Claimants v Fonterra Brands (China) Limited

SCTC15980/10; SCTC15981/10; SCTC15982/10; SCTC15983/10
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The claimants, residents of Mainland China, were parents and their children who suffered physical injuries from consuming contaminated dairy products. The claimants sought monetary compensation from the defendant, from whom they had purchased the contaminated products. The defendant is a 43% material shareholder of Sanlu Group, the manufacturer and distributor of the products. The claimants argued that the defendant breached the duty owed to its consumers when it failed to immediately notify the public upon learning from Sanlu Group that the products were contaminated. As a result, consumers continued to feed the products to their infants until the information was disclosed 40 days later.

The claimants sought an action against the defendant for failure to publicly disclose the contamination of the products.

The Court struck out the claims under forum non conveniens. The defendant was incorporated and registered in Hong Kong, but this was insufficient to make Hong Kong court the appropriate forum to hear the claims. The claims concerned problems that occurred in Mainland China, to Mainland residents, and therefore Hong Kong was “not the natural or appropriate forum or the forum having the most real and substantial and connection with the action.”

The court found there was a lack of evidence demonstrating the existence of a responsibility owed by the defendant to the consumers, citing that “a failure to act is only actionable in tort if there is a prior duty to safeguard the relevant interest of the claimants.” A manufacturer has a duty to warn consumers of a defect in the products sold, even if the defect is discovered after the sale of the goods has occurred. Applying this principle, the court found that the manufacturer of the goods in the action brought forth by the claimants was Sanlu Group, not the defendant.

The court held there was no evidence establishing that the three directors appointed by the defendant to Sanlu Group were involved in the daily operation of Sanlu Group or in control of its management or that they were personally responsible for the manufacture and distribution of any of the contaminated dairy products. There was no prior duty which obligated the defendant to safeguard in the interests of the claimants and therefore the defendant had no responsibility to the consumers.

The court held that there was no cause of action for the claims under Hong Kong law. The Court could not determine whether the defendant owed the claimants a duty of care under the laws of Mainland China.

 

Bodily integrity is an interest protected in tort. Protection against personal injury, indication of each individual’s interest in health and physical well-being, are of prime importance in the law of torts.” (pg.4)

A manufacturer aware of a dangerous feature in its product may be under a duty to warn users and this may apply where the dangerous defect is discovered subsequent to the sale of the product.” (pg.6)

In order to fix a director with personal liability it had to be shown that he was in breach of statutory duty or had assumed personal responsibility for the tort.” (pg.7)

In order to successfully sue for physical injuries from consuming contamination products, plantiffs must show that the defendant “authorized, directed or procured the manufacture and distribution of any contaminated [products and] had assumed any personal responsibility.” (pg.8)

 

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