XCHRX GUANG XIN ENTERPRISES LTD. v. KWAN WONG TAN & FONG (a firm)

HCA 2788/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2788 OF 2001

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D E C I S I O N

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1. This is the Defendant's appeal against the Master's order dated 26 July 2001 whereby the learned Master extended the time for filing and serving a Defence to 31 August 2001.

2. The Writ together with the Statement of Claim herein was served on 28 June 2001. The combined effect of RHC O. 12 r. 5(a) and O. 18 r. 2(1) is that the deadline for filing and serving a Defence was 26 July 2001. There is no dispute that the Statement of Claim is a relatively bulky document consisting of about 300 pages (including the Appendices) and involving technical matters relating to accounting standards and practice. The Defendant considered that about 4 months (including the summer court vacation) would be needed for preparing the Defence and therefore wrote on 17 July 2001 to the Plaintiff proposing that time be extended to 31 October 2001. The Plaintiff disagreed with that estimate and considered that about 2 months' time would be adequate and hence proposed on 19 July 2001 to extend time to 19 September 2001.

3. In view of the disagreement, the Defendant took out a "time" summons on 23 July 2001. That summons resulted in the said order of 26 July 2001.

4. The summer court vacation lasts from 1 August to 31 August according to O. 64 r. 1. Unless the court otherwise directs, time for filing and serving pleadings does not run during the summer vacation: O. 3 r. 3. When the learned Master made the order on 26 July 2001, he must have considered that time should run during the summer vacation despite O. 3 r. 3. In view of the parties' correspondence, no valid complaint can be lodged against this.

5. The Master's order has in effect extended the time for about slightly over 1 month (including the month of August). The Defendant maintains in this appeal that a 4-month time extension is appropriate. On the other hand, despite the letter dated 19 July 2001, the Plaintiff now contends that the time extension given by the learned Master is correct.

6. It is undisputed that in an application of this kind, I should approach the matter afresh with due regard to the Master's decision. Having heard the parties, I consider the matters relevant to the exercise of my discretion should include:-

(1) the Plaintiff's claim involves the technical matters set out above and facts and matters spanning over a modestly long period of time;

(2) the Defendant is not only a firm of professional accountants/auditors, it was the firm which handled the audits giving rise to this claim and hence should have good knowledge of the matters involved;

(3) this action has all the signs of the need for proper case management;

(4) the action was commenced towards the end of the limitation period and therefore due expedition of its progress should be encouraged.

Taking all the matters into account, I consider that the Plaintiff's original estimate of 2 months to be appropriate. The appeal is therefore allowed to the extent that the Defendant should have two months to file and serve a Defence. I shall hear the parties as to whether that period should start to run from 26 July or today.