Full Link Enterprises Ltd. v. Freshfields (A Firm)
Read the full judgment text of HCA 10723/1998 on BabelCite. This High Court CFI judgment was delivered on 30 September 1999.
1. This is an appeal from the decision of Master Cannon made on 23rd November 1998 ordering that the Plaintiff's summons dated 20th July 1998 be dismissed. The Plaintiff's application by its summons dated 20th July 1998 made under O. 14 and O. 14A of the Rules of the High Court was:
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HCA010723/1998 1998 No. A10723 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 10723 OF 1998 ____________
____________ Coram: The Hon. Mr. Justice Sakhrani in Chambers Dates of Hearing: 22 and 30 September 1999 Date of Judgment: 30 September 1999 _______________ J U D G M E N T _______________ 1. This is an appeal from the decision of Master Cannon made on 23rd November 1998 ordering that the Plaintiff's summons dated 20th July 1998 be dismissed. The Plaintiff's application by its summons dated 20th July 1998 made under O. 14 and O. 14A of the Rules of the High Court was:
2. Master Cannon dismissed both parts of the application made by the said summons. This is an appeal in respect of Master Cannon's decision on both parts of the application. 3. The background is that the Defendant is a firm of solicitors who act for Eaton Leonard Inc. ("Eaton Leonard") which brought HCA No. A8245 of 1996 ("the main action") against the Plaintiff herein, Full Link Enterprises Limited ("Full Link"). The main action was principally a claim for money paid under a mistake of fact. Full Link was Eaton Leonard's agent for the sale, distribution and after sale support of Eaton Leonard's products in China for which Full Link earned and received commission. Eaton Leonard claims that it overpaid commissions to Full Link. After taking into account further commission which was to qualify for payment to Full Link, Eaton Leonard claimed against Full Link for repayment of the balance of US$112,444.83, interest and costs in the main action. 4. Eaton Leonard applied for summary judgment under O. 14. That application was heard by Master Jennings on 24th February 1997. It appears that an application was also made orally under O. 14A and judgment was given by Master Jennings under O. 14A. It was adjudged that Full Link pay Eaton Leonard the sum of US$112,444.83 or its Hong Kong dollar equivalent with interest and costs. There was then an appeal which was eventually heard by Barnett J. on 10th November 1997 with judgment being given on 13th November 1997. 5. Before that appeal was heard, however, there was correspondence between the solicitors for the parties in the main action which resulted in the sum of HK$970,410.09 being paid by Full Link's solicitors, on behalf of Full Link, to Eaton Leonard's solicitors, namely the Defendant herein as stakeholder. 6. The Statement of Claim in this satellite litigation pleads the agreement that was made. This is in para. 2(4) of the Statement of Claim which is pleaded as follows:
7. It is also pleaded in para. 3 of the Statement of Claim as follows:
8. The appeal by Full Link in the main action was determined by Barnett J. in his judgment given on 13th November 1997 whereby he set aside Master Jennings' order and gave Full Link leave to defend. There was no appeal from that order. Notwithstanding that Barnett J.'s decision was given almost 2 years ago, the main action has not progressed very far. I am told by counsel for Full Link that the stage which has been reached in the main action is that pleadings are closed. 9. In this satellite litigation, Full Link claims the sum of HK$970,410.09 plus interest from the Defendant herein. Full Link alleges that in breach of the stakeholder agreement the Defendant failed to pay Full Link the said sum. The claim is for money had and received by the Defendant to Full Link's use. 10. It is important to see the way that Full Link has pleaded the agreement. It is said to be contained in the 7 letters pleaded in para. 2(4) of the Statement of Claim as set out above. This is very much in dispute between the parties. The Defendant's case is that the letters preceding the letter of 23rd May 1997 from the Defendant to Messrs. Ng & Lam, Full Link's solicitors, do not form part of the agreement made between the Defendant and Full Link through its solicitors. The Defendant's case is that the agreement is contained solely in that one document, namely, the said letter of 23rd May 1997 from the Defendant to Messrs. Ng & Lam. Thus, there is a clear dispute of fact between the parties as to what the agreement is and where it is contained. 11. In the letter of 23rd May 1997, the Defendant stated that it would pay out the sum held by it as stakeholder with interest in the following circumstances:
12. The hearing of 27th June 1997 was adjourned to 10th November 1997 when it was determined by Barnett J. 13. It is the Defendant's case that the proper construction of clause 3 set out above is that if leave to defend is granted, as was the case, then the amount held would be paid out in accordance with the outcome of the hearing of the whole case, i.e. final disposal of the main action. The Defendant contends that is how the word "matter" should be construed in clause 3. Full Link, on the other hand, contends that the word "matter" means the matter of the appeal before the judge in chambers or any further appeal from that decision and not the outcome of the main action. 14. It is clear that in construing a written agreement the court should look at all the surrounding circumstances and the factual matrix in which the agreement was set to ascertain the objective intention of the parties to the agreement. However, before the court can even begin to construe a written agreement, it must first determine what the agreement is and where it is contained. There is, in my judgment, clearly a triable issue raised as to this entitling the Defendant, in my view, to unconditional leave to defend the action. 15. In my view, this is not a proper case for a determination under O. 14A as sought by Full Link in paragraph (b) of its summons dated 20th July 1998. This is not the type of case where the court is asked to determine, on undisputed facts, a pure question of law or a pure construction of a document or documents. As I have said, the facts are very much in dispute between the parties, particularly as to what the agreement is and where it is contained. 16. In my judgment, Master Cannon was correct to dismiss paragraph (b) of the summons which was made under O. 14A. However, as to paragraph (a) of the summons made under O. 14, I am of the view that instead of dismissing it, she should have given unconditional leave to the Defendant to defend the action. To that extent, the appeal is allowed and I set aside Master Cannon's order as regards paragraph (a) of the summons and order that the Defendant be given unconditional leave to defend the action. That being so and as the matter will have to be resolved at trial, I do not think that it is desirable that I should express a view on the submissions of counsel on the strength of his client's case and the weakness of his opponent's case. [After hearing submissions] 17. Costs of the hearing before Master Cannon should be costs in the cause. Costs of the appeal should, in my view, also be costs in the cause, the reason being that the Defendant has agreed all along to the action being resolved pursuant to O. 14A. The court has held that it is not proper to make a determination under O. 14A. To that extent, it is right, in my view, that costs should be in the cause.
Representation: Mr. C. Y. Li instructed by Messrs. Henry Wan & Yeung for Plaintiff. Mr. Jonathan Harris instructed by Messrs. Freshfields for Defendant. |
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