Chan Hei and Another v. City Century Ltd and Another

HCMP 2712/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2712 OF 2015

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REASONS FOR DECISION

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1.By summons, dated 17 November 2015, the defendants applied for the following orders:

(1) The originating summons and the indorsement of claim annexed therein be struck out under Order 18, rule 19 of the Rules of High Court in disclosing no reasonable cause of action.

(2) Alternatively, the originating summons be struck out on the ground that the same is scandalous, frivolous or vexatious or an abuse of the process of the court.

(3) The undertaking given by the 1^st and 2^nd defendants on 30 October 2015 be discharged.

(4) An order of desist that the 1^st and 2^nd plaintiffs’ solicitors from issuing a writ of summons and an inter partes summons upon their counsel’s undertaking given to the court on 30 October 2015.

(5) That the costs of this action including this summons be to the 1^st and 2^nd defendants on an indemnity basis.

2.The summons was before me on 20 November 2015 for a 30 minute hearing and I made the following orders:

(1) There be no order as to the first order sought.

(2) The originating summons be struck out on the ground that the same is an abuse of the process of the court.

(3) The undertaking given by the 1^st and 2^nd defendants on 30 October 2015 be discharged.

(4) There be no order as to the fourth order sought.

(5) That the cost of this action including this summons be to the 1^st and 2^nd defendants on a party/party basis, to be taxed if not agreed.

3.I indicated I would give reasons, which may assist the court in future, as well as the parties.

4.The history of this matter is most unfortunate due to certain actions of the plaintiffs’ solicitors, which actions the plaintiff’s counsel, Mr Hon, described as “blunders”.

5.On 27 October 2015, the plaintiffs issued an ex parte originating summons together with an indorsement of claim seeking:

(1) A declaration that the plaintiffs have a right of way over certain land owned by the 1^st defendant.

(2) An injunction restraining the 1^st and 2^nd defendants whether by themselves or by their servants or agents from preventing or obstructing access by the plaintiffs, their servants or licensees to and through the right of way.

6.The originating summons was supported by affirmations.

7.The originating summons came before B Chu J on 30 October 2015.  The parties were represented by counsel.  At the hearing B Chu J queried why the plaintiffs had issued an ex parte originating summons. After a series of exchanges between counsel and the court, B Chu J made certain orders with regard to the filing of evidence, including giving the plaintiffs leave to file further evidence on or before 6 November 2015, having first noted the following:

(1) Upon the undertaking of the defendants to preserve the right of way in its present condition until further order.

(2) Upon the undertaking of the plaintiffs to issue the writ and inter partes summons for an interim injunction in substantively the same terms as in the originating summons issued on 27 October 2015 on or before 5 pm on Monday, 2 November 2015.

8.B Chu J also ordered that the earliest possible hearing date be fixed on or after 20 November 2015, with half day reserved.

9.On 2 November 2015, the plaintiffs filed a writ (HCA 2549/2015) but did not file an inter partes summons, contrary to their undertaking.

10.I was told by Mr Hon for the plaintiffs that, on 9 November 2015, the parties’ respective solicitors attended court to fix a date for the substantive hearing but failed to secure a date for the reason that the plaintiffs had not complied with B Chu J’s directions.

11.By letter dated 10 November 2015, the plaintiffs’ solicitors wrote to B Chu J requesting an extension of time in which to file an inter partes summons.  The reason given was that the filing clerk had inadvertently failed to follow the court’s directions.  The letter then went on to state:

“The reason was that the other side had issued a letter dated 2^nd November 2015 to our firm inviting us to attend the office of the Deputy Clerk … on 9^th November 2015 at 3 p.m. to fix a date for the resumed hearing. In this respect, our clerk intended to bring along with the said Inter Parte (sic) summons for the purpose of fixing a date … .”

12.On 14 November 2015, the plaintiffs’ solicitors served the Writ on the defendants’ solicitors (12 days after filing).  (This is a matter which must proceed with celerity but no explanation was given for not serving the Writ much earlier.)

13.On 16 November 2015, B Chu J extended time to file the inter partes summons , granting the plaintiffs leave to file it on or before 17 November 2015.  I asked Mr Hon whether a summons had been filed and was told that no inter partes summons had been filed.  Mr Hon could not explain why the inter partes summons was not filed in accordance with the leave granted but said that the plaintiffs’ solicitors had an appointment that afternoon to fix a hearing date and would bring an inter partes summons along with them to that appointment.

14.I find it disappointing that the plaintiffs’ solicitors, having failed to fulfill their undertaking to the court to file an inter partes summons on 2 November 2015, would then ignore the court’s leave, given by way of indulgence.

15.On 17 November 2015, the defendants filed their summons.

16.At the outset of the hearing, I indicated to Mr Chu, counsel for the defendants, that I would not make the first order sought because it was a matter which should be set down for argument.  Mr Chu accepted that that should be the appropriate course.

17.As for the application to strike out the originating summons for abuse of process, Mr Hon resisted the application, submitting that an originating summons was the appropriate procedure for applying for an injunction with the intention to file a later writ.

18.I disagreed with Mr Hon.  First, an originating summons is not appropriate where there are disputes of fact and there are disputes of fact in this case.  I referred Mr Hon to Order 5, rule 4 of the Rules of the High Court.  Second, the appropriate procedure for an urgent injunction is set out in Order 29, rule 1(3).  Third, the originating summons initiated substantive proceedings, the subsequent writ initiated another set of substantive proceedings based on the same facts and with an indorsement of claim in the same terms as that attached to the originating summons.  The two cannot stand together.  For these reasons, I struck out the originating summons for abuse of process.

19.When I indicated to Mr Chu that I would strike out the originating summons, he advised that he would not seek the first order.

20.As for the defendants’ undertaking, a party’s undertaking given until further order may be discharged if good grounds for doing so are shown (see, for example: Chanel Limited v F W Woolworth Co Limited (1981) 3 All ER 745 at p 751).

21.Mr Hon submitted that the defendants will not suffer any real or substantial prejudice if the undertaking is not discharged.  I disagree. I was shown a contract exhibited to Mr Kwok Chi Yau’s affirmation and Mr Chu told me that, pursuant to that contract, a new road has been built to replace the road over which the plaintiff claims the right of way and that the second phase of work, building a wall and slope works to improve the safety of the claimed right of way were on hold, I understand as a result of the undertaking.  Mr Kwok, in his affirmation, said that the claimed right of way is unsafe and exhibited evidence of past accidents.  Mr Hon did not dispute that a new road has been built but does not accept that it will be able to carry the plaintiff’s heavy vehicles. However, there is no evidence to support Mr Hon’s contention that the new road may not support the plaintiff’s heavy vehicles and Mr Chu told me that the contract specified a carrying capacity of 40 tonnes.

22.I am concerned about the question of safety and delay only exacerbates the situation.  Also, in my view, the defendants are suffering real prejudice; they have contracted for work to be done and they cannot get on with it.  When the defendants gave their undertaking the circumstances were that there would be an inter partes summons filed on 2 November 2015 and there were consequent directions for filing evidence and an early hearing.  Having been told by Mr Hon that there was still no inter partes summons filed, there was neither a hearing date nor any indication as to when this matter might be resolved.  In these circumstances, I consider that there are good grounds to discharge the defendant’ undertaking.

23.I declined to make the fourth order sought because a writ had already been filed.

24.The defendants asked for indemnity costs on the basis of the plaintiffs’ failure to proceed with the substantive action as set out above.  Although Mr Chu rightly condemns the plaintiffs’ failures, I consider that they relate to the substantive action commenced by the writ .  Although the defendants have been discharged from their undertaking because of the plaintiffs’ failures, their substantive application was to have the originating summons struck out and they have succeeded because the plaintiffs used a wrong procedure and I do not think that this error warrants an order for indemnity costs.

Mr Kevin Hon, instructed by George Chan & Co, for the 1^st and 2^nd plaintiffs

Mr George FC Chu, instructed by Leung Kin & Co, for the 1^st and 2^nd defendants