Yue Fung Spinner Ltd v. Goldtex Ltd

HCA1283/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1283 OF 2009

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BETWEEN

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Before : Hon Yam J in Chambers

Date of Hearing : 2 November 2009

Date of Judgment : 2 November 2009

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J U D G M E N T

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1.This is an appeal against the learned Master Lung’s decision refusing to strike out the plaintiff’s Statement of Claim at the request of the defendant. The case involved several purchase orders and the plaintiff pleaded that the agreement was made between the plaintiff and the defendant for the manufacture of certain cotton jeans. The purchase orders were in the name of another company Finemax Limited. The defendant issued a summons under Order 18, rule 19 to strike out the plaintiff’s claim and relied on four grounds. The first three grounds are :

(a)  it discloses no reasonable cause of action;

(b)  it is scandalous, frivolous or vexatious; and

(c)  it may prejudice, embarrass or delay the fair trial of the action.

2.It is trite law to say that for the first three grounds no evidence is allowed and the court will just consider the pleadings whether it discloses a reasonable cause of action. Admittedly the Statement of Claim is clear on its face and there is a clear case of breach of contract as a cause of action.

3.The main ground relied on, in fact, the sole ground relied on by the defendant, is that it is an abuse of process of the court. On this ground the defendant adduced evidence to say that the purchase order was actually in the name of Finemax and therefore the plaintiff has sued the wrong person.

4.In reply to that, the plaintiff adduced evidence in the form of a series of email coming from the defendant Goldtex in respect of all these purchase orders. It is only when the purchase orders were issued from the defendant side, they were in the name of Finemax. The evidence disclosed that Finemax and Goldtex have similar shareholders and directors, they have the same email address; and in fact they have the same office address at Houston Centre.

5.The plaintiff stands firmly on the ground that the purchase orders were placed by Goldtex itself, although it has used Finemax as its nominee or agent. In other words it is not a case where the defendant was saying that Goldtex was only an agent for Finemax. In fact there was no explanation on the part of the defendant why all the email correspondences were sent by Goldtex but eventually Finemax was used as the contracting party on all these purchase orders. It is common ground that material facts have to be pleaded. It has also been said in the White Book that sometimes, it is difficult to distinguish between facts and evidence.

6.I accept the plaintiff’s submission that the plaintiff has materially pleaded his case and that the contract was between the plaintiff and the defendant. It is only a matter of evidence as to how the contract was entered into. All the email correspondences supported the plaintiff’s case that the defendant was a contracting party. I agree with the learned master that :

(1)  The case should not be struck out on the first three grounds of (a), (b) and (c).

(2)  In respect of the second limb, that is ground (d), it is not a plain and obvious case that the plaintiff had got the wrong party.  In fact the evidence supported the fact that the defendant was actually the contracting party.  It is for the defendant to explain why Finemax was used on the purchase orders.

7.For the aforesaid reasons, this appeal is dismissed with costs to the plaintiff in any event.

Ms Rachel Lam, instructed by Messrs Hastings & Co., for the Plaintiff

Mr James Campbell, instructed by Messrs Susan Liang & Co.,for the Defendant