HARVEST RISE LTD AND OTHERS v. LAW KWOK YAN

HCA 771/2004

in the high court of the

hong kong special administrative region

COURT OF FIRST INSTANCE

Action no. 771 of 2004

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J U D G M E N T

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1.  I have two applications in front of me today.  One is for a stay of these proceedings under the inherent jurisdiction on the basis that a settlement agreement has been reached between the parties. 

2.  The more this case went on, the more I felt that it would be a very sensible thing if these parties did reach an agreement and settle their differences because, the more this case goes on, it seems to me that the more costs will be run up.  However, looking at the documents which I have been shown, all I can say is it looks as though the parties are getting close to a settlement, but I do not think, at the moment, that they have reached one because there seem to be differences between the various documents that have been put forward and I think that this has to be sorted out.  I therefore would urge the parties to use their best endeavours to try and settle this before the whole litigation gets totally out of hand. 

3.  In those circumstances, I cannot accede to this summons today and I will adjourn that so that if the plaintiffs really wish to pursue that summons, he can do so, but at the moment I cannot see that, today, I can adjourn these proceedings.

4.  The other matter is an appeal from the master.  What had happened was, in January of this year, there had been a hearing before another master on the defendant’s application to set aside judgment in default.  The master granted that application but ordered the defendant to pay a total of $112,000, $110,000 being the gross sum assessment and the extra $2,000 was the costs of that day. 

5.  On that application, I note, that the defendant had applied for a stay of the costs order but that was refused.  That costs order has not been satisfied and I am told - and there seems to be adequate reason to believe that - that a great deal of money has been spent on litigation, in fact, in other courts and in other cases between the parties, much of it by the defendant making various claims in the District Court and so forth which possibly could have been made in a counterclaim in these proceedings and, therefore, one queries whether that was an appropriate step.

6.  Nevertheless, what the plaintiffs then did was to seek an order from the master that there be an Unless Order that the money be paid and, if it does not get paid, there be judgment in default.  The master refused that order, exercising his discretion.  He explained why; because he did not consider that the defendant had been contumacious, and he did not consider that the failure to pay the amount of costs ordered delayed the proceedings in any way or hampered the proper conduct of the proceedings.

7.  In both respects, he seems to be right.  In respect of contumaciousness, there seems to be a great deal of dispute between the parties as to who owes who what, and it does seem that the defendant has quite heavy financial claims, whether they are justified or not, against the 1^st plaintiff.  As regards delaying the proceedings or hampering the proceedings, I agree with the master that simply a failure to pay the costs is not to be equated with something like failing to provide discovery, which of course hampers the proper administration of justice because the full facts are not before the court; nor is it like failing to provide further and better particulars, which of course are there to clarify what each party’s case is about.

8.  Whilst I do not consider that it would be impossible for a court to make such an order as is requested, in the circumstances of this case and taking into consideration the other litigation which is going on and the other claims which are extant, I do not consider it right, on today’s application, to make such an order.  But because the defendant has not paid a sum which has been ordered to be paid, I do not think that the 1^st plaintiff should have to bear the costs of these proceedings. 

9.  In the circumstances, I propose to dismiss the application with no order as to costs.