ABERDEEN WINNER INVESTMENT CO LTD v. THE INCORPORATED OWNERS OF ALBERT HOUSE AND ANOTHER

HCA 3408/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3408 OF 2003

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J U D G M E N T

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I. Introduction

1. By a Summons ("the Summons") dated 13 October 2003 the Plaintiff ("Aberdeen") seeks the following:-

(1) Leave to re-amend the Statement of Claim by adding the following to the Prayer:-

"6. An Order declaring that the Plaintiff is not liable to contribute to the 1st Defendant's costs."

(2) Final judgment against the 1st Defendant ("the Owners") for $9,239,437.87.

(3) An Order that, if the 2nd Defendant ("Wong") should become bankrupt without having fully paid $4,899,127.76 to Aberdeen, the Owners pay Aberdeen a total of 50% of $34,295,609.11 less whatever amount (if any) Wong has paid.

(4) In the alternative to the foregoing reliefs against the Owners, a determination under RHC Order 14A of the following question:-

"On a proper construction of the Judgment ('the Judgment') in HCPI 828/1997 ('the Action')¹ and insofar as the 2nd to 4th Defendants or the 2nd to 4th and the 6th Defendants in the Action are insolvent, whether Aberdeen is entitled to contribution (and if so, what contribution) from one or other or both of the Owners or Wong in respect of payments made by Aberdeen to the Plaintiffs in the Action."

(5) Costs.

2. By a Summons dated 1 November 2003 the Owners apply to strike out the Amended Statement of Claim as an abuse of process.

3. Although there is no Summons before me to that effect, Aberdeen also seeks default judgment against Wong under RHC Order 13 Rule 1, Wong having failed to give notice of an intention to defend these proceedings.

II. Background

4. At 11 am on 1 August 1994 the concrete canopy outside that part of Albert House fronting Sai On Street in Aberdeen collapsed. Seven persons were injured. One person was killed. The 7 injured persons and the estate of the person killed (collectively, "the Action Plaintiffs") sued the Owners, Housing Management Agency Limited ("HMAL"), Ho Wing Hang ("Ho"), New Best Restaurant Limited (in liquidation) ("New Best"), Aberdeen and Wong as respectively the 1st to 8th Defendants (collectively, "the Action Defendants") in the Action.

5. The Judgment held that the Action Defendants were jointly and severally liable to each of the Action Plaintiffs. Suffiad J further stated (at 50N-51M):-

"As already indicated, the most culpable of the defendants in this case are without doubt [Ho] and [New Best]. For the purposes of apportioning liability as between the different defendants, I will treat both the 3rd and 4th defendants as one. There are two reasons for this. The 3rd defendant is the director and decision-maker of the 4th defendant. Furthermore, there is no contribution notice inter se between the two of them.

On the other end of the spectrum, [Wong] is probably the least culpable, judgment having been entered in default against him, he being the contractor engaged by [New Best] to demolish the fish tank on the day of the accident.

In between these two spectrum are [the Owners], [HMAL] and [Aberdeen]. There is little, if any, to separate [the Owners], [HMAL] and [Aberdeen] from each other in so far as apportionment of liability is concerned. Each had a duty to maintain this canopy. All of them were in complete breach of their own respective duty to maintain the canopy. Without any clear indication as to which of these three is more to blame for the collapse of the canopy, I propose to apportion their liability equally.

In all the circumstances of this case, I shall apportion liability as between the defendants as follows. [Ho] and [New Best] will together be 50% to blame. Each of [the Owners], [HMAL] and [Aberdeen] will be 15% to blame. [Wong] will be 5% to blame. Needless to say, this apportionment only affects the defendants as between themselves. This apportionment does not affect the plaintiffs in any way."

6. Following the Judgment, the damages due from the Action Defendants to the Action Plaintiffs were assessed. Final awards were adjudged on 17 September 2001. A total sum of $33,257,886.25 plus interest and costs was assessed to be payable.

7. The Action Plaintiffs mainly pursued Aberdeen for the sums awarded. In early October 2000 Aberdeen gave a total of $1,566,666.68 to the Action Plaintiffs by way of interim payment. In December 2001 the Action Plaintiffs garnisheed $940,000 of rent due from tenants of properties owned by Aberdeen. On 31 August 2002 Aberdeen's solicitors forwarded to the Action Plaintiffs' solicitors a cheque for $30,222,275.78. That amount represented the balance of the sums due under the Judgment as follows:-

Outstanding balance of damages	$30,073,083.17
Interest	$137,692.61
Charging order application	$11,500.00
	----------------
	$30,222,275.78
	===========

Aberdeen accordingly paid a total of $32,728,942.46 to the Action Plaintiffs.

8. Aberdeen having paid more to the Action Plaintiffs than its 15% share of liability, it issued a generally indorsed Writ on 15 September 2003 seeking contribution from the Owners and Wong. A Statement of Claim was filed on 27 September 2003 and amended on 7 October 2003.

9. The Owners made an interim payment of $1,566,666.68. Later, on 10 September 2002 the Owners' solicitors sent a cheque for $3,891,964.66 to the Action Plaintiffs. That sum was calculated as follows:-

15% of Judgment Debt of $33,257,886.25	$4,988,682.94
15% of $3,132,989.30 (interest onJudgment Debt up to 31 August 2002)	$469,948.40
	---------------
	$5,458,631.34
LESS: Interim payment	$1,566,666.68
	---------------
	$3,891,964.66
	==========

10. HMAL made an interim payment of $1,566,666.67 to the Action Plaintiffs. It has not made any other payment. On 9 July 2003 it was wound up by Order of the High Court made on Aberdeen's Petition dated 14 May 2003.

11. Ho was adjudicated bankrupt by Order dated 28 August 2002. He has not made any payment to the Action Plaintiffs.

12. New Best was wound up as insolvent, even before the trial of the Action Plaintiffs' claim, by Order of the High Court dated 30 December 1998. New Best has not made any payment to the Action Plaintiffs.

13. Wong has not made any payment to the Action Plaintiffs. Aberdeen suspects that Wong is or may soon become bankrupt.

III. Discussion

A. Contribution

14. Aberdeen's claim for contribution is based on the Civil Liability (Contribution) Ordinance (Cap. 377) ("CLCO"). That provides as follows:-

"2. Interpretation

....

(3) A person is liable in respect of any damage for the purposes of this Ordinance if the person who suffered it (or anyone representing his estate or dependents) is entitled to recover compensations from him in respect of that damage (whatever the legal basis of his liability, whether tort, breach of contract, breach of trust or otherwise).

3. Entitlement to contribution

(1) Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).

(2) A person shall be entitled to recover contribution by virtue of subsection (1) notwithstanding that he has ceased to be liable in respect of the damage in question since the time when the damage occurred, provided that he was so liable immediately before he made or was ordered or agreed to make the payment in respect of which the contribution is sought.

(3) A person shall be liable to make contribution by virtue of subsection (1) notwithstanding that he has ceased to be liable in respect of the damage in question since the time when the damage occurred, unless he ceased to be liable by virtue of the expiry of a period of limitation or prescription which extinguished the right (and did not merely bar a remedy) on which the claim against him in respect of the damage was based.

(4) ....

(5) On assessing any contribution under this section the court shall disregard any part of the payment in respect of which the contribution is sought which appears to the court to be excessive.

(6) A judgment given in any action brought by or on behalf of the person who suffered the damage in question against any person from whom contribution is sought under this section shall be conclusive in the proceedings for contribution as to any issue determined by that judgment in favour of the person from whom the contribution is sought.

(7) ....

4. Assessment of contribution

(1) Subject to subsection (3), in any proceedings for contribution under section 3 the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage in question.

....

9. Savings

....

(3) The right to recover contribution in accordance with section 3 supersedes any right, other than an express contractual right, to recover contribution (as distinct from indemnity) otherwise than under this Ordinance in corresponding circumstances; but nothing in this Ordinance shall affect:-

(a) any express or implied contractual or other right to indemnity; or

(b) any express contractual provision regulating or excluding contribution,

which would be enforceable apart from this Ordinance (or render enforceable any agreement for indemnity or contribution which would not be enforceable apart from this Ordinance)."

Except for the limited cases defined by CLCO ss. 9(3)(a) and (b), the CLCO now governs all claims for contribution, superseding any rights to contribution at common law.

15. Limitation Ordinance (Cap. 347) ("LO") s. 6 might also be noted:-

"(1) Where under section 3 of the Civil Liability (Contribution) Ordinance (Cap. 377) any person becomes entitled to a right to recover contribution in respect of any damage from any other person, no action to recover contribution by virtue of that right shall (subject to sections 22 and 26) be brought after the end of the period of 2 years from the date on which that right accrued.

(2) For the purposes of this section the date on which a right to recover contribution in respect of any damage accrues to any person (in this subsection referred to as 'the relevant date') shall be ascertained as follows, that is to say:-

(a) if the person in question is held liable in respect of that damage by a judgment given in any civil proceedings, or an award made on any arbitration, the relevant date shall be the date on which the judgment is given, or the date of the award as the case may be;

(b) ...

and for the purposes of this subsection no account shall be taken of any judgment or award given or made on appeal in so far as it varies the amount of damages awarded against the person in question."

16. Mr Warren Chan SC (appearing for Aberdeen) submits that Aberdeen's claim for contribution against the Owner and Wong falls within CLCO s. 3(1). I agree. As a result of the Judgment, Aberdeen, the Owners and Wong were all persons liable in respect of the damage suffered by the Action Plaintiffs. The Action Plaintiffs opted (as they were entitled) to enforce their awards against Aberdeen, the latter having the greatest financial resources among the Action Defendants. Being jointly and severally liable with the other Action Defendants, Aberdeen had no choice but to accede to the Action Plaintiffs' demands for payment of outstanding damages. Since it paid more than that portion of the Actions Plaintiffs' damages representing its 15% share of liability, Aberdeen must now be entitled under CLCO s. 3(1) to claim reimbursement for the excess paid from the Owners, Wong and the other Action Defendants in accordance with the apportionment of liability determined by Suffiad J.

17. The difficulty arises because HMAL, New Best and Ho have become insolvent. Although none of these 3 have paid their full share of the Action Plaintiffs' damages, Aberdeen cannot recover any contribution from them to cover their proportionate share of the excess paid by Aberdeen. Does this mean that Aberdeen must shoulder the burden of the share of damages which ought to have been paid by HMAL, New Best and Ho? It would be an odd result if Aberdeen could have no recourse against the remaining Action Defendants (namely, Wong and the Owners) to bear proportionately the share of damages payable by HMAL, New Best and Ho.

18. There is no direct authority on the effect of a contributor's insolvency on other contributors. But research by Mr Chain, Mr Chan's junior counsel, has come up with the following passage in the late Professor Glanville Williams' Joint Torts and Contributory Negligence: A Study of Concurrent Fault in Great Britain, Ireland and the Common-Law Dominions (1951) (at §48 (pp. 170-2)):-

"The incidence of risk of insolvency

Before leaving this branch of the subject a few words must be said on the problem of insolvent defendants. The present article will be concerned with the risk of insolvency, and the next with proof in bankruptcy for contribution.

(1) Two tortfeasors only

....

(2) Three of more tortfeasors

The previous paragraph was addressed to the case of two tortfeasors, and there it is clear that as between D1 and the innocent plaintiff the risk of D2's default must be borne entirely by D1. The matter wears a different complexion where there are three or more tortfeasors. Suppose that P sues D1, who brings in D2 and D3 as third parties. P obtains judgment against D1, and D1 in turn claims contribution against D2 and D3. If it is known that D3 is insolvent, the share of contribution payable by D2 will be increased so as to distribute the loss resulting from D3's insolvency equally between D1 and D2. Suppose, however, that D3's insolvency was not known at the time of D1's judgment against his companions for contribution, but is discovered only when the judgment against D3 for contribution comes to be executed. On such facts, unless special provision is made, the loss resulting from D3's insolvency is borne exclusively by D1, yet there is no reason why D1 should bear the whole of it and D2 none of it. D2 is as guilty as D1, and it is mere chance that P happened to sue D1 and not D2. The principle of the Tortfeasors Act is that it should not be left to the plaintiff to determine the incidence of loss between joint tortfeasors. On the facts here imagined this object is frustrated.

The matter can, however, be set right very simply by an appropriate wording of the judgments for contribution. D1 can be given contingent judgment against D3 and D3 severally for contribution of one-third of the sum that he has to pay P, and he may be given in addition a contingent judgment for one-half of the sum payable by the other defendant in the event of default by him. The first of these judgments may be called (for the sake of giving it a distinctive name) the primary judgment for contribution, and the second judgment may be called the secondary judgment for contribution. [Footnote: Both these judgments are normally contingent on the party in whose favour they are given having paid at least part of the damages...] The result of the scheme is that if D3 becomes insolvent, or is untraceable, D1 will recover against D2 (1) one-third of the judgment debt under the primary judgment for contribution and (2) one-sixth of the judgment debt under the secondary judgment. In this way, justice can be done between the solvent defendants. It will be necessary to provide that the secondary judgment can be made absolute only on application to the court, and the applicant will have to prove that the execution of his primary judgment is not reasonably possible.

An alternative mode of securing the same result would be for the court to order the unsuccessful parties to bring into court the amount found due from them and then to order payment out of this fund of the appropriate amounts. Any deficiency in the fund owing to the insolvency of one of the contributors could then be distributed among the various recipients.

In the dearth of authority, the present conclusions must be regarded as framed merely in the optative mood. But if the court is so minded, support for distributing the loss caused by the insolvency of one of three or more tortfeasors can probably be found in the Tortfeasors Act, which provides in s. 6(2), that the amount of contribution recoverable shall be such as may be found by the court to be 'just and equitable.' Where the various defendants are found guilty in unequal proportions, the risk of insolvency should naturally be shared in the same proportions."

19. The thrust of Professor Williams' analysis is that solvent defendants should bear the burden of an insolvent defendant's contribution in proportion to the solvent defendants' respective shares of liability. In its paper "Law of Contract: Report on Contribution" (Law Com. No. 79) dated 9 March 1977, the English Law Commission commented as follows on Professor Williams' suggestion:-

"14. In Whitham v Bullock [[1939] 2 KB, 81, 85] the Court of Appeal approved the following description of the court's role in contribution proceedings between persons equally liable at law to the same demand:-

'If, as between several persons or properties all equally liable at law to the same demand, it would be equitable that the burden should fall in a certain way, the Court will so far as possible, having regard to the solvency of the different parties, see that, if that burden is placed inequitably by the exercise of the legal right, its incidence should be afterwards readjusted. [Footnote: This passage was taken from Rowlatt on Principal and Surety (3rd ed., 1936), p. 173.]'

15. The rules for dividing the loss up into shares are fully considered by Professor Glanville Williams QC in his book Joint Obligations [(1949), chapter 9]. The general rule is that, unless there has been an agreement to the contrary, the amount of the loss is divided up by the number of solvent persons liable and each bears an equal share. However, where two or more persons underwrite a liability in unequal shares or up to differing limits, as is not uncommon with contracts of guarantee or of insurance, the right of contribution is not equal but is proportionate to the liability of each. We suggested in our working paper that the rules worked reasonably well, at least so far as joint liability for debts was concerned, and this provisional conclusion received the general, although not unanimous, support of those who sent us comments...."

20. The distribution of the burden of insolvent defendants among the solvent ones as proposed by Professor Williams not only makes good commonsense, but is also just and equitable in the circumstances. A division of the damages payable by insolvent defendants along the lines suggested, removes the unfairness inherent in one defendant, here Aberdeen, having to bear all or the bulk of damages for which other defendants are liable, simply because those other defendants happen to be insolvent. The insolvency of those other defendants is a fortuitous event. Without special reason, it would be wrong in principle to visit the consequences of insolvency wholly on a party who was not responsible for that occurrence.

21. I am fortified in my view by a precedent found by Aberdeen's counsel. The approach espoused by Professor Williams appears to have been used (without citation of supporting authority) by Lord Denning MR in Fisher v CHT Ltd. [1966] 2 QB 475 (CA). The Master of the Rolls stated (at 480F-481B):-

"The [trial] judge held that Crockfords were 20 per cent responsible; that Tolianis, because of their electrician, were 60 per cent responsible; and that the plasterers were 20 per cebt responsible. No one has any doubt about the responsibility of Tolianis by their electrician Boothroyd.... Tolianis were rightly held 60 per cent liable. But they have got no money. So they pass out of the picture. The other two [defendants], Crockford and the pasterers, have got to bear the whole damages between them. The question is how should they bear them as between themselves. If the judge's decision was right, it meant that they would have to bear them half-and-half. Crockfords appeal and say that is not right, because that is not a proper apportionment of responsibility."

Lord Denning then concludes (at 482G-483C):-

"But, nevertheless, I agree that Crockfords, being occupiers, had some responsibility ynder a duty of care. Seabrook was there as their maintenance man. He knew the switches better than anybody else. He was taking a very considerable interest in the work and was there ready at hand. So much so that the judge thought that the responsibility of Crockfords was equal to the plasterers. I myself would not put it so high. I think that as between Crockfords and the plasterers, Crockfords' responsibility should only be reckoned as one-quarter and the pasterers three-quarters. So, instead of 20 per vent and 20 per cent, I would put 10 per cent to crockfords and 30 per cent to the plasterers; and they should bear the whole of the damages which they have to pay in those proportions. So in respect of the whole damages of ￡4,000, one quarter should be paid by Crockfords and three-quarters by the plasterers."

22. If one were to apply Professor Williams' principles of contribution in the present case, the outcome would be that the entire damages awarded to the Action Plaintiffs should be borne by Aberdeen, the Owners and Wong as follows:-

(1) Aberdeen should bear 15/35 (that is, 15 ( (15 + 15 + 5)) or about 42.857%.

(2) The Owners should bear 15/35 or about 42.857%.

(3) Wong should bear 5/35 or about 14.285%.

Payments received by the Action Plaintiffs from HMAL, New Best or Ho (such as the interim payment of $1,566,666.67 made by HMAL) should be credited to the amounts payable by Aberdeen, the Owners and Wong respectively in the same fractions.

23. More concretely, on the facts Aberdeen should be entitled to claim amounts calculated as follows from the Owners and Won:-

(1) In relation to the Owners:-

(a) As at 31 August 2002 Aberdeen, the Owners, Wong and HMAL had among them paid a total of $35,862,275.81 ("Amount X") (that is, $32,728,942.46 (paid by Aberdeen) + $1,566,666.68 (interim payment by the Owners) + $1,566,666.67 (paid by HMAL)) to the Action Plaintiffs. 42.857% of the total paid is $15,369,495.54.

(b) From the last amount, one must deduct the Owner's interim payment of $1,566,666.68 and the payment of $3,891,964.66 made by the Owners in September 2002. That leaves $9,910,864.20.

(c) Credit should also be given for 42.857% (that is, $671,426.33) of HMAL's interim payment of $1,566,666.67. If that last figure is subtracted, one is left with $9,239,437.87 as the amount due from the Owners by way of contribution.

(2) In relation to Wong:-

(a) 14.285% of Amount X is $5,122,926.10.

(b) From the latter, 14.285% (that is, $223,798.33) of HMAL's interim payment of $1,566,666.67 should be subtracted. This would leave $4,899,127.76 as due from Wong by way of contribution.

24. Ms Priscilla Wong (appearing for the Owners) argues that Aberdeen cannot claim contribution because such claim is not "in respect of the same damage" as that suffered by the Action Plaintiffs. I do not accept this submission. Aberdeen is claiming to be reimbursed for part of the damages which it has paid to the Action Plaintiffs. Aberdeen and the Owners are jointly and severally liable for such damages. Aberdeen's claim for contribution is thus quintessentially "in respect of the same damage" that the Action Plaintiffs have suffered.

25. Ms Wong suggests that Aberdeen's claim is an abuse. She says that damages (including the apportionment of liability among the Action Defendants) has already been dealt with by Suffiad J in December 1999 in the Judgment. To bolster her point, she refers to various Contribution Notices filed by the Action Defendants against each other, all of which would have been before Suffiad J at the trial of the Action Plaintiffs' claim. Again I disagree.

26. There is no "res judicata" in the Action barring the present claim. The present claim only arises because, after the trial heard by Suffiad J, Aberdeen actually paid damages to the Actions Plaintiffs in an amount greater than its liability as apportioned by Suffiad J and Aberdeen cannot now recover the same from the insolvent Action Defendants. The question whether Aberdeen can shift part of the damages which it has borne onto the Owners and Wong is an issue which has only arisen since the Judgment and which could not therefore have been determined by Suffiad J. The question is accordingly not one which was so clearly part of the subject-matter of the Action and something which so clearly should have been raised then, that it would amount to an abuse of process to allow the question to be litigated in the present proceedings.

27. Ms Wong notes that the Owners have paid the Action Plaintiffs representing their 15% share of liability as apportioned by Suffiad J. While that is correct, it begs the issue whether, in light of the circumstances, the Owners have to contribute something in relation to the amounts left unpaid by the insolvent Action Defendants which Aberdeen has had to pay. Aberdeen, too, paid up its 15% share of liability,. But it also had to pay much more. That the Owners have paid up to their 15% share, does not answer the question whether Aberdeen is entitled to some relief against that "more". Contrary to the Owners' Draft Defence, I do not believe that Aberdeen is estopped from making a claim by reason only of the Action Plaintiffs' acceptance of the Owners' 15% payment.

28. Ms Wong finally submits that, even if I am against her on the question of liability, I should exercise the Court's undoubted discretion under CLCO s. 4(1) to reject Aberdeen's claim. Any contribution awarded to Aberdeen against the Owners should be "just and equitable" having regard to the extent of the Owners' responsibility for the damage in question.

29. Ms Wong suggests that Aberdeen has been slow to exercise any rights against the insolvent Action Defendants. Had it acted promptly, it may have recovered something from (say) HMAL and Ho and its claimed contribution from the Owners and Wong would then be correspondingly less. The Owners are now prejudiced by Aberdeen's delay in what they themselves can now recover from HMAL or Ho, even if the Owners by paying Aberdeen were to become subrogated to Aberdeen's rights against HMAL or Ho.

30. While I have sympathy with Ms Wong's argument, it would be wrong in principle to impose the consequences of the insolvency of some of the Action Defendants wholly on Aberdeen. This is especially the case where, as far as Suffiad J was concerned, Aberdeen and the Owners were culpable to the same degree of 15%. Further, Aberdeen's claim is just within the 2-year time limit imposed by LO s. 6(1). In light of the absence of affirmation evidence from the Owners as to the prejudice suffered by them as a result of Aberdeen's Writ being issued when it was, I do not think that it is warranted to exercise my discretion to exempt the Owners from making contribution.

31. I conclude that Aberdeen is entitled to contribution from the Owners and Wong as already calculated above.

B. Default judgment against Wong

32. Aberdeen's solicitors served the Statement of Claim on Wong personally on 27 September 2003. The Amended Statement of Claim was served in similar fashion on 9 October 2003. Wong has not given notice of intention to defend.

33. RHC Order 13 Rule 1 provides:-

"(1) Where a writ is indorsed with a claim against a defendant for liquidated demand only, then, if that defendant fails to give notice of intention to defend, the plaintiff may, after the prescribed time, enter final judgment against the defendant for a sum not exceeding that claimed by the writ in respect of the demand and for costs, and proceed with the action against the other defendants, if any.

(2) A claim shall not be prevented from being treated for the purposes of this rule as a claim for a liquidated demand by reason only that part of the claim is for interest under section 48 of the Ordinance at a rate which is not higher than that payable on judgment debts at the date of the writ."

34. The Amended Statement of Claim claims the following relief against Wong:-

"2. Against the 2nd Defendant: the sum of $4,899,127.76 $4,675,329.43 being 14.28% of HK$32,728,942.46;

2A. ...

3. Interest pursuant to section 48 of the High Court Ordinance, Cap. 4;

4. Further and other relief; and

5. Costs."

35. I agree with Mr Chan that Order 13 Rule 1(1) is applicable. Aberdeen is entitled to have judgment entered in its favour against Wong for the liquidated sum pleaded in the Amended Statement of Claim, together with interest thereon.

C. Miscellaneous reliefs sought by Aberdeen

36. At the hearing before me, Ms Wong did not oppose Mr Chan's application to re-amend the Statement of Claim in the manner suggested by Summons §1. Mr Chan explained that the thinking behind the re-amendment was that, Aberdeen being itself one of the Owners, it would be unfair for the Court to require Aberdeen to contribute towards any liability which the Owners may have for the costs of Aberdeen's action in the event that Aberdeen succeeds. I gave leave for the re-amendment. But I pointed out to Mr Chan that, since the facts underlying the re-amendment were not contained in the evidence filed by Aberdeen in support of the Summons, I could not now make a summary order for the substantive relief prayed by the re-amendment. If, following this Judgment, the parties cannot agree on whether Aberdeen should or should not contribute to any costs payable by the Owners, the question will have to be brought before the Court for determination.

37. I also indicated to Mr Chan that, in the event I found in Aberdeen's favour, I was not minded to make an Order in terms of Summons §3. I doubt that the system of primary and secondary judgments suggested by Professor Williams in the passage quoted above is a practical solution to deal with the problem of the potential bankruptcy of another Action Defendant (in this case, Wong). The Court should as much as possible avoid giving "floating judgments" which crystallise on the happening of certain contingencies in the future.

38. I shall instead adopt a procedure similar to that used when dealing with string contracts in a sale of goods context. A buyer sometimes claims that, as a result of a seller's delivery of defective goods, the buyer is faced with claims from the sub-buyers to whom the buyer has on-delivered the goods. Typically, at the time of the trial, the sub-buyers' claims may not yet have been brought so that a buyer cannot establish that he has incurred an actual loss. In such situation, the Court normally declines to make a declaration that the buyer is entitled to be indemnified by the seller against future claims made by sub-buyers. That would be too much like giving the buyer a blank cheque. Instead, following Trans Trust SPRL v Danubian Trading Co. Ltd. [1952] 2 QB 297, the Court of Appeal (Cons VP, Kempster JA and Power J) in Wong Ho Wai Ying v Yeung Shui Cheung, unrep., Civil Appeal No. 128 of 1992, 24 February 1987 ([1987] HKLY 960) has held that the proper course is to reserve the question of the seller's liability (if any) to indemnify the buyer for later consideration with liberty to apply for directions.

39. By analogy with that practice, I shall adjourn the determination of Summons §3 (along with the corresponding Prayer 2A in the now Re-Amended Statement of Claim) sine die with liberty to restore. In the interim, Aberdeen can try to enforce its default judgment against Wong. If Wong should be or become bankrupt such that Aberdeen is unable to obtain satisfaction of its judgment against Wong, the matter can be restored for further consideration in light of known events as opposed to mere contingencies. Mr Chan indicated to me at the hearing that he had no objection to this course of action.

40. Given my conclusions, it is unnecessary to order the alternative relief sought in Summons §4.

IV. Conclusion

41. There will judgment in Aberdeen's favour against the Owners for $9,239,437.87 and against Wong for $4,899,127.76. Interest is to run on the respective amounts at 1% over Hong Kong prime from the date of the Writ until date of judgment and thereafter at the judgment rate.

42. The determination of Summons §3 (together with Prayer 2A of the Re-Amended Statement of Claim) is to be adjourned sine die with liberty to restore.

43. The Owners' strike-out Summons is dismissed.

44. I make an Order Nisi that Aberdeen is to have the costs of its claims against the Owners and Wong respectively, such costs to include the costs of the Summons (in relation to the Owners) and Aberdeen's application for default judgment before the Master and me (in relation to Wong). The costs are to be taxed if not agreed. The determination of Prayer 6 of the Re-Amended Statement of Claim is to be adjourned sine die with liberty to restore.

45. I also make an Order Nisi that the costs of the Owners' strike-out Summons be to Aberdeen, to be taxed if not agreed.

46. I heard argument on whether there should be certificate for 2 counsel. The substantive applications before me were straightforward. Mr Chan was only engaged at the last minute. Much of the work for Aberdeen's case on the Summons had been ably discharged by Mr Chain prior to Mr Chan being briefed. Contrary to Mr Chan's submission, I do not think that a strike out application for abuse of process by itself justifies the briefing of 2 counsel, even where a party may be understandably anxious as to the outcome of the proceedings. Therefore, although I have benefitted from Mr Chan's submissions, in all the circumstances I do not think that a certificate for 2 counsel is merited here.