CALIFORNIA RED LTD v. GOLD TYPHOON ENTERTAINMENT LTD AND OTHERS

HCA 2684/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2684 OF 2008

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BETWEEN

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D E C I S I O N

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1.  This is an application for leave to discontinue High Court Action 2684 of 2008.

2.  The matter has come before me on two occasions in the last two weeks or so. There are two actions. One is 2684 of 2008, and the other is 2735 of 2008. I briefly explained what the actions were in the decision which I gave last Thursday, and there is no need to go through it again.

3.  What is important to note is that these actions were directed to be heard as a speedy trial on 25 February of this year and the parties have worked towards it. They are now ready for trial, or seemingly so. The reason for the application is put on the basis that it saves the parties costs and time. But the plaintiff started the action. Of course the defendants in 2684 have, so to speak, started their own action, which has resulted in a defence and counterclaim which mirrors the claim in 2684.

4.  Last Thursday I came to the conclusion that the issues in 2684 were so important as regards the whole dispute between the parties that, apart from the decision of the Copyright Tribunal, which was a separate matter, the decision in that case would effectively decide the issues that really would fall to this court to decide, since the other matters which were raised in the action would, as in most copyright cases of this nature, not be highly contested.

5.  So we have now a situation where the plaintiff is ready for trial. It has made an application for an adjournment - and this court has said that it should continue - and now it wishes to discontinue. In those circumstances I do not consider that the reasons which have been put forward for discontinuing the action at this stage, when a speedy trial has been ordered, are satisfactory. It is not right to say it is going to save the parties time and costs. It may save the parties’ time and costs in August of 2009. But if the issues can be ventilated on another occasion, for example in the defence and counterclaim in the other action, it does not save anybody any time or costs. What it does is it adds to the time and cost.

6.  So the next matter which I considered is whether or not I should order that the counterclaim in the 2735 of 2008 should be ordered to proceed. When that was raised it was suggested that application would be made to discontinue that. Having given the matter more thought, I think there is a further difficulty that the defence in the 2735 of 2008 incorporates many of the matters in this action, although not it would seem fully pleaded as regards one of the aspects, which is clause 2.7 of the relevant agreement.

7.  I consider that the best solution to the difficulty which is now posed is that I should refuse this application for leave to discontinue. That gives the plaintiff in 2684 of 2008 the option of having the action dismissed either by consent or otherwise. That will then take care of any issues of estoppel or otherwise which might arise and would certainly bind the parties. It would achieve the same result as I would have otherwise achieved simply by granting an order for leave to discontinue, but making it a condition that no further action on the same grounds be made. I think that is probably the neatest way. It gives the plaintiff the option of either continuing now with the action which will be heard on 10 August, or simply abandoning the whole thing, with the consequences which will follow.

8.  So I will refuse the application to discontinue.