Prime Deal (HK) Enterprises Ltd. v. The Hongkong Shanghai Banking Corporation Ltd. and Another

HCA2142/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. HCA2142 OF 2002

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R U L I N G

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1. This case has perhaps a slightly unusual chronology. On 1 June, which was a Saturday, the plaintiffs went before Ma J, the duty judge, and obtained an injunction ex parte restraining the 2nd defendant from drawing down on a letter of credit drawn on the 1st defendant, the Hongkong & Shanghai Banking Corporation. That matter was then adjourned and came before Sakhrani J, who was I think the duty judge, on 7 June, and he has made an order which appears at pages 59 and 60 of the bundle before me.

2. The injunction was continued and at paragraph 2 of the order he gave the 2nd defendant leave to file and serve evidence in opposition within 10 days from the date of the order. That happened in timely fashion because on 18 June an affidavit was sworn by Mr Donegan, the solicitor who has the conduct of a case on behalf of the 2nd defendants. It was served, I am told and I accept, on the same day just after quarter past 4 in the afternoon. The affidavit itself is a very substantial document exhibiting a number of important documents.

3. What then happened was that the plaintiffs were given leave under paragraph 3 of Sakhrani J's order to file and serve evidence in reply within five days. May I say straightaway that those five days have yet to expire - I think they will on Monday next week.

4. 2 July was then appointed as the scheduled hearing date for the matter to come back before Ma J, who had made the original order. In the meantime, on 19 June which was on Wednesday this week, the 2nd defendant's solicitors wrote to the Registrar of the High Court and that letter was copied to the solicitors for the plaintiff as well as to the 1st defendants, the bank. The letter is in these terms:

"We refer to the summons filed today in relation to the discharge of the order made by the Honourable Ma J on 1 June 2002. We note that the hearing has been scheduled to be heard on 2 July 2002. However, we believe that our client is entitled to apply for discharge of the said order upon giving the plaintiff a 24 hours' notice accordingly. We shall be grateful if you can place our client's case on the list to be heard on 21 June 2002, this Friday. We enclose herewith the hearing bundle and our skeleton argument for your information."

It is as a result of that letter that the matter is now before me with the 2nd defendants applying to discharge the original injunction.

5. Perhaps not surprisingly, Mr Atkin, who appears on behalf of the plaintiff, has applied for an adjournment and he does so on the basis that the timetable set by Sakhrani J has still not expired - and of course that is right - and he requires the adjournment in order to file evidence in reply to the very substantial affidavit filed on behalf of the 2nd defendants. That of course, at first blush, is a very powerful submission to make. The affidavit contains a number of very serious allegations made against the plaintiffs. I summarise it and I hope I do not do it any injustice; it seeks the discharge of the injunction on the basis that Ma J was seriously misled by the plaintiffs who have not made disclosure of the sort that is required when a party applies for an injunction ex parte and it raises a number of matters which, if that is right, should of course have been placed before the learned judge.

6. Going on from that, Mr Kerr, for the 2nd defendant, says that does not matter - what purpose will an adjournment serve? The 2nd defendant's case is so powerful that no possible purpose can be served in permitting an adjournment and to allow Mr Atkin's clients to file their affidavit. I do not agree. Clearly what Sakhrani J had in mind was that these parties should have time to file their evidence.

7. The 2nd defendants have come in with commendable speed and the plaintiffs, who have been given, relatively speaking, a short period of time, still have time under the terms of that order to file their evidence. It may well be that at the end of the day, when all the material evidence is in, that the 2nd defendants will prevail but one cannot anticipate such matters.

8. It is quite clear that there are a number of very compelling matters that have been raised in Mr Donegan's affidavit and also of course in the skeleton argument prepared on their behalf by Mr Kerr. But it seems to me that it simply would not be right to let this matter go in this way and to discharge an injunction that, on the face of it, has been regularly obtained.

9. These matters should be properly argued before the court and the plaintiff should have the opportunity, which Sakhrani J has contemplated, to place their evidence before the court. And when one looks at the matter, of course an injunction which should not be in place should be discharged as soon as is reasonably possible. But this is not a case of any real urgency, this is a commercial dispute; both parties are solvent and whoever succeeds will get everything that they are ultimately entitled to and so I am going to allow this adjournment.

(Discussion re adjournment and costs)

10. The injunction will continue. I adjourn this matter to 28 June and I also direct that the hearing before Ma J on 2 July should also be held.

11. The costs of today will be costs in the application for the injunction.