Simba-toys (Hong Kong) Ltd v. Fullmore Corporation Ltd
Read the full judgment text of HCA 1599/2008 on BabelCite. This High Court CFI judgment was delivered on 20 February 2009.
1. There are 3 applications before the court:-
Cites 1 case
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HCA 1599/2008 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 1599 OF 2008 ----------------------
---------------------- Before: Deputy High Court Judge A. Chow, SC in Chambers Date of Hearing: 16 February 2009 Date of Decision: 20 February 2009 ---------------------- D E C I S I O N ---------------------- Applications 1.There are 3 applications before the court:-
The Plaintiff’s claims 2.The Plaintiff’s claims against the Defendant are for: (a) delivery up of the Moulds, and (b) damages for unlawful conversion of the Moulds. 3.The Plaintiff is a company incorporated in Hong Kong. Although it is not made clear in either the Statement of Claim or the various affidavits filed on behalf of the Plaintiff, it appears that the Plaintiff is an associated company of Simba Toys Fürth GmbH & Co KG (“Simba Germany”), which has authorised the Plaintiff to bring this action on its behalf against the Defendant. 4.The Plaintiff’s case against the Defendant as pleaded in the Statement of Claim can be summarised as follows:-
The Defence 5.The only positive case put forward in the Defence is that the Defendant has not at any time received, obtained or otherwise possessed the Moulds. 6.In substance, the Defendant’s case is that it was the contemplation of the parties to the JVA that the manufacturing of the toys would be carried out by Fullmore Products, and that the Moulds were delivered to Fullmore Products’ factory in the PRC for that purpose. Hence, the Defendant did not, and does not, have possession of the Moulds. In the Affirmation of Mr Ma For, the Senior Engineering Manager of the Defendant, it is asserted that “the Defendant had not at any time actually received, obtained or in any other way taken possession of any of the moulds …”. The evidence 7.The evidence relied on by the Plaintiff to prove that the Defendant has, or at least once had, possession of the Moulds includes (a) an “Authorization Form For Mold Transfer – Tool Maker to Manufacturing Vendor” dated 26 October 2006, (b) a “Purchasing Order for Toolings” dated 27 September 2007, and (c) an “Original Commercial Invoice” dated 6 November 2007, relating to 5 sets of moulds. 8.The “Authorization Form For Mold Transfer – Tool Maker to Manufacturing Vendor” was chopped and signed on behalf of the Defendant and shows, apparently, that 2 sets of moulds were transferred from a previous manufacturer in China to a transferee described as:-
9.The “Purchasing Order for Toolings” was issued by Smoby HK to the Defendant and related to 3 other sets of moulds. The “Original Commercial Invoice”, for the amount of USD14,100, was chopped and signed on behalf of the Defendant and issued to Smoby HK. It related to the same 3 sets of moulds the subject matters of the “Purchasing Order for Toolings”. 10.Although the above documents were not produced through any affidavit, no issue was taken on their admissibility by Mr Wong, who appeared on behalf of the Defendant in these applications. Also, although the documents related to only 5 specific sets of moulds, Mr Wong on behalf of the Defendant accepted that they represented typical arrangements in respect of all 1,094 pieces of the Moulds the subject matters of this action. 11.From these three documents, Mr Shaw on behalf of the Plaintiff contended that the Defendant once had possession of the moulds in question, and thus the burden shifted to the Defendant to show by evidence that they had parted with possession of the Moulds to Fullmore Products. Mr Shaw further submitted that the Defendant had failed to adduce evidence, or sufficient evidence, to discharge this burden. 12.Mr Wong, on behalf of the Defendant, accepted that in respect of the moulds transferred by previous manufacturers, the Defendant would once have possession of them but said that the moulds had since been delivered to Fullmore Products to enable them to manufacture the toys and hence were no longer in the possession of the Defendant. This position is not entirely consistent with that taken in the Defence or Mr Ma For’s Affirmation. On the other hand, in respect of the newly built moulds, Mr Wong maintained that they were built by Fullmore Products’ contractors and never came into the possession of the Defendant. Mr Ma For has also produced some documents which show that 5 new moulds covered by a purchase order placed by Smoby HK with the Defendant were subsequently built by Fullmore Products’ contractors and delivered to Fullmore Products in the PRC. Discussion 13.At the hearing of these applications, Mr Shaw on behalf of the Plaintiff confirmed that:-
14.When the question was raised as to whether the Plaintiff had locus to bring this action in its own name without any assignment of the underlying cause of action, Mr Shaw frankly admitted that he could not think of any basis to contend that the Plaintiff was entitled to sue in this manner. 15.In the aforesaid circumstances, I do not see that it would be proper for the court to enter judgment in the Plaintiff’s favour under Order 14 or Order 27 Rule 3, even if the evidence before the court would otherwise justify giving judgment for the Plaintiff on either basis. In view of my conclusion that the Plaintiff has no locus to sue, I do not consider it appropriate for me to express any view on the merits of the applications for summary judgment or judgment on admissions. 16.I think Mr Shaw also accepted that judgment could not properly be entered in the Plaintiff’s favour in these circumstances. He contended, however, that the position would be different in respect of the application for inspection under Order 29 Rule 2, because the Plaintiff was the agent of Simba Germany, the owner of the Moulds, and there was no reason why an order could not be made to permit the Plaintiff to inspect the Moulds. 17.The difficulty, however, is that if the Plaintiff has no locus to sue (which I consider to be the case), I do not believe that it is proper for the court to exercise its discretion under Order 29 Rule 2 in the action in favour of the Plaintiff. 18.In any event, I am not satisfied that there are sufficient grounds put forward to justify an order for inspection in this case. In the first place, there is in fact no evidence adduced by the Plaintiff to explain why the court should exercise its discretion to order the Defendant to permit the Plaintiff to inspect the Moulds. 19.Further, I am not satisfied that it has been shown that the Defendant was, at the time of the application, in “possession” of the Moulds. Mr Wong drew my attention to the fact that under Order 29 Rule 2, a pre-condition for making an order of inspection was that the property in question must be in the “possession” of a party to the cause or matter, and contrasted that with the wider form of words used in Order 24 Rule 2 relating to discovery, namely, “possession, custody and power”. It has been said that the word “power” in Order 24 means “a presently enforceable legal right to obtain from whoever actually holds the document inspection of it without the need to obtain the consent of anyone else” (Lonrho Ltd v Shell Petroleum Co Ltd [1980] 1 WLR 627 at 635H per Lord Diplock). Fullmore Products is a 100% subsidiary of the Defendant, but whether the latter has a presently enforceable legal right to obtain the Moulds from the former without the need to obtain the consent of anyone else will depend on the position under the PRC company laws, which was not gone into at the hearing. In any event, even if the Moulds can be regarded as falling within the “power” of the Defendant, that is not the same as “possession”, which I consider means either physical or legal possession. As earlier mentioned, I am not satisfied on the evidence adduced that the Defendant has possession of the Moulds. 20.In the circumstances, I dismiss all 3 applications with costs to the Defendant in any event. Since I have not heard the parties on the issue of costs, I shall make it an order nisi, with liberty to the Plaintiff to apply to vary the order as to costs within 14 days from the date of handing down of this Decision. 21.It remains for me to thank the parties’ legal representatives for their clear and succinct submissions to the court.
Mr Geoffrey Shaw of Messrs Deacons, for the Plaintiff Mr Martin Wong, instructed by Messrs Chong & Partners, for the Defendant |
Cases cited in this judgment
Further hearings and rulings under HCA 1599/2008