SNE ENGINEERING CO LTD v. CHIM KEE MACHINERY CO LTD

HCA 2025/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2025 OF 2012

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D E C I S I O N

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1.  This is the defendant’s application under Order 26 rule 3(2) asking the plaintiff to withdraw its interrogatories, which it has served on the defendant under Order 26 rule 3(1).  The plaintiff refuses to do so.  Hence this hearing today.

2.  Mr. Tsui, solicitor acts for the defendant and Mr. Ho, solicitor acts for the plaintiff.

3.  This hearing was set down for 15 minutes only.  However, both parties assured me this morning that the argument will take no more than 15 minutes for each side.  The parties have also confirmed that there will not be affidavit evidence and that they are ready for argument this morning.  So the argument between the parties appears to be short and brief.

4.  It is on this basis, I consider that the Court should hear the argument this morning.  I agree to set aside 30 minutes for hearing the argument despite that the appointment is only for 15 minutes.

5.  Mr. Tsui refers me to the White Book 2014 para. 26/4/3, which states that the normal practice for interrogatories to be taken out is after the exchange of the witness statements unless there are unusual circumstances.

6.  Mr. Ho refers to Wenden Engineering Service Co Ltd v Technic Construction Co Ltd & Another HCCT120/1997 (unrep. Burrell J, 14 June 2001). At paragraph 7, the learned judge said:

“…from time to time, construction case in Hong Kong will give rise to unusual circumstances which warrant a departure from the usual rules, in the court’s discretion.”

7.  Mr. Tsui has no argument over the above case except to say that this not a construction case.  I do not consider that flexibility should only apply to construction cases.  It applies to other general civil litigation cases as well. It will therefore be for the plaintiff to state the unusual circumstances, which justify the plaintiff to take out the interrogatories before exchange of the witness statements.

8.  I do not propose to set out the facts of this matter as I had already done so in my Decision dated 27 September 2013 dealing with the defendant’s application for security for costs. I shall simply deal with this application based upon the facts as set out in my previous Decision.

9.  Mr. Ho produces a set of company search, which reveals that there have been some sorts of charge against the property of Hsin Chong Construction Co Ltd, the principal contractor in favour of the defendant.  Mr. Ho submits that this is a recent discovery and the plaintiff suspects that there had been arrangement of payments of the defendant’s charges directly between the principal contractor and the defendant, the sub-sub-contractor.  If this is the position, the defendant cannot claim against the plaintiff in the counterclaim.

10.  Mr. Tsui challenges the admissibility of the above evidence because the plaintiff has never made known of those documents to the defendant or its solicitors.  The plaintiff admits that this is the position.  In the circumstances, it will be unfair for the plaintiff to rely upon the evidence without giving an opportunity to the defendant to consider and argue against it.  The Court should not give weight to the evidence.

11.  Mr. Ho also agrees that paragraph 2 of the interrogatories are for documents, which should be made under Order 24 instead.

12.  Mr. Tsui relies upon the authority of Kao Lee & Yip v Koo Hoi Yan & Others HCA8847/1993 [2002] HKEC 585 by Ma J. (as he then was).  At paragraph 7(5) of the judgment, the learned Judge set out the relevant legal principles for considering the interrogatories, quoting the authority of Det Danske Hedeselskabet v KDM International plc [1994] 2 Lloyds 534, the relevant parts of which are that the interrogatories should not be used for the purpose of cross-examination or for deposition-taking exercise unless it is really necessary for the purposes under Order 26 rule 1(1), viz. disposing of the matter fairly or for saving costs.

13.  Mr. Ho has raised no argument on the legal principles.

14.  Mr. Tsui then goes through the interrogatories.  Without going into each of the items (altogether 11, with some sub-items), one can see that they are either for discovery of the documents or for cross-examination or they are irrelevant because it is not the plaintiff’s pleaded case that the defendant’s counter-claims had been settled by Hsin Chong.  The plaintiff has not been able to show that those interrogatories are for the purpose of disposing of the disputes fairly or for saving costs.

15.  The defendant has succeeded in its application and the plaintiff should withdraw the interrogatories forthwith.

16.  As to the costs of this application, including the costs for today, Mr. Ho argues that the costs should be in the cause.  This is inconsistent with the normal rule that costs should follow the event.  Mr. Ho has raised objections to the defendant’s costs, which amount to $22,400.  The Court has made reference to the plaintiff’s schedule of costs for this assessment, an approach endorsed by the Final Report of the Civil Justice Reform.  At paragraph 539 ( c) on page 285, the Working Committee said:

“In any particular case, the court should have to hand the costs statements of each of the parties to the application. While they may be instances where one side will justifiably have spent a great deal more that the other in preparing for and arguing the supplication, what the paying has itself spent on costs will often be a helpful indicator of the reasonableness of the costs claimed by the receiving party.”

17.  The costs are assessed at $20,000  to be paid by the plaintiff to the defendant within 14 days from the date hereof.