Woo Wing-fai v. Chung Por Jau and Others

HCA000398/1971

IN THE HIGH COURT OF HONG KONG

ACTION NO.398 OF 1971

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Coram: Cons, J.

Date of Judgment: 13 April 1976

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DECISION

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1. This is an appeal against a refusal to strike out the plaintiff's claim for want of prosecution. No argument whatsoever has been addressed to me on the merits of the claim, that is as to the probability or otherwise of its success. Argument has been confined to the principle laid down in Allen v. Sir Alfred McAlpine & Sons Ltd. and another⁽¹⁾, namely, that a claim will be struck out where the defendant shows that there has been inordinate and inexcusable delay by which the defendant is likely to be seriously prejudiced. It is unnecessary therefore to set out the details of the claim. It is sufficient to say that it is against four defendants. Three of those defendants brought the application to strike out.

2. Complaint is made of three periods of delay. The first was for one year and one month between the taking out of the writ and its service upon the 2nd defendant. No explanation is given for this delay. There can have been no difficulty standing in the way of the plaintiff. The 3rd and 4th defendants were served within a few days. The 2nd defendant, unlike the 1st, was in Hong Kong. There is a suggestion of negotiation for a settlement but there is nothing to how with whom that negotiation was made.

3. The second period is said to have lasted one year and to have followed the obtaining by the plaintiff of an order for substituted service on the 1st defendant. The period was brought to an end by a letter from the solicitors for the defendants reminding the plaintiff of the possibility that his action could be struck out. This was the second time that the solicitors had made that comment. The first occasion had been more than one year earlier. The 1st defendant was an elderly gentleman living at all material times in California. One month after the order for substituted service was made the plaintiff learned that the defendant had already died. Counsel's opinion was taken and eventually it was decided to ask the official administrator to agree to represent the estate. Some delay was to be expected from the unfortunate death of the 1st defendant. However, it is difficult to see why that delay should have been as much as one year.

4. The third period started from the time that the official administrator appeared in the action and filed his defence on behalf of the estate. It continued until the defendant issued the summons to strike out. In all it was a little over one year and nine months. During that time the plaintiff did nothing so far as the defendants were concerned. The plaintiff, however, says that the time was spent in making efforts to obtain from America a document that would be vital evidence in the action. With respect that is not so. A study of the affidavits and the letters attached thereto shows that the total time spent looking for that document was only three months. A further two months may be added for a search that was made for other evidence. Possibly one more month at the end of the period was occupied by counsel's consideration of the plaintiff's position. These explanations cover some six months. For the other fifteen the plaintiff, either alone or with his partners, thought about the matter, while he and his solicitors did nothing.

5. It is a fraction over 5 years from the time that the writ was taken out to the time that application was made to dismiss. The periods I have just dealt with cover three years and ten months for that time. Taking the picture as a whole it is clear that the plaintiff and his solicitors have not bothered to prosecute the action with the diligence that is required. The delays are both inordinate and inexcusable. Are they likely to cause serious prejudice?

6. Counsel for the defendants puts prejudice under three heads. The first is the inherent probability that a fair trial cannot be possible in an action that is now nearly six years old; there is the possibility of untraceable witnesses or lost documents and the fading of human memory. I do not think this aspect is of very much importance in the present instance. The main issue is one of law, whether the registration of a contract of sale against a lease that subsequently expires but is then regranted for a longer period ab initio is effective as against the regrant. The second issue of conspiracy is principally a matter to be inferred, if at all, from undisputed transactions. The third issue, that certain transactions were fictitious or sham transactions would depend upon the evidence of witnesses, but the evidence is not of a kind likely to be affected much by the passage of time. This may be a vital consideration in personal injury cases. I do not think it has much application where the question is one, if at all, of deliberate and Wilful fraud.

7. Then it is said to be prejudicial that the charge of conspiracy and fraud should hang over the heads of the defendants for so long; they are serious charges and should be dealt with expeditiously. To my mind all charges should be dealt with expeditiously unless there are reasons to the contrary. Those against professional men may constitute a particular class on their own requiring higher standards than usual. But the defendants in the present instance are not professional men. There may be some prejudice under both the heads I have so far mentioned but I do not think that by itself it is likely to be serious. It is the third head however that has caused me considerable anxiety.

8. The action is connected with a piece of land in Kowloon. At the time the action started there was an old four-storied building on the land. Since then the defendants - and I use the word loosely - have bought out the tenants of the old building and redeveloped the site in conjunction with the owners of the adjoining properties. It now boasts a sixteen-storied building, both commercial and residential, with a car-park beneath. The occupation permit was granted on 15th July last year. The defendants have purchasers ready for some of the units to the value of over $4,000,000 but the purchasers will not complete because the plaintiff has registered a lis pendens against the property. The units remained unsold and empty. Moreover the defendants are now liable to the Government for rates. If they are correct in their contention that the plaintiff has no right whatsoever in the property they are suffering undeniable financial prejudice.

9. It is said for the plaintiff that the Court should ignore this aspect because the defendants went into the redevelopment with their eyes open; they were aware or must have been taken to be aware of the plaintiff's claim. That may be so. But I do not see why they should have necessarily delayed their plans for that reason. If the plaintiff had gone ahead with the action as he should it would have been over long before the building was available for occupation. A man who goes to law cannot demand that his opponents shall be timid. I am told that the learned Registrar refused to take account of this aspect because he took the view that the Court should only consider delays "within the action", that is matters that would affect the fair trial of the issues. If he did take that view I would think, with respect to him, that he is wrong. In the McAlpine Case all three Lords Justices mentioned the fact that the widow had been unable to complete the winding-up of her late husband's estate. That was a matter which would not have entered into the trial at all. There is, however, a distinction between financial prejudice and other kinds of prejudice. Financial prejudice can always, if the circumstances are appropriate, be put right by the subsequent payment of money. But the doubt that I have is whether the present circumstances are appropriate. The plaintiff has registered a lis pendens against the property. That registration has already caused the defendants loss. If nothing is done until the trial that loss will become considerably greater. If nothing is done until the trial that loss will become considerably greater. If then the plaintiff is unsuccessful I do not think the defendants will be able to recover any part of that loss. I was referred to the case of Wong Wai-him and others v. Kwok Tsz-kwan and others⁽²⁾ as authority that they could. The passage referred to reads:

"If, however, a party to an action should register a lis pendens in the Land Office, thereby intentionally and without just cause or excuse doing an injury to any person's legal right, such party may render himself liable in tort."

But it does not help. I cannot see any likelihood that the defendants will be able to prove that the plaintiff acted without just cause or excuse⁽³⁾. The case is same authority (at 114) for the suggestion that the defendants could have used the plaintiff's want of prosecution as ground for a direct application to vacate the register. If the defendants had brought such an application and had succeeded the plaintiff would have been in a slightly better position than he will be if his present action is struck out. He would then still have had an action for damages on the conspiracy and fraud. Yet if his present action is struck out he will still have some recourse against his own solicitors, although it may be reduced by his own inactivity during the last of the three periods. That inactivity was at a time when he well knew that the defendants were redeveloping the land and must have realised that they would soon be nearing completion. It is this consideration which finally sways the balance and inclines me to the view that taking everything into account justice demands that the action should be dismissed.

10. The appeal is therefore allowed with costs here and before the Registrar. I think it also desirable that this Court should adopt the practice suggested by Salmon L.J. It is therefore further ordered that a copy of this decision be sent by the Court to the plaintiff personally.

Representation:

A. Zimmern, Q.C., and D. Chang (Yung, Yu, Yuen & Co.) for plaintiff.

John J. Swaine, Q.C. (Sousae & Co.) for 2nd, 3rd and 4th defendants.

(1) [1968] 2 Q.B. 229

(2) 22 H.K.L.R. 111 at 113

(3) see also Clerk & Lindsell on Torts 13th Ed., paras.1861 et seq as to malice.