LINCOLN AIR CONDITIONING & ENGINEERING CO LTD AND ANOTHER v. CHAN PING FAI RICKY AND OTHERS

HCA527/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 527 OF 2010

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R U L I N G

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1.  On 15 January 2013, I allowed the plaintiffs’ application to expunge certain paragraphs of the Amended defence and the corresponding paragraphs in the witness statements of the 1^st and 2^nd defendants and dismissed the defendants’ application to plead and adduce evidence as per those paragraphs in the pleadings and the witness statements, as the case may be. These are the reasons of my decision.

2.  The paragraphs in question contain mediation communication during the course of mediation between Ms Ng Wai Ling, and the 1^st defendant in the winding up proceedings.  Ms Ng was the petitioner, the 1^st defendant, one of the respondents.  The defendants sought to rely on the mediation communication to support their defence that the claims now made by the plaintiffs were all included and settled by way of the Memorandum of Agreement (“the Agreement”) reached after mediation.

3.  It is common ground that the defendants must first obtain leave from the court under section 9 of the Mediation Ordinance, Cap 620, before they can deploy the mediation communication at trial.  Failing which, the paragraphs in the pleadings and the witness statements complained of are liable to be expunged.

4.  The defendants first complained that the plaintiffs had been guilty of delay in making their application.  However, the plaintiffs had already raised the objection in the Amended Reply filed last October.  They took out the present application right after the Mediation Ordinance came into force.  No delay could be attributed to the plaintiffs.

5.  The defendants next argued that the mediation communication is required for the fair disposal of the disputes now before the court.  This argument is untenable.  For one thing, the plaintiffs are not even parties to the mediation process or the Agreement.  And Ms Ng was not an agent of the plaintiffs when she conducted the mediation or entered into the Agreement. So whatever might have been said during the mediation or whatever the settlement might have been reached, it is simply not binding on the plaintiffs.  For another, it is trite that what the parties had said during negotiations which led to a subsequent agreement is not admissible as evidence for the purpose of interpreting the agreement itself.  This is exactly what the defendants are now seeking to do.  They want to rely on the mediation communication to support their contention that although the Agreement made no reference to any of the plaintiffs’ claims and despite the entire agreement clause, the claims are all covered and settled.  This is impermissible.

6.  It is for the above reasons that I made the order as I did.