SHUM YUEN NIM v. UNITED VENTURE NAVIGATION CO LTD

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. The plaintiff was seriously injured when he fell from the gangway of a ship on which he was serving as Chief Engineer. This was on 24 May 1982. At the time, the vessel was in port at El Ferrol, Spain. He is suing the second defendant, and others, for damages arising out of that incident.

2. I am concerned with is an application by the second defendant for an order that the plaintiff's action be dismissed, as against it, for want of prosecution under -

3. The writ in the action was issued on 15 April 1985. As I understand the position, service of the writ was not attempted immediately because the Director of Legal Aid wanted to ascertain whether the defendants were worth powder and shot, which is understandable. On 17 October 1985, technical service was effected at the registered office of the second defendant, although it was apparent then that the company was no longer carrying on business and it was unlikely that the writ would come to the attention of any responsible officer of the second defendant. It was not until March 1987, following a renewed service, that the writ came to the attention of someone who could do something about it; the second defendant's solicitors - instructed, no doubt, by the insurer, acknowledged service of it.

4. Reading between the lines, it seems clear to me that, as a "living" entity, the second defendant no longer exists for practical purposes. This action is, in reality, being defended by the second defendant's insurer. The second defendant no longer carries on business, and its directors and records cannot be traced. As far as the second defendant's records are concerned, this situation came about sometime before October 1985.

5. The second defendant made a similar application to strike out in June 1987, and this was dismissed with costs. As Mr Sarony suggests, one might have hoped that this experience might have impressed on the plaintiff and his advisers the need to press on with the matter with due despatch, but, unfortunately, it does not seem to have had that effect. There may be what are seen as good tactical reasons for this heel dragging, but, if so, I have not been told what they are, and, consequently, must assume that there is no valid excuse.

6. This application has, at least, stirred some action in the plaintiff's camp. The summons was issued on 20 October 1989, and, on 24 January 1990, a week or so ago, the plaintiff filed an affidavit in response to the order made over two years ago, which order required the plaintiff to file the affidavit on or before 30 December 1987. The date of this filing is hand-written into a type-written affirmation filed on behalf of the plaintiff in this application.

7. That affirmation, with a chronology attached, demonstrates that there has been extraordinary delay in proceeding with this matter since early 1986. There is evidence of some desultory activity from time to time, but there are also a number of periods of several months' duration in which, apparently, nothing was done at all. In my assessment, no serious attempt is made in the affirmation to excuse the delay, and Mr Chung did not really try to do so before me.

8. But, as been pointed out to me, inordinate and inexcusable delay is not a sufficient ground to dismiss the action; the delay must, in addition, be such that it gives "rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to " the second defendant. (Lord Diplock, at 318: Birkett v James [1978] A.C. 297.)

9. The second defendant says that it has been prejudiced in several respects

10. As I have said, the writ did not come to the "mind" of the second defendant until March 1987. That is not to say that it was not until then that the second defendant knew about the accident sustained by the plaintiff in 24 May 1982. Indeed, the second defendant itself reported the matter to its insurers the next day. The master wrote a report on the incident which is dated 26 May 1982. The second defendant seems to have taken all proper steps as a reasonable employer to see that the plaintiff was looked after and treated. Clearly, then, the second defendant, and its insurer, had every opportunity to undertake such investigations into the matter as it saw fit. It should have anticipated that it was highly possible that litigation would ensue, and a prudent employer (or insurer) would have prepared itself for that event. The master's report makes it perfectly clear that the breaking of a handrail at least contributed to the accident, and it must have been thought that the second defendant might be said to be liable on this basis.

11. I am not told whether, in fact, the second defendant or its insurer conducted any investigations into the accident, beyond receiving the master's report, or, if it did not, why this is so. I could understand, and be more sympathetic to, the second defendant's position if it were the case that proper investigations were conducted when it was possible and prudent to do so, but it now complained to me that witnesses can no longer be traced after the great lapse of time, or that there is an increasing danger that their memories will no longer serve them.

12. It is clear on the authorities that the time that elapsed between the accrual of the cause of action and the issue of a writ within the limitation period cannot constitute inordinate and inexcusable delay (Birkett v. James (Supra); affirmed by Dept. of Transport v. Chris Smaller Ltd. [1989] 2 W.L.R. 578); essentially because such a delay is sanctioned by the law.

13. As to the consequences of delay after this, in Birkett v James (Supra), at 323, Lord Diplock said that, before an action can be dismissed for want of prosecution, "some prejudice to the defendant additional to that inevitably flowing from the plaintiff's tardiness in issuing his writ must be shown to have resulted from his subsequent delay (beyond the period allowed by the rules of court) in proceeding promptly with the successive steps in the action.".

14. I do not think that the "subsequent delay (beyond the period allowed by the rules of court)" can be said to have resulted in any additional prejudice because, in my view, it could not be said reasonably that the plaintiff was guilty of any such significant subsequent delay until the end of 1985 at the earliest, and, by that time, the second defendant, and its records, had effectively disappeared from the scene.

15. I emphasise that any prejudice suffered by the second defendant must arise from the plaintiff's delay, not from its own conduct. It should also be said that the prejudice must real, not the possibility of some other prejudice that might have arisen even if the second defendant had taken reasonable steps to protect its own interests.

16. If the second defendant, or its insurer, had investigated the incident properly when it had the opportunity to do so, it would not be prejudiced now; not in the way it says it is prejudiced - it might, in other circumstances, have been able to allege that it was prejudiced by the fact that it had witnesses standing around losing their memories, but that it is not relevant here.

17. Looking at the prejudice that the second defendant alleges that it has suffered, I make the following comments:

18. I do not think that it is of any moment that the ship's articles are no longer available. These would do little more than spell out the detailed terms of service and are unlikely to be relevant to the issues in the action. In any event, it is unlikely that the articles would have been available when the plaintiff's additional delay became inexcusable.

19. I am also unimpressed by the second defendant's inability to trace witnesses. The point is that the second defendant and its insurer would know who the witnesses were if it had taken the trouble to look after its own interests.

20. The sale of the ship in August 1985 has, of course, no real relevance. Only an inspection of the ship, and the gangway, shortly after the incident might have been helpful, and the second defendant could have done this, if it had wished to do so. I am equally unmoved by the suggestion that the plaintiff's signature to the settlement form in some way induced the plaintiff to abandon all measures to ensure that it would be in a position to defend any litigation. I just do not believe that a prudent person would see the execution of this document, in the circumstances of this case, as a trigger for the disposal of records that would, at this stage, assist it in its defence.

21. As to the allegation that there is financial prejudice arising from a possible increase in damages awarded, I am confident that, if the point is a good one, the trial judge will be able to cope with this when assessing his award.

22. In the result, on the law as I see it, I do not consider that a case has been made out for the relief claimed. Accordingly, I decline to make an order dismissing the action, but I think it just that I should now put the plaintiff on terms by a peremptory order. My order is that, unless the plaintiff has, by 4 p.m. on Monday, 12 February 1990, set the action down for trial, the action be dismissed with costs.

23. As to the costs of this application, the second defendant has not made out a case for the specific relief claimed, but I have found that the plaintiff has been guilty of inordinate and inexcusable, and largely unexplained, delay and I have made a peremptory order against him. My tentative view is that the just order as to costs is that they should lie where they fall. Accordingly, I make an order nisi that there should be no order as to costs.