THE AGRICULTURAL BANK OF CHINA v. LAU YUET WAH AND OTHERS

HCA 2804/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2804 OF 2000

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BETWEEN

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D E C I S I O N

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1.  The trial of this action was originally scheduled to take place in May 2003. Due to the outbreak of SARS, the trial was adjourned. Since then, neither side took any step in resuming the trial of this action. By Summons dated 5 July 2010, the 1^st and 2^nd defendants applied for an order to strike out the plaintiff’s claim for delay (or, as is often called, for want of prosecution) and consequential orders.

The dispute

2.  The plaintiff is a banking corporation incorporated in Mainland China. At all material times, Liu Cheng Lai ("Liu") and Yan Shi Kui ("Yan") were respectively the General Manager and Vice General Manager of the International Business Section of the Jilin branch of the plaintiff ("Jilin Branch").

3.  On the other hand, the 1st defendant and her husband (Sun Ya Fei) were at all material times the proprietor of Jilin Province Overseas Chinese Long Wei Wood Enterprises Co. Ltd. ("Long Wei"), which was a customer of the Jilin Branch of the plaintiff. The 1^st and 2^nd defendants, who are sisters, were directors and shareholders of the 3^rd defendant. They were also the directors of the 4^th defendants. Both the 3^rd and 4^th defendants were companies incorporated in Hong Kong.

4.  Put shortly, the plaintiff’s claim against the defendants is a case of conspiracy. According to the plaintiff, the 1^st to 4^th defendants unlawfully and fraudulently conspired with Liu and Yan to misappropriate substantial amounts of fund from the plaintiff by procuring a number of letters of credit to be issued by the Jilin Branch of the plaintiff in favour of the 3^rd defendant when the alleged underlying transactions did not exist or were bogus. As a result of the alleged conspiracy, the Jilin Branch of the plaintiff issued a total of 25 letters of credit in favour of the 3^rd defendant (see Schedule 1 to the Amended Statement of Claim). They were all applied by Long Wei, and were granted by Liu and Yan without any security. Thereafter, shipping documents were presented and payments were obtained by the 3^rd defendant (see Schedule 2 to the Amended Statement of Claim). The plaintiff contended that a net sum of US$62,067,895.10 was received by the 3^rd defendant, and that the 1^st to 4^th defendants converted the said sum to their own use.

5.  Having discovered the fraud, the plaintiff reported the matter to the relevant authorities in Mainland China and also the Hong Kong Police. Yan was dismissed by the plaintiff in May 1999. Liu was arrested by the Mainland authorities in January 2000, and was subsequently convicted and sentenced to 20 years imprisonment for embezzlement and letter of credit fraud by the Jilin Province Changchun City Intermediate People’s Court. The 1^st and 2^nd defendants were also investigated by the Mainland authorities and also the Commercial Crime Bureau (“CCB”) of the Hong Kong Police. Although neither the 1^st nor the 2^nd defendant was subject to criminal prosecution, it is the plaintiff’s case that this was not because the 1^st and 2^nd defendants are innocent. According to the plaintiff, CCB took the view that the criminal proceedings should take place in Mainland China whereas the relevant Mainland authorities decided not to prosecute on the ground of difficulties in securing witnesses and documents in Hong Kong.

6.  Apart from reporting the matter to the Mainland authorities and the Hong Kong Police, the plaintiff commenced this civil action in Hong Kong on 16 March 2000. The 1^st, 3^rd and 4^th defendants filed one Defence in May 2000 (which was subsequently amended on 2 May 2002). The 2^nd defendant filed a Defence on her own in May 2000.  Whilst the 2^nd defendant’s Defence is basically one of non-admission or bare denial, the overall defence adopted by the 1^st to 4^th defendants can be briefly summarized as follows.

7.  The defendants admitted the position of Liu and Yan. They also pleaded that the International Business Department of the plaintiff was at the time the only department of the plaintiff which had express authority to act for the plaintiff and to deal with all the matters relating to the plaintiff’s investment and business outside Mainland China. According to the defendants, there were various meetings held between August and November 1996. During these meetings, the 1^st defendant and her husband were notified by Liu and Yan of the plaintiff’s intention to establish a company in Hong Kong as the plaintiff’s “window to the West” (or what is often described as a “window company”) so as to subsequently raise funds for the plaintiff’s prospective international business and that the 1^st defendant was requested to assist the plaintiff to do so.

8.  It was, according to the defendants, against this background that the 3^rd defendant was incorporated or caused to be acquired by the 1^st and 2^nd defendants. Further, on 28 January 1997, as it transpired, the 1^st and 2^nd defendants executed a Declaration of Trust declaring themselves holding their shares of and in the 3^rd defendant for and on behalf of Yan as the beneficiary. The effect of this Declaration of Trust would of course be a matter for the trial Judge, if this matter proceeds to trial.

9.  According to the defendants, they genuinely believed that the letters of credit were only means adopted by the plaintiff to inject capital into the 3^rd defendant so as to enable the 3^rd defendant to embark upon investment business in Hong Kong for the plaintiff. On this basis, the defendants deny any wrong doings on their parts.

The procedural history

10.  As noted above, the plaintiff commenced this action in March 2000. When so doing, the plaintiff applied for and obtained from Nguyen J an ex parte Mareva injunction against the 1^st to 4^th defendants restraining them from dealing with or disposing of their assets up to US$63 million. This Mareva injunction was subsequently continued by consent in March 2001 (and until the present application, there was no application by the defendants to discharge the Mareva injunction). Thereafter, the plaintiff and the defendants took steps for the preparation of the trial including the exchange of List of Documents and witness statements.

11.  In September 2002, the plaintiff applied to set the case down for trial. The trial date was fixed at 12 May 2003, with 7 days reserved.

12.  At the commencement of the trial (i.e. 12 May 2003), the plaintiff applied for an adjournment of the trial. (The reason for adjourning the trial will be dealt with in paragraphs 32 and 33 below.) The adjournment was granted by Chu J (as she then was), and the trial was ordered to be re-fixed with a revised estimate duration of 3 days.

13.  After the trial was adjourned, both the plaintiff and the defendants took no steps during the period from May 2003 to July 2010 (i.e. more than 7 years) . It was only on 5 July 2010 that the 1^st and 2^nd defendants took out the present striking out Summons, which sought the following relief: (1) an order striking out the plaintiff’s claim on the ground that the plaintiff has been guilty of inordinate and inexcusable delay and that the 1^st and 2^nd defendants have suffered prejudice which would render a fair trial impossible; (2) the Mareva injunction be discharged; (3) there be enquiry as to damages suffered by the 1^st and 2^nd defendants occasioned as a result of the Mareva injunction.

14.  At the first hearing of the 1^st and 2^nd defendants’ Summons on 5 August 2010, the plaintiff sought an adjournment and also sought leave to file evidence to oppose the 1^st and 2^nd defendants’ striking-out application. Those applications were granted by Deputy High Court Judge Carlson. As a result, further evidence was filed and the hearing was re-fixed at 1 June 2011.

The law

15.  At the hearing of the present Summons, counsel for the 1^st and 2^nd defendants confirmed that the present striking-out application was made on two bases, namely: (a) the second limb of Birkett v James [1978] AC 297, viz., that there has been inordinate and inexcusable delay in the prosecution of the claim, and that such delay gives rise to a substantial risk that a fair trial would not be possible or is likely to cause serious prejudice to the 1^st and 2^nd defendants; and (b) that the plaintiff’s absence of intention to proceed with this action amounted to an abuse of process, as explained in the line of cases starting from Grovit v Doctor [1997] 1 WLR 640.

16.  Given the implementation of the Civil Justice Reform (“CJR”) in 2009, counsel for the plaintiff and the 1^st and 2^nd defendants also made submissions on the effect of CJR on the law of striking out for want of prosecution (including cases such as New China Hong Kong Group Ltd. v AIG Asian Infrastructure Fund LP & Ors [2005] 1 HKLRD 383 and others).

17.  Since the hearing, the Court of Final Appeal had delivered the judgment in Wing Fai Construction Co. Ltd. (in liq.) v Yip Kwong Robert [2012] 1 HKLRD 589, which helpfully clarified and explained the principles and approach that should be adopted in an application of this nature. The relevant passages in the judgment of Ma CJ, insofar as they are relevant to the present application, read as follows (para 75 to 80):

“75. It is not appropriate to deal on a comprehensive basis with the many nuances that can arise in an application to strike out for want of prosecution (such as the different shades of prejudice that can arise when proceedings have been subjected to delay) but the following principles ought to be borne in mind in most cases:

(1) It is first important to bear in mind that striking out is a remedy of the last resort, as stated above, and only where it would be plain and obvious to do so. If there are other measures that are more appropriate to be taken, they ought to be.

(2) Abuse of the process of the court is the foundation for the exercise of the jurisdiction to strike out for delay.

(3) Abuse can take many forms. The Birkett v James second limb will continue, where it is proved, to be a form of abuse so that inordinate and inexcusable delay causing real prejudice would be an abuse. Thus, where a delay which is inordinate and inexcusable causes a substantial risk that a fair trial is not possible, this is perhaps the most compelling form of prejudice to a defendant: cf Birkett v James, 318C-D. There may be other forms of prejudice, such as the prejudice caused by proceedings hanging over the head of a defendant, causing undue anxiety (Biss prejudice: see para 17(5)(c) above). Another form of prejudice might be that caused by the existence of an interim injunction (say, a Mareva injunction) pending trial; in such cases, undue delay might aggravate that prejudice.

(4) In the context of abuse, some mention should be made of "warehousing". I have already referred to this earlier. Merely for a party to start proceedings and then delay (which will often involve a failure to comply with the applicable rules of court) will not necessarily amount to an abuse justifying an order to strike out an action. The appropriate remedy in such cases may be for the court to exercise some of the powers I have already mentioned (such as the making of peremptory orders, the payment into court of substantial sums etc). In order for the "warehousing" of claims to justify striking out, it must be clear that the plaintiff is abusing the process of the court. Accordingly, where the "warehousing" of claims indicates that there is simply no intention to bring proceedings to a conclusion or there is a "wholesale disregard" of the rules or court orders, abuse can be found to exist ... ...

(5) It is still important when looking at the aspect of delay that it should be both inordinate and inexcusable, and that abuse is shown. It has never been the law that mere delay will be sufficient to justify an order to strike out ... ... I would also adopt what was said by Neuberger J in Annodeus Ltd v Gibson regarding the court's consideration of delay:

Ninthly, it appears to me that it is normally relevant to consider the following factors. First, the length of the delay; secondly, any excuses put forward for the delay; thirdly, the degree to which the claimant has failed to observe the rules of court or any court order; fourthly, the prejudice caused to the defendant by the delay; fifthly, the effect of the delay on trial; sixthly, the effect of the delay on other litigants and other proceedings; seventhly, the extent, if any, to which the defendant can be said to have contributed to the delay; eighthly, the conduct of the claimant and the defendant in relation to the action; ninthly, other special factors of relevance in the particular case.

(6) ... ...

(7) I now deal with prejudice. I agree with the proposition that where abuse is clearly demonstrated, proceedings can be struck out even where prejudice to the defendant cannot be shown. For example, where there is contumelious conduct on the part of a plaintiff, no prejudice to the defendant need necessarily be shown. However, in the majority of applications to strike out for delay, the aspect of prejudice to the defendant will often be extremely relevant. Mr Barlow submitted at one stage that post-CJR, prejudice will not be relevant at all. That is not a correct submission. In my view, prejudice to the defendant (whether it exists or not) can still be very much a factor. It is a factor that may well be relevant to the overall justice of the case: see Purefuture Ltd v Simmons & Simmons [2001] CP Rep 30, para 54(2).

(8) As to the conduct of the parties, this will of course remain a relevant consideration of the court. Mr Barlow submitted that post-CJR, applications to strike out for delay should not be (as he put it) "fault based". He meant by this submission that the court should primarily look at the question of delay from the viewpoint of the trial, specifically whether as a result of the delay a fair trial was still possible, and also from the point of view of the administration of justice (an aspect with which I deal below). I have no quarrel with the court having to consider the very important fact of whether a delay has made a fair trial possible nor with the court having to consider the overall administration of justice, but it is wrong to say that the conduct of the parties is not a relevant consideration. Quite the contrary, it will be relevant both to the critical question of abuse as well as to the overall justice of the case. Thus, post-CJR, where all parties to the proceedings have the obligation to prosecute the proceedings and assist the Court in furthering the underlying objectives, it would be highly relevant to consider any failure on the part of the parties here. As far as the defendant is concerned, I would say once again that there is no place anymore for defendants to adopt the attitude of "letting sleeping dogs lie". No longer will it be possible (if it ever was) for a defendant to sit idly by and do nothing, in the hope that sufficient delay would be accumulated so that some sort of prejudice can then be asserted. If it is sought to be argued that time has dimmed the memories of witnesses, the court will usually want to know what steps have been taken by the defendant to take instructions, or proof or locate witnesses: cf the remarks of Ribeiro JA in Hymer v Mass Transit Railway Corp [2000] 2 HKLRD 589, 610D-J. The court will certainly want to know what the true nature of the defence is, in order to assess the extent of the prejudice suffered by a defendant.

(9) As observed above (see para 44), the attitude of the court in considering applications to strike out under Birkett v James, had very much been to look only to the position of the parties themselves. With the coming into effect of the CJR, courts must now have regard to wider considerations. ... ...

... ...

80.     Finally, I would like to stress that the power to strike out for delay is of course discretionary and derives from the inherent jurisdiction of the court. The inherent jurisdiction of the court exists to avoid injustice, prevent abuse, preserve the dignity of the court or to facilitate the administration of justice: see Credit Lyonnais v SK Global Hong Kong Ltd [2003] 4 HKC 104, 107B-C para 2. In exercising its discretion under the inherent jurisdiction, a court must, in applying those principles I have earlier set out, ultimately ask itself the question whether or not in the circumstances, it is just to strike out. A mechanistic approach in which the bigger picture is lost sight of (or, to adopt a more colourful phrase commonly used in our courts, to 'lose the wood for the trees'), is to be eschewed.”

No striking-out

18.  Applying the principles expounded in Wing Fai Construction Co. Ltd. (in liq.) v Yip Kwong Robert (above), I do not think this is a case which ultimately warrants a striking-out order.  My reasons are as follows.

19.  To begin with, I accept the 1^st and 2^nd defendants’ submission that there has been inordinate and inexcusable delay. As noted above, the plaintiff did not take any steps to re-fix the trial of this action after the adjournment granted in May 2003. At the hearing, counsel for the plaintiff had fairly accepted that they were prepared to proceed on the basis that there was inordinate and inexcusable delay.

20.  Apart from the ultimate question of whether it is just to strike out the plaintiff’s claim in this case, the key questions that call for consideration in the present application are whether a fair trial is no longer possible (or that there are serious prejudice to the 1^st and 2^nd defendants) and whether the plaintiff’s conduct constituted an abuse of process.

21.  As pointed out by counsel for the plaintiff, the question of whether serious prejudice to a defendant or a risk that a fair trial is not possible has been caused must be considered in light of the nature of the disputes and the state of the preparation of documentary evidence. The burden to show the requisite prejudice falls squarely on the 1^st and 2^nd defendants in this case.  See: Department of Transport v Chris Smaller (Transport) Ltd. [1989] AC 1197, per Lord Griffiths at p. 1208B - D; Wing Fai Construction Co. Ltd. (in liq.) v Yip Kwong Robert (above), per Ma CJ at para 75(5) to (7).

22.  In the present case, the key prejudice relied on by the 1^st and 2^nd defendants is the assertion that Liu and Yan can no longer be called as witnesses at the trial (if there be one) and therefore the 1^st and 2^nd defendants would be deprived of their oral testimonies. According to the 1^st and 2^nd defendants, their testimonies would be crucial to the issues in dispute.

23.  Normally, the absence of a key witness is an essential consideration in an application of this nature. However, the extent of the impact depends on the facts of each case. Amongst others, one would have to consider whether the absence of witnesses was caused by the delay on the part of the plaintiff and how the absent witnesses, if called to testify at the trial, might assist the defendant’s case.

24.  As noted above, the trial was originally supposed to take place in May 2003. As acknowledged by the 1^st and 2^nd defendants, they were unable to call Liu and Yan back in May 2003 since they were detained by Mainland authorities. In other words, neither Liu nor Yan was on the defendants’ list of witnesses for the 2003 trial.

25.  As of now, the situation is not much different. Liu remains in jail in Mainland China. Yan, according to the 1^st and 2^nd defendants, cannot be located as he has apparently moved out of his last known residence. Since the situation remains effectively the same as at the time of the adjourned trial in May 2003, it is difficult to see how the 1^st and 2^nd defendants can suggest that the absence of Liu and Yan as witnesses was caused by the delay on the part of the plaintiff.

26.  Further, the prejudice alleged in this aspect is based on the premises that Liu and Yan’s evidence will be in support of the 1^st and 2^nd defendants’ case. It is true that there is the Declaration of Trust mentioned above. However, on the materials available, I do not think the 1^st and 2^nd defendants have made out a sufficient case that the testimonies of Liu and Yan would support the defence relied on by the 1^st and 2^nd defendants. That being the case, the impact on the absence of Liu and Yan remains uncertain.

27.  As regards the evidence of the 1^st and 2^nd defendants, there is no suggestion that either of them have suffered any or any significant lapse of memory which would prejudice the fair conduct of the trial. On the contrary, the 1^st defendant was able to deal with their defence as recently as in July 2010 when her 9^th Affirmation was filed (see, amongst others, paragraphs 9 to 16 thereof). In addition, both the 1^st and 2^nd defendants have filed witness statements in this action. Thus, both the 1^st and 2^nd defendants would be able to refresh their memories by reviewing their witness statements.

28.  In addition, the 1^st and 2^nd defendants also sought to suggest that their business or financial interests have been prejudiced by the delay in the prosecution of this action. Apart from the winding up of the 3^rd and 4^th defendants in 2005 and 2002 respectively, it is suggested that the 1^st defendant was forced to cease her trading business due to want of funds by reason of the Mareva injunction. It is also suggested that the Mareva injunction had led to a forced sale of her flat by the mortgagee bank, which resulted in the collapse of her trading business in plywood through the 4^th defendant. As regards the 2^nd defendant, it is suggested that she lost her monthly income of HK$20,000 and that she has been rendered jobless since the winding up of the 4^th defendant.

29.  It is accepted that prejudice in the present context is not confined to loss of witnesses or lapse of memory on the part of a witness. However, the court generally treats prejudice in the form of business or financial interest with caution. See: Hong Kong Civil Procedure 2012, Vol. 1, para 25/L/7 (at p. 595); Department of Transport v Chris Smaller (Transport) Ltd. (above); and Re Lee Siu Fung, unrep., HCB 345/2001 (25 August 2006).

30.  In the instance case, I do not think the prejudice in the form of business or financial interest as relied on by the 1^st and 2^nd defendants (whether considered individually or together) are sufficient to warrant a striking-out order. Most importantly, I do not accept that the prejudice relied on by the 1^st and 2^nd defendants was caused by the delay as such, as they took place either shortly before or after the adjourned trial in May 2003.

31.  The next question is whether there was any abuse of process on the part of the plaintiff.

32.  As noted above, the trial was originally scheduled to take place in May 2003. According to the plaintiff, due to the SARS outbreak in Hong Kong and Mainland China in early 2003, the plaintiff’s witnesses who intended to travel from Mainland China to Hong Kong to testify were affected by the then travel restrictions imposed by the Mainland authorities and thus unable to attend the trial as scheduled. It was against this background that the plaintiff applied for an adjournment, which was granted by the trial Judge.

33.  After the trial was adjourned, the plaintiff made a commercial decision not to press on with the trial because a number of events indicated that any judgment obtained against the defendants would likely to be empty judgment. Those events included the bankruptcy of the 1^st defendant on 9 December 2002 and the winding up of the 3^rd and 4^th defendants in 2005 and 2002 respectively. The plaintiff took the view that it was commercially not worthwhile to proceed with the trial unless and until there was any indication that the 1^st and 2^nd defendants would be able to satisfy any judgment (or part thereof) which might be obtained against them.

34.  As explained in Wing Fai Construction Co. Ltd. (in liq.) v Yip Kwong Robert (above) (at para 75(4) thereof), mere delay will not necessarily amount to an abuse justifying an order to strike out an action. In order for the “warehousing” of claims to justify striking out, it must be clear that the plaintiff is abusing the process of the court. Accordingly, where the “warehousing” of claims indicates that there is simply no intention to bring proceedings to a conclusion or there is a “wholesale disregard” of the rules or court orders, abuse can be found to exist.

35.  Applying these observations in the present case, I accept that the plaintiff has to a certain extent “warehoused” its claim against the 1^st and 2^nd defendants. However, whilst the case may well be a marginal one, ultimately I do not think there is sufficient basis to find abuse. On the explanation of the plaintiff (which is not in any way contradicted by any contrary evidence), the plaintiff’s intention to warehouse the claim against the 1^st and 2^nd defendants was a temporary one. The plaintiff was awaiting to see whether the financial position of the 1^st and 2^nd defendants would improve. In other words, this is not a case where the plaintiff simply has no intention to bring this action to a conclusion, nor is this a case involving wholesale disregard of rules or court orders. Besides, as I understand, if the present striking out application is dismissed, the plaintiff would proceed with the trial.

36.  In addition, I agree with counsel for the plaintiff that it is relevant to look at the conduct of the 1^st and 2^nd defendants. The period of delay between May 2003 to April 2009 is pre-CJR, but the delay since April 2009 is post-CJR. During these two periods, the 1^st and 2^nd defendants did nothing to request the plaintiff to re-fix the trial, nor did they apply to court to re-fix the trial upon the plaintiff’s failure to do so. At least insofar as the post-CJR period is concerned, the 1^st and 2^nd defendants are not entitled to adopt the “letting the sleeping dogs lie” approach. See: Wing Fai Construction Co. Ltd. (in liq.) v Yip Kwong Robert (above), at para 75(8). In the circumstances, it is clear that the 1^st and 2^nd defendants did to some extent contribute to the delay in the prosecution of this action.

37.  It is of course also relevant to point out that a plaintiff who has obtained a Mareva injunction has a duty to prosecute his claim as expeditiously as possible. However, for the reasons set out above, I do not think this particular reason can have any overriding effect. In particular, as noted above, the 1^st and 2^nd defendants did not take any step to discharge the Mareva injunction.

38.  Lastly, I reminded myself that the power to strike out for delay is discretionary and derives from the inherent jurisdiction of the court. This inherent jurisdiction exists to avoid injustice, prevent abuse, preserve the dignity of the court or to facilitate the administration of justice. In exercising this discretion, the court must ultimately ask itself the question whether or not it is just to strike out in the circumstances. See: Wing Fai Construction Co. Ltd. (in liq.) v Yip Kwong Robert (above), at para 80.

39.  The present case is different from most of the other cases concerning striking out for delay. In the majority of the other cases, the actions had not yet reached the stage of trial when the relevant striking out application was heard. In this case, as highlighted above, there was an adjourned trial in May 2003. In other words, the parties were at one stage ready for trial. That being the case, it is important to consider whether there was any material change of circumstances between May 2003 and now which would render a fair trial impossible or which have caused serious prejudice to the 1^st and 2^nd defendants. By reason of the analysis set out above, I do not think there is any. Despite the delay since May 2003, the situation concerning witnesses and documentary evidence remains essentially the same. The witness statements made by the 1^st and 2^nd defendants can be relied on as before. It is true that Liu and Yan would not be called as witnesses at the trial. However, they were not witnesses for the 2003 trial anyway. As far as documentary evidence is concerned, there is simply no suggestion that documents previously available are no longer available. On the other hand, if the plaintiff’s claim is eventually established, it is apparently a very serious claim involving fraud and substantial amount. Hence, even if one is to take into account the duty of a plaintiff to proceed with his claim as expeditiously as possible and other matters relevant to the proper administration of justice, there are good reasons to allow the plaintiff to have a chance to establish its claim against the 1^st and 2^nd defendants.

40.  In the circumstances, although there has been considerable delay, I ultimately come to the conclusion that it is not just to strike out the plaintiff’s claim.

Mareva injunction

41.  In principle, if this action is struck out, the Mareva injunction previously granted against the 1^st and 2^nd defendants should also be discharged; on the other hand, even if this action is not struck out, the court should still consider whether the Mareva injunction should continue or should be discharged.

42.  It is accepted that delay to prosecute a claim on the part of the plaintiff may in appropriate circumstances justify the discharge of a Mareva injunction granted against the defendant. In Gee, Commercial Injunction, 5^th edn., the learned authors explained the applicable principles as follows (at p. 726):

“However, the court will not always discharge the injunction where there has been delay, even though the delay has been substantial. The court will take into account all the circumstances of the case, including the following:

(1) whether the delay was the result of a deliberate decision on the part of the claimant;

(2) the length of the delay, and any explanations put forward by the claimant (e.g. the pursuit of settlement negotiations, or difficulties in funding the pursuit of the proceedings);

(3) the degree of prejudice liable to be caused to the claimant if the injunction is discharged;

(4) whether the claimant sought to rectify the position and proceed with the action or whether the delay is still continuing at the time of the hearing;

(5) the degree of prejudice caused to the defendant as a result of the delay. This should be shown by evidence and not merely based on the assertions of counsel;

(6) whether the defendant has through his conduct either caused the delay or contributed to it.”

43.  In the present case, delay is the only reason relied on by the 1^st and 2^nd defendants. However, applying the principles set out in the preceding paragraph, I do not think I should discharge the Mareva injunction.

44.  First, as pointed out by counsel for the plaintiff (which I agree), although the delay in the prosecution of this action was a result of a commercial decision on the part of the plaintiff, there is no evidence that the plaintiff has sought to use the Mareva injunction as a weapon of abuse against the 1^st and 2^nd defendants. Second, although the delay is substantial, the plaintiff has explained the reason for delay. As observed above, I do not think the “warehousing” of the plaintiff’s claim amounted to an abuse of process. Third, on the evidence adduced by the 1^st and 2^nd defendants and as discussed above, the prejudice that was caused by the Mareva injunction and that caused by the delay is limited. Fourth, as I understand, the plaintiff would proceed to trial if the present striking out application by the 1^st and 2^nd defendants is dismissed. Fifth, as noted above, the 1^st and 2^nd defendants contributed to the delay in question. In addition, there is no explanation on the part of the 1^st and 2^nd defendants as to why either of them did not see fit to apply to discharge the Mareva injunction earlier.

45.  In addition, I also bear in mind that the whole point of granting the Mareva injunction against the 1^st and 2^nd defendants was to prevent dissipation of assets. There is no evidence to suggest that that risk of dissipation has since disappeared.

Conclusion and way forward

46.  It follows from the above that the application by the 1^st and 2^nd defendants to strike out the plaintiff’s claim and to discharge the Mareva injunction fails. In the circumstances, it is not necessary to deal with the application concerning inquiry as to damages as the question does not arise. Accordingly, I now make an order that: (a) paragraphs (a) and (b) of the 1^st and 2^nd defendants’ Summons dated 5 July 2010 be dismissed; and (b) no order be made on paragraph (c) of the said Summons.

47.  I see no reason why costs should not follow the event. I therefore also make an order nisi that the 1^st and 2^nd defendants do pay to the plaintiff the costs of and occasioned by this application, to be taxed if not agreed (with certificate for only one counsel).

48.  Lastly, with a view to ensuring that this matter will proceed to trial, I order that the plaintiff do make an application to re-fix the trial date within 14 days from the date hereof. In this regard, I would also invite the parties to consider whether it would be desirable to have at least one pre-trial review shortly after the trial date is fixed, if not two (i.e. one shortly after the trial date is fixed, and one 6 to 8 weeks before the trial commences). If the parties can reach agreement on that aspect, a consent order to the agreed effect would save time and costs.

49.  It remains for me to thank counsel on both sides for their able assistance at this trial.