Idmiston Lid v. Asian Master Enterprises Ltd and Another

CACV000001/1989

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1989, No, 2
(Civil)

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1989.No.3
(Civil)

BETWEEN

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Coram: Hon. Cons, V.-P., Clough, J. A. & O'Connor, J.

Date of hearing: 17 March 1989

Date of delivery of judgment: 17 March 1989

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J U D G M E N T

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Cons. V.-P.:

1. This is an appeal against the decision of Sears J, on this 19th December last year, whereby he ordered the transfer of the three actions in question into the Commercial List. In so doing he was exercising a discretion given to him by Order 72 rule 5.

2. We have two versions of his reasons for doing so. One is in the form of notes taken by solicitor who was present at the hearing and which has since been confirmed by counsel, although it has to be remembered that they are only notes and not a transcript. We have also the judge's own recorded, but undated reasons,

3. There is some variation between the two versions, but what is common to both is that clearly the judge did not transfer the actions to the Commercial List because he thought that they were of a commercial nature and would be more appropriately dealt with in that list. He did so because he felt he would be able to unravel what he castigated as a procedural maze into which the parties had hedged themselves, and that by taking all future interlocutory work under his personal wing he could preempt what he foresaw would otherwise be a plethora of interlocutory applications to different masters with inevitable appeals to ocher judges.

4. To be fair to him, we understand that that was the principal submission made to him, and is frankly accepted ever now to be the motive behind the Plaintiffs' wishes. But with respect, in my view that is not a relevant consideration for the exercise of a discretion to transfer to the Commercial List. If there are difficulties of that nature, there is a solution provided under rules applicable to the general list.

5. The Commercial List was introduced in Hong Kong, I think in the late 1960s, although it did not become active until 1976. It followed the precedent set in England at the end of the last century when a special list was set up to deal with "causes arising out of the ordinary transactions of merchants and traders; amongst others, those relating to the construction of mercantile documents, export or import of merchandise, affreightment, insurance, banking and mercantile agency and mercantile usages". 'Those words I have taken from the original notice issued by the Queen's Bench Division of the High Court in England in 1895. And they are words which, with only one change, have since been incorporated into the English Rules of the Supreme Court to. Although we have nothing of a similar nature in our own rules, it seems to me that they still provide very useful guidance as to what is a commercial cause.

6. By Order 72 rule 4 a plaintiff may enter his action in the Commercial List by simply noting the writ or the originating summons in the top left hand corner. That was not done in this case. Instead the actions have progressed normally in the general list since the writ was issues on the 12th December 1987, - albeit with quite a number of interlocutory matters, which perhaps to some extent is not too surprising, since what started out between two limited companies now involves six - and had reached the stage when a restored Summons for Directions was about to be heard.

7. The application to transfer to the Commercial List was supported by affidavits from the Plaintiff's solicitor who gave as his opinion that the actions were "eminently suitable for transfer to the Commercial List because the disputes between the parties related to the construction and interpretation of loan and pledge agreements". With every respect to him, that is neither a full nor an accurate description of the three actions.

8. The pleadings disclose that the claims are based upon loans which were assigned by one company to another. The loans are not disputed, the Defences alleging instead that the assignments are shams, deceptive devices intended by the parties merely to give the appearance of creating legal rights and obligations; alternatively, by reason of particular transactions in which the third parties had become involved the loans have been discharged by repayment.

9. The Replies raise counter allegations of fraud and improper control.

10. As I indicated earlier, in my view the judge exercised his discretion upon irrelevant considerations and it therefore fails to this Court to consider the application afresh and exercise its own discretion. In this respect I would like to emphasize that the question is not one of removing actions from the Commercial list, but one of transferring actions from the General List into that particular list.

11. It seems to me that a very brief description of the actions would be that they raise questions of fraud in a commercial context. They are thus actions of a nature that would not necessarily be excluded from transfer to the Commercial List, and I can see some desirability that the judge who tries them should be a judge with some commercial knowledge. There are however in the High Court many judges who have sufficient knowledge of the commercial world to meet that demand. When the case is eventually set down that aspect will, if it is brought to his attention be taken into consideration by the master in charge of the lists.   In the circumstances as I see them now; there is no reason why at this stage discretion should be exercised in favour of transfer and for my part would allow the appeals.

Clough, J A.

12. I agree and there is nothing I can usefully add.

O'Connor, J.:

13. I also agree.

Representation:

Denis Chang, Q.C. & Miss Thelma Kwan (M/s Tai, Tang & Chong) for Defendants/Appellants in 3 appeals

B. Barlow (M/s Hampton, Winter & Glynn) for Plaintiff/Respondent in 3 appeals

Rimsky Yuen (M/s Michael Cheuk, Wong & Kee) for 3rd Defendant by counterclaim