THE INCORPORATED OWNERS OF KWUN TONG INDUSTRIAL CENTRE v. FELS CONSTRUCTION TECHNIQUES LTD.

HCCT 101/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION

PROCEEDINGS NO. 101 OF 2000

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D E C I S I O N

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Background:

1. This is an application by the Defendant to strike out the Plaintiff's Statement of Claim and Reply and Defence to Counterclaim for failure to serve Further and Better Particulars pursuant to an unless order made by Burrell J on 16 July 2001.

2. The circumstances leading to the order made by Burrell J are as follows. Subsequent to the Plaintiff filing its Reply and Defence to Counterclaim on 13 January 2001, the Defendant's solicitors, Messrs Johnson Stokes & Master ("JSM") requested for Further and Better Particulars by a letter dated 11 April 2001. The Defendant granted the Plaintiff a number of extensions of time until 21 May 2001 when the Plaintiff's then solicitors, Messrs Howell & Co ("HC") wrote to JSM that the Reply was not available. The Plaintiff then changed to its present solicitors, Messrs Weir & Associates ("W&A"). Subsequently, JSM filed and served a Summons for Further and Better Particulars of the Plaintiff's pleadings dated 22 May 2001 returnable on 6 June 2001. At the hearing, Burrell J made an order in terms of the summons, save that 28 days was granted to the Plaintiff for filing and serving the reply. In view of the lengthy particulars requested, the Plaintiff served a summons returnable on 16 July 2001 requested for an extension of time for 28 days to file the reply. At the hearing, W&A had no objection to an unless order to be imposed provided an extension of 28 days was given. However, JSM only agreed to an extension of 21 days. At the conclusion of the hearing, Burrell J made an unless order in the following terms:

"Unless the Plaintiff does within 28 days from the date of this Order file and serve the Reply to the further and better particulars of the Statement of Claim and the Reply and Defence to Counterclaim, the Statement of Claim and Reply and Defence to Counterclaim be struck out;"

3. After taking instructions from the Plaintiff, W&A prepared the reply and served it on JSM under cover of their letter dated 11 August 2001. The Defendant's case is that the reply is not a proper reply to the Request and that therefore the unless order has not been complied with. The Defendant therefore seeks to have the Plaintiff's Statement of Claim, Reply and Defence to counterclaim struck out pursuant to the unless order or alternatively pursuant to Order 18 rule 19 of the Rules of the High Court and/or under the inherent jurisdiction of the court on the ground that they prejudice, embarrass and delay the fair trial of the action and/or are otherwise an abuse of the process of the Court.

The Unless Order

4. The Defendant's case is that 60 of the 79 requests have not been satisfactorily answered, which amounts to a wholesale, systematic and contumelious failure to comply with the unless order. Mr Bell argues that the Plaintiff had never claimed before Burrell J that it was unable to provide answers to any of the requests but adopted the attitude that if it could not provide the answer, it needed not to. In respect of some of the requests, the Plaintiff replied that the "matters are sufficiently pleaded" or that it was unable to answer. He also refers to numerous examples where the Plaintiff purports to answer the requests by merely stating "please refer to [document]." Mr Bell submits that this is objectionable because it is not right to require the Defendant to examine the very substantial amount of text in the documents and extract or guess the Plaintiff's answer, while some documents may be ambiguous, other documents do not, in the Defendant's view, contain the answer at all. Another major complaint is that the Plaintiff said it was unable to provide particulars until after preparation of expert reports. Mr Bell submits that when the Court has ordered the Plaintiff to give further and better particulars, the Plaintiff is obliged to comply with the order and if it is unable to explain or properly particularise its pleadings they should be struck out. He refers to Hytec Information Systems Ltd v Coventry City Council [1997] 1 WLR 1666 and submits that the unless order gave the Plaintiff the last chance to put its case in order and the Plaintiff's failure to do so is to defy the order of the Court. He argues that what the Plaintiff's solicitor did in replying was simply extracting information from the documents and pleadings without seeking instructions from the Plaintiff. That he considers is contumelious conduct.

5. Any court order must be taken seriously. It must be obeyed. But the other side of the coin is that a court order must be stated in sufficiently exact terms so that the person to whom the order is addressed knows precisely what he must or must not do. This is particularly so for an unless order which is very draconian in effect. Thus in considering whether to invoke the sanction of an unless order, the first and most basic question is: "What does the order mean?" In other words, what is the default event specified in the order? Is it the failure to file a reply to the request or the failure to supply the particulars requested? The order of Burrell J is to "file and serve the Reply to the further and better particulars of the Statement of Claim and the Reply and Defence to Counterclaim". Ms Cheng SC, submits that the order only asked for the "Reply" to be served and not the particulars. Relying on the authority of Reiss v Woolf [1952] 2 QB 557 and The Prudential Enterprise Ltd v Chen Park Kuen, High Court Action No. 6995 of 1996, unreported, she submits that the order is a time order and has been duly complied with by the Plaintiff filing and serving the reply within time.

6. In Reiss v Woolf, an unless order was made requiring the defendant to deliver certain particulars and that in default part of the defence should be struck out. The defendant delivered some particulars but contended that he was unable to give full details until after discovery or possibly not at all. The English Court of Appeal held (1) that the order was a time order and the particulars having been delivered within the stipulated period there had been no default and (2) that if "default" meant default in the sufficiency of the particulars the event was not defined with the necessary precision and therefore the order was inoperative. Somervell LJ held at 559:

"The judge did not take that view of the order. He referred to a passage from the judgment of Greene L.J. in Abalian v. Innous. That was an appeal dealing with the dismissing of an action. I agree with the judge that the same principle applies to an order striking out what are, or may be, the material paragraphs in the defence. The court in that case came to the conclusion that such orders must be absolutely and perfectly precise in their terms and, unless they were so they were inoperative. Devlin J., applying that principle, said this: "If 'default' means default in the sufficiency of one or more of the answers I should not consider that the event was defined with precision; whether or not it had taken place might be the subject of a genuine conflict of opinion which could only be resolved by further adjudication. If I thought this to be the right construction of the order I should follow Abalian v. Innous and treat it as inoperative. The order can conform with the principle in that case only if it is treated as an order that is dealing with the time of compliance rather than with the mode of compliance. The order does fix a time very precisely, and I think it can and should fairly be construed as a time order. So construed, 'default' refers to default in the delivery of a document within the specified time. I do not of course, mean that any document with writing on it will do. It must be a document made in good faith and which can fairly be entitled 'particulars.' It must not be illusory; that is the word used by Mr Bankes in argument in Davey v Bentinck. That is the test, in my judgment, and not, as the plaintiff contends, whether each demand for particulars has been substantially met. Applying that test, I think there has been no default."

".... But if a document was delivered about which the argument would be "Is it illusory?" then I think it might be the subject of a further application. In my opinion this appeal should be dismissed."

7. In The Prudential Enterprise Ltd v Chen Park Kuen, Findlay J followed Reiss v Woolf and held a similar order as a time order. He quoted the following as a good practice to be followed in requesting for particulars and enforcing that request with an unless order:

"In these matters, I believe it is good practice to make an order in terms that the respondent should respond or reply to a request for particulars with a stated period; not supply the particulars. That response may supply the particulars requested or it may fail to do so, and state why. The applicant, if dissatisfied, must then apply for an order that specifies, with precision, the particulars that must be supplied. The judge or master should then make an order that specifies, with the same precision, the particulars that must be supplied. This, I believe, is consistent with the approach approved by Somervell, LJ in Reiss v Woolf. In other words, as Devlin, J was quoted as saying in that case, initially the respondent must file 'a document made in good faith and which can fairly be entitled 'particulars' ... That is the test, in my judgment, and not, as the plaintiff contends, whether each demand for particulars has been substantially met.'

In this case, the defendant's own evidence is that the plaintiff's solicitor 'did not object to reply to the said request'. He did not undertake to supply the particulars, but to 'reply' to the request. I believe that approach is in accordance with good practice. And that is what the plaintiff did."

8. In the present case, very much the same could be said of the Plaintiff. The Defendant raised 79 requests. This is a construction case. Some of the answers require detailed analysis of the master programme and opinion from experts. It is inconceivable that the Plaintiff's solicitor would have undertaken to supply such a voluminous and meticulous amount of particulars under the pain of having his client's claim struck out if he should fail in supplying any single one of the 79 particulars requested. If "default" means default in sufficiency of one or more of the 79 particulars requested, I do not consider the event was defined with precision. That would render the order inoperative. However, it is the Plaintiff's case that its solicitor consented to reply to the request only but had not undertaken to supply the particulars. In the light of the good, and I should add "and normal", practice in respect of construction cases, I think a time order must be what was in the mind of the Plaintiff's solicitor as well as in the mind of Burrell J who made the order. Accordingly, I find that the Plaintiff's obligation is to reply to the requests within the time allowed. The Plaintiff has filed and served its reply within time. The next issue is whether the reply can fairly be entitled "particulars" or is it illusory.

Whether the Reply is illusory - Statement of Claim

9. So far as the Statement of Claim is concerned, there is only one complaint, namely Request 4, which relates to a small claim of $39,700 incurred as a result of the Defendant refusing to replace some elbow and junction connectors to some water pipes. In its defence, the Defendant admitted obligation to replace plumbing pipeworks but pleaded that the works relating to the connectors were outside the scope of work in the Main Contract, giving citation under the Main Contract and drawing numbers. In its request, the Defendant requested for particulars as to the type and size of the connectors and the pipes to which the connectors were supposed to be connected and the location. As the type and size are not specified in the Main Contract, they must be such as would be fit for the purpose and the type and size of the pipes to which they were to be connected. As for the pipes and their location, the drawings must have provided the answer. Not only that I consider the request adequately answered, I think it was frivolous.

10. Even assuming that the request were not adequately answered, I see no reason why failure to answer such a frivolous request relating to a claim of $39,700 should attract the sanction of having the entire Statement of Claim for a sum of almost $2 million struck out. Plainly, the application to strike out the entire Statement of Claim in relation to the alleged failure to answer the request in relation to a very small part of it is wholly unmeritorious. This inequity reinforces my conclusion that the default event was not defined with precision and that when making the unless order Burrell J had in mind a time order.

Whether the Reply is illusory - Reply and Defence to Counterclaim

11. The deficiencies in the reply to the request complained of by the Defendant are:

(i) Failure to answer some requests at all;

(ii) Mere reference to documents, leaving the Defendant to attempt to deduce the intended answer from the documents;

(iii) Failure to provide or properly to identify the documents relied on;

(iv) Provision of evasive incomprehensible or nonsensical answers;

(v) Repeated reference to the "Master Programme" when in fact such programme either does not provide the answer, or else it is impossible to deduce the answer from such programme;

(vi) Matters allegedly already sufficiently pleaded;

(vii) Waiting for experts reports; and

(viii) Alleged inability to answer requests.

12. I have examined the 59 other requests which the Defendant alleges have not been adequately answered. For the purpose of determining whether the reply can fairly be entitled "particulars", I do not consider it necessary to give a detailed analysis of each of these requests and answers here. The Defendant made numerous requests and for minute details. The Plaintiff answered many of these requests by referring the Defendant to minutes of meetings, letters, Architect's Certificates, Master Programme, reports and to some of the answers in relation to other requests. This is not the proper way to supply particulars. The answers may not be the ideal answers one would hope to receive. However, having examined the documents referred to in the answers, I consider that in the majority of cases, the particulars are self-evident or could be readily ascertained without an onerous effort on the part of the Defendant. In my view, a substantial part of the Defendant's complaints is merely pedantic. Its complaint is one of form rather than of substance. I consider the majority of the answers are far from being equivocal, evasive, incomprehensible or nonsensical. I am satisfied that the majority of the answers, though not perfect and could be improved upon, are nevertheless not illusory. On the other hand, some of the requests are so frivolous and unnecessary as to cast doubts on whether the requests are bona fide raised and not for the purpose of taking tactical advantage or delaying the trial of the action.

13. The following are examples of self-evident answers. The Defendant requested for names of persons who attended certain meetings and the Plaintiff replied by referring to it to minutes of meetings (Requests 3, 4, and 13). These names could be ascertained easily from the minutes with no difficulties. In addition, the Defendant's representatives also attended the meetings. The Defendant requested for the identity of the person who conducted certain sample tests and the Plaintiff replied that it was the structural engineer, without identifying his name (Request 49). As there was only one structural engineer under the contract, his identity is readily ascertainable.

14. Similarly, in reply to Requests 51 and 53 as to when material should be delivered and tested, the Plaintiff asked the Defendant to refer to the Master Programme. In relation to when an event was scheduled to take place as opposed to when it actually took place, the answers are to be found in the Master Programme.

15. In answer to Requests 37, 41, 43, 57, 75 and 76, the Plaintiff replied by referring to certain letters of the Defendant and the Architect's Certificates. The answers are apparent and it is not an onerous task to extract the answers from these letters and certificates.

16. In Paragraph 15.8 of the Reply and Defence to Counterclaim, the Plaintiff pleaded "the Defendant failed to pay workmen wages on time which resulted in a spray paint vandalism incident in September 1996." In Request 72, the Defendant sought confirmation that the vandalism was caused by the alleged late payment of wages. In my view, this is sufficiently pleaded, though whether the allegation could be established by evidence is another matter. In Request 73 and 74, the Defendant sought particulars of the names of persons whose wages were not paid on time and how the late payment delayed completion of the contract. In respect of the former, the Plaintiff replied that it could not provide the particulars requested. For what that answer is worth, I think the Plaintiff has made its position clear. In respect of the latter, it replied that it could not provide the particulars before expert reports are prepared. That, in my view, is not an unreasonable reply.

17. In respect of a number of requests, in particular those relating to critical path, the Plaintiff replied that it could not provide the particulars until after discovery or expert reports have been obtained (Requests 38, 39, 40, 42, 55, 56, 58, 59, 62, 63, 64, 66, 67, 70 and 79). Critical path is not anything which could always be pre-determined. It is the product of many variables. An event would become critical or cease to be critical upon occurrence of other events. To defer answering such requests pending expert reports and analysis of the critical path is not unreasonable. These answers are the best particulars which the Plaintiff could provide at this stage. In some instances, it is obvious that the Defendant knows the facts and the Plaintiff does not. It would be inappropriate to give particulars before discovery. That would only result in unnecessary costs and waste of time. It would be inappropriate to strike out the Plaintiff's pleading for such non-compliance: see John Zink Co Ltd v Lloyds Bank Ltd and Airoil Burner Company (G.B.) Limited [1975] RPC 385.

18. On the other hand, some of the requests are, in my view, frivolous. In Paragraph 7.1 of the Reply and Defence to Counterclaim, the Plaintiff pleaded "in breach of its promise no work was done throughout the said holiday period". In Request 21, the Defendant requested confirmation that the Plaintiff is referring to the Defendant's breach of promise. The Plaintiff replied by answering "pursuant to a master programme". Paragraph 7.1 began with "pursuant to agreement with defendant" the Plaintiff made the car park ramp available for surfacing work. The action is between the Plaintiff and the Defendant who was responsible for execution of the work. Thus, the words "its promise" could admit of no other meaning but "the Defendant's promise".

19. In the Plaintiff's Reply and Defence to Counterclaim, the Plaintiff pleaded a meeting between the Plaintiff, the Defendant and another unsuccessful tendering party, New City Construction Company Limited ("New City"). In Request 12, the Defendant requested particulars as to how New City answered the Plaintiff's questions. The Plaintiff's reply by reference to the minutes of the meeting must be the best particulars the Plaintiff could give. Furthermore, one wonders what is the relevance of New City's reply to the Plaintiff's questions in the present litigation.

20. Another demonstrably frivolous and vexatious request is Request 20. The Plaintiff admitted the Defendant's allegation in paragraph 3.1.2 of its defence that "there were water drips from some air-conditioning installations on the external walls of the building." Yet, the Defendant requested the Plaintiff to state precisely with reference to drawings the exact location of the air-conditioning installations. In effect, the Defendant is asking the Plaintiff to particularise the defendant's defence.

21. While the reply does not directly answer the request, in the majority of cases, the particulars are apparent in the answers or can be readily ascertained without onerous effort. The answers in the reply are not equivocal, evasive, incomprehensible or nonsensical. Some of the particulars could not be provided until after discovery or expert reports have been obtained. In respect of those requests, the answers are the best ones that the Plaintiff could provide. The purpose of giving particulars is to enable the litigation between the parties, and particularly the trial, could be conducted fairly, openly, without surprises and to minimise costs. The particulars enable the other side to know with what evidence they ought to be prepared and to prepare for trial. They limit the generality of the pleadings, the claim and the evidence and limit and define the issues to be tried and as to which discovery is required. They tie the hands of the party so that he cannot without leave go into any matters not included. See Aktieselskabet Dansk Skibsfinansiering v Wheelock Marden Co Ltd & Ors [1994] 2 HKC 264 per Bokhary JA at 269E-270E. Taking a broad view and bearing in mind the purpose of requesting for particulars, I am satisfied that the reply can fairly be entitled "particulars".

Striking out under Order 18 rule 19 and/or the court's inherent jurisdiction

22. Under this ground, Mr Bell submits that the Plaintiff's pleadings are vexatious, embarrassing and prejudicial because of lack of particularisation and the Defendant has to guess what the Plaintiff's true case is. He argues that by failing to particularise, the Plaintiff will be able to shift its ground. He submits that vexation also arises from the Plaintiff's mere reference to documents expecting the Defendant to find and extract the relevant allegations. He also submits that the pleadings are likely to delay the trial of the action and are an abuse of the process of the court.

23. In view of my finding in relation to the requests and reply, I do not see how a case could be made out that Plaintiff's pleadings are vexatious, embarrassing and prejudicial and likely to delay the trial of the action. The Plaintiff has given a reply in compliance with the order of Burrell J, which I consider as one made in good faith and can reasonably be entitled as "particulars". Where the Plaintiff has failed to provide particulars, it has supplied the best particulars available at this stage of the proceedings as some of the information is within the knowledge of the Defendant and some could only be available after discovery or expert reports have been obtained. This is a construction case where input by experts is often necessary. It is not unusual in construction cases for particulars to be furnished after discovery and after expert reports have been obtained. If there are genuine difficulties, they should be resolved by further requests for particulars. I am satisfied that the Plaintiff's reply substantially met the purpose for which particulars are requested.

24. On the other hand, in raising 79 requests for particulars, many of which are in my view unnecessary, irrelevant, frivolous and vexatious, and now in making the striking out application, the Defendant appears to me to be playing a game at the expense of the litigants rather than for the purpose of limiting the generality of the pleadings and defining issues. I am left in a doubt whether the requests were made in the hope of gaining tactical advantage from the Plaintiff's possible failure or inability to comply with the time limit in the unless order.

Conclusion

25. In my view, the Defendant's application is unmeritorious. There is no ground for striking out the Plaintiff's Statement of Claim and Reply and Defence to Counterclaim either pursuant to the unless order of Burrell J or Order 18 rule 19 or under my inherent jurisdiction. The application must be dismissed with costs and certificate for one counsel.