Chim Pui Chung v. Securities and Futures Commission

CACV000120/1999

CACV120/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 120 OF 1999

(ON APPEAL FROM HCCW NO. 348 OF 1996)

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Coram : Hon Chan CJHC, Leong JA and Yeung J

Date of Hearing : 14 May 1999

Date of Judgment : 14 May 1999

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J U D G M E N T

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Chan, CJHC (delivering the judgment of the Court):

1. This is an appeal against the decision of Burrell J made on 21 April 1999 dismissing the appellant's application for 5 directions. That application was made in connection with the trial of the petition presented by the Securities and Futures Commission for the winding up of Mandarin Resources Corporation Limited (the company) under section 45 of the Securities and Futures Commission Ordinance (Cap.24) and for relief against the appellant under section 37A of the same Ordinance. The 5 directions sought by the appellant were set out in his application before Burrell J and in the ruling of the judge. We do not propose to repeat them.

2. In respect of the first direction, the appellant alleges that the petition was presented in 1996 seeking to wind up the company on the ground that it is in the public interest to do so. He says that the company was already suspended for 10 years at the time of the petition and that it is for the Securities and Futures Commission to show that the company's winding up would be in the public interest. He asked the judge to make such a direction. This issue was considered by Rogers J (as he then was) on 7 January 1997. The judge held in favour of the Securities and Futures Commission on this issue. His decision was upheld by the Court of Appeal on 26 June 1997, although the Court of Appeal did not expressly deal with this point. The judge was right to refuse to make such a direction.

3. In respect of the second direction, the appellant alleges that section 29A and section 37A of Cap.24 were added in 1994 and that if the Securities and Futures Commission wants to rely on these provisions, it has to show that they have retrospective effect. He asked the judge to direct the petitioner to do that. Again, this issue was considered at length by Rogers J on 7 January 1997. The Court of Appeal also dealt with that argument at length and upheld the decision of Rogers J. The judge was clearly right in refusing to accede to the appellant's request.

4. In respect of the third direction, the appellant argues that Mr Heslop Q.C. for the petitioner is an overseas counsel but he was not admitted according to the proper procedure. The appellant says that he was not consulted when Mr Heslop was admitted. He submits that the court granted that application but refused his application for the admission of a London Queen's Counsel to represent him in his criminal appeal. The procedure and guidelines on engaging overseas counsel to conduct proceedings in Hong Kong are well established and Mr Heslop was admitted on 3 December 1996 by the then Acting Chief Justice to act for the petitioner until 31 December 1999. That order of the Acting Chief Justice was made pursuant to the procedure and guidelines with regard to the admission of overseas counsel. Under these procedure and guidelines, it is not necessary to consult the other parties to the action in which overseas counsel is briefed to appear. The appellant's application to admit London Queen's Counsel to act for him in the criminal appeal was rejected because at that time he already had two very senior and experienced local leading counsel acting for him. A case was simply not made out for the admission of another overseas counsel in that criminal appeal.

5. In respect of the fourth direction, the appellant alleges that the company is a limited company and that he is only a majority shareholder. As such, he should not be held responsible for the liabilities of the company. Hence, the trial judge should have directed the petitioner to prove the legal liabilities of the majority shareholder. This direction is clearly an issue to be determined at the trial. As a matter of fact, this is exactly what the Securities and Futures Commission has to prove before the trial judge can grant the relief sought by the petitioner against the appellant.

6. I would also add that the same applies to the first and second directions sought by the appellant. These issues will be canvassed at the trial. The judge was clearly right in refusing to make such directions.

7. In respect of the fifth direction, the appellant submits that the Securities and Futures Commission has failed to set out its reasons and amount of claim systematically. He says that it is necessary for the petitioner to list out allegations of its claim, that such allegations must be precise and that the Commission must not be allowed to present just a global allegation. Regarding the question of quantum, Burrell J had directed on an earlier occasion that an expert report be obtained to provide an assessment of the profits which the appellant was alleged to have made on his alleged wrong doings. The report is now available and has been provided to the appellant. It sets out the details of the various items of claim. It is quite clear that the Securities and Futures Commission has to substantiate these amounts at the trial. The trial judge was therefore right to hold that in the circumstances no further direction need be given on this item.

8. For these reasons, we see no merits in the present appeal which must be dismissed.

Representation:

Appellant, Mr Chim Pui Chung, in person

Mr Philip Heslop, QC and Mr Anderson Chow (instructed by Messrs Herbert Smith) for Respondent