CHENEY COMMUNICATIONS PTE LTD V. CHRISTOPHER CHARLES CHENEY

1992, M.P. No.2942

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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J U D G M E N T

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1. This is an originating summons in which the plaintiff is a company called Cheney Communications Pte Ltd, a company incorporated in Singapore ("CCPL"), and the defendant is Christopher Charles Cheney ("Mr Cheney").

2. The dispute between the parties arises out of an agreement made on 27th September 1991 between (1) Mr Cheney (2) Stanley Tan Pok Leng (3) CCPL and (4) Cheney Communications Ltd, a Hong Kong company.

("CCL"). The agreement was intended to regulate the commercial relations between the parties and, in particular, to effect the division between them of existing businesses referred to in the agreement and to provide for the transfer of certain shares in CCL. The agreement contained in Clause 4 a condition in the following terms :

"4.1 The obligations of the relevant Parties to divide the Existing Business and to transfer the CCL Shares are subject to the written approvals of Seavi Group."

3. The parties have fallen out and a question now arises as to whether the written approvals of Seavi Group, to which I have referred, were or were not given. It may be that the Condition 4.1 created a condition precedent to the operation of the agreement, or it may be that it created a condition subsequent non-compliance with which would entitle a party to call off. It does not matter for present purposes which of the two it is; the dispute simply is: Was there or was there not given by the Seavi Group such a written approval as was contemplated by Clause 4.1 of the agreement?

4. Mr Cheney says that a board meeting of CCPL held on 21st September 1991 approved the carrying into effect of an agreement such as the one subsequently entered into on 27th September 1991, and that there was present a director of Seavi Group who expressed his assent to what was to be done. That cannot possibly be such "written approvals of Seavi Group" as the agreement contemplated.

5. However, what is now said on behalf of Mr Cheney is that CCPL has waived the requirement for a written approval, or is estopped by its conduct from relying on that requirement. Since the agreement was made, says Mr Cheney, CCPL has happily gone along with it and cannot now turn round and rely on the absence of this written approval. That is not an issue which can possibly be tried on originating summons. It raises a dispute of fact which can only properly be tried in an action commenced by writ. I cannot possibly decide such a matter without pleadings defining the issues and evidence tested by cross- examination so that I can come to a proper conclusion on the issues. I can see that both parties have gone some way along the road to carrying the agreement into effect and it would be quite wrong to shut out Mr Cheney from the right to advance his case of waiver or estoppel simply on the ground that the affidavit which is sworn in opposition to the present originating summons does not condescend to full particulars of the matters upon which he proposes to rely.

6. The course I propose to take will shut neither party out from judgment though it will unfortunately delay the final resolution of the case.

7. What I propose to do now is to make an order under O.28, r.8 of the Rules of the Supreme Court which provides :

"28/8.(1).Where, in the case of a cause or matter begun by originating summons, it appears to the Court at any stage of the proceedings that the proceedings should for any reason be continued as if the cause or matter had been begun by writ, it may order the proceedings to continue as if the cause or matter had been so begun ....".

Sub-rule (2) further provides :

" (2) Where the Court decides to make such an order. Order 25, rules 2 to 7, shall, with the omission of so much of rule 7(1) as requires parties to serve a notice specifying the orders and directions which they require and with any other necessary modifications, apply as if there had been a summons for directions in the proceedings and that order were one of the orders to be made thereon."

8. In other words I can treat this application as if it were the summons for directions in the action, and I propose to do that too.

9. I propose to lay out an attenuated timetable which will enable this action to come on for trial quicker than might otherwise be the case.

10. I will hear counsel as to the timetable and also as to the costs of this present application.