SINFULL INVESTMENTS LTD AND ANOTHER v. HOLLY WIN LTD AND OTHERS

HCA2412/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2412 OF 2005

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REASONS  FOR  DECISION

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1. This litigation has been beset by complications and difficulties.

2. The plaintiffs’ present solicitors were first instructed in October 2005 when the limitation period for issuing a writ was about to expire.  Their first action was to issue a protective writ in time.

3. Since then efforts have been made to unravel the complex history of the matter, locate parties in mainland China, amend the parties to the writ so that the original 3^rd and 4^th plaintiffs have now become the 3^rd and 4^th defendants, locate documents, produce translations of documents and generally clarify their instructions.  

4. Matters came to a head in late 2006 when the 12-month period for the validity of the writ was coming to an end.  The plaintiffs’ solicitors, then, in time, applied ex parte in writing for an extension of six months in which to serve the writ out of the jurisdiction and extend its validity for that period.  Master B. Kwan, on 6 December 2006, sent a written note to the plaintiffs’ solicitors explaining why the application should be refused.

5. The plaintiffs’ solicitors lodged an appeal against this refusal dated 19 December 2006 (again in time).  The appeal came before Sakhrani J on 30 January 2007.  He rightly pointed out that the Master had, in fact, made no order (she had only sent a written note) and thus there was nothing to appeal.  The plaintiffs’ solicitors therefore drafted an order of refusal, dated 31 January 2007, and sent it to the Master for her confirmation.  At about the same time they re-served their notice of appeal.  The second notice of appeal is dated 12 February 2007.

6. The Master, it seems, did confirm that she had refused the application.  However, the Master’s clerk backdated the draft order which had been submitted by the solicitors from 31 January 2007 to 5 December 2006 (the date of her original decision).  The unfortunate effect of this was to make the solicitors’ second notice of appeal (dated 12 February 2007) out of time (because of the backdating).

7. My first task was therefore to grant leave to appeal out of time which I did because the plaintiffs were only out of time for the above technical reasons.

8. Having heard Mr Michael Liu, counsel for the plaintiffs, on the reasons that it had not been possible to serve the writ within its validity period, I also allowed the appeal with no order as to costs and gave leave to extend the validity of the writ for six months from the date of this order and also gave leave to serve the writ out of the jurisdiction.

9. The Master had not had the opportunity to hear the application in full in court.  This being a re-hearing Mr Liu gave a full explanation and clarification of the difficulties which have been encountered.  They have primarily stemmed from efforts properly to prepare and serve the writ on the appropriate parties in mainland China.  The Master was not fully apprised, as this court has been, of all the material circumstances.  I find it to be a rare case where this court should exercise its discretion afresh.

10. This hearing has established, to my satisfaction, that matters existed which were at least capable of amounting good reasons for extending the writ’s validity.  I was also satisfied that the balance of hardship lay in the plaintiffs’ favour.  To refuse an extension would have deprived the plaintiffs of pursuing a substantial claim about which the defendants have been aware from the outset.  The actual prejudice to the defendants would be minimal when balanced against the potential loss to the plaintiffs.

11. Accordingly I allowed the appeal.