Gobind Mohan and Another v. Hutchison International Ltd

HCA001047/1981

BETWEEN

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Coram: Hon. Clough, J.

Dates of Hearing: 12, 13, 14, 15, 16, & 17 December 1983

Date of Delivery of Judgment: 21 February 1984

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JUDGMENT

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1. The Defendant ("H.I.L.") in this action applies under the inherent jurisdiction of the court to have the action dismissed for want of prosecution by the Plaintiffs. I reserved judgment at the end of a hard fought hearing of five and a half days, partly out of deference to the full argument of Mr. Alexander Irvine for H.I.L. and Mr. John Beveridge for the Plaintiffs, and partly to enable me to consider carefully the additional evidence filed by both sides during the hearing. The Plaintiffs' evidence was not complete until the afternoon of the fifth day of the hearing and Mr. Irvine was unable to attend after the end of the fourth day.

2. By its Summons which was issued on the 10th October 1983 and amended on the 13th October 1983 H.I.L. bases its application on two independent grounds. The first ground is that the Plaintiffs have been guilty of prolonged or inordinate and inexcusable delay in prosecuting the action and further and in the alternative they have failed to comply with the order made by Master Perrior on the summons for directions in the action on the 7th January 1983. The second and alternative ground, which Mr. Irvine argued first, was that the Plaintiffs had been guilty of abuse of the process of the court in resolving not to prosecute the action expeditiously by reason of their commitments to unrelated litigation.

Background

3. The action is one of several which have followed upon the collapse of the Plaintiffs' family fortunes in 1975 as a result of the public flotation in 1973 of one of their companies namely Mohan's Property Investment Ltd. ("M.P.I.L")

4. The 2nd Plaintiff who is the 1st Plaintiff's father had originally founded a small tailoring business many years ago. The business evidently prospered and by 1972 there were several associated private family companies and the 1st Plaintiff was in effective control of them.

5. M.P.I.L. had been incorporated in 1970 and was chosen by the 1st Plaintiff from among the family companies for the public flotation when there was a boom in the Hong Kong stock market in late 1972 and 1973. Unhappily the flotation was caught by the fall in the market and was a disaster.

6. One of the events following and connected with the flotation of M.P.I.L. was the prosecution of the 1st Plaintiff (and others) in the District Court and his conviction there on the 26th May 1980 on 18 charges under various sections of the Theft Ordinance and the Companies Ordinance. On appeal his conviction on 6 of the charges was quashed and the effective sentence imposed upon him by the District Court was drastically reduced to 9 months concurrent on all the subsisting charges.

7. Another sequel to the disastrous public flotation of M.P.I.L. was an action (No. 4611 of 1978) ("the main action") begun by the Plaintiffs on the 20th December 1978 for damages and other relief against five defendants concerned in the flotation and its aftermath. They are the senior partner of the firm of solicitors who advised the Plaintiffs at the time of the flotation and the firm itself, a firm of accountants, the Hong Kong and Shanghai Banking Corporation ("the Hong Kong Bank") and its associated company Wardley Limited. The solicitors acting for the Hong Kong Bank in the main action also act for H.I.L. in this action. The two actions are in no way connected.

8. On the 3rd December 1981 Rhind J. dismissed an application by all the defendants in the main action for dismissal of that action for want of prosecution.

9. The present action is concerned with the circumstances under which the Plaintiffs came to sell 6, 040, 000 of their shares in M.P.I.L. to H.I.L. on 24th September 1976 and gave H.I.L. an option to purchase a further 10, 510, 000 of their shares in M.P.I.L. It is the scope of the transaction that is in issue between the parties.

10. At that time the 1st Plaintiff, who owed the Hong Kong Bank $16, 980, 000 in 1973, was being pressed by the Bank for repayment. Between them the Plaintiffs and various of their companies had borrowed $24, 529, 642 from M.P.I.L.The impropriety of these borrowings has recently been admitted by the Plaintiffs' solicitor in a letter to the Official Receiver dated the 30th June 1983 and they were understandably a source of anxiety to the lst Plaintiff in September 1976. That he had cause for anxiety was confirmed by his subsequent prosecution.

11. The Hong Kong Bank's anxieties at the time were evidently increased by the fact that they held 18.9 million shares in M.P.I.L. as security for the 1st Plaintiff's debts and they were concerned about the value of their security if M.P.I.L.'s assets continued to fall in value.  H.I.L.  likewise was very concerned about the future of M.P.I.L. It had previously acquired 7, 806, 000 shares in M.P.I.L. and, in the words of the 1st Plaintiff in his affirmation filed in this action on 13th May 1982 H.I.L. "........ stood to see the value of their shares in Mohan's Property and Investment, a substantial number of which had been purchased at par fade away".

12. The Hong Kong Bank and H.I.L. had communicated with each other regarding their mutual anxieties concerning the management and prospects of M.P.I.L. In a letter dated 17th September 1976 from Mr. Wyllie, the Chief Executive of H.I.L., to Mr. Turner, the Chief Accountant of the Hong Kong Bank, Mr. Wyllie had expressed the view that M.P.I.L. would "undoubtedly go broke in due course" if immediate action was not taken. By the same letter he sought a meeting to discuss the strategy of the Bank and H.I.L. at the Annual General Meeting of M.P.I.L. due to be held on 24th September 1983.

13. In September 1976 M.P.I.L. owned two subsidiary companies, namely Mohan's Retail Limited and Mohan's Securities Limited ("the subsidiary companies"). At the same time the companies owned by the Plaintiffs and their families were Mohan's Limited, Mohan's Marketing Limited, Mohan's International Trading Limited and Fenchurch Finance Limited ("the Mohan family companies").

The Plaintiffs' Claim

14. The action began on 17th February 1981 when the Plaintiffs issued a specially endorsed writ against Mr. Wyllie and H.I.L. who applied on the 8th June 1981 for an order, striking out the Statement of Claim. After a day's argument before Hooper J. on the application a consent order was made on the 18th May 1982 under which the original Statement of Claim was struck out. The order was expressed to contain two undertakings by the Plaintiffs. They gave an undertaking to serve a new Statement of Claim for breach of contract against H.I.L. only within 28 days. They also gave an undertaking to abandon or forego all claims against Mr. Wyllie and H.I.L. arising out of the facts as pleaded in the original Statement of Claim. The order gave H.I.L. liberty to apply to strike out the new Statement of Claim if so advised.

15. The original Statement of Claim seems to have been a thoroughly unsatisfactory pleading which met the fate it deserved. It included an allegation that when the lst Plaintiff declined to accept proposals put forward by Mr. Wyllie to deal with the problems of M.P.I.L. and of the Plaintiffs and the Mohan family companies Mr. Wyllie had informed the lst Plaintiff that he had to choose between giving up control of M.P.I.L. and going to prison. In addition to allegations of breach of contract the original Statement of Claim also included allegations of negligence, misrepresentation, commercial pressure, duress and undue influence giving rise to a claim against Mr.Wryllie and H.I.L. for damages exceeding $50 million dollars, for a declaration that they had wrongfully deprived the Plaintiffs of $16, 510, 000 M.P.I.L. shares and for an order for the return to the Plaintiffs of the shares and all dividends, scrips and rights issued since the respective dates of sale and purchase of the shares.

16. The subsisting claim of the Plaintiffs is now confined to alleged breach of contract. In paragraph 6 of their Amended Statement of Claim filed on 14th June 1982 they alleged an oral agreement made on the 24th September 1976 between the 1st Plaintiff on behalf of the Plaintiffs and Mr. Wyllie on behalf of H.I.L., the terms of which were as follows :-

17. The Plaintiffs pleaded that in consideration of the above H.I.L. undertook and agreed or alternatively gave collateral warranties that -

18. The Plaintiffs plead in paragraph 8 of the Amended Statement of Claim that they performed their part of the agreement by selling $6 million M.P.I.L. shares  to H.I.L., entering into a written option agreement in accordance with (b) above and resigning as directors of M.P.I.L. but that in breach of the terms of its agreement or collateral warranties H.I.L. -

19. On the basis of the alleged breaches of contract or collateral warranties by H.I.L. the Plaintiffs go on to plead that they and the Mohan family companies have suffered loss and damage and claim:-

20. H.I.L.'s version of the terms of the oral agreement made on the 24th September 1983 is pleaded in paragraph 6 of the Defence and Counterclaim served on the 2nd and filed on the 13th September 1982. Save as to the terms therein admitted H.I.L. denies the terms alleged by the plaintiffs.

21. H.I.L. admits that the immediate sale of 6, 040, 000 shares (not 6 million shares as pleaded in the Amended Statement of Claim) at 30 cents per share was agreed and that it was agreed that the proceeds of the sale ($1, 812, 000) were to be applied by the Plaintiffs "to reduce" the debts of the Plaintiffs and the Mohan family companies to M.P.I.L. and the subsidiary companies.

22. H.I.L. admits that it was agreed that the Plaintiffs were to execute an option agreement in favour of H.I.L. to purchase from the Plaintiffs a further 10, 510, 000 M.P.I.Lshares held by the Hong Kong Bank at the price of 25 cents per share and that the option was to be exercisable at anytime prior to the 30th September  1997 H.I.L.further pleads that upon the exercise of the option the Plaintiffs were to pay 5 cents per share to the Hong Kong Bank in respect of the 10, 510, 000 shares in order to secure their release to H.I.L.

23. H.I.L. admits that it was agreed that the Plaintiffs were to resign as directors of M.P.I.L. on or before the pending Annual General Meeting but pleads further that it was also agreed that 3 nominees of H.I.L. were to be nominated to the board of M.P.I.L. at or before the pending Annual General Meeting.

24. As appears from H.I.L.'s version of the oral agreement made on the 24th September 1976 it admits some of the terms alleged by the Plaintiffs but alleges the different or additional terms mentioned above and denies the terms alleged by the Plaintiffs as conditions or collateral warranties which are referred to at (e) and (f) above. It admits however that it did seek repayment of the debts of some of the Mohan family companies to M.P.I.L. and the subsidiary companies and that 3 of the Mohan family companies were ordered to be wound up by the court on the 18th March 1977.

25. H.I.L. also raises an alternative defence in law to the effect that the agreement pleaded by the Plaintiffs in the Amended Statement of Claim is illegal and void or unenforceable as infringing s.48 of the Companies Ordinance (Cap.32) or being contrary to public policy.

H.I.L.'s Set-off and Counterclaim

26. The substance of H.I.L.'s Counterclaim as pleaded in the Defence and Counterclaim is that on the 29th September 1977 H.I.L. exercised its option to purchase the 10, 510, 000 M.P.I.L.shares at 25 cents per share but that in breach of the option agreement the Plaintiffs failed to pay 5 cents per share to_the Hong Kong Bank to secure the release of the share to H.I.L.. H.I.L. claims that in or about January 1978 H.I.L. purchased 18, 846, 000 M.P.I.L.shares (including the shares which were the subject of the option agreement) from the Hong Kong Bank at a price of 30 cents per share. Accordingly H.I.L. counterclaim for $525, 500 being the extra cost at 5 cents per share incurred by it in respect of the purchase of the 10, 510, 000 M.P.I.L.shares and it also claims to be entitled to set off this amount against the Plaintiffs' claims.

27. In their Reply and Defence to Counterclaim filed on the 26th November 1982 the Plaintiffs pleaded that it was a condition precedent to the performance by the Plaintiffs of the option agreement that H.I.L. should perform its obligations referred to at (e) and (f) above and that by reason of the alleged breaches of those obligations pleaded in the Amended Statement of Claim H.I.L. has repudiated the option agreement and is precluded from enforcing it. It is further pleaded that H.I.L. is estopped from relying on the option agreement by reason of the Defendants having entered into it in reliance upon representations made by Mr. Wyllie on behalf of H.I.L. to the effect that H.I.L. was capable of carrying out the actions referred to at (e) and (f) above and intended to do so.

Limitation

28. It was common ground that the limitation period of 6 years under section 4 of the Limitation Ordinance (Cap.347) had expired before the making of H.I.L.'s application for dismissal of the action on the 10th October 1983. Mr. Beveridge certainly advanced no argument against Mr. Irvine's contention in that effect. The alleged breach of the agreement by H.I.L. calling in the debts of the Plaintiffs and the Mohan family companies to M.P.I.L. and the subsidiary companies and by H.I.L. taking steps to wind up the relevant family companies occurred in January or February 1977.

29. The precise date of the alleged failure by H.I.L. to cause the assets of Mr. Wyllie's two companies to be "injected into M.P.I.L." is difficult to specify. Mr. Irvine relied on the passage in the lst Plaintiff's affirmation filed on the 13th May 1982 in this action in which the 1st Plaintiff affirmed that on the 23rd September 1976 Mr. Wyllie said on at least two occasions that if agreement was reached the debts due from the 1st Plaintiff and the Mohan private companies to M.P.I.L. would be written off within a few months and that having written off those liabilities Mr. Wyllie would "inject" his two companies. In my judgment, bearing in mind the manifest urgency of M.P.I.L.'s need on the 24th September 1976 for assets which is reflected in the 1st Plaintiff's evidence relied on by Mr. Irvine, Mr. Irvine was right when he submitted that the alleged breach of the obligation to make the "injection" of assets must have occurred by about February 1977 and certainly well before 24th September 1977.

Chronology of the Action and Counterclaim

The relevant steps in the action occurred as follows:-

Delay attributable to Plaintiffs upon which H.I.L. bases its application

30. Mr. Irvine for H.I.L. relies for both limbs of his application on the delay on the part of the Plaintiffs subsequent to the order of Master Perrior made on the 7th January 1983 on the Summons for Directors. Under that order the Plaintiffs were directed to -

Under the same order H.I.L. was directed to serve the Plaintiffs with a list of documents within 14 days after the receipt of the above mentioned particulars and inspection was ordered within 7 days of the service of the lists.

31. As far as H.I.L. was concerned the first action taken by the Plaintiffs to comply with Master Perrior's order was a letter dated the 28th July 1983 from their solicitors to H.I.L.'s solicitors informing them that counsel had promised that the further and better particulars would be available to the Plaintiffs' solicitors at some time during the long vacation and they would be filed as soon as they were at hand. H.I.L.'s solicitors were asked if they objected to the particulars being filed during the long vacation. By the same letter the Plaintiffs' solicitors stated that their list of documents had been completed and they asked H.I.L.'s solicitors to agree to filing them out of time. After taking instructions H.I.L.'s solicitors replied on the 5th August 1983 that their clients had instructed them that they were not prepared to consent to the filing of the outstanding particulars or list of documents out of time.

32. On the 26th September 1983 the Plaintiffs' solicitors issued a summons for leave to file their list of documents out of time and on the 28th September 1983 they sent a copy of their list to H.I.L.'s solicitors.

33. No summons was taken out for leave to file the two sets of particulars out of time. The Plaintiffs' solicitor Mr. Robertson exhibited to his affidavit filed in this action on the 10th November 1983 copies of the relevant two sets of particulars bearing counsel's name and dated the 15th October 1983.

34. Accordingly, Mr. Irvine contends that the relevant periods for delay are as follows:-

Intentional and Contumelious Default

35. Mr. Irvine argued the second limb of his application first. He relied on the dictum of Lord Diplock in Birkett v. James (1978) A.C. 297 at p.318E where he states that one of the only 2 situations where the court may exercise its inherent jurisdiction to dismiss an action for want of prosecution is where it is satisfied "....... that the default has been intentional and contumelious, e.g. disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court;".

36. H.I.L. contends by its Amended Summons that this action should be dismissed by reason of the Plaintiffs' abuse of the process of the court in resolving not to prosecute the action expeditiously by reason of their commitments in unrelated litigation. Mr. Irvine argued that after a late start of the action which imposed a fundamental duty to get on there had been intentional delay on the Plaintiffs' part. They had decided their own priority for their several actions. This action was put down the line, he contended, so that they could press on with the main action where $51 million was claimed by the Plaintiffs and their prospects were believed to be greater. This amounted to an abuse of the process of the court.

37. In addition to the deliberate decision of the Plaintiffs to defer prosecuting this action H.I.L. relied on the contention that the Plaintiffs' solicitor Mr. Robertson had obtained the order under the Summons for Directions from Master Perrior on the 7th January 1983 at a time when he had no intention of complying with the time scale it imposed. The subsequent delay was contended to be attributable to the implementation of the decision to "stack" the Plaintiffs' actions. It was contended that such conduct was an abuse of the process of the court.

38. The affidavit evidence of Mr. Pearson, H.I.L.'s solicitor, on this aspect of the case was that Mr. Robertson had told him on or about the 21st December 1982 when discussing this action that the Plaintiffs' intention was not to pursue their claim to trial immediately but to deal first with the Plaintiffs' claim in the main action. Mr. Pearson, who also acts for the Hong Kong Bank in the main action, deposed that Mr. Robertson had told him that the Plaintiffs considered "the main action" to be the main action which they wished to deal with before other actions with which the Plaintiffs were involved. According to Mr. Pearson his view was that conduct of litigation in this manner by the Plaintiffs was an abuse of the process of the court but he had always adopted an attitude of "no comment" when told of the manner in which the Plaintiffs intended to conduct this action.

39. Mr. Robertson's affidavit evidence in answer to Mr. Pearson was to the following effect. He deposed that discovery had been completed in the main action in November 1982. In December 1982 counsel was settling proposed amendments to the Statement of Claim. It was envisaged that the amendments would be complete by the end of December and provided no strong objection was taken to the proposed amendments by the defendants in the main action it was hoped that that action could be heard between June and November 1983.

40. According to Mr. Robertson he thought in December 1982 that the main action would be set down for trial in the near future on the assumption that the proposed amendments did not result in undue delay. He deposed that the present action had still not reached the stage of the hearing of the Summons for Directions but he "........ anticipated discovery of documents being completed by March/April 1983 with everything ready for setting down in June 1983". Based solely on the differing states of progress of the two main actions Mr. Robertson deposed that he envisaged then that the main action would be tried in the summer or autumn of 1983 and that the trial of this action would be towards the end of 1983.

41. As to Mr. Pearson's evidence regarding their conversations about the timing of the main action and this action, Mr. Robertson did not deny Mr. Pearson's allegations. He explained that he had had dealings with Mr. Pearson in both actions. He appeared to be the solicitor in his firm who was solely responsible for the two actions and Mr. Robertson assumed in December 1982 that Mr. Pearson would wish to be able to supervise his clients' defence in both actions. It therefore appeared to Mr. Robertson, he deposed, that a time-table which envisaged the more advanced action being heard first with the other shortly thereafter would be in the interests of Mr. Pearson's clients.

42. Mr. Robertson's further evidence was that in the event the amendments of the Statement of Claim in the main action were resisted strenuously by the defendants in that action and that another solicitor with his firm had the conduct of that action between January and July 1983.

43. Mr. Robertson went on in his first affidavit made on the 10th November 1983 to give an account of the action he had taken toward complying with Master Perrior's order made on the 7th January 1983. He deposed that in January 1983 the Plaintiffs had given him a number of documents but he was aware of other documents that should have been included in the Plaintiffs' list. Some of these documents were in the possession of Mr. Chulani the former secretary of M.P.I.L. and of the Mohan family companies and others were in the possession of Mr. Raymonde Sacklyn, editor of "Target".

44. As regards the documents in Mr. Chulani's possession, Mr. Robertson deposed that he asked Mr. Chulani in November 1982 to look for discoverable documents. Between December 1982 and the middle of June 1983 Mr. Chulani was out of Hong Kong on business for 4 months but in March 1983, Mr. Robertson deposed, Mr. Chulani had delivered to him two files of original documents of M.P.I.L.relating to 1975 and 1976. He added that the files in question contained minutes and notes of meetings which had taken place on the 24th September 1976. They appeared to Mr. Robertson to be important so he asked Mr. Chulani to check if there were any further documents in his office. None had been found but according to Mr. Robertson this may be accounted for by the fact that Mr. Chulani had been out of Hong Kong almost continuously from the middle of April 1983.

45. As to Mr. Sacklyn, Mr. Robertson's evidence was to the following effect. In November 1982 the 1st Plaintiff had informed Mr. Robertson that Mr. Sacklyn had indicated that he had correspondence passing between him and Mr. Wyllie which might have a direct bearing on the matters in dispute in this action. Mr. Sacklyn had also told the 1st Plaintiff that he had other relevant documents which he was prepared to hand over to the Plaintiffs.

46. As Mr. Sacklyn was away on holiday in December 1982 Mr. Robertson did not have the opportunity to take the matter up with him until late January 1983 when he told Mr. Robertson that he possessed and would be prepared to hand over a letter written by him to Mr. Wyllie which Mr. Sacklyn said would be of importance in clarifying the matters in dispute. When asked for a copy of this letter Mr. Sacklyn was unable to provide it but he did provide copies of "Target" and telexes issued "by the Defendants" containing press releases.

47. When by June 1983 Mr. Chulani and Mr. Sacklyn had been unable to produce any further documents Mr. Robertson prepared the Plaintiffs' list of documents, a copy of which he exhibited to his affidavit made on the 10th November 1983, and sent his firm's letter dated the 28th July 1983 to H.I.L.'s solicitors informing them that the list had been completed.

48. Mr. Robertson concluded his affidavit of the 10th November 1983 with an account of the action he had taken to comply with the Master's order for further and better particulars of the Amended Statement of Claim and of the Reply and Defence to Counterclaim. He refers only to difficulties he encountered in connection with the particulars required of the loss and damage claimed to have been suffered by each of the Plaintiffs under paragraph 9 of the Amended Statement of Claim with particular reference to the Plaintiffs' claim to entitlement to indemnity in respect of all debts owed on the 24th September 1983 "inter alia" by the Mohan family companies to M.P.I.L. and the subsidiary companies.

49. I do not dwell on the evidence of Mr. Robertson that follows because Mr. Beveridge conceded at the hearing of the application that the Plaintiffs' claim for indemnity in respect of the debts in question was not sustainable as pleaded. Suffice it to say that Mr. Robertson gives an account of his investigations into actions brought by the Official Receiver as liquidator of Mohan's Limited, one of the Mohan family companies, against the Hong Kong Bank and the Chase Manhattan Bank and also into the validity or otherwise of a proof of debt for $24, 500, 000 filed by Mohan's Retails Ltd., one of the subsidiary companies, in the liquidation of Mohan's Limited.

50. He concludes his affidavit with the observation that this aspect of the quantum of damages in the present action being incapable of resolution in the near future counsel had settled the further and better particulars in the present action and he exhibits copies of the particulars. The further and better particulars of the sum of $24, 529, 642 alleged in paragraph 5(a) of the Amended Statement of Claim to have been owing in September 1976 by the Plaintiffs and the Mohan family companies to M.P.I.L. and the subsidiary companies are stated to be that the correct total amount of the indebtedness was $21, 560, 130 and that amount is stated to be the total of the debts specified in the particulars owing at the material time by each of the Mohan family companies. None of the indebtedness is attributed to either of the Plaintiffs. The particulars actually given in purported compliance with the order for full particulars under paragraph 9 of the Amended Statement of Claim (referred to as paragraph 11 in the Particulars) of the loss and damage suffered by each of the Plaintiffs are as follows:-

"Each of the Plaintiffs resigned from the board of M.P.I.L. and thereby lost control of the day to day management of the company. The liquidation of the Mohan Family Companies led to the collapse of the business interest of each of the Plaintiffs. As a result the Plaintiffs lost their livelihood, income and means of support."

51. The difficulties confronting Mr. Robertson in attempting to quantify the claim for damages in this action was referred to by him in his letter dated the 14th July 1983 to Mr. Bush of the Official Receiver's Office. In the same letter, a copy of which was exhibited to an affidavit of Mr. Pearson sworn on the 18th November 1983, Mr. Robertson refers in one paragraph to this action and to another action (No.5719 of 1982 against the Hong Kong Bank) which he describes as actions taken by "Mr. Mohan" as a result of the liquidation of the Mohan's Group of Companies.

52. In the next paragraph he states that the main action is the action "...... where we consider Obi Mohan has the greatest prospects of success......" and he adds that Obi Mohan has a claim for $51.5 million in that action. After referring to Action No.1048 of 1981 as an action in which Obi Mohan claims $12 million against the Hong Kong Bank relating to the sale of Obi Mohan's home, Mr. Robertson states -

"We anticipate that H.C. Action No.4611 of 1978 should go to trial in the first half of 1984. H.C. Action No.1048 of 1981 will not be heard for some time thereafter as the intention is to take one action at a time."

53. In his affidavit filed on the 10th December 1983 Mr. Robertson deals with his letter dated the 14th July 1983 to Mr. Bush and deposes that "........ any idea that the present action should be conducted in conjunction with H.C. Action No.4611 of 1978 was entirely abandoned in January 1983 when it became clear that the amendments to the Statement of Claim in that action were going to be resisted strenuously by a number of the Defendants in that action with consequent delays".

54. He also explains that H.C. Action No.1048 of 1981 has nothing to do with the present action. He emphasises that in his letter dated the 14th July 1983 he dealt intentionally in the penultimate paragraph with the main action and H.C. Action No.1048 of 1981 and that the statement at the end of the paragraph (including the reference to the intention to take one action at a time) "was made because there are questions as to what amount of damages may be recoverable in H.C. Action No.1048 of 1981 and whether therefore H.C. Action No.1048 of 1981 should be pursued further when it may be detrimental to the Plaintiffs' ability to pursue H.C. Action No.4611 of 1978."

55. Mr. Robertson concludes his evidence in this affidavit by deposing that he has ascertained from the Clerk of Court that, if the present application had not been made and discovery had been completed by the end of November 1983, it would have been possible for this action to be tried in February 1984.

56. Mr. Beveridge for the Plaintiffs contended, rightly in my judgment, that the court should not in an interlocutory application make a finding of fact contrary to Mr. Robertson's affidavit evidence or at the very least there should be oral evidence and cross-examination of Mr. Robertson before any adverse finding of fact were made contrary to his evidence.

57. Mr. Irvine submitted that in his evidence explaining his letter dated the 14th July 1983 written to Mr. Bush, Mr. Robertson had used the language of evasion when he deposed that "any idea that the present action should be conducted in conjunction with" the main action had been entirely abandoned in January 1983 when it became clear that delays were occurring in the main action. The letter in question, referring to the intention of the Plaintiffs "to take one action at a time" was, Mr. Irvine contended, indicative that the decision to "stack" the Plaintiffs' actions was alive and well on the 14th July 1983 and that the Plaintiffs' intention continued to be to bring on the main action for trial before this action.

58. Mr. Irvine further contended that if Mr. Robertson's evidence was to be accepted as stating and meaning that the Plaintiffs had decided to abandon their previous decision to bring the main action for trial first, then it did not stand with Mr. Robertson's failure to tell Mr. Pearson of the change of time-table or with the delay which occurred in 1983. It also beggared belief, Mr. Irvine contended, that Mr. Robertson did not give evidence in his first affidavit of the abandonment in January 1983 of the previous decision to bring on the main action first. Instead there had been merely confession and avoidance by Mr. Robertson in his first affidavit followed by evasive language in his second affidavit when dealing with his letter dated the 14th July 1983 addressed to Mr. Bush.

59. For my part I am not prepared to reject the affidavit evidence of Mr. Robertson regarding the abandonment of the idea of conducting this action "in conjunction with" the main action. No application was made to cross-examine Mr. Robertson. In the absence of cross-examination or of evidence demonstrably disproving Mr. Robertson's evidence I conclude that it is to be accepted as true on this point on the balance of probabilities and that, although he expressed himself in language that was far from explicit and would be regarded as evasive for purposes of pleading, the only fair and reasonable interpretation of his evidence is that in January 1983 the Plaintiffs or the Plaintiffs by their solicitors abandoned the earlier decision to have the main action tried before this action.

60. However, as Mr. Irvine's forceful argument demonstrated, that is not the end of the matter. Apart from the uncontroverted evidence of Mr. Pearson of his conversations with Mr. Robertson regarding the decision of the Plaintiffs to bring on the main action for trial before this action, all the evidence as to the reasons for the delay in 1983 is understandably that of Mr. Robertson. Accepting his evidence as it stands it clearly establishes, in conjunction with the relevant documents and undisputed data, the following facts:-

61. There is no express evidence by Mr. Robertson that the deferred time-table he had "anticipated" in December 1982 was abandoned in January 1983 when the Plaintiffs abandoned their earlier decision to bring on this action after the main action. However Mr. Robertson had deposed at the end of paragraph 6 of his first affidavit dealing with the time-table for this action and the phasing of this action and the main action that his view was based solely on the differing states of progress of the two actions. Moreover he has never admitted that the deferred time-table for this action was retained after January 1983 and he has given his reasons for the delay by explaining what he did to comply with the order and the difficulties he encountered.

62. Doing the best I can with the enigmatic evidence of Mr. Robertson in the absence of cross-examination and bearing in mind that the overall onus of proving intentional and contumelious default is on H.I.L., I give the Plaintiffs the benefit of a very real doubt and conclude that on the balance of probabilities the deferred time-table for this action was abandoned in January 1983 and that thereafter there was no delay attributable to an intention on the part of the Plaintiffs to "stack" actions or to deliberately adopt a deferred time-table which intention had been concealed from the Master on the 7th January 1983.

63. On the basis of the above findings of fact I consider that the conduct of the Plaintiffs and their solicitors in applying on the Summons for Directions for a time-table for this action which was grossly incompatible with the actual time-table the Plaintiffs had decided upon was a flagrant misuse of the process of the court of the degrees of gravity contemplated by Lord Diplock in Allen v. McAlpine (1968) 2 Q.B. 229 (C.A.) at p.259 and in Hobbs v. Marlowe (1978) A.C. 16 at p.40, and by Megarry V.C. in Joyce v. Joyce (1978) 1 W.L.R. 1170 at p.1176D as amounting to abuse of the process of the court. In my judgment there does not have to be such an extreme form of misuse of the process of the court as occurred in Wallersteiner v. Moir (1974) 1 W.L.R. 991 (C.A.) before misuse of the process can be described by the more emotive term abuse of the process.

64. The only authority available to me by the industry of counsel where a court has considered the nature of abuse of the process in the present context is the unreported decision on the 15th November 1983 of the English Court of Appeal in Reed v. Reed.

65. In holding that there has been abuse of the process in the present case I adopt and apply the test which Fox L.J. applied in Reed v. Reed (supra) at p.6 of the transcript of that case where he observed that "contumelious" involved "a substantial degree of misconduct amounting to a contemptuous disregard for the court's process, though it might not be a contempt of court in the technical sense".In my judgment the conduct of the Plaintiffs by their solicitors on the 7th January 1983 falls squarely into this category and I reject Mr. Beveridge's argument that a subjective test should be applied because, as Fox L.J. observed, contumelious conduct is penalised in order to maintain the authority of the court

66. Whilst I conclude that there was abuse of the process of the court by the Plaintiffs by their solicitors on the 7th January 1983 1 am concerned here with the inherent jurisdiction of the court to dismiss an action for want of prosecution and that necessarily involves delay. Mr. Irvine submitted that the relevant chronology showed that there was abuse followed by some delay and that was enough.

67. I am unable to accept that argument. In my judgment the abuse of the process of the court constituting intentional and contumelious default referred to by Lord Diplock in Birkett v. James (supra) necessarily involves a real measure of delay attributable to the abuse. An example is the abuse recognised by Lord Diplock in Allen v. McAlpine (supra) where the parties' solicitors make a collusive arrangement to let the action go to sleep.

68. It seems clear from p.6 of the transcript of the Court of Appeal in Reed v. Reed (supra) that the basis of the argument of the applicant was that there had been substantialintentional delay and that under the circumstances it was contumelious. If, in the present case, I had been satisfied on the balance of probabilities that after obtaining the order of the Master on the 7th January 1983 the delay which occurred was attributable to the Plaintiffs having persisted in implementing a deliberate plan to ignore the order and keep to their own plan to "stack" actions and defer the setting down of this action, I would have found that the conduct of the Plaintiffs amounted to intentional and contumelious default justifying dismissal of the action for want of prosecution.

69. However, on the facts established by H.I.L., the amount of delay attributable to the Plaintiffs' abuse of the process is undefined but it must be negligible. The return date for the Plaintiffs' summons to amend their pleadings in the main action was the 21st January 1983. By then they must have known that the main action had lost its momentum and it was this knowledge which Mr. Robertson deposed resulted in January in the abandonment of the Plaintiffs' previous decision to "stack" the action. By the 21st January 1983 discovery was due from the Plaintiffs under the Master's order but the time stipulated for particulars and for setting down had not expired.

70. Any delay attributable to the abuse of the process by the Plaintiff and not to the reasons given by Mr. Robertson in his evidence must therefore have been minimal and, in my judgment, insufficient to justify the dismissal of this action on the grounds of intentional and contumelious default. Accordingly I do not consider here the submissions made on both sides regarding the relevance or otherwise of the alleged weakness of the Plaintiffs" case.

Prejudicial Delay

71. The second limb of H.I.L.'s application under this heading is based on the inherent jurisdiction of the court to dismiss an action for want of prosecution where it is satisfied, in the words of Lord Diplock in Birkett v. James (supra) at p.318 F-G-

"(a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants either as between themselves and the plaintiff or between each other or between them and a third party."

(a)    Inordinate Delay

72. The onus is on H.I.L. to establish inordinate delay. Birkett v. James (1978) A.C. 297 (H.L.) lays down that to justify dismissal for want of prosecution the delay relied upon must be post-writ delay.

73. However a late start makes it more incumbent upon the plaintiff to proceed with due speed and when considering whether post-writ delay is inordinate and inexcusable pre-writ delay should be taken into consideration because a pace that might have been excusable if the action had begun sooner may be inexcusable in the light of pre-writ delay: see Birkett v. James (supra) per Lord Diplock at p.322 G-H and per Lord Salmon at p. 331 B-C. As Lord Denning M.R. observed at p.7 of the transcript of the unreported case of The President of India and Union of India v. John Shaw & Sons (Salford) Limited decided by the English Court of Appeal on the 25th October 1977 -

"Even a few weeks delay may be inordinate and inexcusable when a long time has elapsed before issuing the writ."

Previously he observed in Rowe v. Tregaskes (1968) 1 W.L.R. 1475 at p.1477 that -

"The delay in the first two or three years is often the most prejudicial of all."

74. As Lord Salmon observed in Allen v. McAlpine (supra) at p.268 there is no tariff for inordinate delay. It all depends on the facts of each particular case but inordinate delay should not be too difficult to recognise when it occurs.

75. In the present case the writ was not issued until the 17th February 1981 some 3?to 4 years after the cause of action arose, the original Statement of Claim was struck out by consent on the 18th May 1982 and that the action was not effectively on its feet until the Amended Statement of Claim was filed on the 14th June 1982 some 15 months after the issue of the writ and nearly 6 years after the oral agreement of the 24th September 1976.

76. The delay of which H.I.L. complains was effectively 6 months in the case of discovery. It was 8 months in the case of the particulars if the line is drawn on the 10th October 1983 when the summons for dismissal of the action was issued by H.I.L. The action has never been set down but I accept Mr. Beveridge's submission that the default in relation to the setting down is really attributable to the non-compliance with the other requirements of Master Perrior's order.

77. In my judgment the above mentioned delay considered in the light of the late start alone is inordinate. It is particularly so where, as here, an oral agreement is relied on and where serious allegations are going to surface at the trial. The allegations of pressure, duress, misrepresentation and undue influence no longer appear in the Plaintiffs' pleading but Mr. Irvine submitted and Mr. Beveridge did not deny that the allegations had only gone in the sense that they were no longer relied upon in support of any cause of action.

78. The affirmation of the 1st Plaintiff filed on the 13th May 1982 in support of the original Statement of Claim gives his version of the relevant events and speaks for itself. It includes the allegation that on the 24th September 1976 Mr. Wyllie told him he should trust Mr. Wyllie and asked him whether he preferred to retain control of M.P.I.L. or to go to prison. As it stands now the claim of the Plaintiffs is that H.I.L. has broken its word after relieving the Plaintiffs of control of M.P.I.L. when they were in difficulties.

79. These are serious allegations of bad faith and I accept Mr. Irvine's submission that, by analogy with allegations of fraud, it is most important that delay in prosecuting the action should be avoided: c.f. Yiannides v. Radley Gowns Ltd. (1975) 119 S.J. 711 (C.A.) and the dictum of Lord Diplock in Allen v. McAlpine (supra) at p.265A.

80. A matter which further emphasises the inordinate character of the delay which occurred in 1983 is the fact that the original Statement of Claim which contained scandalous allegations against H.I.L. was struck out by consent on the 18th May 1982 and it was not until the 14th June 1982 that the action got effectively on to its feet when the Amended Statement of Claim was filed. Under the circumstances the delay in 1983 is, in my judgment, readily recognisable as inordinate.

81. In opening Mr. Irvine had made it clear that H.I.L. relied only on the post-writ delay of the Plaintiffs in 1983 as being inordinate and inexcusable and that he regarded the delay which occurred between the issue of the writ on the 17th February 1981 and the striking out of the original Statement of Claim on the 18th May 1982 as neutral.

82. Mr. Beveridge argued that whilst if there were a special duty of expedition the period of delay after January 1983 would have been inordinate there were three factors which prevented the delay from being inordinate. The three factors were - (i) H.I.L.'s own delay of 15 months in relation to the initial striking out application; (ii) the implied agreement of Mr. Pearson to be inferred from his silence when told by Mr. Robertson on the 21st December 1982 of the Plaintiffs' decision to bring the main action on for trial before this action; and (iii) the fact that H.I.L. had allowed its Counterclaim to go to sleep throughout the only real period of delay.

83. As to (i) above Mr. Beveridge in opening his case on the 13th December 1983 in answer to Mr. Irvine's submissions asserted that one of the astonishing things was that one year's delay occurred after the issue of the writ because H.I.L. wanted counsel of its own choice. By consent he put in a letter dated the 6th November 1981 sent by H.I.L.'s solicitors to the Clerk of Court with a copy to the Plaintiffs' solicitors. In that letter Mr. Pearson requested a hearing of the striking out application to be fixed for the 17th May 1982. He informed the Clerk of Court that in September an unsuccessful attempt was made to fix a hearing date for the application in November at a date convenient to all the parties and went on to say that the first mutually convenient and available date for all the parties was from the 17th May 1982 onwards. He also indicated that the main difficulty in agreeing an earlier date was the unavailability of H.I.L.'s leading counsel Mr. Irvine.

84. On the 15th December 1983 in the forenoon Mr. Beveridge cited the dictum of Lord Diplock in Allen v. McAlpine (supra) at p.260 dealing with the relevance of the defendant's conduct and the consequences of his own unnecessary delay. He then went onto submit. that H.I.L. had set its own pace in the striking out application and that there had been a gross delay of 15 months. He added that, on instructions, he could inform the court that there were a number of letters in which the convenience of Mr. Irvine was given as the reason for the delay. The only impression given, he contended, was that H.I.L. was not worried about delay.

85. This was too much for those instructing H.I.L. and immediately after the mid day adjournment Mr. Irvine put in evidence on affidavit sworn by Mr. Pearson on the same day in which he gave his version of the relevant facts and submitted that it was a travesty of the facts to suggest that the delay between the issue of the Summons to strike out on the 8th June 1981 and the hearing on the 17th May 1982 was H.I.L.'s responsibility.

86. Mr. Beveridge did not oppose the admission of Mr. Pearson's affidavit on terms that he was to have the right to reply with evidence from Mr. Robertson. The latter eventually made an affidavit some parts of which were admitted in evidence on the 16th December 1983 after Mr. Irvine had been obliged to withdraw from the conduct of H.I.L.'s case by reason of other commitments.

87. In order to minimise prolixity in an already regrettably lengthy judgment I confine myself to observing that, in my judgment, Mr. Pearson's affidavit destroys the basis for the factual assertion of Mr. Beveridge that the delay in bringing on the striking out application was solely due to H.I.L.'s wish to employ leading counsel of their choice and that H.I.L. was not worried about delay. The telex dated the 16th July 1981 from Mr. Robertson provides the clearest evidence that Mr. Pearson was then pressing for a hearing as quickly as possible and Mr. Robertson was reminding him of the agreement between solicitors that the matter was to be tried before a judge on a date to be fixed in consultation with counsel's diaries and pointing out the difficulties he was experiencing in meeting a date in July because of problems with the leading counsel he contemplated instructing.

88. Mr. Robertson deposes that in September 1981 after the attempts to fix a date for hearing in July had failed he was not able to negotiate effectually with Mr. Pearson for a hearing date because he was having difficulties in getting legal aid for the Plaintiffs. He also deposed that he therefore never actually agreed the date after April 1982 for the hearing when he expressed a preference for a date after the 10th April 1982 and for the same reason he did not take any action when he received Mr. Pearson's letters dated the 3rd and 16th October and 5th November 1981 respectively.

89. According to Mr. Robertson the matter was discussed with him as alleged in Mr. Pearson's letter dated the 16th October 1981 to the Clerk of Court but it was "only true on the broadest basis to say that the date of the 17th May or a mutually convenient date." He had indicated a preference for a date after the 12th April if that was the option because he could not be ready for a date in November.

90. Bearing in mind that Mr. Robertson's evidence is that he had a full legal aid certificate by the 24th November 1981 and yet it appears that he took no action to have the date of the 17th May 1982 vacated and an earlier date substituted, I accept the submissions of Mr. Tong for H.I.L. that the conduct of both Mr. Pearson and Mr. Robertson is explicable by reference to the initial agreement that the hearing of the striking out application should be adjourned to a date to be fixed in consultation with counsel's diaries and that considering the evidence of both solicitors in the round the fixing of the 17th May 1982 as the hearing date was effected by Mr. Pearson but after consulting with Mr. Robertson, obtaining his preference of date and thereafter keeping him informed of all his communications with the Clerk of Court.

91. Having regard to the initial agreement between the solicitors for the parties, to the difficulties encountered in getting mutually convenient dates, and to the success of the application itself I conclude that the delay in bringing the Summons for striking out to a hearing was not in all the circumstances unreasonable or unnecessary and was not attributable to the default of either H.I.L. or the Plaintiffs or their solicitors but is a neutral factor.

92. In so far as the Plaintiffs rely on the delay of H.I.L. between the issue of the writ on the 17th February 1981 and the summons to strike out issued on the 8th June 1981 I do not accept that the delay was unreasonable or unnecessary. A Summons for discovery was issued on the 23rd April 1981 and there being no letter before action the problems facing H.I.L. in understanding the Statement of Claim and getting documents must have been formidable.

93. Being satisfied that H.I.L. has established that it was not guilty of gross and unnecessary delay in bringing on the striking out Summons and there is no evidence to justify the contention that H.I.L. set a dilatory pace for the conduct of the action as a whole or lulled the Plaintiffs or their solicitors into believing that a pedestrian pace was acceptable to H.I.L.  I rejected Mr. Beveridge's arguments under (i) above.

94. As to his arguments under (ii) above (regarding the implied consent of Mr. Pearson on the 21st December 1983 to the "stacking" of actions by the Plaintiffs) Mr. Beveridge contended that this was not a case of mere in-action on the part of a defendant. Mr. Pearson had, Mr. Beveridge contended, given every impression of accepting the delay involved in this action by bringing on the main action first for trial.

95. If Mr. Pearson was keeping his discontent to himself he was, Mr. Beveridge submitted, being too clever by half. He distinguished the present situation from that of a solicitor deliberately taking an action to spare a professional colleague which incurred the strictures of Lord Diplock in Allen v. McAlpine (supra) and he cited the unreported decision on the 13th June 1983 of the English Court of Appeal in Claremount Constructions Ltd. v. G.C.T. Construction Limited for the proposition that discussion between solicitors regarding the time-table of an action was proper.

96. In my judgment this argument which at times seems to wander from the issue concerning inordinate delay to that concerning inexcusability of inordinate delay is not sustainable on the evidence. Mr. Robertson's own evidence in paragraph 5 of his first affidavit was that when mentioning the "stacking" decision to Mr. Pearson he assumed that Mr. Pearson would wish to be able to supervise his clients' defence in both actions and that therefore the time-table he mentioned to Mr. Pearson appeared to Mr. Robertson to be in Mr. Pearson's clients' interests.

97. In my judgment Mr. Robertson was deluding himself and digging his own grave regarding Mr. Pearson's wishes. There was nothing in Mr. Pearson's previous conduct of this action or of the main action to justify it appearing to Mr. Robertson to be in Mr. Pearson's clients' interests that the two actions be staggered. Mr. Pearson's firm had already applied to have the main action dismissed for want of prosecution. Moreover, in the light of Lord Diplock's dictum in Allen v. McAlpine (supra) at pp. 258-9 Mr. Pearson would have been in breach of his duty to his clients if he had agreed to Mr. Robertson's declared time-table to suit his own convenience.

98. Under the circumstances I to not consider that Mr. Pearson was under any obligation to indicate to Mr. Robertson that he did not accept the time-table unilaterally declared by Mr. Robertson on behalf if the Plaintiffs: Allen v. McAlpine (supra) lays down that mere in action by a defendant is not acquiescence to delay by a plaintiff and there is no obligation on a defendant to give prior warning before applying for dismissal. If Mr. Robertson wanted Mr. Pearson's agreement to his "stacking" proposals he should have seen to it that he obtained it instead of acting on his own unilateral decision and self-induced assumptions without actually obtaining the comments of Mr Pearson: c.f. the observations of May L.J. on a unilateral decision by a plaintiff to hold his hand appearing in the transcript of Claremount Constructions Ltd.v.G.C.T. Construction Limited (supra at pp. 14D, 15G and 16A, B, C.

99. As to Mr. Beveridge's argument under (iii) above (allowing the Counterclaim to go to sleep throughout the only real period of delay) Mr. Beveridge argued that it was the duty of H.I.L. to pursue its Counterclaim and that where both parties to an action were in breach of their duty to prosecute their claims the court should strike out both parties or neither of them unless there be a paramount reason to do otherwise.H.I.L..had. made its Counterclaim in this action on the 2nd September 1982. If it claimed to be prejudiced by delay why had H.I.L. not got on with its Counterclaim? In support of this argument he cited two cases in which the principles he relied upon had been applied, namely Zimmer Orthopaedic Ltd. v. Zimmer Manufacturing Co. Ltd. (1968) l W.L.R. 1349 ( C.A.) and Instrumatic Ltd. v. Supabrase Ltd. (1969) 1 W.L.R. 519 (C.A.).

100. However Mr. Irvine provided what in my judgment was the complete answer to this argument. He pointed out that in both the cases cited the counterclaiming defendants had clearly been in breach of the rules of procedure whereas it was equally clear that H.I.L. had not been guilty of any breach of any procedural rule since it made its Counterclaim on the 2nd September 1982 and furthermore its obligation to make discovery under Master Perrior's order did not arise until the Plaintiffs had furnished H.I.L. with the particulars directed to be furnished therein. No particulars had been furnished at the date of the application to dismiss the action. As regards the default of the Plaintiffs in setting down the action in compliance with the Master's order Mr. Irvine stressed that whilst O.25 r.1(4) empowered H.I.L. as Defendant in this action to set down the action for trial, it also gave H.I.L. the alternative right to apply to have the action dismissed. There having been no particulars delivered in compliance with the order H.I.L. could be under no practical duty to set down the action for trial and having been the victim of the Plaintiffs' non-compliance with the Master's order, H.I.L. had properly applied for dismissal of the action.

101. At the time Mr. Irvine advanced these arguments which I find wholly persuasive he undertook on behalf of H.I.L. to withdraw the Counterclaim on terms that each side bore its own costs of the Counterclaim if the court were to dismiss the Plaintiffs' claim.

(b)    Inexcusable Delay

102. The overall onus is on H.I.L. to show that the delay on the part of the Plaintiffs was inordinate and inexcusable but once inordinate delay is established, as it is here, then, as a rule, until a credible excuse is made out the natural inference would be that it is inexcusable: see Allen v. McAlpine (supra) per Salmon L.J. at p.268F-G.

103. Under this head Mr. Beveridge relied again on the three arguments he had advanced under the head of inordinate delay. I have rejected those arguments for the reasons given above.

104. Having accepted Mr. Robertson's evidence as indicating that the Plaintiffs resiled from the "stacking" decision in January 1983 and that the delay in 1983 was therefore effectively attributable to the reasons he gave in his evidence I conclude that, in the context of an action which began late with no letter before action and with the original Statement of Claim making scandalous allegations that were struck out by consent 15 months later, the reasons given by Mr. Robertson indicate that the delay was demonstrably inexcusable.

105. Mr. Beveridge sought to rely on the dictum in the minority judgment of Sachs L.J. in Marlton (An Infant) v. Lee-Leviten (1968) 1 W.L.R. 1214 (C.A) at p.1220B to the effect that conduct on the part of a solicitor was only inexcusable if it was inexcusable in the sense that no reasonable solicitor acting in the interest of his client would have taken the course which in fact was taken.

106. He conceded that here what was done was not the wisest or ablest action but he contended that Mr. Robertson did what any reasonable solicitor would do by getting what he could and putting in something if pressed by the other side. As to the difficulties arising out of the pleadings and the quantification of damages, Mr. Beveridge contended that a solicitor was entitled to assume the pleadings were properly drafted. Mr. Robertson had not, he contended, fallen outside the limits of what a reasonable solicitor might have done.

107. In my judgment Mr. Irvine was right in contending that the test of inexcusability was an objective one and that in any event a reasonable solicitor would not have taken the course Mr. Robertson did. I add that if a reasonable solicitor's conduct is to be adopted as a test it clearly must be also a reasonable trained solicitor.

108. Examining the action of Mr. Robertson in 1983 on an objective basis in the light what a reasonable trained solicitor might have done in the interest of his client it seems to me that such a solicitor would have realised that it was doubtful whether the documents he sought from Mr. Chulani and Mr. Sacklyn were required to be given on discovery. He would also have realised that he should comply with the Master's Order for discovery which he had himself sought and, if necessary, serve a supplementary list later.

109. Furthermore if there was difficulty in getting documents from Mr. Chulani (who appears to have been in Hong Kong from January to Mid-April 1983) and in getting particulars from counsel a reasonable trained solicitor would surely seek to agree an extension of time or apply for one to the Master because he would know that, particularly in the light of the history of this action, the order of the Master should be complied with on peril of an application for dismissal for want of prosecution.

110. The fact that the relevant delay is partly attributable to Mr. Robertson having difficulty in pursuing his inquiries up a blind alley regarding the quantification of damages is not, in my judgment, a matter to be excused as attributable to bad pleading by counsel. The pleading is so demonstrably ill founded that a reasonable trained solicitor would recognise this, particularly after the matter had been ventilated at the earlier striking out application. Furthermore counsel could have been pressed to settle the best particulars he could in compliance with the Master's order : c.f. the dictum of Lord Denning in Thorpe v. Alexander Fork Lift (C.A.) (1975) 1 W.L.R. 1459 at p.1464H.

111. Under the circumstances the unavoidable conclusion I arrive at on this issue is that the inordinate delay on the part of the Plaintiffs' solicitors in 1983 was inexcusable.

Prejudice

112. Leading counsel on each side did not speak with unanimity on the law under this head. Mr. Beveridge submitted that the dicta of Lords Diplock and Salmon in Birkett v. James (supra) appeared to need explanation. He emphasised that serious prejudice resulting from inordinate and inexcusable delay had to be established before the jurisdiction of the court to dismiss an action for want of prosecution was exercisable and he questioned the dicta of Lords Diplock and Salmon indicating that a less onerous degree of prejudice was needed to complete the cycle where there had been pre-writ delay which had caused prejudice. He invited the court to accept that the better view on prejudice attributable to post-writ inordinate and inexcusable delay is expressed in the judgment of Buckley L.J. in William C. Parker Ltd. v. F.J. Ham & Son Ltd. (1972) 1 W.L.R. 1583 at p.1588     where, Mr. Beveridge argued, the view was expressed that very much more than minimal additional prejudice attributable to post-writ delay was required.

113. For my part I understand the judgment of Buckley L.J. in the above-mentioned case to be not only expressed to be but actually agreeing with the reasoning of Russell L.J. in that case which was subsequently approved by the House of Lords in Birkett v. James (supra). Moreover after careful consideration of the speeches in Birkett v. James (supra) and of the subsequent authorities mentioned below I consider that Mr. Irvine put the relevant law to me accurately.

114. Although in Birkett v. James (supra) the House of Lords laid down the law, so far as material to this application, in the form of obiter dicta they were setting out, as Lord Diplock indicated at p. 319C-D of the report, to deal with three points which had remained undecided by Allen v. McAlpine (supra). One of the points which had subsequently given rise to conflict in the decisions of the English Court of Appeal was the relevance of the period which the plaintiff had allowed to elapse before action brought, when this was done within the limitation period. Accordingly the decision of the House of Lords when intending to lay down the law in definitive terms on this point is intended to be given so that it can be followed by lower courts.

115. In Birkett v. James (supra) the House of Lords first approved Allen v. McAlpine and laid down what Mr. Irvine rightly calls the overall test to justify the dismissal of an action for want of prosecution where there has not been intentional or contumelious default. As the headnote accurately records, the members of the House of Lords were unanimous in accepting the requirements defined by Lord Diplock in Birkett v. James (supra) at p.318F-G which I have cited above. It is clear from the words used by Lord Diplock that the requirements are stated without reference to whether the inordinate and inexcusable delay of the plaintiff giving rise to a substantial risk that a fair trial will not be possible or to serious prejudice to the defendant has occurred before or after the issue of the writ.

116. The House of Lords then considered inter alia the relevance of time elapsed before action brought and when doing so held unanimously that to justify dismissal of an action for want of prosecution the delay relied upon must relate to time which the plaintiff allows to elapse unnecessarily after issue of the writ: see per Lord Diplock at p.322G, Lord Simon at p.325G, Lord Salmon at p.331B-C, Lord Edmund-Davies at p.335A-F and Lord Russell at p.336E.

117. When considering the relevance of time elapsed before action brought the House of Lords also held unanimously, as the headnote indicates, that where the plaintiff has delayed in bringing his action he must thereafter pursue his action with diligence but to justify dismissal of the action for want of prosecution there must be some additional prejudice to the defendant from the delay after action brought.

118. Lord Diplock, with whom Lords Simon, Edmund-Davies and Russell concurred, after approving William C. Parker Ltd. v. F.J. Ham & Son Ltd. (supra) expressed his opinion in the following words at p.323G-H: -

"To justify dismissal of an action for want of prosecution some prejudice to the defendant additional to that inevitably flowing from the plaintiff's tardiness in issuing his writ must be shown to have resulted from his subsequent delay (beyond the period allowed by rules of court) in proceeding promptly with the successive steps in the action. The additional prejudice need not be great compared with that which may have been already caused by the time elapsed before the writ was issued; but it must be more than minimal;"

119. Lord Salmon with whom Lord Simon concurred also approved William C. Parker Ltd. v. F.J. Ham & Son Ltd. (supra) and then expressed his opinion at p.331B-C as follows:-

"When a defendant is seriously prejudiced (as he often is) by a writ being issued long after the cause of action has accrued, before the action can be dismissed for want of prosecution (a) the delay subsequent to the issue of the writ must fail to comply with the time-table laid down in the rules: (b) it must be inordinate and inexcusable; (c) in deciding whether it is, the delay prior to the issue of the writ should be taken into consideration; and (d) the delay after the issue of the writ must increase the prejudice already suffered by the defendant in that he must be worse off than he would have been but for that delay."

120. Lord Edmund-Davies added observations of his own and stated at p.335D-F as follows:-

"In my opinion, the correct approach is that adopted in William C. Parker Ltd. v. F.J. Ham & Son Ltd. (1972) 1 W.L.R. 1583, where Russell L.J., as he then was, said, at p.1586:-

'...... in ascertaining whether delay after the proceedings have started is inordinate and inexcusable and prejudicial to the defendant, it must be borne in mind that the delay comes on top of delay in launching the proceedings in a case where there has been delay in launching the proceedings; but that, nevertheless, does not mean to say that the delay before the issue of the writ is to be taken into direct consideration in considering whether there has been prejudice to the defendant ......... If it be the fact ........ that the delay since the pleadings were closed did not contribute to any difficulties that the defendants might have ......then it seems to me quite clear, and quite clear on authority, that the inexcusable delay is not to be regarded as having contributed to the prejudice of the defendants ...... if the delay is not excusable after the proceedings have been launched but does not worsen the position of the defendant, then it is not a case for dismissing for want of prosecution.'"

121. In the light of the above opinions of the members of the House of Lords in Birkett v. James (supra) I conclude that their unanimous view is that, as Mr. Irvine contended, where a plaintiff has been responsible for both pre-writ and postwrit delay, to justify dismissal of the action for want of prosecution the overall test of substantial risk that a fair trial will not be possible or of the likelihood of serious prejudice to the defendant must be satisfied.

122. However, although pre-writ delay may not be directly relied on however prejudicial, nevertheless in considering whether the prejudice due to the post-writ delay is of a sufficiently serious degree to satisfy the overall test regard may be had to the existence of any prejudice which may have been already caused by the pre-writ delay. If the prejudice due to both the pre-writ and post-writ delay for which the Plaintiff was responsible is of a sufficiently serious degree to satisfy the overall test and if, but only if, the pre-writ delay has worsened the position of the defendant by causing to him additional prejudice of a degree which is more than minimal, then there is a case for dismissing the action for want of prosecution.

123. This interpretation of Birkett v. James (supra) seems to be consistent with that adopted Denning M.R. in Biss v. Lambeth Health Authority (1978) 1 W.L.R. 382 (C.A.) at pages 388B-C, 389H and 390A c.f. the observations of Huggins V.P. in Union V -Tex Shirt Factory Ltd. v. Union Tex Realty Ltd. (C.A. No. 48 of 1983) at page 21 to the effect that any prejudice from the default of a plaintiff has to be viewed in the light of previously existing prejudice. It is significant, in my judgment, that in Tolley v. Morris (1979) 1 W.L.R. 592 (H.L.) Lord Diplock made a number of adverse comments on certain dicta of Lord Denning M.R. in the Biss case (supra) but he did not criticise Lord Denning's interpretation of Birkett v. James (supra) referred to above and he said that he saw no reason for disagreeing with the actual decision in the Biss case.

124. Accordingly, in my judgment, the two questions arising are:-

125. In the course of the hearing an affirmation of the 1st Plaintiff made on the 13th of December 1983 was filed in which he explained amongst other things that he did not appreciate there might be grounds for civil proceedings against H.I.L. until a Police Chief Inspector, who was interviewing him in connection with matters connected with M.P.I.L. which resulted in his subsequent prosecution, suggested to him that he took proceedings against Mr. Wyllie and H.I.L. He affirmed that he subsequently instructed a solicitor, Mr. Double, in November 1980 about this matter through his wife while he was in prison. He explained that he did not take action previously because his financial resources were devoted to dealing with Police inquiries and the Police investigation absorbed a substantial amount of his time and all his nervous energy.

126. This evidence is not in my judgment material. Mr. Irvine submitted, and I agree, that one of the effects of Birkett v. James (supra) is that pre-writ delay is not per se culpable. It merely involves the taking up of part or all of the limitation period and its excusability is not relevant in the present situation. As the authorities cited above indicate, the relevance of pre-writ delay is as a factor for the appraisal of post-writ delay.

127. H.I.L. relied on the evidence of Mr. Pearson to establish what he referred to as substantial and irreparable prejudice occasioned to H.I.L. by the delay of the Plaintiffs.

128. He deposed that the action would essentially turn on oral evidence in relation to an alleged oral agreement made on the 24th of September 1976 over 7 years ago, and Mr. Wyllie who was no longer a party to the action was no longer Chief Executive or employed by or connected with H.T.L.. Although Mr. Wyllie had some recollection of the matters connected with the proceedings and had made an affidavit on the 22nd of March 1982 in the action in support of the striking out application with regard to certain aspects of the case his memory of what took place would have to be relied on in far greater detail. His memory must, Mr. Pearson deposed, be getting weaker and poorer daily. Mr. Pearson added that although Mr. Wyllie had already been involved in the action Mr. Pearson had not been able to attempt to take a final statement from him and  this could not be done until particulars had been furnished by the Plaintiffs and discovery completed.

129. He exhibited a Schedule of potential witnesses of H.I.L. including, Mr. Wyllie indicating their relevance and whereabouts and deposed that he envisaged the same difficulties arose in the case of witnesses other than Mr. Wyllie as he had outlined in the case of Mr. Wyllie.

130. Four of the potential witnesses, namely, Messrs. Boyer, Welsh, French and Turner were connected with the Hong Kong Bank in September 1976. Mr. Boyer who is now believed to be in London but whose present position is not known was the General Manager of the Hong Kong Bank. He is referred to in the original Statement of Claim and in the 1st Plaintiff's affirmation filed in this action on 13th of May 1982 as having interviewed the lst Plaintiff on 20th of September 1976 and threatened to move for the winding up ofM.P.I.L. at the pending Annual General Meeting on the 24th September 1976. The 1st Plaintiff also alleges that Mr. Boyer told him on the same day to go and see H.I.L. to work things out.

131. Mr. Welsh was a Manager of the Hong Kong Bank and is now in London as an Executive Director of the Bank. He is referred to in the original Statement of Claim as attending the meeting on 20th of September 1976 with Mr. Boyer. He is also referred to in the 1st Plaintiff's affidavit filed on the 13th of May 1982 as appearing to have prepared a memorandum dated the 5th of July 1976 setting out in outline discussions with Mr. Richardson of H.I.L. indicating that as early as July 1976 the Hong Kong Bank and H.I.L. were working in concert to remove the lst Plaintiff from the managment of M.P.I.L.

132. Mr. French is referred to in the original Statement of Claim as attending the meeting with Mr. Boyer on the 20th of September 1976. He was a Hong Kong Bank Manager and continues in that position in Hong Kong.

133. Mr. Turner was the Chief Accountant of the Bank and is now an Executive Director of the Hang Lung Bank in Hong Kong. He again is referred to in the original Statement of Claim as attending the meeting on the 20th of September 1976 with Mr. Boyer. He was the recipient of a letter dated the 17th of September 1976 from Mr. Wyllie exhibited to the affidavit which Mr. Pearson made on the 8th of December 1983. In that letter Mr. Wyllie seeks to arrange to meet Mr. Turner to discuss strategy of the Bank and H.I.L. at the pending Annual General Meeting on the 24th September 1976. Mr. Turner is also referred to in the lst Plaintiff's affirmation filed on the 13th of May 1982 in a passage in which the lst Plaintiff states that he went to see Mr. Turner on the 25th of September 1976 at Mr. Wyllie's instigation about writs issued by the Hong Kong Bank which were served on the Plaintiffs immediately after the Annual General Meeting on the 24th of September 1976.

134. Another four persons named in Mr. Pearson's Schedule, namely, Messrs. Bullen, Richardson, Paton and Ng are or were potential witnesses connected withH.I.L. Mr.Bullen  was Secretary of H.I.L. He was appointed a Director of M.P.I.L. on the 24th of September 1976 along with Mr. Paton and Mr. Ng who were H.I.L. employees. He died in March 1982. He would have been an important witness because, as appears from paragraphs 33 and 34 of the original Statement of Claim, the Plaintiffs there alleged that when in late November 1976 M.P.I.L. called in the debts of the Mohan family companies in breach of the agreement with H.I.L. the Plaintiffs objected through Mr. Chulani and Mr. Bullen is alleged to have told Mr. Chulani that M.P.I.L. had to go through the motions of calling in the loans before they could be written off and that these reminders and any subsequent notices should be ignored.

135. Mr. Richardson was a Director of H.I.L. and is now in Hong Kong as Chief Executive of its parent company Hutchison Whampoa Ltd. He is referred to in the original Statement of Claim as the person whom Mr. Wyllie suggested to the lst Plaintiff in September 1976 should be appointed to the board of M.P.I.L. He has made an affidavit which was filed in this action on the 23rd of March 1982 exhibiting various material documents including a copy of a memorandum from him to Mr. Wyllie dated the 11th of February 1976 about the unsatisfactory state of affairs of M.P.I.L. and the proposal that Mr. Richardson should replace a colleague Mr. O.J. Nicholl on the board of M.P.I.L. Maintenance of "momentum" is suggested by Mr. Richardson and Mr. Wyllie appears to have endorsed his approval to some pressure being applied. Mr. Richardson is also referred to by the 1st Plaintiff in his affirmation filed on the 13th of May 1982 as appearing from Mr. Welsh's memorandum dated the 5th of July 1976 referred to above to have been involved in discussions between M.P.I.L. and the Hong Kong Bank on the removal of the 1st Plaintiff from the management of M.P.I.L.

136. Mr. Paton was an employee of H.I.L. and is now in Hong Kong as Finance Director of A.S. Watson & Co. Ltd. He was appointed a Director and Chairman of M.P.I.L. on the 24th September 1976 following the agreement between H.I.L. and the Plaintiffs. He is referred to in the 1st Plaintiff's affirmation filed on the 13th of May 1982 as having announced the agreement for the reorganisation of the affairs of M.P.I.L. at the Annual General Meeting on 24th September 1976. A copy of the Minutes of that meeting is exhibited to Mr. Richardson's affidavit filed on the 23rd of March 1982. The minutes recorded that Mr. Paton as Chairman referred to an agreement between the Plaintiffs and H.I.L. whereby H.I.L. had been requested by the Plaintiffs to assist in a reorganisation of M.P.I.L.'s affairs.

137. Mr. Ng who is now in Australia was an employee of H.I.L. and was appointed a Director of M.P.I.L. on the 24th of September 1976 along with Mr. Paton and Mr. Bullen. It appears from documents of exhibits to Mr. Pearson's affidavit made on the 8th of December 1983 that Mr. Ng may be an important witness. He prepared a report dated the 11th of November 1976 for H.I.L. relating to outstanding loans and advances to the Mohan's Group of Companies. In that report it is stated that after applying the $1.812 million dollars (being the price of the M.P.I.L. shares acquired by H.I.L.) $21.59 million dollars was outstanding and that at a recent meeting the 1st Plaintiff had informed Mr. Ng that he was unable to repay any of the loans. Mr. Ng was concerned that provision would have to be made in the accounts for this.

138. On the 6th of July 1982 a letter was sent to Mr. Ng asking for his recollection of the meeting with 1st Plaintiff and whether he could remember if at the time the 1st Plaintiff had invoked the alleged agreement of H.I.L. to apply the $1.82 million dollars in settlement of the indebtedness to M.P.I.L. the balance of which was to be written off. At the same time Mr. Ng was also sent a copy of and asked for his comments on the letter dated the 1st October, 1976 from the 1st Plaintiff to M.P.I.L. indicating how the $1.812 million dollars was to be applied.

139. On the 2nd of August 1982 Mr. Ng replied by letter giving his recollections of the relevant meeting and prefixes his account of what the 1st Plaintiff said to him in the presence of Mr. Chulani at the relevant meeting with the words "As far as I can remember". He adds at the end of his letter that he cannot remember what the lst Plaintiff's letter dated the lst of October 1976 was about.

140. In his first affidavit Mr. Pearson deposes in forensic terms that after an interval of seven years there is a danger that witnesses will not be able to remember specific events, they will have to rely on documents produced on discovery and may assume that the contents of documents such as references to oral exchanges are factually true and accurate because the witnesses themselves have no firm recollection of the events. In this connection he relies on the fact that the lst Plaintiff was found to be an unreliable witness at his criminal trial in the District Court.

141. He asserts that due to the lapse of time it is likely that it will be extremely difficult if not impossible to obtain accurate statements from potential witnesses including witnesses additional to those named in his Schedule. He refers to former employees of M.P.I.L. or of the Plaintiffs and to associates of the Plaintiffs whose evidence might be relevant. Mr. Chulani is not specifically referred to by Mr. Pearson. However, as Mr. Irvine pointed out, Mr. Chulani who was the 1st Plaintiff's accountant and chief assistant, was referred to in the original Statement of Claim and the Plaintiffs allege that he was present immediately after the Annual General Meeting on the 24th of September 1983 when Mr. Wyllie is alleged to have explained H.I.L.'s plan to the 2nd Plaintiff, reiterated its benefits to the Plaintiffs and to have said that the day was a happy one for the Mohans.

142. As regards M.P.I.L. Mr. Pearson deposes that it is now fully independent of the Hutchinson Group Companies. In July 1981 the Hutchison Group shares in M.P.I.L. were sold to another company.

143. He exhibits an extract from the 1982 Annual Report of Hutchison Whampoa Ltd. the parent company of H.I.L. in which there is reference to the Plaintiffs' claim with a comment that the directors are of the opinion, based upon legal advice, that the claim is without merit. For understandable reasons the claim is described as one for damages and is not quantified.

144. Mr. Pearson further complains that the lapse of time and the movement of M.P.I.L. files as a result of its change in ownership has made discovery much more difficult. Also some of M.P.I.L.'s files were seized by the Commercial Crimes Bureau when investigating the lst Plaintiff's affairs. He envisages that it will therefore be extremely difficult and may be impossible to trace such documents as may be missing.

145. In my judgment, on that evidence, Mr. Pearson was fully justified in submitting in his affidavit that if the matter is allowed to proceed it is unlikely that a fair trial can be held.

146. In his submissions Mr. Irvine was content to rely, under the serious prejudice head in relation to the total delay for which the Plaintiffs were responsible, on the contention that H.I.L. had established that there is a substantial risk that a fair trial is not now possible. In the light of the pleadings and the particulars exhibited to Mr. Robertson's affidavit filed on the 10th of November 1983 and of Mr. Pearson's evidence I consider that there is a substantial risk that a trial which can only take place 7?to 8 years after the agreement made on the 24th of September 1976 and 7 to 7?years after the alleged breaches would not be a fair trial because the central issue in the case will turn on oral evidence whereas the memory of witnesses will be seriously impaired, their availability will in several cases be questionable, one of them having already died in March 1982, and the traceability of relevant documents is also questionable.

147. Mr. Beveridge relied on the observations of Lord Salmon in Birkett v. James (supra) at p.327F-H where he stressed that on the facts of that case the result would depend chiefly on the view which the court would take of the integrity rather than the memory of the plaintiff and the defendant, and that the case depended on who was lying and who was speaking the truth. Here, where the case will turn on whether Mr. Wyllie or the 1st Plaintiff is lying, Mr. Beveridge contended that there was no serious prejudice even if pre-writ delay may be taken into account.

148. In my judgment Mr. Irvine was right when he contended that this was an over simplification and that there were many surrounding witnesses whose evidence could well be determinative in deciding where the truth lies on matters in issue. In this case there was a build-up of events and meetings culminating in the oral agreement made between Mr. Wyllie on behalf of H.I.L. and the 1st Plaintiff on behalf of the Plaintiffs. Those meetings and events are all material as would be the evidence of the witnesses concerned with them. There were also events following the agreement which are material such as the Annual General Meeting when Mr. Paton spoke of the agreement and of H.I.L.'s plan for M.P.I.L., the explanation of H.I.L.'s plan to the 2nd Plaintiff by Mr. Wyllie in the presence of Mr. Chulani after the meeting and the subsequent meeting between Mr. Ng and the 1st Plaintiff and Mr. Chulani between the 24th of September and the 11th of November 1976 when the 1st Plaintiff told Mr. Ng that the indebtedness to M.P.I.L. and the subsidiary companies could not be discharged.

149. These examples are not intended to be exhaustive but there is, in my judgment, ample evidence to show that in the trial of this action the court would want to consider very carefully the evidence of witnesses dealing with surrounding events as well as that of Mr. Wyllie and the 1st Plaintiff in order to assist it in assessing the credibility of the latter two witnesses.

150. Accordingly I hold that H.I.L. has established that in the light of the total delay for which the Plaintiffs are responsible there is a substantial risk that a fair trial of this action will not be possible and serious prejudice is therefore established.

151. In addition to the evidence of Mr. Pearson referred to under the previous head H.I.L. also relied on his evidence in his first affidavit to the effect that if the action were allowed to proceed he would have to review again many documents which he had previously looked at but the details of which he had since forgotten. There would be a duplication of work and H.I.L. would incur duplication of charges which would not have occurred had the Plaintiffs proceeded with their action expeditiously. In any event, he deposed, the legal cost of maintaining a defence to a claim of the present magnitude is tremendous.

152. Mr. Irvine contended that there would be additional prejudice under this head at least to some degree in that there would be a continuing risk of the impossibility of a fair trial as a result to the progressive loss of memory of all the witnesses. He relied on the following observations of Huggins V.P. in the Union V-Tex Shirt Factory Ltd. case (supra) at page 21 -

"I suppose it may be true that the curve of loss of memory against time is steepest at some point a few months after the events, though much must depend upon the individual and upon the nature of the events. Usually the curve does not then stop rising and, indeed, it may never flatten out. Three years' delay may not be so serious, if it starts seven years after the events, as if it starts immediately after them, but it is not to be ignored."

153. I respectfully adopt that approach but emphasise that I have considered this head of prejudice on the footing that the courts accept that where there is a late start it is in the nature of things that all or nearly all the prejudice to the defendant in the shape of fading memories and lost documents would usually have taken place before the writ was issued. It is therefore very rare where there has been a late start that prejudice of the kind just described will be increased by post-writ delay to an extent that it is more than minimal. Mr. Beveridge naturally pressed this point and cited a number of authorities to me but I think it suffices to mention the very clear dicta in Biss v. Lambeth Health Authority (supra) per Lord Denning M.R. at p.388 E, F & G and per Geoffrey Lane L.J. at p.392A-B.

154. There was evidence that Mr. Ng was qualifying his reply to an important question on the 2nd of August 1982 with the words "As far as I can remember" and saying that he could not remember the significance of the 1st Plaintiff's letter dated the 1st of October 1976 regarding the application of the $1.812 million dollars. It may be that his memory grew progressively worse in 1983 or that it crystallised fully or to a substantial degree as a result of being asked to recollect the relevant matters.

155. It may be also that the recollections of Mr. Wyllie and Mr. Richardson and of Mr. Chulani and the Plaintiffs have long since crystallised to a substantial degree. Taking all these factors into account I do not ignore the possibility that memories of the relevant witnesses may have grown dimmer during the relevant period of post-writ delay in 1983 but I do not consider, indeed I do not understand it to have been argued by Mr. Irvine, that it is probable there was additional prejudice of more than minimal degree due to the one factor of progressively fading memories of witnesses or loss of documents.

156. The main thrust of Mr. Irvine's argument was clearly under the head of "Biss" type prejudice. He relied heavily on the dictum of Lord Denning at p.303 in Biss to the effect that there is much prejudice to a defendant to have an action hanging over his head indefinitely, like the sword hanging over the head of Damocles, not knowing when the action is going to be brought to trial. He also relied on the passage where Lord Denning stated that there comes a time when a defendant is entitled to have some peace of mind and to regard the incident as closed and that it should not have to keep in touch with witnesses or to have to preserve records in case they should be needed. He cited the dictum of Cumming Bruce L.J. at p.13 of the transcript of the unreported case of Haynes v. Atkins (1978 H2577)(C.A.) to the effect that the "sword of Damocles" anxiety contemplated in Biss was not limited to situations as extreme or outrageous as a case like Biss.

157. He further relied on Lord Denning's observations in Biss at pp. 390H to 391A where he emphasises that a late start may result in even a short delay being treated as inordinate and inexcusable after the issue of the writ and give a basis for an application to dismiss for want of prosecution followed by the words -

"So in the present case the delay of nine months was properly admitted to be inordinate and inexcusable. It is a serious prejudice to the hospital to have the action hanging over its head even for that time. On this simple ground I think this action should be dismissed for want of prosecution."

He also relied on the dictum of Geoffrey Lane L.J. to similar effect at pp. 392H - 393B.

158. Mr. Irvine emphasised the prejudicial effect of the gravity of the allegations against Mr. Wyllie and H.I.L. in the present case. In my judgment the nature of the claim and the accompanying allegations against Mr. Wyllie and H.I.L. is the crucial factor on this issue. It was common ground between leading counsel for the parties that the serious allegations made against Mr. Wyllie and H.I.L. in the original Statement of Claim had not been abandoned by the Plaintiffs except in so far as they were no longer the basis for any cause of action. Indeed the Plaintiffs' leading counsel himself submitted at a later stage of the proceedings that if the 1st Plaintiff was right then a powerful coterie he dealt with had dispossessed him of his assets.

159. The integrity and reputation of any person be that person an individual or a corporation is precious to that person. Allegations impugning that integrity and reputation and amounting to allegations of bad faith must, in my judgment give rise to real prejudice to the person against whom the allegations are made. The situation is not exactly but closely analogous to a situation where fraud has been alleged. At the very least the reputation of H.I.L. and its group as a commercial concern is being impugned.

160. In my judgment it would be too cynical a view to assume that because H.I.L. is part of a very big group of companies with a very substantial financial backing it is to be treated as being indifferent to the claim made against it. Although the relevant period of delay and consequential prejudice is relatively short, being 8?to 9 months it is a period of delay which has been found to be inordinate and inexcusable and, in my judgment, the consequential prejudice to H.I.L. is aggravated by the fact that the Plaintiffs have failed to quantify a substantial limb of their claim for damages even at this late stage.

161. As Mr. Tong, junior counsel for H.I.L. pointed out towards the end of the hearing the claim has been subsisting during a period of serious recession in Hong Kong. As it stands it is a claim for an amount of upwards of $41 million dollars. It is embarrassing and therefore prejudicial to H.I.L. to be put in a position where the claim for indemnity in excess of $20 million dollars not only remains thoroughly inadequately particularised but has been described by Mr. Robertson the Plaintiffs' solicitor as giving rise to a question which is incapable of resolution in the near future. As Lord Denning observed in the unreported case of the President of India (supra) at p.79, albeit in relation to a defendant of less substance than H.I.L. -

"It is a serious prejudice to a commercial concern to have a claim of this kind hanging over their heads - a claim not formulated, not quantified and with no particulars given."

162. I have borne in mind the salutary reminder of Mr. Beveridge that the Biss case was a very clear and extreme example of obvious prejudice. However every case has to be decided on its own facts and, in my judgment the prejudice caused to H.I.L. under the circumstances of this case during the relevant period of inordinate and inexcusable delay was of the character contemplated in the Biss case.

163. A further material factor which I consider is not to be ignored and is also a factor contributing to a degree of additional prejudice which I find to be overall more than minimal is the continuing need for H.I.L.'s solicitors to keep in touch with potential witnesses who are no longer connected with H.I.L. or the Hong Kong Bank, and, to a lesser degree, to preserve documents against their being needed at a future trial.

164. Mr. Beveridge relied understandably on the decision of the English Court of Appeal in Abouchalache v. Hilton International Hotel (U.K.) Ltd. decided on the 10th of November 1983 and reported in the Times newspaper. In my judgment that case is distinguishable from this case on its fact because, although the Court of Appeal was influenced by the fact that the defendants were part of a large international undertaking which was not fearful for the outcome of the litigation the writs had been issued in England after the expiration of the limitation period with the consent of the defendants and the Court of Appeal was not persuaded that there was any additional prejudice to such as was already present when the writs were issued and with which the Defendants were then prepared to contend.

165. Finally I consider that the factor of additional costs deposed to by Mr. Pearson is not to be ignored but I have borne in mind that the effect of section 19(2) (a) of the Legal Aid Ordinance would be that any order for costs in H.I.L.'s favour at a trial would not result in any risk of H.I.L. receiving less than its taxed costs from the Director of Legal Aid in respect of the period when the Plaintiffs were on legal aid.

166. Accordingly I conclude that the cumulative effect of all the factors relied upon by H.I.L. to establish additional prejudice is fully adequate to establish more than minimal additional prejudice and that the "Biss" type prejudice attributable to an insufficiently particularised substantial claim which impugns H.I.L.'s reputation is by itself a sufficient degree of more than minimal additional prejudice for the purposes of this application.

( c )    Discretion

167. Dismissal of an action for want of prosecution is a Draconian measure. Ultimately the court has a discretion whether or not to adopt such a course. After anxious consideration I do not consider that there are any factors present in this case which would justify me in declining to dismiss this action for want of prosecution.

168. Mr. Irvine pressed me in argument with the proposition that the Plaintiff's case was very weak. Mr. Pearson had given evidence to that effect and he contended that the claim made by the Plaintiffs was not a genuine one. Mr. Irvine cited the dictum of Rhind J. in Mohan v. McElney & Others (H.C. Action 4611/78) at p.18 to the effect that in principle the corollary of the right of a court to take into account that a plaintiff appears to have a strong case on the merits as a factor disposing the court to exercise its discretion in the plaintiff's favour by refusing to dismiss his action for want of prosecution is that in the converse situation where a plaintiff appears to have a weak case on the merits the court should likewise take that into account as a circumstance inclining the court to strike out. The same learned judge made a similar observation in Ng Wing-fat v. Lam Ming-kwan (1982) H.K.L.R. 27 at p.33.

169. If the present action were to be tried the central issue would be determined in accordance with whether the court believed the evidence of the lst Plaintiff or Mr. Wyllie. The evidence of numerous other witnesses would be important but at the end of the day the court would have to decide whether it believed Mr. Wyllie or the 1st Plaintiff. I accept the submissions on behalf of H.I.L. that the Plaintiffs' case has many questionable features but I do not consider that any useful purpose can be served by the court attempting to assess the strength or weakness of a case which must ultimately depend upon credit. The whole purpose of a trial would be to decide that issue. Accordingly it suffices, in my judgment, for me to indicate that this is not a case in which it has been shown that the Plaintiffs have a strong case. There have been no material admissions, there has been no payment into court and I can see no other reason justifying the exercise of the court's discretion in favour of the Plaintiffs.

170. Mr.Beveridge submitted, in relation to discretion, that if plaintiffs were right then a powerful coterie had dispossessed them of their assets and therefore to shut them out from trial for procedural errors would be a terrible injustice. The Plaintiffs have the sympathy of the court in their misfortune but there are two sides to every case and, in my judgment, it would not be just or equitable to refrain from exercising the jurisdiction to dismiss this action for want of prosecution and leave H.I.L. in the prejudicial position in which it finds itself merely because it is a company with substantial financial backing.

171. Furthermore this is not a case where the Plaintiffs have been unaware of the hazards of dilatoriness in the prosecution of litigation. They were put at serious risk in the main action when an application was made to dismiss it for want of prosecution. That application was dismissed by Rhind J. on the 3rd of December 1981. Nevertheless the delay complained of in the present action occurred in 1983. Accordingly I do not consider that this is a situation where the entire responsibility for delay should be laid at the door of the Plaintiffs' solicitor: c.f. the dictum of Edmund-Davies L.J. in Austin Securities Ltd. v. Northgate & English Stores Ltd. (1969) 1 W.L.R. 529 (C.A.) at page 534 F to the effect that it is not open to a party to says where his solicitor has let time go by, that the party is himself ipso facto to be excused for all the delay which has occurred, because it is still the duty of the party to prod his solicitors into activity.

172. The effect of the majority decision of the House of Lords in Birkett v. James (supra) is that the fact that the plaintiff may or may not have an alternative remedy against his solicitor is not a relevant consideration in considering whether to dismiss an action for want of prosecution.

173. Accordingly I consider that it is my duty in the present case to grant the application of H.I.L. on the first ground set out in its Amended Summons dated the 13th of October 1983 and I therefore dismiss the Plaintiffs' action.

174. In his closing submissions Mr. Irvine indicated that if the action were dismissed H.I.L. intended to undertake to withdraw its counterclaim on terms that each side bears its own costs of the counterclaim. Under the circumstances I will deal with that matter and the question of costs generally when this judgment is delivered.

Representation:

Mr. John Beveridge, Q.C. with Mr. Clifford Smith instructed by M/s. Robertson, Double & Boase for the Plaintiffs.

Mr. Alexander Irvine, Q.C. with Mr. R. Tong instructed by M/s. Baker & Mckenzie for the Defendant.