XCHRX CHOW KWOK FAI v. WAYSUNTONE COMMUNICATION LIMITED

1996, No.A8866

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H E A D N O T E

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Satellite litigation. Master imposed Unless Order on exchange of witness statements. Exchange subsequently made but Defendant still proceeds with the appeal.

Held : Appeal dismissed.

Observation on inherent jurisdiction and O.38, r. 2A(17).

1996, No.A8866

IN THE HIGH COURT OF HONG KONG

COURT OF FIRST INSTANCE

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J U D G M E N T

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Satellite litigation

1. This is an example of satellite litigation which our Court of Appeal had on recent occasions voiced its disapproval. The order that is being appealed against had been complied with. The issue that is raised in this appeal is now academic and has no bearing on the outcome of this case. Steps taken of this kind must be put to a stop if the Court is to take an active role in case management and to prevent its diary being clogged up by frivolous matters.

Unless Order

2. On 19^th June 1997 Mrs Justice Le Pichon ordered the parties to exchange witness statements by 29^th July 1997. On 28^th July 1997, the Defendant's solicitors asked the Plaintiff's solicitors for extension of time until 29^th August 1997 to comply with the order. A few days later the Plaintiff's solicitors issued a summons seeking an unless order against the Defendant. The summons was heard on 9^th September 1997, by which time the Defendant was still not ready to exchange witness statements. Master Chung ordered that :

"Unless the Defendant do within fourteen days from the date hereof serve on the Plaintiff its witness statements in accordance with the order of the Honorable Mrs Justice Le Pichon dated 19^th June 1997, the Defence and Counterclaim herein be struck out and the Plaintiff be at liberty to make an application for judgment in default and the money paid into court by the Plaintiff be released to the Plaintiff immediately."

The appeal

3. The Defendant then filed the Notice of Appeal but nonetheless effected exchange of the witness statements on 23^rd September 1997. Notwithstanding the exchange of the witness statements, the Defendant still proceeds with its appeal against the order of Master Chung. One may ask immediately what is the value of this exercise. No ground breaking principle of law is involved at all. Apart from compling with the order of exchanging the witness statements which the Defendant was required to do anyway, the Defendant was not required to perform any other deeds.

Jurisdiction

4. The Defendant said that the Master had no jurisdiction to make such an order. I, for one, would say that the jurisdiction to make the unless order is available. The inherent jurisdiction of the Court and the provisions under O.38, r.2A gave the jurisdiction. Order 38, r.2A(17) clearly provides that the Court may override the provisions of the rules. Mr Li submitted that subrule 17 applies only to matters regarding the content of the witness statement and how the evidence or witnesses should be dealt with at the trial. I do not think subrule 17 is to be construed in such a restrictive manner. It has already excluded specific provisions of O.38, r.2A. How subrule 17 is to be exercised depends on the facts of each case. The existence of subrule 17 is in accordance with the inherent jurisdiction of the Court to regulate its own procedure : see I. H. Jacob, The Inherent Jurisdiction 1970, 23 Current Legal Problems.

5. An order requiring exchange of witness statements remains a court order and non-compliance must result in sanctions being made against the defaulting party. The making of an unless order does not depend solely on someone deliberately flouting court orders. In Hytec Information Systems Limited v. Coventry City Council, Times Law Report, 31^st December 1996, Auld L. J. referred to prolonged failure to comply with one or a number of orders which could qualify for the exercise of the court's jurisdiction to grant an unless order.

Discretion properly exercised

6. In this case the Defendant could not even meet its own deadline of 29^th August 1997. No explanation was given even up to now about the cause of the failure. The Master clearly had exercised his discretion correctly by imposing the Unless Order.

7. The reference to payment out in the Order was to deal with the outstanding matter of money in court in the event that the action was terminated.

8. If a Defendant does not wish to call evidence at all at the hearing, then it should inform the Court of its stance, but this is not the case here. In the context of this case, the Defendant simply cannot advance the argument that, at most, the sanction for non-compliance is that the Defendant is precluded from adducing evidence at the trial, because the Defendant obviously wishes to call evidence at the trial. The Defendant suffers no prejudice at all by filing the witness statements.

9. As to the question of costs, the cost that was incurred by the Plaintiff's summons was minimal : it was attended by solicitors at the Master's 3-minute summons list.

10. The correspondence disclosed that on 22^nd September 1997 the Defendant's solicitors asked for the exchange of the witness statements on the same day. The Plaintiff's solicitors were not ready and the exchange only took place on the following day. Although the Plaintiff's solicitors should, as a matter of caution, have the signed witness statements ready, the position as disclosed in the correspondence is that the Plaintiff's solicitors had the draft witness statements ready by 29^th August and exchange could then be made. This does not affect the making of the Unless Order.

Appeal dismissed

11. The only appropriate course to take in this case is to dismiss the appeal and I will dismiss the appeal accordingly.

12. I will order that the costs of the appeal to the Plaintiff, to be taxed on a common fund basis.

13. I will further authorize the publication of the judgment of this appeal which is heard in Chambers.