YEUNG SHU LAM WILSON t/a WILSON YEUNG & CO v. CHAN SUI TING

HCA 284/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 284 OF 2002

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J U D G M E N T

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1. The Defendant in this action wrote a complaint letter to the Law Society against the Plaintiff on 16 January 2002. The Plaintiff was duly informed about this by the Society and he issued the writ against the Defendant for defamation on 24 January 2002. The action developed until 10 September 2002 when the Master Levy made an unless order against the Defendant requiring him to file and serve a list of documents in his possession and an affidavit verifying the list within 7 days.

2. The list was filed on 17 September 2002 but not with the accompanying verifying affidavit. On 29 January 2003, the Plaintiff issued a summons for judgment for the defendant's failure to comply with the unless order. The summons was heard on 7 February 2003 before Master Bharwaney and in the absence of the solicitor for the Defendant. Interlocutory judgment was entered together with cost on that day.

3. The Plaintiff made an appointment to tax the bill of cost on 21 July 2003 and an allocator in the sum of HK$125,493 was issued on 2 December 2003. Six days later which was on 8 December 2003, the Defendant's solicitors issued a summons to set aside the interlocutory judgment granted by Master Bharwaney and to strike out the statement of claim. In parallel with this, the Plaintiff on 6 January 2004 issued a petition for the Defendant's bankruptcy.

4. The Defendant's application to set aside the interlocutory judgment was part heard before Master Levy on 21 April 2004 and the Master dismissed it at the adjourned hearing on 11 June 2004.

5. On 15 June 2004, the Defendant filed a notice of appeal against the order of Master Levy and that appeal has been scheduled to be heard on 6 October 2004 before Madam Justice Chu.

6. The Defendant then issued a summons for stay of execution of the judgment granted by Master Bharwaney and also opposed the petition for bankruptcy. Both are being dealt with today.

7. It has been submitted very forcefully and valiantly on behalf of the Defendant that the fault in not compiling with the unless order was not an intentional or contumelious one. In fact, an explanation has been given by the solicitors for the Defendant through an affidavit of Mr Quan filed on 23 April 2004. Mr Quan admitted that it was because of his unintentional oversight and also the wording in paragraph 5 of the Defendant's list that he had not prepared the verifying affidavit for the Defendant to swear.

8. Apart from explaining the default, the Defendant also submitted that the letter of compliant was subject to absolute immunity or privilege from defamation suit and hence there is a good prospect that the Defendant would be able to set aside the judgment of Master Bharwaney and then to strike out the statement of claim.

9. I have been referred to the case of PT Bank Pembangunan Indonesia (Persero) and Tan Eddy Tansil & Others [1997] HKLRD 57 at 59E where Bokhary JA (as he then was) cited a principle pronounced by Sir Nicholas Browne-Wilkinson VC (as he then was) in the case of re Jokai Tea Holdings Ltd [1992] 1 WLR 1196 at 1203B:

"In my judgment, in cases in which the court has to decide what are the consequences of a failure to comply with an "unless" order, the relevant question is whether such failure is intentional and contumelious. The court should not be astute to find excuses for such failure since obedience to orders of the court is the foundation on which its authority is founded. But if a party can clearly demonstrate that there was no intention to ignore or flout the order and that the failure to obey was due to extraneous circumstances, such failure to obey is not to be treated as contumelious and therefore does not disentitle the litigant to rights which he would otherwise have enjoyed."

10. The Defendant has submitted that the court is always lenient to default in compliance with unless order. I cannot agree with that approach and I must protect the integrity of the court and to ensure that its orders are being carried out properly and to the full extent. I have been informed by counsel for the Defendant today that despite the order of Master Levy made on 10 September 2002 requiring the list of documents to be verified by an affidavit, there is still no such affidavit up to this moment.

11. If Mr Quan should have unintentionally overlooked the need to file the affidavit. He should have become fully aware of his default by July 2003 when the Plaintiff served his bill of costs with an appointment for taxation. There is no explanation on why the affidavit has still not been filed up to today. In the light of this continued failure to comply with an unless order of this court, I have no option but to dismiss the application to stay, regardless of how strong may be the Defendant's case in striking out the statement of claim. I do so with an order of costs against the Defendant.

12. The debt has been due and payable for sometime as the petition was filed on 6 January 2004. I cannot see any reason to delay the making of the bankruptcy order. I make the usual order of bankruptcy with costs against the debtor. And I further advise the debtor through his lawyers to notify the Official Receiver about the bankruptcy order as the Official Receiver may have a say on how or whether to go ahead with the appeal scheduled on 6 October 2004. The Official Receiver may take over it and decide whether to go ahead with it. Alternatively, the Official Receiver may say that it is something personal and would allow the bankrupt to decide what to do with it.