GUANGDONG YINGGAO SHIPPING LTD v. SECRETARY FOR JUSTICE

HCA 1677/2015

[2022] HKCFI 305

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1677 OF 2015

________________________

________________________

________________________

REASONS FOR DECISION

________________________

1.  This is the appeal of Guangdong Yinggao Shipping Limited (“the plaintiff”)  from the order dated 29 September 2021 made by Master Hui extending time to 20 October 2021 for the Secretary for Justice (“the defendant”)  to file its amended defence.

Procedural history

2.  On 24 July 2015, Yinggao Shipping (HK)  Limited (“the original plaintiff”)  commenced this action against the defendant by issuing a writ endorsed with a statement of claim.

3.  The court was informed by Mr Ng Man Sang Alan counsel for the plaintiff that the original plaintiff went into compulsory liquidation at some point.

4.  On 20 January 2021, the plaintiff was substituted as plaintiff in place of the original plaintiff by an order made by Master Hui and, some 5 months later, on 24 June 2021, the plaintiff applied by summons to amend its statement of claim.

5.  This resulted in a consent order made by Master Rita So on 7 July 2021 (“the July order”)  which, inter alia, provided that:

“§3. [T]he Defendant do have leave to make consequential amendment(s), if so advised, and to file and serve the amended Defence within 28 days from the date of service of the Amended Writ of Summons endorsed with the Amended Statement of Claim;”

6.  The plaintiff served its amended statement of claim on the defendant on 12 July 2021.

7.  The defendant failed to file its amended defence by 10 September 2021 which was the deadline for so doing under the July order. 

8.  By summons dated 23 September 2021, then being 13 days out of time, the defendant applied for an extension of time for the filing of the amended defence. There was no supporting affidavit to the summons.

9.  The application was heard by Master Hui on 29 September 2021 (“the September hearing”). Neither the plaintiff’s counsel at this hearing nor its present solicitors were at the September hearing. The plaintiff was represented by its former solicitors who opposed the application. There is in the court file the written submission dated 29 September 2021 from the plaintiff’s then solicitors to the court opposing the defendant’s application.

10.  Ms Esther Chan, Senior Government Counsel for the defendant, who was present at the September hearing informed the court that the only question posed by the Master at the September hearing was whether it was the defendant’s first application for time. That question was answered in the affirmative.

11.  The Master extended time for the defendant to make consequential amendments to its defence by 3 weeks, to 20 October 2020.

This appeal

12.  The plaintiff’s case is premised on the proposition that non-compliance with a court order automatically gives rise to a ‘sanction’. Mr Ng submitted that the fact that a defendant is debarred from filing an amended defence without the leave of the court is implicitly a ‘sanction’ imposed on that defendant.

13.  It was further submitted that the general extension application taken out by the defendant has no effect on the ‘sanction’ so imposed and the only recourse open to the defendant is to seek relief under O. 2, r. 4 which it failed to do. On that basis, it was said that no time extension under O. 3, r. 5 should have been granted.

14.  The plaintiff relied on Top One International (China)  Property Group Co Limited v Top One Property Group Limited [2011] 1 HKLRD 606. However, that case concerned an “unless order” and so does not address a situation such as the present.

15.  In my view, the present application is wholly misconceived.  As is clear from Practice Direction 16.5, that there are 2 forms of peremptory orders.  One is an “unless order” with the ordered consequences should there be non-compliance. The other does not carry within its wording the sanction for disobedience. The latter form is only preliminary to an “unless” order and, on disobedience, a supplementary order in “unless” form setting out the sanction should be obtained.

16.  The July order does not contain a self-executing sanction. It is therefore not, and cannot be, an “unless order”.

17.  It is clear from the following passage in Halsbury’s Laws of Hong Kong, 2^nd Ed. 2021, Vol 8 at §90.0070 that O.2, r.4 is not applicable in the circumstances of the present case:

“Where the court makes a peremptory order but without accompanying it with an ‘unless’ order, the court has jurisdiction to grant an extension of time for complying with the peremptory order.

Where, however, the court makes an ‘unless order’ and a party fails to comply with it, any sanction imposed by the ‘unless’ order will take effect unless the party in default applies to the court and obtains relief from the sanction within 14 days of such failure to comply.”

18.  O.2, r.4 is particularly relevant when the extension of time sought is with respect to compliance with an “unless order” the time for which has expired: see Hong Kong Civil Procedure (“HKCP”)  2022 at §3/5/5.

19.  The plaintiff’s alternative submission is that the Master should not have exercised his discretion under O.3, r. 5 in the absence of any explanation by the defendant as to why she could not have adhered to the original deadline.

20.  Given that the grant of an extension of time involves the exercise of a judicial discretion, there is no absolute requirement that an adequate explanation for delay be given before the discretion can be exercised; rather all matters (including the adequacy of any reason for delay)  must be considered: HKCP 2022 at §3/5/2.

21.  While “an adequate reason for delay is the norm”, it is equally clear that “the exercise of the judge’s discretion to enlarge time is highly fact-sensitive”: see Wing Fai Construction Co Limited v Cheng Kit Yin Kelly, CACV 249/2010, unrep., at §28 Thus, the court eschews rigidity and considers all relevant matters and the overall justice of the application: see The Decurion [2012] 1 HKLRD 1063 at §11 (1).

22.  The plaintiff sought to rely only on part of the observations made by the court in the Wing Fai case, without taking into consideration the fact that the court’s remarks were made in the context of the particular facts of that case.

23.  The plaintiff alluded to the fact that the present action was commenced in 2015. That fact has little relevance when the plaintiff only took over as plaintiff in January 2021. It is apparent from the amended statement of claim filed in June 2021 that the amendments made to the statement of claim were substantive.  

24.  The July order (whilst a peremptory order)  was not an “unless order”. The defendant’s time extension application was the very first application made for an extension.  In those circumstances, in exercising the court’s discretion afresh (this hearing being a rehearing of the summons), it is obvious that the discretion should be exercised in favour of the defendant.

25.  There is nothing to the point that the application was only made after the time for compliance had expired. O.3, r. 5 (2)  empowers the court to grant such an extension although it is not made until after the expiration of the period for filing the defendant’s amended defence.

26.  It was plainly within the Master’s power to grant a retrospective time extension and there is no valid basis for challenging the exercise of his discretion.

27.  Accordingly, the plaintiff’s summons was dismissed with costs.