NANTONG ANGANG GARMENTS CO LTD v. HELLMANN INTERNATIONAL FORWARDERS LTD

cacv 64/2005

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 64 of 2005

(on appeal from HCCL NO. 117 of 1994)

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REASONS FOR JUDGMENT

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Hon Le Pichon JA:

1.  This is an application by the defendant for leave to appeal to the Court of Final Appeal under section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance, Cap. 484.  At the conclusion of the hearing of this application, leave was refused with costs with reasons to be given in writing later.

2.  The background to the matter and the decision of this court is to be found in the judgment handed down on 23 September 2005.  The first ground upon which leave was sought was that there was an issue of great general or public importance as to the manner in which the court should approach an application made pursuant to Order 35, rule 2 of the Rules of the High Court, Cap. 4A.  However, no question as such encapsulating the issue said to be of great general or public importance was framed in the defendant’s notice of motion for leave.  The question as discerned from the skeleton submissions of leading counsel for the defendant appears to be

“whether it is required, and if so, how the reasons for the delay should factor into the consideration.

Should it be a pre-requisite (as in Bristol-Myers and other English cases, Revici, Ratnam and Savill)

Should it be one of the many relevant factors to be considered (as in Mobil Petroleum two Inc and other English cases, Costello, Mortgage Corp PLC and Finnegan)

Should a court to exercise it discretion when a litigant deliberately allows time to slip …”

3.  But to get to first base, it must be shown that the law is unsettled on this question.  The two lines of authorities were extensively reviewed in the judgment of Hartmann J in Mobil Petroleum Co Inc & Another v Registrar of Trade Marks [2001] 1 HKLRD 225 who came to the conclusion that with the judgment of Mortgage Corp PLC v Sandoes [1997] PNLR 263 and Finnegan v Parkside Health Authority [1990] 1 WLR 411 that “the law is now settled as to the correct principle to be adopted in the exercise of the court’s discretion under O.3, r.5”, a conclusion with which this court agreed.

4.  At the hearing Ms Cheng SC who appeared for the defendant did not pursue the submission outlined in her skeleton.  When pressed by the court as to the question of great general public importance that was said to arise, it was put as follows:

“Whether in considering an application under O.35, r.2, the court should give consideration to prejudice suffered by the defendant in light of the delay.”

5.  Ms Cheng’s complaint was that the element of prejudice to the defendant was never expressly mentioned in the judgment and that therefore it could not have been taken into consideration.  Ms Cheng accepted that the defendant had not filed in the evidence below as to the prejudice it would suffer if the judgment were to be set aside.  Such evidence as there was related to the steps taken subsequent to the judge and costs incurred in having the costs taxed and in having undertaken proceedings in New York.  It is to be noted that nowhere in the judgment of this court was it said that no consideration should be given to prejudice suffered by the defendant because of the delay or that that should not be a factor to be taken into account.  Rather, the court placed emphasis on the need to have regard to “all the circumstances and decide whether the overall justice of the case requires the exercise of the discretion to extend time” (emphasis added).  The absence of specific reference to prejudice likely to be suffered by the defendant does not and cannot mean that that factor should not be taken into account or that it was not taken into account.  Ms Cheng’s reading of the judgment is wholly unwarranted.

6.  In my view, the defendant has failed to show the existence of a question of great general or public importance and no question of granting leave under that ground can arise.

7.  The defendant also relied on the “or otherwise” limb.  It was said that the third parties did not have a strong case on the merits but at best have only shown an arguable case.  Even if (which I do not for a moment accept) the third parties have not shown any real prospect of success, that would not constitute “exceptional circumstances” to warrant the application of the “or otherwise” limb.

Hon Cheung JA:

8.  I agree.