LI ZHUO MING v. HUAYAO BIO-TECHNOLOGY HOLDING GROUP LTD

HCA 2701/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2701 OF 2004

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J U D G M E N T

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The Defendant applies for an Order that the Plaintiff be granted leave to discontinue this action with costs to the Defendant, to be taxed if not agreed, on condition that no subsequent action shall be commenced by the Plaintiff on the same or substantially the same subject matter as in this action again.

2. Usually it is the Plaintiff who makes the application of this type.  In this case is the Defendant because the Plaintiff has indicated that he intends to discontinue the action by filing a Notice of Discontinue (sic Discontinuance) on 8 March 2006.

3. The filing was irregular.  Under Order 21 rule 2(1) of the Rules of High Court (Cap. 4A) the Plaintiff has the right to discontinue an action or withdraw any claim within 14 days after service of the defence without leave of the court.  In this case the defence was filed on 7 June 2005, some nine months ago.  The filing was irregular because leave had not been obtained.

4. As I understand from Ms. Yu for the Defendant, the Defendant has no objection to the discontinuance but the discontinuance should have a condition that no further action be taken by the Plaintiff on similar subject.  Ms. Yu relies on the Judgment of Mr. Justice Keith in the case of Trend Publishing (HK) Limited v Vivien Chan & Co. (A Firm) [1996] HKC433.  In paragraph 11 of his Judgment, Keith J has this to say:

“11.     The discontinuance of an action does not prevent a plaintiff from commencing a subsequent action for the same or substantially the same cause of action (see Ord. 21 r. 4).  Accordingly, if a plaintiff seeks leave to discontinue an action in order to avoid having to pay the defendant’s costs of the action, the plaintiff runs the risk that leave would only be granted on condition that no subsequent action will be commenced on the same or substantially the same grounds.  The resurrection of actions which have been discontinued is something to be avoided if at all possible, and I see no reason at all why the Plaintiff’s sensible decision to discontinue these proceedings should not be treated as bringing the dispute between it and the Defendant to an end once and for all.  In my view, the mater should have made the discontinuance of the action conditional upon the Plaintiff not commencing another action on the same or substantially the same subject-matter as the present action.  To be fair to the master, it may be that she lost sight of this point because the principal focus of the argument before her obviously related to the issue of costs.”

5. I must say the paragraph does not seem to me to establish a general rule: every discontinuance must have a term that the Plaintiff is disallowed to commence another action on the same or substantially the same subject matter as the discontinued action.  We have to look at the circumstances of the case before such a condition is imposed.

6. In the case of Trend Publishing (HK) Limited, Keith J had analysed the merits of the Plaintiff’s case in that action and came to the conclusion that the Plaintiff’s action against the defendant was bound to fail (paragraph 9 of the Judgment).  It was under such circumstances Keith J imposed the condition.

7. In the present action, the proceeding has passed the stage of checklist hearing.  The Plaintiff was asked to supply further and better particulars of the Reply by 4:00 p.m. on 29 March 2006, failing which the Plaintiff’s claims be dismissed with costs to the Defendants.  Before the due date, on 8 March 2006 the Plaintiff filed the Notice of Discontinuance.

8. I am not sure the purpose of the discontinuance whether it is to avoid the consequence of the unless order.  But, I am sure that he has no intention to abide by the terms of the unless orders.

9. On examination of the documents index in the court file, there were quite a number of instances that the Plaintiff failed to file and serve his documents within time.  Against this background the unless order was imposed.

10. It is very clear that the Plaintiff does not intend to proceed with the present claim.  It is logical to conclude that he also did not intend to supply the further and better particulars of the Reply requested for.  If the action had taken its normal course, the unless order would have taken its effect and judgment be entered.  In such a case, the Plaintiff would not have any right to institute another action on the same or similar cause.

11. For the above reason I make an order that the action be discontinued on condition that no subsequent action shall be commenced by the Plaintiff on the same or substantially the same subject matter in this action.

12. As to costs of this action including the costs of this application, I make an order nisi under Order 42 rule 5B(6):

(a)   That the costs be to the Defendant to be assessed by me with the following directions:

(i)   That the Defendant shall at least 21 days before hearing of the assessment file and serve a Statement of Costs in the form as suggested by me to the Law Society contained in Circular No. 06-2;

(ii)  That the Plaintiff shall within 14 days thereafter file and serve a list of objections;

and    (iii)   That a date be fixed for hearing of the assessment with an estimated length of one hour.

(b)   That this order shall become absolute 14 days after the date of this Judgment unless a written application has been made to vary this order within the said 14 days.