (4) of the ELPA, which was not disputed by Walker, which provide that the Register shall be prima facie evidence showing the names and details of each person who is a limited partner. Conyers then referred to the 2022 Maples Register which did not record the Plaintiff as a limited partner.

21.Such being the context, this Court completely failed to understand Kam’s so-called pleading point, particularly bearing in mind that Kam was seeking the striking out on the basis that the Plaintiff’s claim must fail and therefore evidence was allowed to be considered by the Court for that purpose. Evidently, the dispute over the validity and/or weight of the 2022 Maples Register, unless it can readily and clearly be shown one way or the other without investigation, are always questions only suitable to be dealt with at trial and not on striking out.

22.Moreover, and as I stated in §71 of the Striking Out Reasons, even if the Plaintiff has acquired an interest as a limited partner, it does not follow that there would be no falsity regarding the other representations pleaded in §8(1) of the Statement of Claim or that there would be no fraud. There is now no complaint that I erred in that view.

23.I find no merits or prospect of success in respect of Ground 2(2).

24.Ground 5 complains that this Court took into account irrelevant matters “including but not limited to considering provisions in the Partnership Agreement”.

25.In Kam’s Skeleton, it was not identified which provision of the Partnership Agreement this Court has taken into account, and particularly taken into account as a reason for refusing the striking out.

26.At the hearing, Mr Lee stated upon enquiry by this Court that only §24 of Kam’s Skeleton related to Ground 5. In that paragraph, it was complained that this Court ought not have taken into account that the Plaintiff has not received any dividends and Kam/SSGI/SSI has not provided any financial report or information (which matters were common ground).

27.Indeed, in §75 of the Striking Out Reasons, this Court made reference to and duly considered that “there is no evidence indicating that any account of whatever sort or nature has been prepared by Kam/SSGI/SSI regarding the operation, assets and investments of SSI”.

28.In the present case, the Plaintiff complained that Kam perpetrated fraud by making representations fraudulently to induce, and having in fact induced, the Plaintiff to pay over a substantial amount of money purportedly to invest on the Plaintiff’s behalf but Kam indeed had no intention to invest and indeed had not so invested; and that one of the fraudulent representation alleged was that Kam represented that she would provide information about the investment. That being the Plaintiff’s case, this Court completely failed to understand how Kam could even begin to argue that the fact that no dividend has been paid since November 2019 and no financial information has ever been provided were irrelevant, particularly in the context of Kam’s present contention for striking out that the Plaintiff’s case was bound to fail and against the backdrop that a substantial sum of HK$49,586,000, has been allegedly applied and paid as management fee to an entity owned and controlled by Kam.

29.Ground 5 has no merits at all and has no prospect of success.

30.Thus, I also refused leave to appeal against the Striking Out Decision.

Indemnity costs

31.Having heard submissions on costs at the hearing, I acceded to the Plaintiff’s submission to award costs of this application to the Plaintiff on indemnity basis, for these reasons:

a.  I accepted Ms Ho’s submission that Kam adopted a “kitchen-sink” approach and advanced 14 Grounds most of which were either intelligible, completely lacking in merits or were new arguments. Upon a reasonable time after the Striking Out Reasons were handed down on 19 June 2024, Kam should have taken steps to withdraw all but the 2 Grounds now relied on. Yet, it was only 3 days before the hearing, ie on 15 July 2024, and by Kam’s Skeleton that it was disclosed for the first time that all but Grounds 2(2) and 5 were abandoned;

b.  Even Ground 2(2) and 5 are completely lacking in any merits and are hopeless; and

c.  Lastly but weightily, I accepted and was much persuaded by this submission of Ms Ho, that (i) Kam’s conducts were appalling, and here as she did in the Striking Out Application, which was yet another instance of her gamesmanship, Kam initially raised numerous unmeritorious grounds/matters (in striking out, 8 grounds) but at the last minute dropped the majority of them, (ii) thereby very substantial time and costs were spent and wasted by the Plaintiff and much Court time and judicial resources were also wasted, and (iii) the Court must express its affront and disapproval of such conducts as a matter of principle and to deter further similar abuse.

32.I thank counsel for their assistance.

Miss Sabrina HO and Ms Sakinah SAT, instructed by P.C. Woo & Co, for the Plaintiff

Mr Jun LEE, instructed by W K To & Co., for the Defendant