CABLE & WIRELESS HKT INTERNATIONAL LTD. v. NEW WORLD TELEPHONE LTD.

CACV 150/2000
& CACV 243/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NOS. 150 & 243 OF 2000

(ON APPEAL FROM HCCL NO. 229 OF 1999)

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J U D G M E N T

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Introduction

1. In 1995, the Plaintiff's monopoly on connecting international telephone calls to and from Hong Kong was removed. Competition in the industry has since then been regulated by the Office of the Telecommunications Authority. Its regulatory activities include the issue of determinations. One of those determinations outlined the terms for the interconnection of the telecommunications networks of the Plaintiff and the Defendant. Those terms included the delivery fees payable for calls delivered from one network to the other, as well as the basis on which the delivery fees would be payable.

2. In the litigation to which these two appeals relate, the Plaintiff seeks the repayment of the sum of $280m. which it paid to the Defendant, and a declaration that a further sum of $94m. is not payable to the Defendant. It contends that on a true construction of the determination the sums were not payable to the Defendant at all, but payable to its own wholly-owned subsidiary. The Defendant responded by issuing a summons under Ord. 14A which, following its refinement at the hearing of the summons before Stone J, sought a ruling on the proper construction of the determination. Although Stone J heard full argument on the proper construction of the determination, he concluded that the issue of construction was not one which should be decided on an application under Ord. 14A.

The directions which are sought

3. The Defendant is now appealing to the Court of Appeal. It wants the Court of Appeal to hold that, as a matter of procedure, it was appropriate for the construction issue to be determined under Ord. 14A. But since Stone J did not decide the construction issue, the Defendant wants the Court of Appeal to decide the issue itself. Accordingly, the Defendant asks for the procedural issue and the construction issue to be heard together. For its part, the Plaintiff wants only the procedural issue decided by the Court of Appeal initially. If the appeal on that issue fails, the construction issue can only be decided at the trial. If the appeal on the procedural issue succeeds, so that the construction issue ought to be decided at the interlocutory stage, it can then be remitted to Stone J for him to decide that issue himself.

4. There is one other matter. After Stone J dismissed the Defendant's application under Ord. 14A, the Plaintiff applied for leave to amend its Statement of Claim. Some of the proposed amendments were opposed. Stone J granted the Plaintiff leave to make all the amendments sought. The Defendant is appealing against that order as well. It wants that appeal to be heard at the same time as the appeal from the dismissal of the application under Ord. 14A. The Plaintiff's proposal is that that appeal should await the outcome of the appeal on the procedural issue.

5. The issue which I have to decide today relates to how the appeals should be listed: both appeals to be listed together with a time estimate of 3 days on the Defendant's proposals, but only the first appeal to be listed initially (with a direction that only argument on the procedural issue be heard) with a time estimate of 1 day on the Plaintiff's proposals. If I direct that, for reasons of case management, both appeals be listed to be heard together with a time estimate of 3 days, that does not, of course, prevent the court which hears the appeals from taking its own course. Accordingly, the only thing which I can do today, as Mr Barrie Barlow for the Plaintiff concedes, is to make what seems to me to be the appropriate order for the listing of the appeals.

The relative merits of the proposals

6. I see the theoretical force of the Plaintiff's proposals. If the procedural issue and the construction issue are heard together, but if the appeal relating to the procedural issue is dismissed, time and expense will have been wasted in arguing the construction issue. And if the appeal relating to the procedural issue is allowed, so that the construction issue has to be addressed at the interlocutory stage rather than at trial, it would be better for Stone J to determine it since he has already heard the arguments. The hearing before him could well be a short one, in effect to remind him of the arguments which had already been developed. It is even possible for there to be no hearing at all. Since Stone J has heard all the arguments, it could be said that all he needs to do now is to retire to his chambers and prepare his judgment on the construction issue, which his decision on the procedural issue prevented him from doing. And in the event of a further appeal, the Court of Appeal would derive much benefit from having a reasoned judgment from Stone J on the construction issue.

7. However, not without some hesitation, I have concluded that it would be more appropriate for the Ord. 14A appeal to be listed for hearing with a time estimate which enables both the procedural issue and the construction issue to be argued. What persuades me that that is the right course to take is that, although the procedural issue and the construction issue are conceptually distinct, and although the court does not have to reach a concluded view on the construction issue in order to decide the procedural issue, nevertheless a real understanding of the construction issue is, it seems to me, necessary to decide the critical questions on the procedural issue. Those are (a) whether the construction issue is one which can be decided at an interlocutory stage on such evidence as has been filed, and (b) whether the determination of the construction issue at the interlocutory stage would dispose of the action, and if not what issues would be left. If an informed decision on the procedural issue can only really be made with a real understanding of the construction issue, the court would have to get to grips with the construction issue even on the Plaintiff's proposals. If the court does that, and if it then decides that the construction issue is one which is appropriate for determination under Ord. 14A, much of the preliminary work which would be needed to put the court into the position to decide the construction issue will already have been done.

8. Thus, even if the appeal relating to the procedural issue is dismissed, the time and expense which will have been wasted in arguing the construction issue will not have been all that great. If, on the other hand, the appeal relating to the procedural issue is dismissed, and if the court having heard the argument on the construction issue decides to determine that issue, such hearing of the construction issue as might have been necessary before Stone J will have been saved, as well, of course, as the hearing of any appeal from Stone J's determination of the construction issue.

Conclusion

9. Mr Paul Shieh for the Plaintiff accepted that, if the appeal from the dismissal of the application under Ord. 14A was listed with sufficient time for both the procedural issue and the construction issue to be argued, it would be appropriate for the appeal relating to the amendments to the Statement of Claim to be listed for hearing at the same time. Accordingly, I direct that both appeals be listed to be heard together, and that the two appeals be heard by a court consisting of three Justices of Appeal with a time estimate of three days on dates to be fixed after consultation with counsel's diaries.