Chun Wo Building Construction Ltd v. Metta Resources Ltd

HCCT 29/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO. 29 OF 2013

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DECISION
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1.This is Chun Wo’s application for an unless order against Metta in respect of the exchange of the first round of factual witness statements.  Given that this action was started in August 2013, it is, putting it mildly, highly unsatisfactory that there is yet to be an exchange of witness statements in this case.

2.According to the existing directions (see Order dated 21 May 2014 (“Order I”), §§ 7-9 and Order dated 10 November 2014, §§ 1 and 4), and putting aside Metta’s construction argument which, as explained below, I find unmeritorious, the exchange of the 1^st round of witness statements should have taken place on 11 May 2015. 

3.In light of the fact that the trial is to take place in March 2016, this presents a very tight time frame during which much pre-trial works have to be completed.

4.There are 2 arguments advanced by Metta.  I shall deal with the construction point first.  It is said that the existing directions provide for the exchange of statements only after the completion of inspection of documents.  Due to a number of issues over discovery, the blame for which Metta says lies with Chun Wo, inspection was only completed on 17 April 2015.  Hence, the statements are not due to be exchanged until 17 September 2015.

5.The high-water mark of Metta’s argument rests in the reference in para 9 of Order I to “within 5 months after inspection”.  Quite apart from the point that Order I made no suggestion that witness statements are to be exchanged only after completion of inspection, this cannot conceivably be a sensible understanding of the directions.  Such an understanding means that either party can unilaterally dictate when the exchange can take place, thereby frustrating any effort by the court to manage this case. 

6.With respect, if there was a genuine misunderstanding on the effect of the directions in question, it would be reasonable to expect that the matter be clearly laid out before the court on evidence with identification of the basis of the misunderstanding.  I do not agree with Mr Scott SC that there is such evidence. 

7.The 2^nd reason for resisting the unless order is that Metta is not ready for the exchange of witness statements.  This suggestion comes very much as a surprise to the court.  When this application came before the court for directions on 28 May 2015, it was observed by the court that it expected Metta to have advanced drafts of the statements of its witnesses, because if the court agrees with this application Metta should not expect to be allowed a lengthy period of time for the exchange.  There was no indication given that Metta was not in a position to exchange its statements.

8.There are 2 reasons advanced by Metta to justify the lack of readiness.  Firstly, it is said that the rectification works have yet to be completed.  The short answer is that Metta may be permitted to submit supplemental statement(s) to deal with the rectification works which have not been completion at the time of the 1^st round of exchange. 

9.In any case, this is an unconvincing excuse. The relevant directions have been in place since May 2014.  It must not be overlooked that only factual witnesses are involved in the 1^st round of exchange.  The difficulties cause by the completion of rectification works are only advanced in counsel’s submissions.  There is no proper specificities to demonstrate how such difficulties in fact impacted upon the preparation of statements.  The generalities presented in submissions deserve little weight.  This court does not even have evidence on the state of readiness of Metta’s statements and how long it would take for the drafts, if there is any, to be completed.  I should say that I have been told in submission this morning that there are draft witness statements.  This does not take the matter much further.   

10.If there was genuine difficulties in producing the statements in accordance with the timetable, it would be reasonable to expect Metta to come back to court for an extension of time supported by adequate evidence.  There has been no such application. 

11.Secondly, Metta says that the deficiencies in Chun Wo’s discovery have caused delay in the preparation of its statements.  I have already dealt with Metta’s discovery application on 3 June 2015.  For a construction case involving vast amount of details, as a matter of reality, deficiencies in discovery can only be expected.  I do not believe that either Chun Wo or Metta is taking the position that its discovery is beyond reproach.

12.The proposition that such deficiencies justify a delay in the exchange of factual witness statements cannot be accepted without adequate evidence which condescends to proper particulars.  I see no such evidence.  I should add that if Metta’s witnesses had in fact been involved in dealing with the alleged deficiencies in Chun Wo’s discovery, they were assisted by an able team of lawyers.

13.Metta must know by now what its factual case is.  I cannot see why it is not in a position to put its factual evidence in black and white.  If it is subsequently discovered that certain facts stated in the statement(s) are incomplete or incorrect due to the unavailability of document(s) which should have been provided by Chun Wo, an appropriate application, properly supported, can be made to remedy the situation. 

14.For these reasons, an unless order is justified.  I shall hear the parties on the precise terms of the order.

Mr Peter Clayton SC and Mr Jonathan Wong, instructed by J Chan, Yip,  So & Partners, for the plaintiff

Mr John Scott SC and Mr Anthony Chow, instructed by Hogan Lovells,for the defendant