Dbs Bank (Hong Kong) Ltd v. Gary K.W. Tam t/a Gary K.W. Tam & Co (A Firm)
|
HCA2987/2003 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 2987 OF 2003 ----------------------
---------------------- Before : Hon Yam J in Chambers Date of Hearing : 4 August 2008 Date of Judgment : 4 August 2008 Date of Reasons for Judgment : 7 November 2008 --------------------------------------------------- REASONS FOR JUDGMENT ------------------------------------------------- 1.I have decided in this case that the plaintiff’s action herein should be dismissed on the following grounds, namely :
2.This case started off way back in or about August 1997 whereby the defendant’s firm of solicitors were instructed by the plaintiff (previously known as Dao Heng Bank) to act for them in respect of certain “Mortgage Transactions”. At that time the mortgager of the two properties was one Madam Ho and the principal borrower was her son, one Mr Lam. 3.In the previous mortgage action (HPMC644/2000), the bank tried to enforce the Mortgage Transactions but failed. Deputy Judge A. Cheung (as he then was) gave his judgment on 28 October 2002 and held that Mr Lam had misrepresented to Madam Ho and exerted undue influence on her in order to procure the mortgages which were therefore set aside. 4.This action was thereafter instituted on 12 August 2003 against the defendant’s firm of solicitors. The bank alleged, inter alia, that the defendant had negligently and in breach of the implied terms of the retainer failed to advise the plaintiff of the possibility that Madam Ho was under Mr Lam’s undue influence and they also failed to advise it to inquire into the matter and take precaution to protect the interest of the plaintiff in the Mortgage Transactions. 5.In the defence of the solicitors, they contended that their retainer was only restricted to prepare the documents in relating to the Mortgage Transactions and to handle any related procedural matters. They said that they were not instructed to give legal advice on issues of undue influence or otherwise assess the plaintiff’s legal risk of entering into the Mortgage Transactions. 6.In the previous proceedings before Deputy Judge A. Cheung, the defendant Mr Tam and a Ms Pong, solicitor in the defendant solicitors firm gave evidence for the defendants as a third party in those proceedings whereas a Ms Yung gave evidence for the plaintiff bank as their employee handling this matter. 7.Thus the scope of the retainer in the instructions of the bank is very crucial. The parties do not just rely on the witness statements of the aforesaid three witnesses. Accordingly it cannot be said, as submitted by the plaintiff, that there is no risk of fading memory of the witnesses because of their previous written witness statements already given in the previous proceedings and the oral evidence as recorded in the transcript. The material event happened in August 1997 which was 11 years ago and by the time of the trial, all these memory will fade and it will not be fair to ask the witnesses to recall events which happened such a long time ago. 8.I therefore came to the firm conclusion that the delay has already caused prejudice to the defendant. What was the material delay in this action? 9.I also came to a conclusion that there was inexcusable and contumelious delay on the part of the plaintiff in prosecuting this action. The following facts will speak for themselves. 10.After the judgment of Deputy Judge A. Cheung on 28 October 2002 the plaintiff commenced the action herein only 9 months later, in August 2003. 11.It took the plaintiff another 5 months to file and serve a statement of claim in January 2004. The defence was promptly served the next month on 20 February 2004. 12.By a consent order made by Master de Souza on 14 May 2004 it was agreed that :
13.The defendant then filed his list of documents within time on 4 June 2004. However the plaintiff only filed his list on 15 June 2004 in breach of the consent order. 14.What is significant is that there was an inexplicable inactivity of about 19 months thereafter without any inspection of documents. As submitted by the defence side, more importantly and in further breach of the consent order, the plaintiff has never prepared any witness statements to be exchanged despite repeated requests sought from the defendant’s solicitors on 7 and 9 September 2004. 15.Eventually the plaintiff filed a notice of intention to proceed on 26 January 2006, i.e. after the aforesaid 19 months delay. In spite of that there was a further delay of 4 months until 9 May 2006, by which time the plaintiff then filed an amended statement of claim. The defendant promptly filed an amended defence accordingly on 2 June 2006. 16.In other words, by 9 May 2006, there was nearly 26 months of inactivity when the plaintiff had done nothing in relation to the proceedings. Up to the time of the defendant’s application to strike out the action, on 3 January 2008, there was no exchange of any witness statements and the plaintiff is still in continuing breach of the aforesaid consent order dated 14 May 2004. 17.It is by no surprise that Master de Souza allowed the defendant’s application to strike out the plaintiff’s action on 5 May 2008. 18.In sum, there were a number of periods of inactivity on the part of the plaintiff as follows :
19.The aforesaid account of events shows clearly that :
20.The only excuse put forward by the plaintiff was that it has always considered the possibility of settlement and it was, “prior to and after [its] amending the Statement of Claim herein”, trying to procure a settlement between the parties. 21.Mr Raymond Lee of the plaintiff’s solicitors contended that he was having “intermittent communications” with Mr Harrington of the defendant’s solicitors. However, the defendant’s solicitors have clearly pointed out that Mr Bowers of the defendant’s solicitors had taken over the conduct of the litigation since about 24 April 2006, i.e. that was well before the plaintiff had even filed and served his amended statement of claim. Thus it is implausible, as contended by the defendant’s solicitors, that the so-called negotiation for settlement was done between Mr Raymond Lee and Mr Harrington from mid-2006 onwards. 22.The plaintiff’s solicitors had a duty to diligently pursue the action in spite of the fact that it was trying to negotiate for a settlement. In any event, as pointed out by the defendant’s solicitors, Mr Raymond Lee was only prepared to recommend to their client the terms as set out in the so-called letter of settlement. There was no offer of any settlement or the parties were engaged in any kind of negotiation. The formal offer of settlement only came by 27 December 2007. All in all the inactivity in this period of time was not caused by the defendant nor the negotiation for a settlement. Conclusion 23.By reason of the aforesaid matters, I have dismissed the plaintiff’s appeal with costs to the defendant, to be taxed if not agreed.
Mr Kenneth C.L. Chan, instructed by Messrs Michael Cheuk, Wong & Kee, for the Plaintiff Mr Jose-Antonio Maurellet, instructed by Messrs Richards Butler, for the Defendant |
Cases cited in this judgment
Other judgments that cite this case