LEE TAK (or TUCK) YAN AND OTHERS v. THE PRUDENTIAL ENTERPRISE LTD AND OTHERS

HCCW594/1999, HCA1240/2001
and HCA4225/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO.594 OF 1999

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(HEARD TOGETHER)

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D E C I S I O N

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1. On 31 October 2003, the 6th defendant in HCA No.4225 of 2001 ("D6") issued a summons applying for further extensions of time for the exchange of witness statements and expert reports. At about the same time, D6 also through its solicitors indicated to the other parties in these three sets of proceedings that it had decided not to take part in the trial of the Petition in HCCW No.594 of 1999, and would require witnesses to be recalled at the trial of HCA No.4225 of 2001, which is to be heard after the conclusions of the trials of the Petition and of HCA No.1240 of 2001. This is a hearing for further directions on the conduct of these proceedings.

2. For my part, the starting point is to preserve the trial date that was fixed a long while ago. It is also my starting point to preserve the integrity of court directions and orders, even though they relate only to matters of conduct of the case, as opposed to matters of determination of substantive issues. Unless there are cogent and very good reasons, the direction for sequential trial and the date of 17 November 2003 for the commencement of the first trial should be taken as immovable milestones in case management terms. Other things therefore, would have to be worked around those immovable milestones.

3. Against these observations, I wish to make a couple of responses to the submissions made, which I hope would help to focus all parties' minds in the further conduct of these three sets of proceedings. Before that, I must point out that any case management or directions will only be of value and serve useful purposes if they are met with parties' willingness and readiness to co-operate with a view to bringing the litigation to a speedy, efficient and expeditious resolution.

4. Firstly, on the question of recalling witnesses at the subsequent trials, this is, of course, a possibility that cannot be ruled out by an order for sequential trials. But that does not mean that witnesses are to be recalled irrespective of need. It is important to note that when the order for sequential trial was given in August 2003, we were proceeding on the basis of a clear indication from the D6 that they would participate fully in the trial of the Petition. It is also necessary to point out that whilst there is a possibility of witnesses being recalled, that possibility is not to be taken as an opportunity for any unnecessary or tactical manoeuvres. In my view, the savings of time and costs remain a primary objective of an order for sequential trial.

5. The second matter I wish to respond to is the submissions regarding when the judgment on the Petition would be handed down. It appears from submissions I heard in these two afternoons that counsel considered this to have significant impact on the case management of these three sets of proceedings, at least with regard to the Blue Pool Road action in HCA No.4225 of 2001.

6. Sequential trials means each trial would be adjudicated on the basis of the issues pleaded in that case and the evidence adduced in that case. The court always endeavours to render a judgment expeditiously, but whether the judgment on the Petition is to be handed down before, during or after the third trial, meaning the Blue Pool Road action trial, the judgment on the Petition can only be an adjudication of the dispute and issues in the winding-up proceedings.

7. As to the concern on the uncertainty of when that judgment is available, the so-called uncertainty has always been there. The Decision of 19 August 2003 is not premised upon judgment on the Petition being delivered before or during or after the commencement of the Blue Pool Road trial.

8. The third matter that I wish to comment upon is the participation of the D6 in the trial of the Petition. Leave has been given to the D6 as well as the 2nd third party in HCA No.4225 of 2001 to participate in the trial of the petition. Whether that is to be taken up and to what extent is, of course, entirely a matter for those parties. The court cannot compel them to take any part at the trial of the Petition. However, any decision whether to take part or not to take part, if it should ever result in unnecessary increase in costs and length of the subsequent trial, then the court may review those and bear them in mind, and may well visit the unnecessary steps with costs consequences. And it is for the parties to bear these matters in mind when they decide to take whatever course.

9. With these remarks, I turn to deal with the application for extension of time by D6. As I understand it, three matters has been put forward as recent developments necessitating a third enlargement of time for the exchange of witness statements and the expert report. The first matter is about when judgment on the Petition will be handed down, which I have already dealt with. The second matter is the decision not to participate in the trial of the Petition. That I have also dealt with.

10. The third, and what seems to me to be a crucial point, is this. It is said that the advice of Mr Strachan QC with regard to the expert report and the lay witness evidence have led to a need for more time for their preparations. For my part, I have no reason to doubt what counsel presented to the court and I am quite prepared to accept that more preparations and, in turn, more time is required as a result of counsel's advice. But that, in my view, is not a recent development that cannot have been avoided. Quite the contrary, the course of events since August 2001, and in particular, the stance and position taken by D6 on various directions hearings and on what directions to be given for the preparations of the trials, suggest that this development is a result of late preparations or perhaps late instructions, as counsel has suggested.

11. In my Decision of 19 August 2003, I did say that the D6 could not be said to be guilty of delaying the progress of the preparations of the trial on the basis of the materials then before the court. It was after that Decision that this court has the benefit of being told about the actual progress of D6's preparation with regard to obtaining witness statements and expert reports. I also recalled commenting in that Decision that it was unlikely that D6 would be ready to face a full trial on 17 November 2003. Although the submission I had received on that occasion on behalf of D6 is that it matters not whether there be a sequential or combined trial, the order for sequential trial was made as I took the view that sequential trials would alleviate the pressure D6 would come under as opposed to being ready for a full trial in November 2003.

12. Notwithstanding what I have said, I do recognize that the court does not exist to punish the parties. To the extent that D6 now says it is not ready and genuinely require more time, the court would, without affecting the immovable milestones that I have identified, make provisions for that. D6 has offered to serve the draft witness statements and expert reports by 10 November and to have the final versions of those ready by 18 December. I am prepared to accept this two-stage approach, rather than to shut out D6's completely, notwithstanding I had said on the last occasion that 7 November 2003 was meant to be the final extension. I believe there is really no objection to the drafts coming in on 10 November 2003. What may have caused problems is when the final versions of the expert reports and the witness statements should be made available. In my view, if they were deferred to 18 December 2003, it would cause problems to the trial of the Petition.

13. It is suggested to have all the expert evidence heard in one go and towards the end of the trial. There may be some attractions in that, but this would have the undesirable feature of the factual evidence being led on behalf of the respondents before the petitioners' case is closed. That is an unusual approach and should only be adopted if it is appropriate. I have some reservations as to whether this is an appropriate case to do so. At any rate, both leading counsel for the petitioners and leading counsel for the 1st respondent do not see this as an appropriate course.

14. It is said that D6's expert requires the time up to 18 December to have the final versions ready. I tend to think, however, that people can work faster if they are placed under time constraints. I also bear in mind that this state of play is a matter that could have been avoided if the preparations had been gone in with a degree of intensity appropriate to the complexity of the case at an earlier stage. I would say that there should be a four weeks period after the drafts were served to have the final versions ready. That effectively, means the final witness statements and expert reports should be ready by 8 December 2003.

15. I note Mr Fung's point that the petitioner's team would like to see the drafts before they finalize the Opening. As I have said, I am prepared to accommodate these matters. I would have the date of service of the petitioners' Opening deferred to 12 November 2003. At the risk of contradicting my base line that the trial date is an immovable milestone, I would defer the first day of the trial from 17 to 19 November 2003, just to give the respondents a bit more time to study the Opening before the trial starts. A short delay of two days is something that we can cope with.

16. On the question of the costs of this hearing, it is best answered by asking why do we have to assemble for these two afternoons. One of the reasons is, of course, D6's summons for time. The other is the indication from D6 with regard to its difficulties in meeting the initial timetable and its reservations about taking an active role in the trial of the Petition. I note, of course, that realistic proposals have been put forward today by Mr Strachan QC on behalf of D6. I would have thought that had these proposals come about earlier, we might not need the hearing or certainly not a hearing of this duration.

17. On D6's summons, there's no reason why the plaintiffs should not get the costs against the D6 in any event. That, in fact, is the proposal in the summons itself. Otherwise, as to the costs of yesterday afternoon commencing 3 p.m. onwards and of this afternoon, if one analyses why we have to be here and what effectively are we doing during these two sessions, then the only conclusions must be for all the other parties to have their costs being met by D6 in any event. Hence I order that the costs of the hearings on the afternoons of 3 and 4 November 2003 be to the plaintiffs, the 2nd to 5th defendants, and the 2nd third party in HCA No.4225 of 2001 against D6 in any event.