Guang Xin Enterprises Ltd. v. Kwan Wong Tan & Fong (A Firm)

HCA002788B/2001

HCA 2788/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2788 OF 2001

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Coram: Deputy High Court Judge R Tong, SC in Chambers

Date of Hearing: 18 June 2002

Date of Judgment: 18 June 2002

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J U D G M E N T

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1.On 21 May 2002 I struck out the statement of claim in this action and also ordered that the action be dismissed save and except as regards a cause of action relating to two companies. These transactions were referred to as the Wantong and Life Circle transactions in the proceedings. I also ordered that in so far as it was possible to do so, the Plaintiff ought to reformulate its claim in relation to transactions concerning those two companies within 21 days of my order.

2.Before me today is an application for an order to stay my order of 21 May 2002 until 21 days from the final determination of the appeal against my said order. The appeal has already been brought.

3.It would appear that the Plaintiff had not done anything within the 21-day period referred to in my order in reformulating their claim. Instead, they took out a summons to stay that part of my order pending appeal. Strictly speaking, the time limit for the filing of a further amended statement of claim had already expired. The question today is whether further time should be given to the Plaintiff.

4.Now, this is not a case where the appeal will be rendered nugatory if there is no stay. The only question seems to me is whether the Plaintiff should be forced to incur costs to prepare a new statement of claim on the only cause of action left after my order of 21 May 2002.

5.The relevant considerations are quite obvious. On the one hand, the Plaintiff will not be prejudiced in any way save as to costs in preparing a new statement of claim. One would have thought it would welcome the opportunity to set its own house in order as soon as possible while the points are still fresh in the minds of the legal team. On the other hand, the Plaintiff had already had more time than the law would allow. Time to institute a new action had already expired. The Plaintiff had been afforded numerous opportunities to amend, none of which was taken up by the Plaintiff so far. Should they be given more time? I think not. The Defendant is entitled to some finality as to how such a huge claim is to be reformulated against it. In particular, it would be wholly unfair to give the Plaintiff still further time to put forward a valid claim which it should have done so in the first place when the writ was issued.

6.There is another point. There may well be another application to strike out if the Plaintiff is still unable to plead a sufficiently good cause of action in the new amended statement of claim. On the facts, that is quite possible and I envisage that there will be a real argument as to whether or not the company was indeed defrauded of anything by the fictitious transactions relied on by the Plaintiff. If so, it may be that in terms of proper management of the court's resources, it would be better if any further appeal in relation to the new statement of claim should be heard together with the main appeal arising from my judgment of 21 May 2002.

7.I have come to the view that the Plaintiff should not be given more time. Any prejudice they may suffer in terms of costs can be compensated for by a proper order for costs by the Court of Appeal eventually. Mr Harris, I think very properly, accepted that if the appeal was allowed, then the further costs of preparing the statement of claim in the meantime should really form part of the costs of the appeal to be dealt with by the Court of Appeal at the same time.

8.For these reasons, I am of the view that the application made by the Plaintiff must be declined. Miss Mak asks for another 21 days from today. The position is the Plaintiff has already had more than 21 days from 21 May 2002. I would have thought that it would not really be too difficult to reformulate a statement of claim on facts which they obviously must know by now. In these circumstances, I think they should be given perhaps another 14 days. I shall therefore make an order that the action herein would be dismissed unless the Plaintiff do file an amended statement of claim within 14 days from today setting forth the remaining cause of action in the action. In so far as costs of this application is concerned, I shall now hear the parties.

Representation:

Miss P Mak of Messrs Deacons, for the Plaintiff

Mr J Harris, instructed by Messrs Linklaters, for the Defendant

Plaintiff's appeal against the 1st judgment and order (CACV263/2002) to Court of Appeal dimsssed and 2nd appeal by the Plaintiff (CACV292/2002) to Court of Appeal allowed. Please refer to CACV263/2002 dated 13 March 2003