HUI (ANNIE) GUO v. YUEDONG XU AND OTHERS

HCCL 3/2019

[2022] HKCFI 1331

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO. 3 OF 2019

(TRANSFERRED FROM HIGH COURT ACTION NO. 2404 OF 2018)

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D E C I S I O N

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1.  By summons of 2^nd March 2022, the Plaintiff applied for an extension of time, until 4^th May 2022, for the parties to take out all outstanding interlocutory applications.

2.  By a further summons of 21^st April 2022, the Plaintiff applied for leave to amend this summons, to extend time to 7 days from a further directions hearing to be listed not before 1^st June 2022.  I grant leave for the amendment and will consider the application for a time extension on this basis.

3.  The original deadline by which the parties were to take out their outstanding interlocutory applications was 6^th August 2021, pursuant to the order of A Chan J of 12th November 2020.  There were further extensions by consent.  The time extension summons of 2^nd March 2022 is the Plaintiff’s fifth request to extend time for the taking out of interlocutory applications.

4.  The Plaintiff relies on the following grounds for extension.

4.1  The Plaintiff has a fee dispute with her previous solicitors King & Wood Mallesons Hong Kong (“KWM”).  KWM has only provided some of the pleadings and a limited number of documents to the Plaintiff’s current solicitors K&L Gates (“K&L”)  and is not willing to transfer other files until all of KWM’s fees have been paid.

4.2  There has been a material change of circumstances as the Plaintiff had not changed her solicitors when agreeing to the previous deadline.

4.3  It has not been possible to take copies of documents from the court file between 7^th March 2022 to 11th April 2022 by reason of the General Adjournment of Proceedings announced by the Judiciary due to the COVID-19 pandemic (“GAP”).

4.4  The value of the claim is substantial, so that fairness requires that the Plaintiff should be afforded a real opportunity to obtain legal advice.

4.5  The 1^st, 4^th and 5^th Defendants have taken out interlocutory applications against the Plaintiff, so that the parties will need time to deal with these in any event and minimal prejudice will be caused by the time extension sought by the Plaintiff.

Fee dispute

5.  Mr Thomas Wong, counsel for the 4^th and 5^th Defendants, has submitted that even if there is a fee dispute with KWM, the Plaintiff could settle the disputed bills first under an express reservation of rights to refer the bills to taxation, obtain the papers, and then commence taxation proceedings.  He cited Springbok Shipping (HK)  Ltd & others v Clayton Wong & Co [1998] 1 HKLRD 225, where the Court of Appeal held that despite paying the bills, the plaintiffs were entitled to proceed to taxation as (inter alia)  they had reserved the right to taxation.

6.  In the present case, it is unknown whether KWM would have released the papers on such a basis.  However, there is no evidence that the Plaintiff even attempted such a course.

Material change of circumstances; inability to take copies of documents from the court file

7.  The currently operative deadline, which has passed, for the making of interlocutory applications was 4^th March 2022.  This date was proposed by KWM on 24^th December 2021.  The parties agreed to it and an order was accordingly granted by A Chan J on 24^th January 2022.

8.  Whilst it is true that the Plaintiff had not changed her solicitors when agreeing to this previous deadline, I note that the Plaintiff engaged K&L on 7^th February 2022, and K&L had already learnt by 10^th February 2022 that KWM was only going to transfer limited documents to it because of the fee dispute.  The handling partner of K&L has made an affirmation stating that he was mindful of the necessity to act with due haste.  Yet no explanation has been given as to:

8.1  why the court file could not have been searched between 10^th February 2022 and 7^th March 2022 when GAP started, particularly given that the deadline for making interlocutory applications was 4^th March 2022;

8.2  whether any attempts were made to ask for leave to search the court file during GAP.

9.  It appears that K&L has, since the end of GAP, on 11th April 2022 carried out searches of the court file although it is said that not all of the interlocutory applications and orders have been obtained.  It is not clear why this is the case.

10.  It is said that K&L does not have copies of:

10.1  documents discovered by the parties to the proceedings;

10.2  correspondence between the parties;

10.3  documents prepared by KWM for the Plaintiff; and

10.4  documents received by KWM from the Plaintiff’s counsel.

11.  As to documents discovered by the parties, the 1^st, 4^th and 5^th Defendants today have helpfully indicated that they would be willing to provide copies to the Plaintiff.  The 4^th and 5^th Defendants have indicated that they would be willing to provide photocopies of the documents of which the Plaintiff gave discovery, and electronic copies of the documents of which the Defendants gave discovery, within a week, upon payment of copying charges and reasonable costs for work involved.

12.  As to correspondence between the parties, it is not clear to me why this would be needed in order to decide what interlocutory applications need to be made.

13.  As to the documents prepared by KWM for the Plaintiff, the emphasis in the skeleton of Mr Leon Ho, counsel for the Plaintiff, was placed on the fact that draft proofs of evidence prepared by KWM were not available.  It is not clear to me why such documents would be necessary for KWM to consider whether interlocutory applications should be made.

14.  As to the documents received by KWM from the Plaintiff’s counsel, there is no evidence as to whether counsel was asked for copies.

15.  Furthermore, whilst the Plaintiff has focused on what is said to be the inability of K&L to consider what interlocutory applications should be made in the absence of documents made available since they were engaged, what the Plaintiff has not explained is why the necessary interlocutory applications were not taken out whilst KWM was still acting for her.  The relevant chronology is as follows.

15.1  On 26^th May 2021, KWM proposed that interlocutory applications of all parties should be made within 28 days after exchange of witness statements between the Plaintiff and the 1^st Defendant.  A consent order was made by DHCJ MK Liu on 15^th June 2021 incorporating this provision.

15.2  It appears that KWM overlooked this and it suggested by letter of 26^th July 2021 that interlocutory applications of all parties should be made within 14 days after exchange of witness statements between the Plaintiff and the 1^st Defendant.

15.3  There were subsequently further extensions of time.

15.4  The Plaintiff was in fact served with the 1^st Defendant’s witness statements on 12th October 2021, which was some four months prior to the termination of KWM’s retainer.

15.5  There has been no explanation as to why the Plaintiff was unable to take out interlocutory applications during those four months.

Value of the claim

16.  Whilst the value of the claim may be substantial, this alone is not a reason to grant an extension of time, if the Plaintiff has already had a sufficient opportunity to obtain legal advice.

Interlocutory applications taken out by the Defendants

17.  The Plaintiff says that the 1^st, 4^th and 5^th Defendants have taken out interlocutory applications themselves and that (a)  they may result in consequential applications, (b)  time will be needed to deal with such applications in any event so delay arising from the time extension will not be substantial, and (c)  there will be minimal prejudice caused from any additional delay arising from an extension of time.

18.  As to (a), this is speculative.

19.  As to (b), there is nothing to indicate that the delay would not be substantial, particularly when the Defendants’ applications were in fact taken out before the deadline of 4^th March 2022, and are all due to be heard in May 2022, whereas the Plaintiff is asking for a somewhat open-ended deadline after 8^th June 2022.

20.  As to (c), the 4^th and 5^th Defendants say that an extension of time will cause them great prejudice as the Plaintiff obtained a freezing injunction in Australia in aid of the present proceedings, covering assets of the 4^th and 5^th Defendant in the amount of over A$22.6m, and this has been in place since October 2018.  Furthermore, the 4^th and 5^th Defendants have suffered loss in the form of lost interest and penalties for late repayment of loans.  The Plaintiff says that this is a matter for the 4^th and 5^th Defendants to take up with the New South Wales court.  I do not agree, as the prejudice arises from delay caused by the extension of time sought in the Hong Kong proceedings.

Disposition

21.  Taking the above into account, I will grant a short extension to the Plaintiff so that she may have the opportunity to obtain the documents which she says she currently does not have.

22.  However, given the history of repeated extensions of the deadline and the prejudice which further delay will cause to the 4^th and 5^th Defendants, I do not agree that it would be appropriate to make a somewhat open-ended order of extending the deadline to 7 days from a further directions hearing to be listed not before 1^st June 2022.

23.  I will therefore order that unless by 20th May 2022 the Plaintiff do take out all interlocutory applications she seeks to make, she will be debarred from so doing.

24.  I should make it clear that it is a matter for the Plaintiff to decide what documents she wishes to obtain and from which source, and that the operation of the unless order does not in any way depend on whether the Plaintiff obtains any particular documents from any particular source.  She may for example choose to pursue obtaining documents from KWM.  I am not making any order that the Defendants provide documents to her.  I simply record that the 4^th and 5^th Defendants, through counsel, have indicated their willingness to provide a set of documents provided by the parties in discovery within a week and upon payment of charges and costs as aforesaid.  Whether the Plaintiff wishes to avail herself of this is a matter for her.