Samlane Development Ltd v. Fung Chi Fai

HCA 318/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 318 OF 2006

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BETWEEN

AND BETWEEN

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DECISION

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1.This is an application by the defendant for an order that the plaintiff should provide further and better particulars of the Amended Statement of Claim and the Reply, the particulars of such requests are set out in pages 80-100 [80-100] of the bundle of documents for the hearing.

2.It is not disputed that the plaintiff had provided some answers to the defendant’s requests [20-45 & 69-79], the defendant says that the plaintiff has failed to answer the requests sufficiently and satisfactorily.

3.Mr. K. Lin, counsel acts for the defendant and Mr. N. Nip, counsel acts for the plaintiff.

4.Mr. Lin says that the requests are proper and necessary for the trial whereas Mr. Nip argues that the defendant’s application, which is made more than 6 years after service of the Reply, is a frivolous exercise which serves no legitimate purpose but which has resulted in significant time and legal costs being incurred.

5.The general background of this matter is, as according to Mr. Nip, as follows:

a.  The plaintiff is and was a limited private company incorporated on 4 January 1994.  It carried on the business of, inter alia, providing transportation and logistics services.  It was wound up on 4 September 2006 and Bruno Arboit and Simon Blade were appointed the liquidators (“Liquidators”) on 6 June 2007;

b.  At all material times, plaintiff had 3 directors and shareholders, namely Robert Ng (“Ng”), John Mackie (“Mackie”) and the defendant.  The defendant was appointed a director in 1994 although he claims that since January or March 2005, he ceased to be a de facto, if not de jure, director of the plaintiff;[1]

c.  Samlane has been liquidated and the liquidators had assigned this action to Remedy Asia Limited as the plaintiff in this matter;

d.  The plaintiff, as the assignee of this action, claims against the defendant for debts and money had and received.

6.I shall adopt the brief facts as set out in Mr. Nip’s written submissions in relation to the plaintiff’s claims as follows:

a.  According to an audit confirmation signed by D (“Audit Confirmation”), as at 31 March 1999, he was indebted to P for the sum of HK$2,293,578.92 (“Opening Balance”).

b.  From time to time, P made payments in advance to D for him to settle the monthly wages of P’s staff and employees, and, as at 15 April 2005, D owed P HK$437,135.90 as the outstanding balance of such advance payments (“Outstanding Balance of Advance Payments”). The procedure for accounting for the sums was that:

  i.  P would estimate the staff’s wages for a period and pay D (who was in charge of P’s operations) in advance of the estimated wages. 

  ii.  P would then confirm the actual wages of the staff and take into account the over-payment or under-payment in the next advance to D, or in some cases, D deposited a sum to return the overpayment to P.

c.  As at 15 April 2005, D owed P HK$883,418.62 being the aggregate amount of miscellaneous loans from P to D (“Outstanding Balance of Miscellaneous Items”).

d.  On various dates between April 1999 and January 2005, D caused various payments in the total sum of HK$4,127,062.74 to be withdrawn from P and paid to himself purportedly for reimbursement of entertaining expenses incurred by him for or in connection with P’s business, and/or for defraying various expenses incurred by P (“Improper Withdrawals”).

  i.  P agreed to make various payments to D for the purposes of reimbursing entertainment expenses or defraying various liabilities incurred on behalf of P subject to the conditions that he must produce proper receipts and that Ng must approve the same.

  ii.  The Improper Withdrawals were made by D without proper receipts.

e.  Less HK$1.5m being personal loans of HK$1m and HK$0.5m made by D to P in December 2004 and February 2005 respectively (“Director’s Loans”). (see ASOC §§4-6 [2-5]; Arboit 1^st §34 [136])

f.  Alternatively, in relation to the sum for Improper Withdrawals, P claims for the return of this sum on the basis of breach of director’s duties, money had and received, unjust enrichment and/or conversion (ASOC §§8-11 [5-6]).

g.  The details of the payments are particularised in the Statement of Account annexed to the ASOC (“Annexure”) [8-18].

h.  Since commencement of P’s business in around 1999, it had engaged Messrs W Wong & Co, CPAs to perform accounting works, including the preparation and keeping of accounts.  The accounts department of P which was also involved in the preparation of the books and ledgers was accountable to and followed the orders of Ng and D.  P also engaged Messrs Horwath Hong Kong CPA to audit P’s accounts and prepare audited financial statements (Reply §5 [61-62]).

7.Annexed to the Amended Statement of Claim (Annexure I) is a revised schedule I of the statement of account that sets out the defendant’s debts due to the plaintiff, in which the following particulars were set out: date, voucher reference, description, payment in advance on payroll, entertainment without supporting, others, received on a/c, net monthly balance and accumulated balance covering the above debts.

8.The defendant has pleaded in the Defence in relation to:

a.  The opening balance of $2,293,578.92 – a flat denial and further that the defendant was only treated, for the accounting purpose, as being indebted to the plaintiff in the sum of $3,322,022.00 for the year ended 31 March 2004 for the purpose of covering up the plaintiff’s true financial loss from the bank for credit purpose;[2]

b.  The outstanding balance of advance payments for $437,135.90 – a flat denial[3];

c.  The outstanding balance of miscellaneous items for $883,418.62 – a  flat denial[4];

d.  The improper withdrawals for $4,127,062.74 – the defendant denies that the money was withdrawn without Mr. Ng’s approval, although on the other hand, he does not admit receiving the money in §7.4 of the Defence.  He further pleads that he was entitled to 5.882% non-accountable entertainment allowance for each transportation order from Parknshop and all the claims for the entertainment payments were effected by payment vouchers prepared by account department of the plaintiff after Mr. Ng’s approval.[5]

9.In the Reply, the plaintiff denies the opening balance was a contrivance to mislead the bank over the plaintiff’s financial loss.

10.The above pleaded issues are the major disputes between the plaintiff and the defendant for the resolution of the court at trial.  I have not dealt with the issue of injection of personal loan of $1.5 million, which was also pleaded in the pleadings because I consider that it is not necessary to refer to this issue for the present application.

11.Before I discuss the legal principles for this application, I should also mention that the defendant in his Defence has not challenged the authenticity or accuracy of the statement of account annexed to the statement of claim as Annexure I.  The statement of account appears to have been compiled by the accountant with reference to the vouchers and financial records of the plaintiff.  The defendant has not complained that he was not allowed to inspect the supporting vouchers or financial documents in support of the statement of account.  I have made enquiry with counsel for the parties today and they confirm that the particulars in Annexure I contains all the particulars in relation to the debts as pleaded in the Amended Statement of Claim compiled by the accountant and audited by the auditor of the plaintiff and those supporting financial documents have been incorporated in the list of documents subject to disclosure at trial.

The legal principles

12.This application is made under Order 18 rule 12 of the Rules of the High Court (RHC), the relevant provisions of which are:

“12. Particulars of pleading (O. 18, r. 12)

(1) Subject to paragraph (2), every pleading must contain the necessary particulars of any claim, defence or other matter pleaded including, without prejudice to the generality of the foregoing-

(a) particulars of any breach of trust, wilful default on which the party pleading relies;

(b) ; and (L.N. 404 of 1991)

(c) where a claim for damages is made against a party pleading, particulars of any facts on which the party relies in mitigation of, or otherwise in relation to, the amount of damages. (L.N. 404 of 1991)

(3) The Court may order a party to serve on any other party particulars of any claim, defence or other matter stated in his pleading, or in any affidavit of his ordered to stand as a pleading, or a statement of the nature of the case on which he relies, and the order may be made on such terms as the Court thinks just.

(3B)  No order shall be made under paragraph (3) unless the Court is of the opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs. (L.N. 152 of 2008)”

13.When considering the issues of dispute for the trial, the court must refer to the pleadings and identify the issues.  See Tempra Virginia Pido v. Compass Technology Company Limited & Another CACV210to 217/2009 delivered by Ma CJHC (as he then was) at §§24 and 25 and Paron Gloves International Limited v Wu Wai Kit & Leung Yuk Chun, by M Chan J.  at paragraph 5.  The Civil Justice Reform has changed the culture of pleadings, in particular, the pleading of defence, which must not be evasive, there being no “bare denials” and the defendant must state his own version in the pleadings[6]. This change of pleading defence has been codified by statute under Order 18 rule 13(5) and (6), which were passed after the CJR :

“13. Admissions and denials (O. 18, r. 13)

(5) Where an allegation made in a statement of claim or counterclaim is traversed by a denial, the party who denies the allegation shall in his defence or defence to counterclaim-

(a) state his reasons for doing so; and

(b) if he intends to put forward a different version of events from that given by the claimant, state his own version. (L.N. 152 of 2008)

(6) A party who-

(a) fails to deal with an allegation; but

(b)   has set out in his defence or defence to counterclaim the nature of his case in relation to the issue to which that allegation is relevant, is to be taken to require that allegation to be proved. (L.N. 152 of 2008)”

14.It can be seen that under the new provisions of sub-rules 5 and 6 above, if the defendant pleads in the defence a bare denial, he is putting the plaintiff to prove his case at trial. As stated in paragraph 18/13/9 of the Hong Kong Civil Procedure 2013, “However, he will be taken not to have put forward any positive case, and accordingly, will not be entitled to call any evidence of fact contrary to or inconsistent with the other party’s pleaded contentions.”

15.Mr. Lin for the defendant refers to Aktieselskabet Dansk Skibsfinansiering v Wheelock Marden & Co Ltd [1994]2 HKC 264 to support his argument and he says in paragraph 21 of his written submissions:

“The functions of the requirement for particulars of pleading are stated by Bokhary JA (as he then was) in Aktieselskabet Dansk Skibsfinansiering v Wheelock Marden & Co Ltd [1994] 2 HKC 264 at pp.269-270 as follows:

1.1 inform the other side of the nature of the case they have to meet as distinguished from the mode in which that case is to be proved;

1.2 prevent the other side from being taken by surprise at the trial;

1.3 enable the other side to know what evidence they ought to be prepared with and to prepare for trial;

1.4 limit the generality of the pleadings, the claim and the evidence;

1.5. limit and define the issues to be tried, and as to which discovery is required; and

1.6  tie the hands of the party so that he cannot without leave go into any matters not included (although if the opponent omits to ask for particulars, evidence may be given which supports any material allegation in the pleadings).”

16.Mr. Nip has no objection to the legal principles stated above.  He lays emphasis on Order 18 rule 12(3B) supra that no order should be made if not for the purpose of fairness or saving costs.  He submits that it would be sufficient for a party (eg acting in representative capacity) to give the best particulars which he is able to give: HKCP 2013 Vol 1 §18/12/63; Marshall v Inter-Oceanic Steam Yachting Company (1885) 1 TLR 394; Higgins v Weekes (1889) 5 TLR 238; Fenn Kar Bak Lily v Christine Koo & Ip & Ors (unrep, HCA 4082/2002, 5 Dec 2003) at §14; Moulin Global Eyecare Holdings & Anr v Ma Lit Kin Cary & Anr (unrep, HCA 1037/2006, 1 Dec 2006) at §12(c).[7]  However, it should be noted that in Fenn Kar Bak Lily and Moulin Global Eyecare Holdings & Anr., the court held that the plaintiff’s claim should not be struck out if the plaintiff would be able to give the particulars requested after discovery or further proceedings.  Here, we are concerned whether those particulars should be given at all.  Mr. Nip’s authorities do not assist him in his argument.

17.The legal principles set out in Aktieselskabet Dansk Skibsfinansiering v. Wheelock Marden & Co. Ltd. define the function of pleadings in a broad sense.  One must bear in mind that further and better particulars in the pleadings do not deal with the broad function of pleadings, but rather a microscopic examination of whether certain particulars of the pleadings should be given for the purpose of a fair trial within the context of case management, which lays emphasis on fairness and expedition of the proceedings, prevention of abuse and for saving costs.  The law on civil procedure has developed after the CJR, putting the proper focus of case management within the context of active case management provided under the CJR.

18.In Sunny Tadjudin v. Bank of America, National Association HCA322/2008 delivered on 22 December 2011 by Deputy Judge M. Chan (as she then was) dealing with the applications for specific discovery and further and better particulars of a case concerning labour disputes, at paragraphs 7 and 65 of the judgment, she said:

“7. It is also clear that post CJR, the Court should give effect to the underlying objectives of the rules and procedures when it exercises its powers under Order 24 and when it interprets the provisions of Order 24. In deciding whether any document relates to a matter in question in the action, whether any document is or has been in the possession, custody or power of a party, and whether discovery of a document sought is necessary either for disposing fairly of the cause or matter or for saving costs, the Court should always bear in mind the objectives of cost effectiveness, expeditious disposal of cases, proportionality, procedural economy and ensurance of fairness between the parties.

65. Again, the legal principles are clear. The main functions of particulars are to inform the other side of the nature of the case that they have to meet, as distinguished from the mode in which that case is to be proved, to prevent the other side from being taken by surprise at trial, to limit the generality of the pleadings, the claim and the evidence, and to limit and define the issues to be tried. Since the Civil Justice Reforms, under Order 18 rule 12 (3B), no order for particulars shall be made unless the Court is of the opinion that the order is necessary either for disposing fairly of the cause or matter, or for saving costs. Much of what is stated in the preceding paragraphs of this Decision in relation to discovery is equally applicable to the determination of the Plaintiff's requests for particulars, in that the Court must take a proportionate approach, balancing the interests of the fair disposal of the cause or matter in accordance with the parties' substantive rights against cost effectiveness, expeditious disposal of cases, procedural economy, and confidentiality.” (emphasis supplied)

19.In Well Joint Trading Limited v. Chiu Chung Chiu also known as Chui Chung Chiu Thomas & Others HCA1768/2011 delivered by Deputy Judge Au Yeung (as she then was) on 9 July 2012 where she was dealing with an application for further and better particulars relating to a case of disputes by the parties over a joint venture, she said at paragraph 17:

‘It must not only be shown that particulars are relevant but that they are also necessary.

“Where application is made by the parties themselves, it is for the party applying for the order to satisfy the Court that the order is necessary either for disposing fairly of the cause or matter, or for saving costs. Unless the Court makes the order of its own motion, the burden and onus of so proving rests upon the party bringing such application.

It is not enough for the applicant merely to show that the particulars requested are ‘relevant’: for ‘relevance’ is not the rest proscribed – it must be shown that granting an order for those particulars is ‘necessary’ for one or more of the purposes stated and set out in para.(3B), which provides for an exhaustive and conclusive definition of what can be (and only those can be) considered by the court to be ‘necessary’ (namely, only for disposing fairly of the cause or matter, or for saving costs.).” Hong Kong Civil Procedure 2012, 18/12/66.

“…However, if the only object of the summons is to obtain the names of witness or some other clue to the evidence of the other party, it will be dismissed (Temperton v Russell (1893) 9 TLR 319 at 321; Briton Medical Association v Britannia Fire Association (1888) 59 LT 888)…” Hong Kong Civil Procedure 2012, 18/12/48’

20.With the above legal principles in clear perspective, I shall now consider the defendant’s application.  I am grateful for the soft copies of counsel’s written submissions.

Request 3 of the Amended Statement of Claim

21.D asks a series of questions of §4 ASOC that D was indebted to P for the Opening Balance as at 31 March 1999, including:

a.  When D first became indebted to P for HK$2,293,578.92.

b.  Whether D was so indebted by reason of loans or money advanced by P to D and if so the manner of advancement of the loans or money.  If not, the facts and circumstances upon which D became indebted.

c.  Full particulars of the records of the loans or money advanced or the indebtedness.

d.  Whether there were any repayments made by D to P prior to 31 March 1999 and if so the manner and records of repayments.

22.It is in relation to the debt under opening balance, to which the defendant has simply denied such a debt.  The defendant has also pleaded the nature of his defence, viz. it was a contrivance between Mr. Ng and the defendant to mislead the bank over the plaintiff’s loss in order to obtain credit from the bank.  I consider that all those particulars requested are irrelevant to the issues of dispute.  Annexure I to the Amended Statement of Claim is the statement of account, which has all the fundamental particulars already.  On this item, the plaintiff has pleaded that the defendant had signed an audit confirmation that as at 31 March 1999, the defendant was indebted to the plaintiff for the sum of $2,293,578.92.[8]  The defendant has not denied the signing of the audit confirmation in his Defence.  On the defendant’s denial, the defendant is putting the plaintiff to prove its case by reference to the particulars in the schedule, the authenticity of which the defendant has not disputed.  The defendant is entitled to cross-examine the witness, who will give evidence on the particulars.  The defendant is also entitled to put forth his case to the court at trial, which will be a question of fact to be found by the trial judge after assessing the evidence.  Mr. Lin argues that the court should, at trial, go further to investigate how the debts were incurred and the manner and circumstances under which they were incurred as the requests for particulars will show.  I disagree.  The defendant has not, in his Defence, set out such parameters for the trial court to do so.

23.This request is clearly objectionable and must be dismissed.

Request 5 of the Amended Statement of Claim

24.Alleging that the Outstanding Balance of Advance Payments was HK$437,135.90 as at 15 April 2005, D requests particulars on:

a.  The total amount of the Advance Payments.

b.  When and from whom and in what manner they were paid to D.

c.  Total amount of the wages and full breakdown of names of staff and employees of P who received the wages.

25.P has already provided the following answers [27-30, 265-266]:

a.  The total amount of the advance payments is HK$25,069,800.65 as particularized in the Annexure under the column “Pay’t in advance on payroll”.

b.  The advance payments were paid on each occasion to D or a third party at D’s direction in accordance with the accounting documents in support.  The accounting documents have all been served as exhibits to the witness statement of Bruno Arboit dated 2 March 2012.  The supporting documents have been summarized in the table at [28-30] showing the dates and amounts of the payments as well cheque numbers and payees.

c.  The total amount of staff wages is HK$24,632,664.75 as particularized in the Annexure.

26.This request relates to the opening balance plus the outstanding balance of advance payments and the outstanding balance of miscellaneous items less the defendant’s loan to the plaintiff for $1.5 million.  I have dealt with the opening balance above.  As to the outstanding balance of advance payments and the outstanding balance of miscellaneous items, the defendant has simply given a flat denial in his Defence.  Under Order 18 rule 13(5) and (6) and as explained in paragraph 18/13/9 of HKCP 2013, the defendant has only put the plaintiff to prove its case at trial.  The particulars have been set out in the statement of account in Annexure I of the Amended Statement of Claim.  At paragraph 27 of the written submissions, Mr. Lin says that the defendant is entitled to know the particulars of the alleged advanced payments as many of the payments were not made to the defendant.  In the Amended Statement of Claim, the plaintiff pleaded in paragraph 5(1) that the advance payments were for the defendant to settle the monthly wages of the plaintiff’s staff and employees.  Annexure I contains the particulars of the payments.  The defendant has not denied this fact in his Defence.  The defendant should be aware of the staff he had paid as they were the plaintiff’s employees.  The liquidators will be unable to supply the particulars requested as they were not involved in the business before.  This factor alone is certainly not the excuse for the liquidators not to supply the particulars if they are necessary for a fair trial or for saving costs.  However, this shows that the liquidators are not hiding the facts from the defendant deliberately or they are playing games.  At trial, the question will be for the plaintiff to prove whether the amounts as stated in Annexure I were drawn down by the defendant.  Mr. Lin argues that in the statement of claim, the plaintiff has pleaded that the money was given to the defendant, who had paid to the staff and employees.  But now, the plaintiff has changed its case by saying that the money was paid to the third parties at the direction of the defendant. The defendant is therefore entitled to those particulars as requested.  I agree with Mr. Nip that this change of stance issue should be an issue for the trial judge, but not for further and better particulars.  Having considered the arguments, I find that the particulars requested are not necessary for fair resolution of the disputes at trial or for saving costs and they are disallowed.

Requests 6 and 7 of the Amended Statement of Claim

27.As regards §5(3) of ASOC alleging that the Outstanding Balance of Miscellaneous Items was HK$883,418.62 as at 15 April 2005, D requests particulars on:

a.  Dates of payments and loans from P to D.

b.  Amounts of such payments and loans.

c.  When, by whom and in what manner were the payments and loans made.

d.  Facts and basis upon which and circumstances in which P made the payments.

e.  D’s personal liabilities which P alleged to have settled and when, by whom and in what manner were the settlements made.

f.  Whether the loans were granted orally or in writing.  If orally, when, where and by whom the loans were granted to D and the full terms of the loans.  If in writing, the documents containing the loans.

28.They relate to the money paid by the plaintiff to settle the defendant’s liabilities and the loans by the plaintiff to the defendant under the outstanding balance of miscellaneous items for $883,418.62.  The plaintiff has given some particulars in response to the request[9]. The particulars are set out in the Annexure I prepared by the accountant and audited by the auditor of the plaintiff.  Further particulars were given by the plaintiff’s solicitor at page 269 of the bundle.  The transactions were made during the period when the defendant was a director of the plaintiff.  He was also the shareholder of the plaintiff, as such, he was regarded as one of the bosses of the plaintiff as alleged by the plaintiff.  The liquidators are unable to give the particulars as requested.  The question is whether the particulars are necessary for a fair trial or for saving costs.  Mr. Lin argues that the particulars given on page 269 are not clear enough.  He has raised the example of an entry dated 31/3/2003 where the description is: add capital from 1M to 2M @HK1.00.  Another entry is dated 31/3/2005 and the description being: transfer investment in Sinogrand to Fung Chi Fai’s C/A.  Mr. Nip submits that the explanation will be given by the witnesses at trial and it is a matter of evidence.  I agree.  I do not consider that without those details, a fair trial is not possible.  Having considered the submissions, I am of the view that they are not necessary for a fair trial of the disputes between the parties, nor are they for saving costs.  The defendant has not disputed the plaintiff’s system of making payments to settle the defendant’s liabilities or giving loan to the defendant.  He is only disputing the debt as alleged.  Again, it is understandable that the liquidators are unable to give particulars because they are to be kept by the accountant and audited by the auditor.  At trial, the plaintiff will rely upon the account statements and the supporting documents.  The defendant is entitled to seek discovery of the supporting documents to verify the financial entries.  As such, those particulars are unnecessary.  They are even irrelevant for the plaintiff to prove its case.  They are dismissed.

Requests 8 & 9 of the Amended Statement of Claim

29.In relation to the Improper Withdrawals, D asks for details on the agreement to make payments to D for the purpose of reimbursing entertainment and other expenses and for details on the payments comprising the sum of HK$4,127,062.74.

30.It is the plaintiff’s case that the withdrawals were made by the defendant by way of petty cash without adequate supporting documentation and was in breach of the agreement.  The defendant has stated his case, which is that he was entitled to claim entertainment allowance at 5.882% for each round of transportation.  No receipts or supporting documentation were required and the withdrawals were made with approval of Mr. Ng.  He has not denied receipt of the money.  He only gives his explanation for his receipt.  The main issue will be for the plaintiff to prove the accuracy of the amount claimed by reference to the account records and the supporting documents.  The defendant will be putting forth his defence for the court to make a finding of the fact.  Those particulars as to when the agreement of reimbursement was made and the circumstances upon which the agreement was made are unnecessary or they are simply irrelevant to the issues of dispute.  However, Mr. Lin submits that the plaintiff has pleaded that between April 1999 to January 2005, the defendant had withdrawn payments without receipts or Mr. Ng’s approval.  The defendant is therefore entitled to seek particulars on the manner by which those payments were made and all the circumstances as to why payments were made without receipts or Mr. Ng’s approval.  These form the bases of Request 9(a) and 9(b).  I agree with Mr. Nip that such issues have been answered under paragraph 9 of the answer [35-36] and further evidence is not for the plaintiff to give particulars, but for the defendant to raise them at the trial with the witnesses or by way of submissions to the court.  This is a matter of evidence for the trial.  The plaintiff has pleaded its case.  The defendant has not denied receipt of the money for the sum of $4,127,062.74.  He has given his reasons for receiving the money in his Defence.  The requests are dismissed.

Request 10 of the Amended Statement of Claim

31.D has asked for details on the demands made by P to D for the provision of receipts to substantiate the Improper Withdrawals.

32.For reasons stated above in respect of the improper withdrawals, I agree with Mr. Nip that they are unnecessary and the request is refused.

Request 11 of the Amended Statement of Claim

33.D requests for details on the demands and requests made by P to D for the repayment of the outstanding debt.

34.This is not pleaded as defence by the defendant. They are irrelevant for the trial and are refused.

35.Since Mr. Lin agrees that he will not pursue the issue of regularity of the board meeting of the plaintiff, he will not pursue requests 1-3 of the Reply.

Request 4 of the Reply

36.This request is in relation to the opening balance relating to the payments in advance to the defendant for settlement of the stock in trade for the plaintiff and the defendant asks for the amount, by whom and the manner in which each of the alleged payments in advance was made and for the receipts.  Mr. Nip replies to this request 4 of the Reply, saying that since the defendant has signed the confirmation of audit, this request is not necessary. I agree.  The defendant has put in the issue of contrivance of the accounting records in order to mislead the bank for credits to the plaintiff.  For the reasons stated above, this is very much a fact to be found by the court at trial.  This request is refused.

Requests 5 & 6 of the Reply

37.They refer to the particulars of the advance payments exceeding 2 million by 31 March 1997; and the defendant asks for the total amount, the manner of the advanced payments, total amount of purchase with documentary proof including the receipts etc.  They are relating to the particulars for the opening balance.  For reasons mentioned above, I do not consider that they are relevant for the trial.  These requests are refused.

Request 7 of the Reply

38.The defendant asks for the manner in which $3,322,022.00 was reflected in the Running Account.  I agree with Mr. Nip that the particular for this request is unnecessary because the defendant has not disputed the accuracy of the amount.  He only disputed the existence of such a debt by stating that he had signed the audit confirmation because it was a contrivance between himself and Mr. Ng.  The question for the trial is whether there was such a contrivance as alleged by the defendant.  This request is refused.

39.As to the costs of this application, Mr. Nip asks for costs on an indemnity basis for the following reasons: delay of about 6 years; defendant withdrew 3 of the requests; the requests are frivolous and unnecessary, causing a waste of time for the plaintiff and the court, with counsel’s certificate.  Mr. Lin replies that, on delay, there was a winding-up order against the plaintiff; proceedings were stayed, only restored in March 2012 after substitution of the present plaintiff for Samlane.  The requests were made in September 2012 and answers were given in November 2012 and the latest answers on 25 February 2013.  It is not a frivolous exercise for particulars. Costs with indemnity costs are only for cases with special features.  In fact, the plaintiff has given some answers.  The costs should only be given for today’s hearing.  Insofar as other requests where answers had been given, they should be costs in the cause.  So costs should run after 25 February 2013 on which date the plaintiff had given the last particulars.  Having considered the arguments, I consider that the proper costs should be given to the plaintiff with counsel’s certificate on a party to party basis and I will assess the costs under Order 62 rule 9, bearing in mind the above submissions at $135,000.00 to be paid by the defendant to the plaintiff within 14 days from the date hereof.

40.I shall make an order in terms as follows:

a.  The defendant’s summons be dismissed;

b.  Costs of this application, including the costs reserved and for for today’s hearing are assessed at $135,000.00 to be paid by the defendant to the plaintiff within 14 days from the date hereof.

Mr. Norman Nip, instructed by Messrs Gall, for the Plaintiff

Mr. Kenny Lin, instructed by Messrs B. Mak & Co., for the Defendant