CHRISTOPHER RICHARD BALL v. STAR JET AVIATION (HONG KONG) LTD

DCCJ 5199/2023

[2024] HKDC 2149

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5199 OF 2023

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DECISION

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Introduction and Background

1.  By two Summonses dated 23 April 2024 and 5 June 2024 (“the Summonses”), the Plaintiff (“P”)  applied:

(1)  For summary judgment pursuant to O 14, r 1 of the Rules of the District Court, Cap 336H (“RDC”)  against the Defendant (“D”)  in the sum of US$50,000; and

(2)  For a determination by the court under O 14A, r 1 of RDC the following questions of law:

(a)  Whether the correspondence exchanged between the parties referred to in paragraphs 3 to 5 of the Statement of Claim (“SOC”)  are without prejudice in nature and therefore covered by “without prejudice privilege” and therefore are inadmissible; and

(b)  Whether the correspondence exchanged between the parties referred to in paragraphs 7 to 12 of SOC, notwithstanding that some of them are marked “without prejudice”, are admissible.

2.  Essentially, P claims that on 6 October 2023, P and D had entered into a written settlement agreement (“the Settlement Agreement”)  to settle a dispute between the parties.  It is P’s case that notwithstanding D’s promise to P that the Settlement Agreement will be countersigned and returned to P in the week beginning 16 October 2023, D failed to sign and return to P the countersigned Settlement Agreement.  P seeks inter alia: (1)  a declaration that the Settlement Agreement is effective and time for the Defendant to make the payment under the Settlement Agreement has elapsed; (2)  an order by way of specific performance of the Settlement Agreement; and (3)  damages to be assessed in lieu of or in addition to specific performance of the Settlement Agreement.

3.  In a “Statement of Defence” (“Defence”)  filed by a director of D, at paragraph 1 there is a general statement that, “[D] denies P’s claim in its entirety and paragraphs 1 to 15 of [SOC] are specifically denied” (“Para 1”). It was further pleaded that P refers to and seeks to rely on communications, exchanges and documents between the parties which are clearly marked “without prejudice” or were implied to be without prejudice by their very nature.  It is pleaded that those communications, exchanges and documents were privileged and inadmissible relying on the authority of Re Jinro (HK)  International Ltd [2002] 4 HKC 90.  It is claimed therefore that P has no reasonable cause of action and P’s claim should be summarily dismissed with costs on an indemnity basis.

4.  At a hearing of the Summonses on 23 September 2024, the parties consented to judgment be entered against D in favour of P in the sum of US$50,000 together with interest and costs of the Summonses agreed at HK$100,000, payable by instalments.  However, the parties were not able to agree the costs of this action as counsel for D indicated that he was not able to obtain instructions from his client.

5.  I therefore adjourned the determination of the disposal of this action and the question of costs of this action to a further hearing before me.  Today is that hearing.

6.  Although Mr Chan, solicitors, appeared on behalf of D, he informed this court that although he has instructions to appear he has no instructions to make any submissions today.

7.  Ms Yue, solicitors, appeared on behalf of P.

Discussion

8.  Where there is an outstanding issue as to costs, the court is entitled to determine the substantive issue so as to decide the liability as to costs notwithstanding the substantive question of law which had become academic because there was no dispute to be resolved between the parties: see Hong Kong Civil Procedure 2025, Vol 1, §62/3/3.

9.  Ms Yue submitted that there is only a general denial of P’s factual claim in Paragraph 1 of the Defence.  The pleaded offer, acceptance and terms of the Settlement Agreement were not specifically traversed.  Pursuant to O 18, r 13(3)  of RDC, D is deemed to have admitted them.  See Laerdal Medical Limited v Hong Kong Haocheng International Trade Limited (unrep)  CACV 154/2017, 20 November 2017 at §18.

10.  Ms Yue further submitted the only matter raised in the Defence is the alleged inadmissibility of the correspondence between the parties marked “without prejudice”.  That argument would have failed.

11.  I agree with Ms Yue that D is deemed to have admitted P’s case on the Settlement Agreement.  In those circumstances, the raising of the admissibility of evidence affords no defence to P’s claim.

12.  Even if I were wrong, it is now well-established that where the issue is whether without prejudice communications have resulted in a concluded compromise agreement, those communications are admissible: see Unilever Plc v The Procter & Gamble Company [2000] 1 WLR 2436 at 2444D and Lai Tai Miu, Rovana v Everest Timothy Wodehouse [2021] HKCFI 206, §8.

13.  I therefore accept that not having raised any defence to P’s claim, P would have obtained final judgment in this action against D and costs should follow the event.

Disposition and Order

14.  I would therefore order D to pay to P the costs of this action to be taxed if not agreed.