Zebra Industries (Orogenesis Nova)Ltd–[Zion] v. Wah Tong Paper Products Group Ltd

HCMP 436/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 436 OF 2013

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D E C I S I O N

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A. INTRODUCTION

1.By way of these proceedings, the plaintiff company seeks to set aside a consent order (“the consent order”) dated 11 Dec 2012 it entered into with the defendant.  The fundamental basis of the plaintiff’s case to set aside the consent order is that it was obtained under economic duress premised on the costs orders the defendant had obtained in earlier proceedings.

2.For the purpose of the anticipated trial of the present proceedings, both parties have filed various witness statements. Moreover, the plaintiff sought to rely on various affirmations filed previously.

3.By way of its summons dated 18 December 2013, the defendant applied to strike out certain parts of the witness statements and various affirmations filed by the plaintiff for the purpose of the trial.

4.This striking out summons came before this court on 9 January 2014.  The parties had by then filed skeletons in support of and in opposition to it.  However, after disposing some other applications relating to striking out and amendments of the pleadings at that hearing, this striking out summons was adjourned at the suggestion of the court to enable the parties to see if they could dispose of it by consent or agreement.

5.The parties did not manage to dispose of the striking out summons as hoped.  It came before me again on 11 April 2014 for substantive hearing[1].

6.On 11 April, after hearing, I ordered, among others[2], the striking out of the “Reply Affirmation of Elijah Saatori to the Perjurious Affirmation of the Defendant” filed herein on 7 May 2013 save and except its Exhibit 3 for the purpose of the trial primarily on the basis of irrelevance.  For convenience, I would refer this affirmation as the “Reply Affirmation”.

7.Before me now is the plaintiff’s application[3] for leave to appeal the above order for striking out the Reply Affirmation save and except Exhibit 3.

B. THIS LEAVE APPLICATION

8.For leave to be given to appeal against an interlocutory order, the court has to be satisfied that the intended appeal has a reasonable prospect of success or that it is in the interest of justice to do so.  See: s 14AA(4) of the High Court Ordinance (Cap 4).

The intended grounds of appeal

9.The plaintiff principally raises two grounds to support the intended appeal:

(1) The plaintiff’s director and representative Mr Saatori did not have the chance to read the defendant counsel’s skeleton in support of the striking out application before the hearing on 11 April 2014.  He also did not have time to read the hearing bundles which were only served on the plaintiff on 8 April 2014.  As such, he was prejudiced and not in a position at the hearing to make proper and full submissions in rebuttal of the defendant’s submissions to strike out the Reply Affirmation.

(2) In any event, the Reply Affirmation is relevant to and important for the upcoming trial of the plaintiff’s claim.

10.I would consider these 2 grounds in turn.

No proper chance to read the defendant’s skeleton and hearing bundles before the hearing

11.It is the plaintiff’s own position that the defendant’s skeleton was sent to the plaintiff by email as an attachment on 9 April 2014.  It is also the plaintiff’s own position that it did not open and read the email until 11 April 2014 at 5:03 pm[4] (ie, after the hearing on 11 April).

12.In the premises, taking its position to the highest, it is the plaintiff’s own decision and choice not to open the email and the attached skeleton and read them before the hearing.  Thus, even if any prejudice was caused to the plaintiff as alleged by not having read the defendant’s skeleton before the hearing, it was caused by the plaintiff’s own act.

13.Moreover, and in any event, I do not think the plaintiff had suffered any real prejudice as alleged.  This is so because first, the plaintiff had already had the defendant’s earlier skeleton in support of the striking out applications filed for the hearing originally fixed on 9 January 2014.  That skeleton raises effectively identical submissions for striking out the Reply Affirmation as raised in the defendant’s skeleton filed for the 11 April hearing.  Second, at the hearing on 11 April, I had explained to Mr Saatori the bases of the defendant’s application to strike out the Reply Affirmation.  In the premises, Mr Saatori should not be prejudiced in making submissions to oppose the application (see also paragraphs 18 and 19 below).

14.Insofar as the hearing bundles are concerned, again, it was the plaintiff’s own decision not to open the package served on it before the hearing and not to bring them to the hearing on 11 April 2014. Again, if any prejudice was caused as alleged, it was a result of the plaintiff’s own act.

15.Further, and in any event, the hearing bundles contained only those court documents (including the pleadings, summonses, witness statements and affirmations together with the exhibits) necessary for the purpose of the hearing in a paginated manner for the convenience of the parties and the court.  These documents are also in the plaintiff’s own possession.  In the circumstances, I do not accept that there is any real prejudice caused to the plaintiff that would render Mr Saatori unable to properly argue the matter regarding the striking out of the Reply Affirmation at the hearing.  As a matter of fact, at that hearing, Mr Saatori had with him his own copy of the Reply Affirmation and exhibits[5].

16.For the above reasons, in my view this ground of appeal does not have a reasonable prospect of success to set aside the order to strike out the Reply Affirmation save and except Exhibit 3.

The Reply Affirmation is relevant to the trial

17.The Reply Affirmation was filed by the plaintiff in reply to Mr But’s affirmation filed by the defendant before the matter was ordered by me on 6 June 2013 that it be continued as if the same had been begun by writ, and that the parties’ respective pleadings be filed and witness statements be exchanged.

18.I struck out the Reply Affirmation essentially on the following bases as submitted by the defendant:

(1) The defendant would not call Mr But nor rely on Mr But’s Affirmation at the trial.  Thus, the Reply Affirmation is no longer relevant insofar as those parts are made to rebut or respond to Mr But’s evidence made in his affirmation.

(2) Further, most of the other contents of the Reply Affirmation refer to matters on the long and chequered litigation history between the parties, including what had happened in the arbitration between the parties[6]. They also contain various allegations of fraud practised by the defendant and its legal representatives in obtaining the previous costs order before Burrell J.  These matters are not relevant to the trial.  This is particularly so as (a) the Court of Appeal and this court have repeatedly concluded previously that it is not open to the plaintiff to revisit the propriety of these costs orders[7]; and (b) the plaintiff has in any event already applied for committal against defendant and its solicitors based on the same allegations of fraud.  The committal proceedings are now seized by Mimmie Chan J.

19.On other hand, I also accepted Mr Saatori’s submissions at the hearing that, since Mr But’s assertion that the defendant did not know the alleged impecunious position of the plaintiff at the material time had been repeated in Mr Lai’s witness statement (filed by the defendant for the purpose of the trial), this allegation was thus relevant to the trial on economic duress.  I therefore allowed (accepting Mr Saatori’s submissions) the entire Exhibit 3 to the Reply Affirmation to be admitted and relied on by the plaintiff at trial.  Exhibit 3 consists of documentary evidence which Mr Saatori said would show that the defendant was aware of the plaintiff’s dire financial position at the material time.  For ease of reference, I attach to this decision as appendix the relevant parts of the transcript of the hearing on 11 April 2014 (pp 22F-35I) showing the reasons why I struck out the Reply Affirmation but allowed Exhibit 3 to remain and be relied on as evidence at the upcoming trial.

20.In light of my above bases in making the order, suffice for me to say that I do not think the plaintiff fairs a reasonable prospect of success to say that the Reply Affirmation (other than Exhibit 3) is relevant to the issues at trial and should be admitted as evidence.

21.I therefore also do not think leave to appeal should be granted on this ground.

C. CONCLUSION

22.For the above reasons, I refuse to grant leave to the plaintiff to appeal and dismiss its summons[8].

23.There are no reasons why costs should not follow the event.  I therefore further order that costs of this application be to the defendant, to be taxed if not agreed.

Plaintiff, in person, represented by its director, Mr Elijah Saatori

Mr Josiah Chan Chung Ming, instructed by W K To & Co, for the defendant

APPENDIX

Please refer to HCMP1503/2014 for the relevant appeal(s) to the Court of Appeal.