XCHRX OMAR INVESTMENT LTD. v. TUNG CHOI ENTERPRISES LTD.

1998, No. MP 5091

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

_________________

JUDGMENT

_________________

1. The plaintiff issued a vendor and purchaser summons against the defendant on 30 September 1998 claiming declarations that certain requisitions in a letter dated 10 January 1998 have not been sufficiently answered, that good title has not been shown, repayment of a deposit in the sum of $3 million and damages. The plaintiff registered this summons as a lis pendens on 30 September 1998. Since 30 September 1998, the plaintiff has done nothing to advance the action.

2. On 15 January 1999, the defendant issued a summons seeking orders that the plaintiff's summons be struck out for failure to prosecute it and that the registration of the plaintiff's summons be vacated under section 19 of the Land Registration Ordinance (Cap. 128). This is the summons now before me. The defendant filed evidence in support of this summons on 23 February 1999. The plaintiff filed its evidence only on 20 April 1999.

3. The letter of 10 January 1998 containing the relevant requisition was issued by a sub-purchaser only 5 days before the due completion date. This was conveyed to the defendant's solicitors on 13 January 1998; only 2 days before the due completion date.

4. The plaintiff seeks to explain its delay in prosecuting its action by saying that, on 29 December 1998, they said to the defendant's solicitors that, because there was a dispute of fact, the matter should be dealt with by writ. The defendant's solicitors insisted that the plaintiff file its affirmation, and then "unreasonably" took out the summons now before me.

5. The defendant's solicitors were, of course, quite right. The plaintiff should have filed its affirmation, awaited the defendant's evidence, and, then, if disputes of fact had emerged, applied under Order 28, rule 8, for the matter to continue as if begun by writ. I do not know why it did not do this. Instead, it did nothing of substance.

6. Nevertheless, I do not think that this is a case for striking out. I do not think that any purpose would be greatly served by this course. Instead, I think the plaintiff should have an opportunity of putting its house in order. I order that, unless the plaintiff file its affirmation in support of the summons of 30 September 1998 within 14 days, the summons be struck out. Thereafter, if it appears, after the defendant has filed its evidence, that there are disputes of fact, the plaintiff should make an application under Order 28.

7. As for the registration of the summons, Mr Chong argues that I should order that it be vacated on good cause shown. He says that the requisition concerned was late, and the plaintiff had no justification for failing to complete.

8. Mr Mui says that he agrees that the requisition was out of time - he could hardly do anything else - but argues that the defendant's solicitors waived compliance with this. He says that, by answering the requisition, compliance was waived. This can only be so if the defendant solicitors did not expressly say that they were not waiving compliance. The letter by the defendant's solicitors dated 13 January 1998 started by saying - "On a without prejudice basis and without admission to the requisitions . . . and as a matter of courtesy, we make our comments . . ." and ended by saying that the plaintiff failed "to raise the appropriate requisition within the time limit . . ." Nothing, I think, could be clearer than that. In the clearest possible terms, the defendant's solicitors said - "We are not waving compliance with the time limits, but will comment." In the face of that, it is difficult to understand how Mr Mui can argue that the letter did waive compliance.

9. It seems to me that the unjustified delay by the plaintiff is prosecuting its action and the weakness of its case on the requisition concerned establish "good cause" for vacating the registration of the summons. Accordingly, I grant an order vacating that registration.

10. There seems no good reason why costs should not follow the event. I also think that this is an appropriate case for ordering that the costs be paid forthwith. I make an order nisi that the plaintiff pay the costs of this application and the vacation of the registration of the summons, and that these be paid forthwith.