LEE TAK (or TUCK) YAN AND OTHERS v. THE PRUDENTIAL ENTERPRISE, LTD AND OTHERS

HCA4225/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.4225 OF 2001

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D E C I S I O N

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1. By summons filed on 14 October 2003, the 6th defendant applied to set aside the Order dated 10 June 2002 joining it to these proceedings, and for an order that it be removed from these proceedings on the ground that the limitation period for the plaintiffs' cause of action against it had expired when the plaintiffs applied for joinder.

2. The summons was initially returnable on 30 September 2003, when by consent, it was adjourned for argument. Although it was then fixed for argument on 3 November 2003, there was no time to reach the summons on that day and it was further adjourned to today. By then the plaintiffs and the 6th defendant has agreed that "the date upon which the plaintiffs commenced proceedings against the 6th defendant is deemed to be 12 June 2002 for all purposes in connection with the Limitation Ordinance".

3. On that basis, it was agreed between the plaintiffs and the 6th defendant that there was no need to proceed further with the summons. The outstanding issue to be resolved is the costs of the application. Both the plaintiffs and the 6th defendant seek costs against the other side.

4. Following the approach suggested by Mr Chan SC for the 6th defendant, the starting point is that costs should follow event. What is of essence then is to establish what is the event in question.

5. Apparently by the summons, the 6th defendant is seeking to have it removed from these proceedings through the setting aside of the order for joinder made in June 2002. At the same time, it is acknowledged that the plaintiffs could have issued fresh proceeding against the 6th defendant and consolidate it with the present case. Accordingly, it is said that the underlining purpose is to invite the plaintiffs to consider issuing fresh action and for the fresh action to be consolidated with the present action. Ultimately the purpose is to preserve the 6th defendant's position on the limitation issue.

6. It is submitted that the 6th defendant had prior to issuing the summons, endeavoured to resolve the matter amicably. It is pointed out that the 6th defendant's solicitors had by letter of 3 October 2003, suggested to adopt 17 October 2003 as the notional commencement date of the plaintiffs' fresh action against the 6th defendant so that for limitation purposes, that would be the date on which time is deemed to have stopped running. What has been achieved by the parties' agreement is that for limitation purposes, 12 June 2002 would be taken to be the relevant date. With the agreement, the joinder order remains intact and the 6th defendant continues to be a party in these proceedings.

7. What then does the 6th defendant achieve out of the application? It is said what is obtained is a clarification that it will not be deprived of a limitation defence notwithstanding the joinder order and the effect of section 35 of the Limitation Ordinance. In testing this proposition, the immediate question that springs to one's mind is : Is the 6th defendant prevented from running the limitation defence at the trial if the plaintiffs were to fail on the deliberate concealment point? I would have thought that the answer was "No" because the issue of deliberate concealment, which is a material element of the plaintiffs' claim against the 6th defendant, is a point to be determined at the trial : Hong Kong Civil Procedure 2002, Vol. 2, paragraph G1/26/4, which is quite apart from the effect of section 35 of the Limitation Ordinance. I note too that the Reply of the plaintiffs never pleads that by virtue of section 35, the limitation defence is no longer open to the 6th defendant.

8. Be that as it may, I am prepared to assume that the 6th defendant for prudence or cautions sake would wish to secure a clarification with regard to its position under section 35 of the Limitation Ordinance. But the question remains whether it is necessary for the 6th defendant to issue the summons and make the present application? As I understand it, the 6th defendant's argument is that there had been a lack of response from the plaintiffs' solicitors to the letter dated 3 October 2003. But if one were to read that letter it is very difficult to understand what it is aiming at, particularly what the plaintiffs were asked to confirm by paragraph 7. On a reasonable comprehension, I am not persuaded that it conveys the 6th defendant's intention, namely, to secure a clarification that section 35 of the Limitation Ordinance will not operate as a bar to its limitation defence. There is also the point that the date proposed under paragraph 7 of the letter was 17 October 2003 which is not the presently agreed date of 12 June 2002.

9. Secondly, the wordings of the summons are misleading because it suggests that the joinder order should be set aside for the reason that the limitation period had expired by the time the joinder application was made. But effectively what the 6th defendant is saying is that the joinder order should not have been made because it would confer a procedural advantage on the plaintiffs by reason of section 35 of the Limitation Ordinance. The focus and the essence of the intended application are not reflected by the wordings of the summons.

10. On that basis, it would seem to me that although the plaintiffs' solicitors had not responded to the letter of 3 October 2003 in the way the 6th defendant had wanted, the blame does not lie at the door of the plaintiffs. It is unfortunate that the letter was not set out in clear and succinct terms and did not convey what the 6th defendant's objective. The wordings of the summons do not ease the problem.

11. For these reasons, there is no reason why the plaintiffs should be put to the burden of paying the costs of the 6th defendant for this application. On the contrary, the costs could have been saved had the position or the request of the 6th defendant been made clearly either in correspondence or by its summons. In the circumstances, the plaintiffs ought to be entitled to the costs of this application, including the costs today.

12. The order I make on the summons is that there be no order on the summons save that the costs of the application be to the plaintiffs against the 6th defendant in any event.