Your World of Legal Intelligence
 Hong Kong | 1-800-335-6202

Sincere View International Ltd v Kenco Investments Ltd And Others

Judgment Cited in Precedent Map Related
Vincent
Judgment Date03 February 2006
CourtHigh Court (Hong Kong)
Judgement NumberHCA301/2005
Subject MatterCivil Action
HCA000301/2005 SINCERE VIEW INTERNATIONAL LTD v. KENCO INVESTMENTS LTD AND OTHERS

HCA 301/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 301 OF 2005

____________

BETWEEN

　 SINCERE VIEW INTERNATIONAL LIMITED Plaintiff
　 and 　
　 KENCO INVESTMENTS LIMITED 1st Defendant
　 EVERBRIGHT INVESTMENT & MANAGEMENT LIMITED 2nd Defendant
　 CHINA EVERBRIGHT HOLDINGS COMPANY LIMITED 3rd Defendant

____________

AND

HCA 569/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 569 OF 2005

____________

BETWEEN

　 SINCERE VIEW INTERNATIONAL LIMITED Plaintiff
　 and 　
　 KENCO INVESTMENTS LIMITED 1st Defendant
　 EVERBRIGHT INVESTMENT & MANAGEMENT LIMITED 2nd Defendant
　 CHINA EVERBRIGHT HOLDINGS COMPANY LIMITED 3rd Defendant

____________

(Heard Together)

Before: Hon Kwan J in Chambers

Date of Hearing: 3 February 2006

Date of Decision: 3 February 2006

_____________

D E C I S I O N

_____________

1. These are two appeals from the decision of Master Kwan on 5 January 2006 in HCA No. 301 of 2005 and HCA No. 569 of 2005. The parties in the two actions are identical.

2. The three defendants in each action issued a summons on 28 October 2005 to consolidate the actions, so that they may proceed as one with consolidated pleadings. The application was dismissed by the Master, and the defendants have appealed.

3. I am not concerned with the merits of the two actions in these appeals, so I shall refrain from saying anything that may touch on the merits, particularly as the application for summary judgment in HCA No. 569 is to be heard before a judge in a month’s time.

4. In deciding whether to order consolidation of actions, the court has an unfettered discretion. The power is to be exercised in a flexible way with regard to the particular circumstances of the situation. The objective of such an order is to save time and costs. There is no hard and fast rule that just because the parties are identical and some common question of fact or law is involved in both actions, it would be expedient and proper to order consolidation.

5. In the particular circumstances of the present situation, I am not persuaded that it is proper or expedient to exercise my discretion to order consolidation.

6. I shall give an account of the relevant matters to explain why I agree with the Master.

7. HCA No. 301 was brought by the plaintiff against the three defendants on 18 February 2005. The claim arose out of a sale and purchase agreement made on 18 March 2004 (“the Agreement”) of shares in China Everbright Technology Limited (“the Company”). The plaintiff agreed to purchase from the 1st and 2nd defendants a large quantity of such shares at a consideration of $218 million odd. The 3rd defendant is the guarantor of the liability of the 1st and 2nd defendants under the Agreement. The sale and purchase was completed on 25 March 2004. The claim in this action is for breach of warranties under section 3 of Schedule 4 in the Agreement in that some of the amounts warranted by the defendants in the Agreement on various assets values of the Company and its subsidiaries were lower than the amounts certified by Ernst & Young, the appointed accountants, in the certificate issued in November 2004. The plaintiff claims $54 million odd and the difference between the consideration and the proper and fair market value of the shares. The plaintiff has not sought summary judgment in this action.

8. In the defence filed on 16 September 2005, the defences raised are as follows:

(1) one of general non-admission and denial of the plaintiff’s actual loss; and

(2) in any event based on the allegation that the plaintiff has failed to serve written notice of the claim within 60 days of various events pursuant to clause 8.4(a) of the Agreement.

9. A summons for direction was issued on 7 October 2005 and an order was made by Master Kwan on 5 January 2006 after she dismissed the summons for consolidation.

10. HCA No. 569 was brought by the plaintiff against the same defendants on 31 March 2005. The claim also arose out of the Agreement. The plaintiff’s claim is for breach of warranties under section 1 item 8 of Schedule 4 in the Agreement for non-disclosure. Prior to execution of the Agreement and as part of disclosures required, the plaintiff received the disclosed documents in which it was stated there were receivables from a Shenzhen entity called Tak Yuk of RMB 39 million odd. The defendants had failed to disclose to the plaintiff what was contained in a letter dated 26 April 2004 from the Company to Ernst & Young (“the Letter”), in which it was stated that Tak Yuk had encountered financial difficulty during the six months ended 31 December 2003, as a result no further settlement had been received nor any sales orders placed by it in the second half of 2003 and that Tak Yuk has been undergoing liquidation. The Letter ended by saying that the Company considered full provision should be made against the outstanding receivables from Tak Yuk. The plaintiff claims that the failure to disclose the above matters in the Letter constituted a breach of warranties and it...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT