Carfield (Asia) Ltd v. Kwok Tak Yan and Another

HCA 180/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 180 OF 2013

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D E C I S I O N

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1.The application before me is made by summons which is dated 22^nd April 2013.  By that summons, the plaintiff seeks orders that the 2^nd Defendant to the action “retain and preserve pending the trial of the action and upon 7 days’ notice give inspection” of certain goods defined in the Statement of Claim to the Plaintiff and to its legal advisers and experts.  The goods in question are a consignment of wine, which is specified in some detail in Appendix to the Statement of Claim, and the detail of which has been exhibited among other places to the affidavit evidence in this action.

2.I accept that I have jurisdiction to make either or both of the orders which were sought, and I accept, having been taken to some of the correspondence, that the refusal even to allow an inspection of the wine on the part of the Defendants may have caused some alarm on the part of the Plaintiff.  However it seems to me that the burden remains on the Applicant, in this case, the Plaintiff, to show a reason why the orders should be made, one having a basis in the evidence that is before me.

3.In considering the application I have kept in mind the observation made by Mr Justice Tang as he then was in Laguna Properties, namely that the purpose of Order 29 Rule 2 is to secure a just and proper trial of the issues in dispute between the parties.

4.I acknowledge that the plaintiff’s claim includes the possibility of specific performance. In making that observation, I have also kept in mind, however, the observations made by Madam Justice Queenie Au Yeung, Deputy Judge Queenie Au Yeung, as she was at the time, in Samtani v Samtani, and in particular the references given at paragraphs 6 and 7 in the headnote summarized in those paragraphs, that Order 29 Rule 2 was for circumstances in which something ought to be done for the security of the property.  There was no necessity in making the enquiry to investigate the relative merits of the claims or to show a risk of dissipation, but, ordinarily a preservation order would not be granted if damages would be an adequate remedy.

5.As far as the material before me is concerned, it appears to be established in the evidence, albeit somewhat indirectly, that the wine in question is reasonably valuable, and there is evidence indicating a value of around HK$30 million.  As I have indicated previously, the particular wine was specifically identified by type number of bottles and so on.  I also acknowledge that there is no evidence as to the precise circumstances of its storage although it is stored in a quality-approved godown.  There is no evidence as to the precise way in which it is stored.  However, there seems to be no issue in the evidence that is not at least safe where it is, in the sense that it is not likely to be stolen or in any way interfered with.  Importantly it seems to me that there is no challenge in the evidence as to the appropriateness of the present storage. The application seeks to inspect and the application seeks to preserve, but there is no specific suggestion that other storage arrangements are required.

6.I accept that the inspection may throw up something different, but as the evidence stands, there is no such suggestion.  It is well-known wine can be subject to deterioration over time but not in the way that, say fruit and vegetables are.  It is not a matter of particular urgency as it seems to me, and I brought that into account as well.

7.The plaintiff has not set out the reasons why an inspection is needed in fact. There is no basis in the evidence, it seems to me, for the court to act, as I have indicated already, nor is there any evidential basis on which to suggest that the present storage arrangement is inappropriate.  Correspondingly therefore no basis in the evidence on which the court could exercise a discretion to make an order regarding preservation.

8.The remedy of specific performance, which the plaintiff seeks, is the discretionary remedy and would be allowed only in appropriate circumstances.  Damages are frequently given as an alternative remedy.  On the evidence before me there is nothing to suggest that damages would not be an adequate remedy in this particular case.

9.In making that observation I have in mind also the fact that the agreement that existed between the parties made provision for repurchase by the defendants at their option if the relevant circumstances arose.

10.So in all the circumstances, it seems to me that the necessary foundations for either order are not available in the evidence insofar as the material before me goes.  It would not be appropriate for me to exercise my discretion to allow either application.  Accordingly, I do not allow those applications, and dismiss the summons.  I order costs to the defendant.

Mr Lau Wai Wah Roland, instructed by Mak Solicitors, for the plaintiff

Mr Peter Yu, instructed by C Y Chan & Co, for the 1^st and 2^nd defendants