HANGZHOU LIANLUO LIAISON INTERACTIVE INFORMATION TECHNOLOGY CO LTD v. CHINA DIGITAL CULTURE (GROUP) LTD

HCA 536/2020

[2024] HKCFI 2460

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO. 536 OF 2020

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BETWEEN

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D E C I S I O N

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1.  This case has been set down for trial and the trial is scheduled to commence on 21 October 2024 (with 5 days reserved).

2.  On 31 July 2024, the plaintiff (“P”) has taken out a summons to re-re-amend the Re-amended Writ of Summons (“the Writ”) and the Re-amended Statement of Claim (“SOC”) by correcting the name of P and updating the principal place of business of the defendant (“D”) (“the Amendment Summons”). This summons has been fixed for a 15 minutes hearing before me today.

3.  On 29 August 2024, P has taken out another summons under Order 25, r 6 of the Rules of the High Court (“RHC”) requesting D “shall confirm with the Court and the Plaintiff’s solicitors in writing by 4 pm on 30^th September 2024 whether it shall attend the trial on 21^st October 2024 and contest the Plaintiff’s claim,…”.

4.  Basically, they have asked the court to grant them as order that, if D fails to do so, their Amended Defence (“Defence”) be struck out and P is at liberty to enter judgment (i) in the sum of HK$438,295,375.69 (“the said Sum”); interest of the said Sum at 1% above prime rate from 7 May 2020 to the date of judgment and thereafter at judgment rate until payment; and (iii) costs of the action with all costs reserved” (“the “Unless Order” Summons”).

5.  This summons was filed with the registry on 29 August 2024 to be heard by me on the same day and at the same time as the Amendment Summons, ie today. Time estimated by P’s solicitors for hearing this summons was also for 15 minutes only.

6.  The trial of this action was originally fixed to be heard before me at the Pre-trial review before The Hon Madam Justice Mimmie Chan on 29 July 2024 (“the PTR”) to commence on 21 October 2024 (with 5 days reserved). However, the case has recently been transferred to be heard by another judge, namely, The Hon Mr Justice Tam commencing on the same day.

THE AMENDMENT SUMMONS

7.  Let me start by saying that I have absolutely no problem with P’s proposed amendments contained in the Amendment Summons and consider that a 15-minute time estimate made by P’s solicitors for it was proper and appropriate. Having studied the contents of the Amendment Summons and the proposed re-re-amended Writ and SOC attached to it, I am satisfied that they are in order. I will therefore make an order in terms of the Amendment Summons.

THE “UNLESS ORDER” SUMMONS

8.  However, I do have huge reservations of P’s “Unless Order” Summons for the following reasons.

9.  First, in my judgment, the “Unless Order” Summons had been issued under the wrong rules of the RHC. Instead of issuing the summons under the usual rules for unless orders under Order 42, r 2 and Order 45, r 6 of the RHC, P issued the summons under Order 25, r 6 purportedly asking for the same thing. In my view, Order 25, r 6 is clearly designed to request parties at the case management summons (“CMS”) stage of the proceedings “to provide all the information and produce all the documents as the court may reasonably require for the purposes of enabling it to properly deal with the (CMS)”. It is not designed for the purpose of striking out a defendant’s defence for inaction or anticipated failure in turning up to a trial scheduled to commence in a few weeks’ time as P is clearly trying to do today. Thus, the “Unless Order” Summons in my view has been misconceived and issued under the wrong rules. For that reason alone, I think it should be dismissed. However, if P is minded to renew or continue with the application, they should at least consider amending the margin to the summons to provide the correct citation(s) of the rules under the RHC.

10.  Second, the “Unless Order” Summons was taken out at a very late stage (on 29 August 2024) and the evidence filed in support by way of affirmations and documentary exhibits were not provided until very recently (on 29 August and 4 September 2024), making it impossible for the court to have sufficient time to properly understand and digest both the legal and factual issues relied on by P for the application.

11.  Further, it was fixed by P’s solicitors for a totally unrealistic estimated time of hearing, ie for 15 minutes only, making it impossible for the court to have sufficient time to hear the arguments properly for the time it has been allocated for hearing of the summons.

12.  The “Unless Order” Summons was supported by 2 affirmations filed by P’s handling solicitor Mr Hui Lap Tak (“Hui”), viz. 2^nd affirmation of Hui filed on 28 August 2024 (“Hui’s 2^nd Aff”) and 3^rd affirmation of Hui filed on 4 September 2024 (“Hui’s 3^rd Aff”). Hui’s 2^nd Aff consisted of 11 pages and 32 paragraphs with 11 exhibits exhibiting different documents over 100 pages. Hui’s 3^rd Aff consisted of 3 pages and 7 paragraphs with 2 exhibits. The volume of papers speaks for itself. By any stretch of imagination, they cannot be dealt with by the court within 15 minutes. P’s solicitors should know better.

13.  Given the fact that the PTR took place before Madam Justice Mimmie Chan on 29 July 2024, I see no reason why P or its solicitors had to wait for a month before they issued the “Unless Order” Summons as D had not turned up at the PTR and had already been acting in person by that stage. Thus, the purported facts now relied on by P for the application must have been apparent to it and its legal advisers by that time. Yet they had waited for a month before making the application without proving any good reasons for the delay.

14.  Third, rather unusual and unexpected for a summons hearing which has been scheduled for a 15 minutes hearing before the court, P has instructed a very junior counsel to prepare a 14-page written submissions (which consisted of 42 paragraphs), accompanied by 6 legal authorities, for the purpose of the hearing. The written submissions was dated 6 September 2024 and was received by the clerk of the court in the afternoon on the same day. This court only has the opportunity to read the skeleton submissions for the first time yesterday.

15.  For the record, the hearing bundle which consisted of 2 large box files containing 319 pages of documents were received by the clerk of the court on 4 September 2024.

16.  Clearly, given the above, 15 minutes is not sufficient for hearing this very important and substantial application. In my view, P by doing so is trying to force the court to do the impossible, namely, by reading the lengthy affirmations and exhibits and written submissions (and the accompanying authorities) for a very substantive and important application within a totally unrealistic time frame. In my view, this is wrong and tantamount to an abuse of the court’s procedures. P should not think that they can do whatever they like and at a time they like. They also should not think that the court will work according to their timetable and schedule. More importantly, P should not, as happened in this case, try to fix a substantive hearing involving very important and significant arguments in a 15-minute time slot when they or their legal advisers knew very well that the arguments, if properly heard, should take at least no less than 1 hour (according to P’s counsel’s own estimate given to the court today) or 2 hours (according to this court’s own estimate). They should not treat the court as if it will automatically “rubber stamp” their applications without the opportunity to carefully listen to the submissions first in regard to the issues raised in their application and the legal and factual foundation they rely on to make good of their submissions.

17.  In my judgment, this application should have been fixed for at least 2 hours for arguments. Thus, had they provided the correct and more realistic time estimate, no doubt they are aware that they will have to follow the usual timeline for filing the written submissions in order to allow sufficient time for the court to read them beforehand.

18.  Practice Direction 5.4, paragraph 11 requires an applicant to file his skeleton submissions and list of authorities at least 72 hours before the hearing (excluding Saturdays, Sundays and general holidays). This court did not have the time to read the very detailed (and may I say very carefully written) submissions and authorities prepared by P’s counsel in this case. In my view, this is wrong and against one of the fundamental principles of the rule of law, ie following the due process of law.

19.  For the above reasons, I was minded to dismiss P’s “Unless Order” Summons and was going to order that either P or P’s solicitors to bear the costs of the application, including the wasted costs incurred by the unnecessary hearing today.

20.  However, I was persuaded by Mr Johnson Cheung, P’s counsel, to give P the option to adjourn and to re-fix the substantive hearing of the “Unless Order” Summons to a different date before the trial judge in order for him to have the opportunity to properly consider all the issues raised and the evidence relied on by P now contained in Mr Cheung’s written submissions. In my view, the trial judge will be in a better position to decide whether, even if D were not going to appear at the trial (as all the signs indicate that this most likely will be the case), P is still required to come to court during the scheduled trial dates to prove its case. Given the huge sum which P is seeking against D and the very serious allegations made against it under the re-re-re-amended SOC, the court may consider it is necessary for P to do so. However, this is a matter best left for the trial judge to decide.

21.  Thus, I will fix the substantive hearing of the “Unless Order” Summons before The Hon Tam J on 19 September 2024 at 10:00 am with 2 hours reserved.

22.  Having heard P’s counsel further submissions on the issue of costs for the “Unless Order” Summons, I will make no order as to costs for today’s hearing in relation to that application.