STUART JAMES BROMLEY AND ANOTHER v. CIC HIGHTIME RESOURCES LTD

HCMP 2623/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2623 OF 2005

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D E C I S I O N

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1.  I am concerned in this hearing today only with two appeals from the orders made by Registrar Chan.  These orders are purely matters of case management.

2.  In the 1^st order on 23 February 2006, he adjourned a summons issued by the plaintiffs on 17 February 2006 to me for argument.  In the summons, the plaintiffs seek an order to stay the proceedings brought by way of counterclaim on the ground of forum non conveniens.  The Registrar refused the plaintiffs’ application to extend time for filing a defence to the counterclaim pending determination of the stay application.  He ordered the plaintiffs to file and serve a defence to counterclaim within 21 days.

3.  The plaintiffs have appealed against the order requiring them to serve a defence to counterclaim notwithstanding there is an extent application to stay the counterclaim.

4.  The 2^nd order against which an appeal is brought is the order of the Registrar on 8 March 2006 refusing to stay his order on 23 February 2006 pending the plaintiffs’ appeal.

5.  Mr Carolan for the plaintiffs contended that the discretion of the Registrar is plainly wrong.  He submitted there are two reasons why a defence to counterclaim should not be served until after the determination of the stay application:

(1)     it would undermine the plaintiffs’ application to stay the counterclaim; and

(2)     the defence to the counterclaim would largely duplicate the position already taken by the plaintiffs in various proceedings in British Columbia, Canada and would serve no useful purpose.

6.  I am unable to see how in the present circumstances service of a defence to the counterclaim should undermine the plaintiffs’ application for a stay.  The plaintiffs have already issued a summons to stay the counterclaim.  They sought to defer filing a defence to the counterclaim until a determination of that application but were unsuccessful.  They were required by an order of the court to serve a defence to the counterclaim within a specified time.  If the plaintiffs were to comply with the court order, this could not be regarded as a voluntary submission to jurisdiction or waiver of any kind.  As for the argument that the plaintiffs’ position might be prejudiced, as in future both the proceedings in Canada and in Hong Kong would be carried on, I think one should look at the steps taken by the plaintiffs in Hong Kong as a result of a court order in the proper context.

7.  Both parties have addressed me on the prospects of success of the stay application.  Mr Manzoni for the defendant submitted that the plaintiffs’ prospects of success are obviously limited, so there is no point in delaying proceedings by extending time to serve a defence to counterclaim pending the determination of the stay application.  Mr Carolan contended otherwise, he prayed in aid that the applications in Canada to stay proceedings there on the ground of forum non conveniens were unsuccessful to boost his chances of success in his stay application in this court.  It is not necessary to express any views on the merits of the stay application at the moment unless it can be shown that the stay application clearly has no prospect of success, so I do not think I should consider the merits for present purpose.

8.  The other ground relied on by Mr Carolan is that it would serve no useful purpose for a defence to counterclaim to be filed, pending the determination of the stay application.  In deciding whether proceedings should be stayed on the ground of forum non conveniens, the court would need to establish there are real issues between the parties (Bayer Polymers Company Limited v Industrial and Commercial Bank of China, Hong Kong branch [2000] 1 HKC 805) and to ascertain whether those issues are more appropriately tried in this court or elsewhere (Rambas Marketing Company LLC v Chow Kam Fai David [2001] 2 HKC 250).

9.  It is not suggested that there are no real issues between the parties, what I need to consider in the stay application is whether the issues are more appropriately tried in Hong Kong or Canada.  Mr Manzoni contended that the plaintiffs have not identified precisely what their defence would be and that it would not be sufficient merely to refer to the documents filed in Canada.  He has helpfully summarised the issues raised in the counterclaim in paragraph 8 of his submission.  He submitted there are issues raised in the counterclaim in Hong Kong not dealt with in the Canadian proceedings.  This seems to be right.  It is accepted by Mr Carolan that the issues in paragraphs 8.3 and 8.6 are not covered in pleadings and affidavits filed in Canada.  Mr Carolan has offered to provide an affidavit to deal with those two matters.  There are other differences as well in the counterclaim in Hong Kong and the proceedings in Canada, but there should be no difficulty in ascertaining the underlying factual disputes and the rival contentions taken.

10.  For the purpose of the stay application, it appears to me that the court would be assisted if an affidavit of the kind offered by Mr Carolan is to be filed.  It is tolerably clear from the counterclaim in Hong Kong and from the documents filed in Canada what the issues of law and fact are likely to be raised in the counterclaim in Hong Kong.  I do not think it is necessary to put the plaintiffs to the expense of serving a defence to counterclaim for this purpose.

11.  I would allow the appeal on the above ground.  I set aside the Registrar’s orders.  In place of that I would direct the plaintiffs to file an affidavit to deal with the defence that may be raised to the issues in the counterclaim as summarised in paragraphs 8.3 and 8.6 of Mr Manzoni’s submission.  The time for filing and serving a defence to counterclaim is extended to 21 days after the determination of the stay application.