MOHAWK INCORPORATED AND OTHERS v. SWIRE INSURANCE LTD.

1987, No. CL-81and
1988, No. CL-247

IN THE HIGH COURT OF HONG KONG

COURT OF FIRST INSTANCE

COMMERCIAL LIST

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J U D G M E N T

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1. By a summons dated 27th March 1997 the Defendant moves to dismiss this consolidated action for want of prosecution on the well-known grounds adumbrated in Birkett v. James, [1978] AC 297, namely, that there has been inordinate and inexcusable delay in this action on the part of the Plaintiffs or their lawyers, such that there is a substantial risk that it is not possible to have a fair trial of the issues in the action or such that it is likely to cause or to have caused serious prejudice to the Defendant either as between it and the Plaintiffs or between it and a Third Party.

2. As the title indicates, these cases are of some age; they were consolidated by Order of Mr. Justice Mayo dated 17th January 1992 and, individually and in consolidated form, have been the subject of considerable interlocutory activity. The present application is extensively documented and has attracted lengthy and tightly argued affidavits from Miss Sumption on behalf of the Defendant and from Mr. Sheppard on behalf of the Plaintiffs; indeed the significant amount of detail contained in this application provides the ever present danger that the shape of the proverbial wood will be all but obscured by the forensic trees, and I have been much assisted by Mr. Fok, Counsel for the Defendant, and Mr. Griffiths Q.C. for the Plaintiffs in my attempt to come to grips with the case.

3. The dispute has its factual origins in a fire which took place aboard a vessel owned by the 1st Plaintiff, the "American Mohawk", on 10th May 1981 in the Malacca Straits. This vessel, later renamed the "Tai Chun", was one of a fleet of vessels which formed what was known as the Wan Hai fleet; at the time of the fire this vessel was insured by Tokio Marine & Fire Insurance Co. Ltd. However, in October 1981 the Defendant, Swire Insurance Ltd., was approached by personnel of the fleet manager, the 6th Plaintiff herein, with a request for an insurance quotation on what had by then had become the vessel "Tai Chun", and a primary focus of this consolidated action involves examination of what transpired in the discussions between one Steve Lan of the Defendant, the broker dealing with Wan Hai's insurance, and Dr. C.C. Chen and Captain Liu of Wan Hai regarding the insurance cover to be so provided.

4. Policy cover was initially effected through Swire Insurance Ltd. from 30th November 1981 to 10th September 1982; prior to such cover Steve Lan of the Defendant was told that the fire aboard the "American Mohawk" had resulted in a claim in respect of damage to the vessel of approximately S$105,000.00. It was not until the time of the 1984/85 renewal of the insurance that the Plaintiffs requested several other brokers to obtain quotations for the insurance renewal; part of this process consisted of providing those brokers with the fleet claims record, and the figures then provided disclosed the existence of a substantial claim in general average. It was in this way that underwriters first learned that the fire on board the "American Mohawk" in the Malacca Straits had given rise both to the known damage claim and to the significant liability in general average, which claim in fact had already been met by the vessel's previous insurers, Tokio Marine & Fire.

5. The total value of the claims made in respect of the May 1981 fire incident exceeded US$1 million. Underwriters apparently took the view that this provided a significantly different claims history for the vessel and the fleet from that which had been originally presented to them at the inception of the insurance; and, as a result, although cover was maintained, an additional premium was charged. And it is this which is the nub of this case. The Defendant says that underwriters simply levied an additional premium to represent the amount they would have charged had they been made aware of the true nature of the risk from the outset; to the contrary, the Plaintiffs say that the additional premium charged was in fact a penalty imposed by underwriters who, had they been made aware at the outset of the correct claims figures, would not have charged premiums as high as were eventually charged upon discovery of the non-disclosure. In summary, the Plaintiffs say that Swire should have made sure it found out about the outstanding claim in general average and told the underwriters, or at least, advised Wan Hai that there would be severe consequences flowing from any non-disclosure. This, in essence, is what may conveniently be termed the non-disclosure element of the case.

6. That however is not the entirety of the dispute, for the case also involves an issue in negligence regarding a warranty given to underwriters in connection with the chartering of vessels in the Wan Hai fleet. This arises as follows. The insurance of the Wan Hai fleet was placed through sub-brokers in the London market, Willis Faber. At various points during the currency of the policies written in relation to the fleet, some only of the vessels were under charter to John Swire & Sons (Japan) Ltd., and it appears that a warranty was given to the underwriters by the London brokers to the effect that all the vessels were so chartered. This discrepancy emerged during the negotiations following the discovery by underwriters as to the different fleet claims record, and this, the Plaintiffs claim, gave underwriters further reason to charge increased premium(s). Against this, the Defendant's case is that the increase in premium simply represented the actual level of risk; at no stage had all vessels been on charter, and if in so far as this was a relevant factor in determining premium, it was clear that premiums previously levied in the absence of that knowledge were lower than should have been the case. This encompasses what has, during argument, been generally referred to as the breach of warranty point.

7. As the result of these matters the Plaintiffs assert that by reason of the non-disclosure of the true extent of the casualty on board the "American Mohawk" and/or by reason of the negligent misrepresentation by the Defendant that the Plaintiffs' vessels would be on charter whilst insured, the Plaintiffs had to pay additional premium of US$402,285.11 for past years and an extra US$200,000.00 in each subsequent year.

8. So much, therefore, for the broad shape of the case, against the backdrop of which Mr. Fok helpfully has identified three principal factual questions arising in the case which are of particular relevance to the application, viz.:

(1) What was Steve Lan told about the casualty on board the "American Mohawk" during an alleged conversation with Dr. C.C. Chen on 5th November 1981?

(2) Was a general average claim disclosed to Steve Lan during a meeting in Taiwan in early September 1982 between himself and Dr. C.C. Chen and Captain Liu?; and

(3) What was the reason for the increased premiums demanded by the underwriters as from the year of renewal 1984/85?

9. I turn now to consider the particular arguments advanced. In doing so, I bear in mind particularly the fourteen-point summary in the judgment of Neill L.J. in Trill v. Sacher, [1993] 1 WLR 1379, (at 1398-1399), which if I may respectfully say so, provides invaluable contemporary guidance from high authority as to the applicable principles for use in an application to strike out for want of prosecution.

Inordinate and inexcusable delay

10. Mr. Fok reminds me that inordinate delay is delay which is "materially longer than the time which was usually regarded by the courts and the profession as an acceptable period of time": see Tabata v. Hetherington, The Times, 15.12.83, CA. He points out that this action was a "late start" action, in that the writs in each of the two separate actions were not served until almost the expiry of the one-year period of validity of the respective writs, and the actions themselves were commenced shortly before the expiry of a relevant six-year limitation period; accordingly it was all the more incumbent upon the Plaintiffs to proceed with expedition. He reminds me also that the time elapsed after the issue of the writ and before the expiry of the limitation period is relevant delay: see Rath v. C.S. Lawrence & Partners [1991] 1 WLR 399 at 406-407; and that the whole period of delay will be considered by the Court: see Trill v. Sacher, op. cit. at 1388-9.

11. As a matter of history, Mr. Fok submits that there have been four distinct periods of delay by the Plaintiffs:

(a) from October 1988 and October 1989 respectively to November 1990, periods of respectively 2 years (in CL 81 of 1987) and 1 year (in CL 247 of 1988);

(b) from 17th January 1992 to 14th July 1994, a period of some 21/2 years;

(c) from 23rd May 1995 to 7th February 1996, a period of over 8 months (for 7 months of which the action was stayed); and

(d) from 24th February 1996 to 22nd February 1997, a period of just under 1 year.

12. Mr. Fok submits that each of the periods thus identified are relevant periods of inordinate and inexcusable delay by the Plaintiffs; in any event, he says, the delay can and should be looked at cumulatively.

13. Mr. Griffiths Q.C. for the Plaintiffs takes a bold line. His robust submission is that there has been no inordinate and inexcusable delay in this case. He takes no issue as to the legal principles involved, but emphasises that each case turns upon its own facts. The progress of the case, he submits, must be viewed in the context of several general factors: first, the very substantial nature of the case, with discovery amounting to some 30 box files, with corresponding time required by leading counsel and experts to assimilate the documentation; second, the difficulties encountered in, to use his words, "dragging evidence from the Defendant", necessitating a collateral discovery action, No. C.L. 194 of 1988; and third, the possibility (not, I note, ultimately acted upon) of having to plead fraud in the warranty claim, with consequent demands upon counsel.

14. Each of the particular periods of delay identified by Mr. Fok was also sought to be justified by the Defendant; to do no more than summarise, such justification was with reference to the necessity for the collateral discovery action, the difficulty of finding an expert to advise both generally and as to the additional discovery required, the regrettable death of one expert and the difficulty of finding a replacement, security for costs considerations (security for costs was ultimately provided in February 1996) , and thereafter settlement discussions, a search for an underwriting expert, and the obtaining of preliminary expert reports in December 1986. Thereafter, a Summons for Directions was issued in February 1997, followed the present application by summons dated March 1997.

15. The foregoing plainly is no more than an overview of the detailed matters placed in evidence before the Court to explain and justify the delay; however, after carefully considering these matters, I am bound to say that I am unable to accept Mr. Griffiths' primary submission that there has been no inordinate and inexcusable delay. The short and inescapable point is that, looked at overall, this action is stale, and inexcusably so, notwithstanding difficulties that have been experienced by the Plaintiffs and their advisers.

16. In this context I note that the theme of Mr. Sheppard's evidence on behalf of the Plaintiffs is that the delay has been due to the Defendant's failure to comply with its discovery obligations; he takes issue with the way in which events have been portrayed such as to "suggest that the Defendant has been blameless for this delay, when in fact it is the Defendant who has, throughout, caused most of the difficulties in question." However, after making due allowance for the 'discovery element' of the case, in my judgment the delay of 21/2 years from January 1992 to July 1994, was excessive and unjustified, as was the period of the stay of proceedings from 21st June 1995 to February 1996 (at which point the stay was lifted consequent upon the provision of security for costs by the Plaintiffs). Nor do I consider, in light of the time elapsed to-date, that a whole year's further delay from 24th February 1996 to 23rd February 1997 (the date of the issuance of the Summons for Directions) can be justified; in this connection I recognise that settlement negotiations inevitably take some of the 'steam' out of a case, but by June 1996 a very considerable amount of time had been taken up in this case, and in my view it was the more necessary for the Plaintiffs to have pressed forward.

17. Accordingly, whilst I recognise difficulties solicitors encounter in complex cases, and after considering Mr. Griffiths' persuasive submissions to the contrary, I hold, in the words of the hallowed phrase, that there has indeed been inordinate and inexcusable delay. The question that arises, therefore, is whether consequential prejudice is established such as to meet the Birkett v. James benchmark?

Prejudice and the risk of inability to have a fair trial

18. Mr. Fok says unequivocally that the delay complained of has given rise to a substantial risk that a fair trial cannot be had and that the Defendant has been prejudiced in a number of respects. If I may adopt his summary of the categories of consequential prejudice, he itemises this issue thus:

(a) the dimming of witnesses' memories thus affecting the evidence that will be given by them, in particular Mr Steve Lan;

(b) the inability of the Defendant to call Mr Mark Brockbank because of his reluctance to give up his time to do so;

(c) the inability of the Defendant to call the intermediate brokers most closely involved with presenting the risk to underwriters, name Mr Tony Proctor and Mr Paul Calver, due to changes in the identity of their employers and their own reluctance to become involved;

(d) the inability of the Defendant to call certain of the underwriters involved due to retirement, ill health and/or reluctance to become involved, namely Mr Norman Evenett and Mr Tebbutt;

(e) the difficulties in identifying a suitable expert underwriter and/or broker to give evidence as to the hull insurance market from as early as 1984 and (on the Plaintiffs' pleaded case) up to the present date;

(f) the financial and case-management prejudice caused by the duplication of effort on the part of the Defendants' solicitors and the replacement of personnel from time to time; and

(g) the difficulty the Defendant and the London brokers will both be bound to face in relation to an indemnity claim by the Defendant against the London brokers (which claim the Plaintiffs themselves allude to).

19. This is an impressive list. However, as I made clear to counsel during the hearing, it seems to me that in reality the crucial consideration in this application relates to Mr. Fok's category (a); in the course of argument, Mr. Griffiths went so far as to characterise the Lan/Chen exchanges as "the heart of the case", and Mr. Fok also submitted that the "oral testimony is crucial" to the claims against the Defendant in terms of the telephone conversation of November 1981 and the meeting in Taipei in September 1982. Accordingly, it is to this element of the case that I have accorded particular attention.

20. As with the issue of delay, there is, I apprehend, no difference between the parties in terms of legal principle. And in the context of memory loss, I am grateful to Mr. Fok for drawing my attention to Shtun v. Zalejska [1996] 1 WLR 1270 (CA), in which the English Court of Appeal (Neill, Peter Gibson and Hobhouse L.JJ.) considered in particular the degree to which in an appropriate case the Court was entitled to draw an inference that by reason of the delay complained of serious prejudice (or at any rate more than minimal prejudice) would be caused to the Defendant as the result of the impairment of witnesses' recollection; in other words, that the inference of prejudice is available, depending on the circumstances of the case, it being expressly recognised by the Court that there is an unreality in a Defendant being required to put in affidavit evidence explaining specifically how an individual's recollection may have been affected. Hobhouse L.J. expressed it thus (op. cit., at 1288):

"When a case, such as the present case, depends upon conflicting oral testimony to be given about what was said or understood some 15 years earlier, the quality of the recollection of a witness is bound to be central to the trial and, in respect of the evidence of the party on whom the evidential burden lies, critical to the establishment of his case. The cross-examination of such a witness is bound to be directed primarily to attacking the reliability of the witness's recollection and testing it by reference to other evidence that may be adduced at the trial. It is unreal to expect a defendant to do more at the stage of his application for dismissal in demonstrating the existence of the substantial risk.

In the present case the risk of prejudice to the defendant and of unfairness at the trial was clearly shown from the character of the case and the issues which it raised. The affidavit evidence confirmed this. The evidentiary burden at the trial would be on the defendant. The improper delay had clearly increased her disadvantage by a significant margin. The judge was right to be satisfied that the risk existed. He was not constrained by authority from so concluding. The question remains one of fact: the drawing of inferences and the assessment of risk. Authorities do not help. The judge has to arrive at his own conclusion on the material before him and the whole of the circumstances of the relevant case." (emphasis added)

21. In Shtun, the appeal was allowed and the action dismissed. Should the same result pertain in this case?

22. Mr. Fok says an emphatic yes, and suggests that his ability to call evidence and to cross examine is substantially impaired as a result of the passage of time. He asks me to infer additional memory loss on the part of Mr. Steve Lan from 1991 onwards. He submits, also, that it would be wrong to penalise the Defendant because Mr. Lan was proofed in 1991. To do so would leave the Defendant between a rock and a hard place, so to speak: early proofing would preclude complaint as to subsequent delay, whereas late proofing would facilitate argument on behalf of the Plaintiffs that prejudice was solely attributable to the Defendant's inaction. I have some sympathy for the argument, forensically attractive as it is.

23. At bottom, however, it seems to me that the answer in this regard depends on an examination of the precise nature of the evidence underpinning the contention as to the actual or inferential impairment of memories. In her affidavit leading the application Miss Sumption deposes in some detail to the events of November 1981 and September 1982. She points out that the Plaintiffs claim that in a conversation between Dr. Chen of Wan Hai and Steve Lan on or about 5th November 1981 Mr. Lan was informed, inter alia, that there were outstanding claims in respect of the casualty and average adjusters had been appointed by the charterers of the vessel to look into the question of general and particular average in relation to the casualty. To this, she says that Steve Lan denies that any reference was ever made in conversation with him to outstanding claims in respect of the casualty. She further points out that there is no documentary evidence of any kind which mentions a possible outstanding claim in general average, and concludes that the question of what Steve Lan was or was not told or should or should not have been able to deduce is entirely a question of oral evidence in terms of discussions which took place almost 151/2 years ago before the inception of the first of the policies in issue.

24. As to the meeting in Taipei in September 1982 at the time of the renewal, it is again the Defendant's case that no mention was made of an outstanding claim in general average; indeed it is the Defendant's case that Mr. Lan was specifically told that no claim other than the S$105,000.00 would be made under the policy applicable at the time of the fire. Miss Sumption deposes to the fact that this conversation took place at a meeting between representatives of Wan Hai and Steve Lan at Wan Hai's offices in Taipei, and that although Steve Lan made a few notes of the meeting it was largely a courtesy call as he was in Taipei at the time on other business. The notes of the meeting do not provide much detail of what was said but merely recall factual relevance to the claims experience of the various vessels in the fleet. Again, says Miss Sumption, this will be a matter which will be dealt with entirely by way of oral evidence as to what passed between Captain Liu and Dr. Chen of Wan Hai and Steve Lan of Swire Insurance with regard to a meeting that took place some 141/2 years ago. She deposes to the effect on Mr. Lan's evidence as follows:

"The clarity of the evidence of Steve Lan, for example, will I believe have deteriorated since the time that we first took a proof of evidence from him. This was in 1991. Although Mr. Lan's recollection is pretty good, given the time which elapsed between that proof of evidence and the conversations and meetings to which he refers (1981 and 1982), I do not believe that he will now be able to remember anything more than he could remember then. Witness Statements have still not been exchanged and so he does not yet know what sort of allegations he will have to meet. ..." (emphasis added)

25. Miss Sumption further refers to events in 1984. She says that in addition to evidence about the information passed to the Defendant in conversation and meetings in 1981 and 1982, the Defendant will also need evidence of events which took place at the time of the 1984/85 renewal; this will involve evidence to be given by brokers in London who actually dealt with the underwriters, and evidence from the underwriters themselves. In this connection she points out that a fundamental question in this litigation is whether the additional premium charge was or was intended to be a penalty imposed on Wan Hai, and that the brokers who discussed these two issues with the underwriters, and indeed the underwriters themselves, may now find it difficult to recall with any clarity how the underwriters reacted, in 1984 to the new information. In memory terms, however, in an exception may well be that of the lead underwriter, Mr. Mark Brockbank. Of him Miss Sumption says:

"Mr. Brockbank does, I understand, recall the events of 1984 better than might be expected because Dr. Chen of Wan Hai paid him a visit in August 1985 in order to complain about what he perceived to be a penalty imposed upon him by underwriters for something which he considered to be Swire's fault. For this reason the insurance of Wan Hai stands out in his memory. Mr. Brockbank remembers assuring him that no such penalty was imposed and that the premium was simply re-rated in order to reflect the risk involved in the insurance of the Wan Hai fleet. However in the 13 years which have passed since the events in question, Mr. Brockbank has become an increasingly important figure in the London markets. He is now extremely busy and I believe he is now very unlikely to have the time (or the inclination) to come to Hong Kong to give evidence on behalf of Swire Insurance in relation to such an old matter. While we may be able to secure a written statement I fear it will not have the same impact of the presence in Court of the very underwriter whose decision lies at the heart of this dispute. ..." (emphasis added)

26. In summary, therefore, Miss Sumption submits that the Defendant has suffered prejudice in relation to the ability of any witnesses of fact to remember clearly what observed in 1981, 1982 and 1984.

27. Mr. Griffiths Q.C. takes issue with each and every allegation of prejudice. In his submissions Mr. Griffiths directed my attention specifically to the way in which Miss Sumption had put the case on affidavit. So far as Mr. Lan is concerned, it is plain, said Mr. Griffiths, that Mr. Lan will recall all that he could remember when he was proofed in 1991; indeed, Mr. Lan's recollection is said to be "pretty good", and it is worth noting that it is not said that Mr. Lan cannot recall now what he could remember in 1991. The fact is, submitted Mr. Griffiths, that Mr. Lan does have a good recollection and is able to deal with the factual matters in issue. The conversation in November 1981 and the meeting in September 1982, for example, focuses upon pretty straightforward issues, viz.: Was Mr. Lan told by the client that on "Mohawk" there was a general average loss, and further did Mr. Lan as a broker, knowing that a significant number of containers had been damaged on the vessel, ask the client whether was or there was not such a loss? In other words, the conversations in question, which will require specific findings of fact, are neither greatly detailed nor do they involve difficult or intricate arguments.

28. I think that this point is well taken. The fundamental dispute is clearly defined, and it seems to me that even after the passing of a what is a very considerable passage of time each of the parties present at the 1981 conversation and the 1982 meeting is likely to be a witness who will retain a pretty clear recollection of the essentials of what took place. In this regard, I am reminded of that part of the judgment of Glidewell L.J. in Trill v. Sacher, op. cit., at 1393, where he said as follows:

"Although after the passage of so many years the memories of all the witnesses, whether for the plaintiffs or the defendants, will undoubtedly be less clear than they would have been nearer the time about the detail of particular events or conversations, it is in my view unlikely in the extreme that any of the defendants will not remember whether they did enter into a fraudulent agreement. In particular, I find it inconceivable that the fifth defendant will not have a clear recollection of the truth or falsity of the plaintiffs' allegation. In the end, therefore, I have concluded that the deputy judge's evaluation of this issue was correct. ..." (emphasis added)

29. Whilst I accept the Trill v. Sacher involved a plainly different fact situation, in my view the observations of Glidewell L.J. are of relevance; in this case the battle lines are clearly drawn, and have been so throughout, and on the material before me I am disinclined to draw an adverse inference with regard to Mr. Lan's memory sufficient now to halt this case.

30. In terms of recollection of other witnesses, I have already noted Mr. Brockbank's position. However, under the general "dimming of memory" head, Miss Sumption refers to the argument applying equally well "to the brokers in London and to some of the secondary underwriters in London". In particular she would wish them to "give evidence as to the effect that the discovery of the non-disclosure and the breach of warranty had on the underwriters at the time". However, these potential witnesses are not identified by the Defendant (unless by this is meant the particular gentlemen to whom I subsequently refer), and in fact no evidence is provided that the witnesses whom the Defendant wishes to call have actually forgotten the events. Moreover, since the non-disclosure issue has been alive since November 1990 and the false warranty point since May 1995, no explanation is given as to why the intended witnesses have not already been proofed.

31. At the end of the day, it may be that the present application stands or falls on the success of the "dimming of memory" argument; indeed, I dare say that without this all important category of prejudice, the present application may not have seen the light of day, Mr. Fok accepting in his reply that the prejudice was "mainly Mr. Lan". Be that as it may. I recognise that the dimming-of-memory line of argument is a powerful weapon in the armoury of any Defendant seeking to strike out for want of prosecution, and that the instinctive (and probably generally correct) reaction of most litigators would be to accord considerable weight to this aspect in an application involving reference to conversations taking place some 151/2 years ago. Ultimately, however, everything must be placed in the context of the particular circumstances of the case. And although I have been tempted, given that I have found serious and inordinate delay, in the final analysis I am not persuaded, in the exercise of my discretion on the material before me, to accede to the Defendant's application under this head.

32. I have also carefully considered Mr. Fok's other categories of prejudice. So far as Mr. Brockbank is concerned, Miss Sumption deposes to her belief that he is now very busy and unlikely to have the time or the inclination to attend the trial, although I note that she accepts that she may be able to obtain a statement from him. In this connection, I have sympathy with the Plaintiffs' suggestion that this evidence is essentially speculative. On the face of the evidence at least, Mr. Brockbank does not appear to have actually been approached on the matter, nor is it clear when he decided (if indeed he so did) that he would not come. Neither, apparently, has he been proofed.

33. Turning to the London brokers and secondary underwriters, the only brokers who are specifically identified are those formerly at Willis Faber, in particular Messrs. Proctor & Calver, neither of whom are now employed by that company. Again they have not been proofed, and whilst Miss Sumption accedes to the possibility that they may be prepared to make a written statement, she deposes to her belief that their departure from Willis Faber will mean that these individuals cannot be called given the unlikelihood of their employers letting them come to Hong Kong, coupled with their apparent reluctance when she last spoke with them. Aside from the lack of a proof, it is not clear how or why their departure from Willis Faber is a matter which can be ascribed to the Plaintiffs; I have little doubt that as a general proposition securing time away from work is always likely to cause problems. I note in passing, also, that there is no evidence that these two gentlemen will suffer difficulties of recollection.

34. With regard to Messrs. Evenett & Tebbutt, the underwriters at the second syndicate on the slip, Miss Sumption accepts she is currently "researching the position". It is not clear when Mr. Evenett's syndicate collapsed, nor when he suffered a heart attack, nor for that matter why his retirement from the market, or indeed that of Mr. Tebbutt, should be regarded as anything more than a purely incidental event. Again, Messrs. Evenett & Tebbutt have not apparently been proofed, nor do I grasp why the evidence of the secondary underwriters (who in any event, Mr. Griffiths suggests, would have followed Mr. Brockbank in his acceptance of the risk) is in the particular circumstances of this case other than peripheral.

35. Turning now to the remaining categories of prejudice relied upon, in my view difficulties with regard to quantum have been elevated to too high a level, notwithstanding problems inherent in the present assessment of past risk. This is one area at least which is likely to be documented in general terms, and which remains susceptible to hard evidence. Nor is it clear why an expert has not (apparently) yet been retained. I appreciate in this context that the Plaintiffs also have their difficulties; that, of course, is a matter for them, and they are no doubt in the course of confronting the problem.

36. The argument as to prejudice arising from the case-management aspect is a practical problem which may or may not arise in litigation over the passage of time, and is a matter which evokes no sympathetic reaction in the present context. Mr. Fok's final point goes to the anticipated joinder, as third parties, of the sub-brokers responsible for including the warranty, which, as he puts it in his skeleton argument, "but for this application [the Defendant] would have acted upon". I am not sure that he presses this line particularly hard. The fact is that the cause of action with regard to the warranty claim was permitted to be added to the proceedings in May 1995, and if and in so far as the Defendant did not pursue such third party proceedings in favour of the present application, that, it seems to me, is peculiarly a matter for the Defendant.

37. The Plaintiffs' submissions on the issue of prejudice were that the prejudice alleged either did not exist or that any prejudice (which is denied) was not caused by delay on the Plaintiffs' part. During the course of argument Mr. Griffiths Q.C. adverted in passing only to the issue of estoppel or acquiescence. Part of the Plaintiffs' skeleton argument, however, raised argument to the effect that if there had been delay, the Defendant was estopped from claiming that it had suffered or would suffer serious prejudice as a result. In this regard reliance was placed upon the fact that, notwithstanding its present complaints, the Defendant had made further and better discovery, sought security for costs, and filed an Amended Points of Defence; each activity, it was said, amounted to a representation that the Defendant was prepared to allow the proceedings to continue, and nothing new had arisen since the filing of the Amended Points of Defence, on 7th February 1996, which would not already have been present on 14th July 1994 (when the Plaintiffs gave notice of intention to proceed), or 28th June 1995 (when the Plaintiffs provided security for costs) which could amount to serious prejudice to the Defendant.

38. As to this, I accept Mr. Griffiths' observation during argument that such an element of the case is simply a factor to be placed into the scale: see Lord Browne-Wilkinson in Roebuck v. Mungovin, [1994] 2 AC 224 at 226:

"Where a plaintiff has been guilty of inordinate and inexcusable delay which has prejudiced the defendant, subsequent conduct by the defendant which induces the plaintiff to incur further expense in pursuing the action does not, in law, constitute an absolute bar preventing the defendant from obtaining a striking-out order. Such conduct of the defendant is, of course, a relevant factor to be taken into account by the judge in exercising his discretion whether or not to strike out the claim, the weight to be attached to such conduct depending upon all the circumstances of the particular case." (emphasis added)

39. Whilst the Defendant's last action prior to the issue of the present summons to dismiss was the filing of its Amended Points of Defence on 20th February 1996, an action which perhaps does not sit entirely easily with its current submissions as to prejudice and the inability to have a fair trial, in my view the outcome of this case is not dependent upon any estoppel or acquiescence argument. The particular procedural actions of the parties are merely one of the matters to be taken into account by the Court in arriving at its conclusion, and I have proceeded upon this basis.

Result

40. The result of the foregoing is that, finally, I am not persuaded that by reason of the delay a fair trial will no longer be possible or that the Defendant has suffered substantial causative prejudice in relation to the trial of the issues sufficient for me to dismiss this action for want of prosecution.

41. I have arrived at this conclusion after considering all the evidence before me, together with the submissions of counsel, and then not a little reflection. In the process, I confess, also, to some degree of hesitation in coming to my decision. However, as Ching J.A. pointed out in the recent case of Computronics International v. Piff Shipping Ltd. [1997] 2 HKC 53, at 62F, the House of Lords' decision in Roebuck v. Mungovin, op. cit., is authority for the proposition that the court retains an overall discretion on the basis of what, in all the circumstances, is necessary to achieve an equitable result. And after reviewing all the circumstances, it is my judgment that justice will not be served by acceding to the Defendant's application. Accordingly, despite Mr. Fok's attractive arguments, this application is dismissed, and I so order.

42. I will, however, add this. The Plaintiffs may have got home, but their successful resistance to this application has been by but a very short head, so to speak, and there should be no room for doubt that further significant delays in the course of this case are unlikely to be sympathetically received.

43. I will hear the parties in due course as to the costs of and occasioned by this application, together with any consequential directions as may be necessary for the future conduct of this case.

44. I am grateful to counsel on both sides of the table for the precision and care with which they formulated their arguments.