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Hanly International Ltd v Maurice Choy And Another

Judgment Cited authorities 2 Cited in Precedent Map Related
Vincent
Judgment Date16 April 2020
Neutral Citation[2020] HKCFI 590
Judgement NumberHCA1975/2005
CourtHigh Court (Hong Kong)
Subject MatterCivil Action
HCA1255/2005 HANLY INTERNATIONAL LTD v. MAURICE CHOY AND ANOTHER

HCA 1255/2005

and HCA 1975/2005

[2020] HKCFI 590

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1255 OF 2005 and 1975 OF 2005

________________________

BETWEEN
HANLY INTERNATIONAL LIMITED
(恆耀國際有限公司) 		Plaintiff
and
MAURICE CHOY (蔡浩明)
WONG PING YIN DANNY (黃炳賢) 		Defendants

[Consolidated by Order of Master Levy dated the 9th day of December 2005]

_______________________
Before: Hon B Chu J in Chambers
Date of Hearing: 4 December 2019
Date of Judgment: 16 April 2020

_________________

J U D G M E N T

_________________

_____________________

Table of Contents

_____________________

Page
A. Introduction
4
B. Background leading to P and Ds entering into the SPAs
6
C. Events after signing of the SPAs and lending to the commencement of the 2 Actions
20
D. Relevant events in the Mainland concerning the Company at about the time of the commencement of the 2 Actions and thereafter
25
E. Procedural steps
29
F. Grounds for dismissal
32
G. The legal principles
33
H. Delay
35
I. D’s conduct
I.1 “Letting sleep dogs lie”
41
I.2 Ds’ failure to comply with the Injunction Orders
42
J. Any abuse of process
J.1 Material non-disclosure and failure to provide a cross undertaking as to damages in relation to the Injunction Orders
48
J.2 Whether the 06.12.18 Letter contained an unwarranted demand
48
J.3 Inconsistencies in P’s evidence
56
J.4 Conclusion on whether any abuse
65
K. Prejudice to Ds
71
L. Exercise of discretion
75
M. Orders
76

A. Introduction

1. Before this Court are two summonses issued by the defendants/Ds, to dismiss the two actions issued by the plaintiff/P against them (collectively “2 Actions”) for want of prosecution.

2. The summonses were sparked off by a letter dated 1 August 2018 sent to the parties by the Judicial Clerk (Unclaimed Fund) of the High Court at the direction of the Registrar[1] (“Registrar’s Letter”) . In the letter, the parties were informed that the High Court was carrying out a review of pending cases to check whether moneys left in court for a long time should be transferred to the General Revenue, and as there was a sum of US$154,281.31 paid into court on 17 August 2005 by a director of P, Mr Lee Kin Pan Christopher (“Christopher”) , as guarantee in favour of D1, and no action had been taken by parties since April 2009, the parties were requested by the Registrar to make written submissions, within the deadline imposed, to (i) to show cause why the action should not be dismissed for want of prosecution; and (ii) to take out a summons for payment out/disposal of the monies in court with accrued interest.

3. The parties were further informed that unless cause was shown under (i) or a summons taken out under (ii) by the due date, the court would consider dismissing the action and the monies would then be transferred to the General Revenue without further notice to the parties.

4. Upon joint request, the Registrar granted time extension to the parties for making written submissions to the Court on or before 2 October 2018. Ds’ solicitors sent a substantive reply on 2 October 2018 seeking a dismissal of the 2 actions. There was no reply from P’s then solicitors, and the Registrar had to send a final reminder, and it was not until 18 October 2018 that P’s then solicitors sent a substantive reply.

5. As it appeared that Ds’ dismissal of the action for want of prosecution and P’s application for payment out would be contested, P and Ds were then directed by the Registrar on 24 October 2018 to issue their respective applications.

6. It was under the above circumstances that on 1 November 2018 Ds issued the present summonses respectively in the 2 Actions to dismiss the actions under the inherent jurisdiction of the High Court (“Dismissal Summons”) . This was followed by P issuing a summons on 7 November 2018 for payment out of court of the sum paid in by Christopher on behalf of P, and this summons was subsequently ordered by the Registrar on 1 March 2019 to be withdrawn by P.

7. Counsel Mr Adrian Tam appeared for P at the hearing before this Court. At the time of the issue of the summonses, Ds were legally represented but about a month prior to the hearing before this Court, they each filed a notice to act in person.

8. Ds had requested for the hearing to be conducted in Chinese and their request was acceded to. However, Ds have been described as Canadians[2], and D1 now lives in Vancouver in Canada, and further most of the court documents, including D’s respective notices to act in person were in English, and also all their affirmations were in English and did not contain any interpretation clause. Having considered this, Ds should be able to read English and this judgment is delivered in English. A copy of the Chinese translation will be made available to any of the parties upon written request.

B. Background leading to P and Ds entering into the SPAs

9. Christopher is the youngest of 3 children born by the same mother. The eldest of the 3 children is called Lee King Yee Annabell (“Annabell”) and the second is Lee Kin Lond Patrick (“Patrick”) . Their father is Samuel Tak Lee (“Father”) and their late mother is Lee Woo Miu Yue Minnie (“Mother”) . Father controls the Prudential Enterprises Group, which includes Prudential Hotel and Prudential Centre in Hong Kong as well as real estate such as hotels, buildings and shops in other parts of the world.

10. According to Christopher and Annabell, Mother was a devout Christian and the children were brought up with Christian values and beliefs. During her lifetime, Mother was very much involved in charitable and community service, particularly for the elderly, and it was said to be her wish to set up a centre for the elderly in the name of her late father-in law Lee Man Wah, to be named “文華樓敬老中心” (“Man Wah Elderly Centre”) .

11. In about 1995-1996, a Hong Kong company called 寶光國際投資有限公司/Bright Post International Investment Limited (“Bright Post”) was advertising and promoting on Hong Kong television and other media in relation to a “敬老村”/“Village for the Elderly” called 塘廈湖景敬老渡假村/Tangxia Lakeview Elderly Holiday Resort (“Lakeview Elderly Resort”) , with facilities for the elderly, including a holiday resort in Tangxia in Dongguan, and Bright Post was selling memberships for this resort, which came with the right to occupy a residential unit in the resort for 50 years. Ds were directors of Bright Post.

12. Bright Post was incorporated on 21 April 1994 with D2 holding 5,500 shares out of 10,000 issued shares of HK$1.00 each and another person holding the remaining 4,500 shares[3]. On 4 October 1995, the 4,500 shares were transferred to a company called Groupland Properties Limited and D1, then became a director of Bright Post. There were various shareholders in Groupland but at all the material times, D1 and D2 were two of its directors. Later, as seen in the Annual Return of Bright Post of 21 April 2001, D2’s shares were reduced to 4,900 shares and 600 shares then became held by a company called Yat Tai International Trading Limited. As for this company, it would appear in its Annual Return in 2004, a Lo Kin Wah (“Lo”) became a 50% shareholder and one of its directors[4].

13. Bright Post had entered into an agreement on 22 July 1995 with (i) Dongguan Tangxia Town Local Government (“Local Government”) , and (ii) Dongguan Civil Administration Department (“Civil Administration Department”) for the development of Lakeview Elderly Resort for a period of 50 years from 18 July 1995 to 17 July 2045. The agreement provided, amongst other things, (1) Bright Post would be responsible for all capital for the project and for inviting members and providing all facilities for its members under the project, and for providing 50 units to the Local Government and paying an annual sum to the Local Government for rent and management fees, and an annual sum of RMB 100,000 to the Civil Administration Department for management fees; (2) the Local Government would provide land of 170 acres near a reservoir for the project for the period 50 years; (3) the Civil Administration Department would be responsible for arranging for all formalities[5].

14. There was a supplemental agreement of the same date[6], signed by the Local Government and Bright Post, it was stated that, amongst other things, that (1) the consideration for the Local Government to provide the land to Bright Post for 50 years from 18 July 1995 to 17 July 2045 was RMB 5m, RMB 3m to be paid upon signing the agreement and the balance to be paid in full in 5 years; (2) after commencement of the operation of the resort, Bright Post was to pay to the Local Government an annual sum of RMB 300,000 for management fees of the project and for the land, such to be increased by 10% every 5 years, in addition to the annual sum of RMB 100,000 to the Civil Administration Department.

15. According to Christopher, the Lakeview Elderly Resort came to the attention of Mother who then became interested in the project. She contacted the persons in charge of Bright Post, namely Ds, with the intention of purchasing memberships and establishing an investment plan for the setting up of Man Wah Elderly Centre[7].

16. On 19 November 1997, Mother through a company called Wise On Limited (“Wise On”) entered into an agreement with Bright Post to purchase 8 “diamond” memberships in the Lakeview Elderly Resort for HK$1,843,200[8] (“1st Purchase Agreement”) . Further, on 10 August 1998, Mother through Wise...

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