Kerry Foodstuffs Co. Ltd. v. Phulsawat Navy Co. Ltd. and Others

HCCL000001/1992

HCCL No. 1 of 1992

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL LIST

ACTION NO. 1 OF 1992

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Coram: Deputy Judge A. Chung in Chambers

Date(s) of Hearing: 14, 15, 16 and 17 September 1998

Date of Handing Down Decision: 28 September 1998

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D E C I S I O N

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1.Introduction

In July, 1991, some 5,000 metric tons of Thai sugar were shipped to Sri Lanka by the Plaintiff. About 3,000 metric tons of the lot were then handed over by the 3rd Defendant ("D3"), acting as the 1st Defendant's ("D1") shipping agent, to the 2nd Defendant ("D2"). The Plaintiff claims that the goods were its property and commenced this action against all the Defendants for conversion. There is an additional claim against D2 for price of goods sold and delivered.

D1 defends the claim principally on the ground that the goods no longer belonged to the Plaintiff. D2-3 defended the claim mainly on the basis that property in those goods had already passed from the Plaintiff to D2. In October, 1997, D2-3 amended their Defence by adding a further defence that by virtue of a pre-existing course of dealing, property in the said goods passed from the Plaintiff to D2-3 at the time when D2' bank account was debited. Although D1's Defence has not been amended to incorporate this additional line of defence, D1 indicated its intention to do so if these proceedings progress further.

2.Was there a Delay?

A detailed chronology of the history of these proceedings was provided by the Plaintiff. I have made revisions to it to include only steps taken by either the Plaintiff or the Defendants in the proceedings. This is attached at the end of this Decision as "Schedule 1". There were also other matters related to, but were not steps taken in, these proceedings. These include settlement discussions, renewals of a bank guarantee by D1 and correspondence over other subjects. They are set out in "Schedule 2" which will be referred to later in this Decision.

The more important events in relation to the court proceedings are summarized below:-

(a) the cause of action accrued sometime in about July, 1991;

(b) the Writ was issued on 3.1.92 against D1;

(c) on 11.5.92, D1's Defence and Counterclaim was filed after D1 made specific discovery before defence;

(d) on 11.7.92, the Plaintiff filed Points of Reply and Defence to Counterclaim and Further and Better Particulars of the Points of Claim;

(e) application to join D2-3 and leave to serve out of jurisdiction was made on 28.7.92;

(f) D1 filed a summons for directions and Third Party summons on 22.9.92;

(g) application for leave to amend Statement of Claim to join D2-3 on 24.9.92;

(h) Amended Statement of Claim was filed on 9.10.92;

(i) Plaintiff filed Further and Better Particulars of the Amended Statement of Claim on 29.12.92;

(j) D2-3 filed Defence on 9.1.93;

(k) Plaintiff applied for summons for directions on 4.2.93;

(l) Points of Reply and Defence to Counterclaim was filed on 9.3.93;

(m) Lists of Documents were exchanged and filed on 27.5.93;

(n) D2-3 filed a Supplemental List of Documents on 11.6.93;

(o) Plaintiff filed Supplemental List of Documents on 6.11.95;

(p) Plaintiff applied for summons for directions on 24.1.96;

(q) there was a series of consent orders for service of witness statements and expert reports from about June, 1996 to about June, 1997;

(r) Plaintiff applied for a Further and Better List of Documents of D2-3 on 16.9.96;

[ limitation period expired in about July / August, 1997 ]

(s) exchange of witness statements took place on 16.9.97;

(t) D2-3 applied for leave to amend their Defence on 21.10.97;

(u) D2-3 applied to strike out the claim on 10.12.97;

(v) D1 applied to strike out the claim on 5.2.98;

(w) Plaintiff applied to set down the case on 6.5.98.

Based on the history of the proceedings, D1 argued that there was a general delay and also the following specific periods of delay:-

(a) 27.5.93 to 6.11.95 (called "Periods A and B"): 2 years and 5 months;

(b) 7.2.96 to 5.7.96 (called "Period C"): 5 months;

(c) 5.7.96 to 11.8.97 (called "Period D"): 10 months.

Based on that history, D2-3 also argued that there was a general delay but the specific periods of delay in relation to them were:-

(a) pre-writ delay from July, 1991 to January, 1992;

(b) 3.1.92 to 9.10.92 (called "1st Period"): 9 months;

(c) 3.8.93 to 24.1.95 (called "2nd Period"): 1 year and 5 months;

(d) 24.1.95 to 25.10.95 (called "3rd Period"): 9 months;

(e) 9.2.96 to 7.96 (called "4th Period"): 4 months;

(f) 20.9.96 to 7.97 (called "5th Period"): 10 months;

(g) 8.97 to 11.97 (called "6th Period"): 3 months.

The following periods overlap:-

(a) D1's "Periods A and B" and D2-3's "2nd Period" and "3rd Period";

(b) D1's "Period C" and D2-3's "4th Period"; and

(c) D1's "Period D" and D2-3's "5th Period".

It is not disputed by the parties that the basic principle relevant to the determination of this application is: a plaintiff's claim is liable to be struck out for want of prosecution if the plaintiff (or the plaintiff's solicitors) have been responsible for inordinate and inexcusable delay which has caused substantial prejudice to the defendant(s). This is subject to the qualification that generally an application made prior to the expiration of the limitation period will not be granted because it will be open for the plaintiff to take out a fresh action after the original claim was dismissed and this will only serve to aggravate the original delay.

The limitation period of the Plaintiff's claim expired by about August, 1997 at the latest. Hence, by the time when the Defendants took out their applications for striking out, the limitation period has expired.

Having considered the overall circumstances of this case, I agree with the Defendants' submissions that during the above-mentioned specific periods of delay (except D2-3's "6th Period"), no effective steps have been taken by the Plaintiff in the proceedings (save perhaps a few brief/uncontested interlocutory applications). I do note that from about June 1996 to about June, 1997, there has been a series of consent orders extending the time for filing and serving witness statements and expert reports. However, I do not regard, in the context of this case, these consent orders as "effective" steps in the further progress of these proceedings.

The Plaintiff argued that these periods cannot be regarded as periods of delay even though no effective steps have been taken because:-

(a) in order for the Defendants to properly ground an application for striking out the Plaintiff's claim, they must be able to pinpoint what specific procedural step(s) the Plaintiff has delayed in taking, for example, a failure to file document(s), or a failure to set down the case for trial. It is insufficient for the Defendants merely to say that the Plaintiff has delayed the proceedings so that the period taken far exceeded that usually recognized by the profession and the courts to be an acceptable one for bringing the case to trial;

(b) any period which was covered by an order extending time cannot be regarded as delay;

(c) even though there be delay by the Plaintiff before the expiration of the limitation period, if the Defendants cannot establish any period of delay after the expiration of the limitation period, there is nothing for the pre-limitation period to attach to. The Defendants' applications will therefore fail.

I do not agree with the Plaintiff's point (a) above. The rules of court do not prescribe time limits for all conceivable procedural steps which may need to be taken by litigants. There may therefore be cases where it would not be possible to say that a plaintiff has fallen foul of any specific time periods prescribed by the rules and yet a clear delay is easily identifiable. I also do not agree with Mr. Barlow's argument that in Hong Kong there is no period recognized by the profession and the Court as to what is an acceptable one for bringing the case to trial. Naturally the question must be decided after taking into account a wide range of factors (some of which have been referred to by Mr. Barlow) such as the nature of the case, the number and location of parties, the need for (and the time spent on) interlocutory applications, the number and location of witnesses, whether expert witnesses are involved as well as the cause for the delay (if any).

Further, the lack of progress in legal proceedings, save where the time involved is really trivial as to fall within the de minimis category is in effect a delay. Merely because a step is permitted to be taken within a specified period of time (for example, by the rules of court or by a court order) does not mean that it ought to be taken only at or near the end of that period. Whilst such specified period may prevent the delay from being an inordinate or inexcusable one, I consider that the taking of a step only at or near the end of that period would nevertheless turn such period of inactivity into a "period of delay". In this connection, I refer to the observations made by Mr. Justice Fuad, V.P. (as he then was) in United Venture Navigation v. Shum Yuen Nim [1991] 2 H.K.C. 73:-

"It seems to me quite clear from the passage of Lord Diplock's speech in Birkett v. James ... which I have cited above, that utilizing periods allowed by the rules of court cannot be prayed in aid as culpable delay in a striking out application. ... I think that Lord Griffiths was tacitly recognizing the impact of both limitation statutes and rules of court on the exercise of the court's discretion in these matters in D.O.T. v. Chris Smaller Ltd. ... This dicta fortifies my view that delay cannot, at one and the same time, be permitted by the rules and be inexcusable." (at p. 88) (underline and emphasis supplied).

Having said so, in cases where the "delay" is minor, it is unlikely that it will be regarded as "inordinate" or "inexcusable". However, these last-mentioned matters involving different considerations will have to be dealt with under separate headings below.

I also do not agree with the Plaintiff's point (b) above. There is a fundamental difference between the period allowed by the rules of court for a procedural step to be taken and that allowed by a court order for doing so. An order allowing further time to take a step is usually an act of indulgence granted by the Court on the application of one or more of the parties. The reason why there was the need to apply for such an order may be a relevant factor in deciding on whether the delay was inordinate or inexcusable. Even though the Court may have granted this period of indulgence, the extra time incurred is still a period of delay.

The need to deal with the Plaintiff's point (c) above depends on a finding as to whether the periods of delay (if any) occurred before or after the expiration of the limitation period. As set out below, I find that they almost all fell before that time. In D1's written submissions, Mr. Smith argued that:-

"Provided the limitation period has expired when the application to dismiss for want of prosecution is made, the court is entitled to pay regard to any period(s) of delay after the commencement of action, whether the limitation period had expired in relation to the said period(s) of delay: Rath v. Lawrence [1991] 1 W.L.R. 399.".

On the other hand, in Mr. Barlow's written submissions, he contended for the Plaintiff that:-

"the Defendants have not established a case of post-limitation inordinate delay. There is thus nothing upon which their doubtful allegations of pre-limitation delay can attach itself.".

I do not agree with Mr. Barlow over this issue. While it is true that it will generally be useless for the Court to strike out a claim when it is still possible for a plaintiff to commence a fresh action for the same claim, it does not follow that in order to succeed in a striking out application, a defendant must establish post-limitation delay. An example will demonstrate the fallacy of this argument.

Take for instance a personal injury case which occurred in January, 1994. The limitation period would expire in January, 1997. The writ was issued in February, 1994 followed by total inactivity by the plaintiff until the beginning of December, 1996. However, since that time the plaintiff has prosecuted his case with utmost diligence. The case involved no documentary evidence on liability. The defendant's only witness passed away in mid-December, 1996. If those were the only factors present, I cannot see how, as a matter of law, an application for striking out the plaintiff's claim taken out in, say, February, 1997 is bound to fail. I therefore concur with the observations of Farquharson, L.J. in Rath v. Lawrence when he said:-

"The position of the plaintiff who has delayed the issue of his writ until the last moment of the limitation period is, it is true, in one sense more advantageous than that of the plaintiff who issues his writ without delay. The former has exploited the period given to him by Parliament to the fullest extent, and cannot be criticized unless he is guilty of further delay after the limitation period has expired. The position of the latter is, however, quite different. Once the plaintiff has issued his writ and set the treadmill of litigation into motion, he is bound to observe the rules of the court. If he flouts them to the extent that the plaintiffs have in the present case I can see no reason why the defendants should not rely upon it, after the limitation period has expired, to support an application to strike out." (at p. 406).

Although the facts in the Rath case involved post- and pre-limitation delay, I do not consider the above observations as having laid down a legal principle that post-limitation delay is a prerequisite to an application for striking out.

For the above reasons, and taking into account all the circumstances, I find that there was delay on the part of the Plaintiff in relation to the following periods:-

(a) in relation to D1

(1) from August, 1993 to October, 1995, a period of about 2 years and 2 months;

(2) from February, 1996 to July, 1996, a period of about 5 months;

(3) from July, 1996 to July, 1997, a period of about 10 months;

(b) in relation to D2-3

(1) from January, 1992 to October, 1992, a period of about 9 months;

(2) from August, 1993 to October, 1995, a period of about 2 years and 2 months;

(3) from February, 1996 to July, 1996, a period of about 4 months;

(4) from September, 1996 to July, 1997, a period of about 10 months.

I further consider that these were relevant periods of delay for the purposes of the 2 applications for striking out for want of prosecution.

3.Was the Delay Inordinate?

I agree with the proposition in The Supreme Court Practice 1997, Vol. 1, para. 25/1/8 that "'inordinate' means 'materially longer than the time usually regarded by the profession and courts as an acceptable period. It is easier to recognize than to define.".

Even taking into account that this action involved 3 Defendants and that 2 of them are residing overseas, I do not consider that it should take over 6 years (from January, 1992 (the date of Writ) to May, 1998 (the date of application for setting down) for this action to be set down for trial. This is a commercial case and the nature of the Plaintiff's case, as far as I understand, rests primarily on documents.

Thus, even allowing for the usual heavy workload of solicitors in Hong Kong, I consider that there has been an overall delay of about 3-1/2 years to 4 years. In other words, if there had not been this delay, the trial of this action would have taken place by about September, 1994, or by about March, 1995 at the latest. I consider that this overall period of delay of about 3-1/2 years to 4 years was inordinate but do not find it necessary to distinguish between D1 and D2-3 over this issue.

Quite some evidence has been filed by both sides on the reason for the delay. In essence, both sides said that the delay was caused by the other side. I do not consider this to be relevant to the question of whether the delay was inordinate, but it may be relevant to the issue of whether the delay was inexcusable.

4.Was the Delay Inexcusable?

The Supreme Court Practice 1997 stated at para. 25/1/6: "'inexcusable'?This ought to be looked at primarily from the defendant's point of view or, at least, objectively; some reasonable allowance, for illness and accidents may be made. But the best excuse is usually the agreement of the defendant or difficulties created by him.". I consider this to be the correct test to be adopted for deciding this issue.

4(a)Relevance of the Defendants' Conduct

For this reason, I agree with the Plaintiff's submission that inordinate delay which is attributable to the defendant or to both parties cannot be relied upon for applying for dismissal. This view was shared by the learned authors of The Supreme Court Practice 1997 when they observed that: "The Court will look at the conduct of both parties. If the defendant has considerably contributed to the delay or, a fortiori, has actually agreed to it, he will seldom obtain the dismissal of the action ..." (at para. 25/1/8).

The above observations were consistent with the Judgment of the House of Lords in Roebuck v. Mungovin [1994] 2 W.L.R. 290 where Lord Browne-Wilkinson said:-

"... subsequent conduct by the defendant which induces the plaintiff to incur further expense in pursuing the action ... is, of course, a relevant factor to be taken into account by the judge in exercising his discretion ... At one extreme, there will be cases like the present where the defendant's actions are minor (as compared with the inordinate delay by the plaintiff) and cannot have lulled the plaintiff into any major additional expenditure: in such a case a judge ... will be likely to attach only slight weight ... At the other extreme one can conceive of a case where ... the defendant has for years thereafter continued with the action thereby leading the plaintiff to incur substantial legal costs: in such a case the judge may attach considerable weight to the defendant's activities ..." (at p. 298).

The defendant's conduct referred to was his seeking to obtain proper particulars, discovery and information as to the quantum of the plaintiff's claim from about April to May, 1990. This occurred in the context of the plaintiff's delay spanning from 1984 (date of injury) to October, 1991 (date of application to strike out).

Adopting the same approach, the Court of Appeal in Hunter v. Skingley [1997] 1 W.L.R. 1466 said:-

"... where both the defendant and the plaintiff were responsible for delays which might prejudice a fair trial, it was proper and necessary to consider the various periods of delay and items of alleged prejudice, and to decide, where possible, to whose fault they were attributable ..." (headnote at p. 1466).

The defendant's conduct in that case was his disappearance for 2 years. The judge found his culpable delay to be 5-1/2 years while that of the plaintiff to be 3-1/2 years. Judgment was already entered against the defendant and the delay was related to the assessment of damages. The Court of Appeal concluded that only 1 year of the overall delay from 1987 to 1996 was attributable to the plaintiff.

On the strength of these remarks from the Courts, the Plaintiff submitted that even if there be any inordinate delay, the Defendants in this case have condoned or acquiesced in the Plaintiff's inordinate delay, so as to encourage the Plaintiff to incur further expense in pursuing its action. For this reason I should consider their conduct when deciding how to exercise my discretion.

While the Defendants do not dispute the above principles, they submitted that the Defendants' conduct when compared to the Plaintiff's delay was minimal and therefore should attract little weight in the balancing exercise. In relation to settlement negotiations in particular, they relied on The "Finnrose" [1994] 1 Ll. L.R. 559. In that case, Mr. Justice Rix said:-

"Sporadic attempts at a settlement are no excuse for letting an action go to sleep. Litigants who mislead themselves into thinking that fruitless negotiations are going somewhere have only themselves to blame if they allow time to pass them by. There is no reason in any event why negotiations cannot be pursued simultaneously with the advancement of the litigation. There was no evidence in this case that the negotiations were making progress, let alone evidence of any agreement or representation on the part of the defendants that the action could be stalled pending discussions between the parties" (at p. 564).

The settlement negotiation in that case took place in May, 1991, February, 1992 to mid-May, 1992, once in July, once in August and once in October, 1992. These were in the context of an action commenced in 1990 for a cause of action accrued in about January, 1988. The striking out application was made in 1993 by which time discovery of documents was about to take place.

The Defendants argued that their conduct fell within the "slight weight" category referred to in the Roebuck case and the "sporadic settlement" category referred to in The "Finnrose" case.

As can be seen in "Schedule 2", the Defendants' relevant conduct in this case included the following:-

(a) correspondence with D1 regarding the renewal of the bank guarantee to be provided by D1's bank. This occurred around September/October from 1991 to 1997;

(b) settlement discussions with D1 during September and December, 1991, October, 1995 to June, 1996 and with D2/3 in February to March, 1992 and October, 1995 to June, 1996;

(c) correspondence with D2-3 regarding further discovery in June, 1993, November, 1993 to April, 1994 and July to October, 1996.

Further to the above, in "Schedule 1", the Defendants took (or agreed to) the following steps:-

(a) a series of some 10 consent orders relating to time extensions for the exchange of witness statements and expert reports from about June, 1996 to about June, 1997;

(b) further, D2-3:-

(1) filed List of Documents in May, 1993, Supplemental List of Documents in June, 1993 and 2nd Supplemental List of Documents in August, 1993;

(2) requested for further and better particulars of the Amended Statement of Claim in May, 1996;

(3) applied for specific discovery in May, 1996;

(4) applied for leave to amend their Defence in October, 1997.

Having considered all the above circumstances, I do not agree with the Defendants' submissions over this point. On the contrary, I agree with the Plaintiff's submissions that the Defendants' conduct in this case fell within the category "... the defendants have for [considerable periods of time] continued with the action thereby [led] the plaintiff to incur substantial legal costs ...". The legal costs so incurred would include preparing the witness statements, expert report, discovery of documents of both sides, and filing and serving various documents including further and better particulars.

For these reasons, I consider that the delay in this case was not inexcusable. Since I am already able to reach a conclusion based on condonation and acquiescence, I do not find it necessary to adopt the approach in the Hunter case and determine who was at fault in causing the various periods of delay in this case. If I had to do so, I would have concluded that on an overview, both sides were equally blameworthy. The overall period of delay would have to be split between the Plaintiff and the Defendants. I would also have dismissed the applications by reason that the parties were equally to be blamed for the delay.

5.Was there Prejudice Caused by the Delay?

Having reached the above conclusion, it is unnecessary for me to consider whether the delay has caused substantial prejudice to the Defendants. I shall however do so for the sake of completeness.

5(a)Vis-à-vis D1

D1 argued that it suffered from the following prejudice:-

(a) financial prejudice:-

(1) while it may be true that D2 is now financially insolvent, from the materials disclosed in the affidavits filed by the Plaintiff, D2 was probably financially able to answer any order for contribution or indemnity made in these proceedings if the matter was concluded in 1994 or 1995. Thus, even though D2 has been made a Third Party, D1 is now financially prejudiced by the delay;

(2) it is common ground that D3 is now a shell of a company having no assets. Similar to D2, even though D3 has been made a Third Party, there is no likelihood that D1 would be able to recover anything by way of indemnity or contribution;

(3) prior to the hand-over of the sovereignty on 1 July, 1997, it was possible to enforce a Hong Kong judgment in Sri Lanka. However, the evidence filed by D2-3 shows that it is now impossible for such a judgment to be enforced there;

(b) prejudice relating to the lack of evidence:-

this relates to the "new defence" which was introduced by D2-3 by way of the amendment made in October, 1997. I shall deal with this more fully in relation to D2-3.

As to D1's point (a)(1) above, I agree with Mr. Smith's submissions that prejudice to a defendant's financial position can in law be relevant prejudice in an application for striking out: see Antcliffe v. Gloucester [1992] 1 W.L.R. 1044, Biss v. Lambeth, Southwark and Lewisham Health Authority [1978] 1 W.L.R. 382, 387, and D.O.T. v. Chris Smaller [1989] A.C. 1197, 1209. I also agree with him that the evidence in this case shows that it was possible D2 was financially able to answer any order for indemnity/contribution in 1994 or 1995 but it is quite possible that D2 is unable to do so now. In fact, Mr. Ramasamy Veerabagu is no longer in Sri Lanka and the affidavit he made only shows a "care-of" address. The same reasoning would apply to D3 save that it is unknown whether D3 was financially in a better position in 1994 or 1995 than now.

I agree that the evidence filed on behalf of D1 shows that it is impossible for a post-hand-over Hong Kong judgment to be enforced in Sri Lanka (see D1's point (a)(3) above). Mr. Barlow submitted that the advice from the Sri Lankan lawyers should be read as limited to reciprocal enforcement of judgments only. In such a case, the presumption that foreign law is the same as Hong Kong law applies. Since it is possible to enforce a foreign judgment by way of a common law action, it is presumed that this is also possible in Sri Lanka. With respect, I do not see any valid basis to so limit the advice given by the Sri Lankan lawyers when they have expressly given any unqualified advice.

For the above reasons, I would have found that D1 has suffered financial prejudice if the delay had been inexcusable.

As to D1's point (b) above, since I opine that the prejudice relating to the "new defence" of D2-3 was not caused by the Plaintiff's delay (see below), I do not find that D1 can successfully rely on this alleged prejudice in this application.

5(b)Vis-à-vis D2-3

By the amendment made to their Defence in October, 1997, D2-3 introduced a new line of defence. This "new defence" is basically that there was a pre-existing course of dealing between D2 and the Plaintiff. Because of this course of dealing, it was agreed by conduct that property in the goods sold by the Plaintiff to D2 would pass to D2 at the time when D2's bank account was debited by its bank. D2 stated in evidence that although documents and witnesses were available to support this defence until about 1993, since about 1996 they were unavailable because the documents could not be located and witnesses were either missing or unwilling to testify.

The Defence of D2-3 was filed and served in January, 1993. There is no explanation given as to why the "new defence" was not raised in the pleadings until October, 1997 (although it was mentioned in correspondence in 1996). It is also difficult to understand the assertion that supporting witnesses and documents were available in about 1993 but somehow this defence was either omitted (or concealed) by D2-3 until much later. As this case may shortly be set down for trial, I shall refrain from commenting further on this aspect save to remark that I find the assertion relating to the alleged existence of supporting documents and witnesses rather hard to believe.

Even if these supporting documents and witness did exist in 1993, I do not consider that their absence now was caused by the Plaintiff's delay. I agree with Mr. Barlow's submissions over this point that any prejudice relating to the "new defence" was self-induced. I understand that discovery was ordered as early as in February, 1993. All relevant documents should have been disclosed then or (because there is a continuing duty to discover) since then. Even if the prejudice relating to the "new defence" could not be regarded as self-induced, it would at least be a prejudice caused equally by D1's fault. I would still have dismissed the application on this basis.

There were also other alleged prejudice but I do not propose to set out all of them. One alleged prejudice is the death of Mrs. Subbamal Ramasamy, the mother of Ramasamy Veerabagu. She was described to have been "an integral part" of the partnership. This is a vague term which does not define what her role in the partnership was, let alone her role in relation to the transaction in this action. According to the witness statement of Mr. Veerabagu, he was the person solely responsible for dealing with the Plaintiff. I therefore do not find the death of Mrs. Ramasamy to be relevant at all to this application. For similar reasons, I do not consider the lack of communication between Mr. Veerabagu and his two brothers to be relevant either.

D3 was described in the affidavits as "a shell" or "the shell of a company". I understand this to mean that D3 does not carry on any business, has no employee or assets, and in essence has but a fictional existence. In this circumstances, I do not understand how it can realistically be argued that D3 will suffer any prejudice. Any prejudice can only be theoretical: the worst that can happen is that an "empty" judgment will be entered against D3.

6.Other Matters

Mr. Barlow attributed part of the delay to the listing procedure of this Court. He said that part of the reason why the Plaintiff was unable to set down this case was because of the Listing Judge's refusal to do so if it was asserted by any party at the checklist hearing that the case was somehow not ready for trial. I do not accept this to be a valid criticism. The Listing Judge will not tolerate any attempt by any litigant to avoid the case from being tried nor, in fact, would any tribunal in Hong Kong. All that the legal representatives need to do is to make the appropriate application timely to prevent such attempts. Preemptory orders are regularly made by the Courts without hesitation in appropriate cases.

Mr. Barlow also argued that D1 should not be allowed to rely on D2-3's "new defence" in this application because D1 has not yet amended its Defence to incorporate it. Mr. Smith informed me, and I accept what he said, that D1 will do so should the case proceed further. I consider that it is quite possible that D1 will be able to obtain leave to incorporate this defence, since it has already been allowed in relation to D2-3. For this reason, I find that the "new defence" ought also to be considered in relation to D1 even though technically this has not yet been set out in D1's Defence.

7.Conclusion

To conclude, both applications are dismissed. The parties agreed that in such case I should give leave for the Plaintiff to set down the case for trial. However, I consider that this may be a matter more appropriate for the Listing Judge and therefore leave it to the parties to make such application before him.

8.Costs

There is no reason why a costs order nisi should not be made pursuant to Ord. 42 r. 5B(6) or why costs should not follow the event. Costs of D1's application are to be paid by D1 to the Plaintiff while those of D2-3's application are to be paid by D2-3 to the Plaintiff. As the hearing for the two applications took approximately the same time, the costs of the hearing are to be split equally between D1 on the one hand and D2-3 on the other. All costs are to be taxed if not agreed in any event.

(Andrew Chung)

Deputy Judge of the Court of First Instance

Representation:

Mr. Barrie Barlow i/s by Messrs. Richards Butler for the Plaintiff

Mr. Clifford Smith i/s by Messrs. Ince & Co. for the 1st Defendant

Mr. Ashley Burns i/s by Messrs. Stephenson Harwood & Lo for the 2nd and 3rd Defendants

HCCL No. 1 of 1992

SCHEDULE 1

CHRONOLOGY OF EVENTS: COURT RELATED PROCEDURE

[ D1's "Periods of Delay A and B": 5.93 to 7.96 ]

[ D2-3's "2nd and 3rd Periods of Delay": 8.93 to 10.95 ]

[ D1's "Period of Delay C": 2.96 to 7.96 ]

[ D2-3's "4th Period of Delay": 2.96 to 7.97 ]

[ D1's "Period of Delay D": 7.96 to 8.97 ]

[ D2-3's "5th Period of Delay": 9.96 to 7.97 ]

HCCL No. 1 of 1992

SCHEDULE 2

CHRONOLOGY OF EVENTS: OUT-OF-COURT STEPS

HCCL No. 1 of 1992

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL LIST

ACTION NO. HCCL 1 OF 1992

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CHRONOLOGY

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Remarks:
On appeal by the 1st Defendant to the Court of Appeal: Appeal dismissed. Please refer to judgment CACV000262/1998.