BILL CHAO KEH LUNG v. DON XIA

HCA9289/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CIVIL ACTION NO. HCA 9289 OF 2000

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J U D G M E N T

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1. Following a five day trial, I handed down judgment in this case on 8 August this year in which I gave judgment in favour of the plaintiff in the sum of US$495,750. On 13 August, the plaintiff's solicitors wrote a letter to the court pointing out that the judgment required amendment in two respects.

2. Firstly, that the plaintiff was only required to give credit to the defendant for US$240,000 and not US$300,000 as expressed in paragraph 40 of the judgment. This was because the undisputed evidence was that he had already paid the defendant US$60,000 on account of the US$300,000 which he was required to pay for the shares which were the subject matter of the action and the payment of US$60,000 on account had already been recognised earlier in the judgment.

3. Secondly, that because the judgment was silent as to a claim for dividends which formed part of the prayer in the statement of claim and in its subsequent amendments, I should now make some pronouncement on that matter, preferably by awarding the plaintiff those dividends.

4. Having regard to these matters, I directed that the case should be relisted for further argument. That argument has now been addressed to me by Mr Carolan for the plaintiff and Mr Stokes for the defendant, both of whom of course were counsel at the trial. I am grateful to them for their assistance in this matter.

5. I have had no difficulty in rectifying a clear oversight on my part as to the US$60,000 which the plaintiff had already paid for which I had intended to give him credit and which, when I came to write paragraph 40 of the judgment, I had overlooked. It seems very clear to me that this situation is of the sort contemplated by the "slip rule". My intention had been to give the plaintiff that credit. I now take this opportunity to put right that error on my part.

6. Therefore, the judgment must be amended to the effect that the amount of the judgment will be increased by this sum to US$555,750. I will return to the precise terms of the amendment presently.

7. The next matter concerning the dividends is not as straightforward. What Mr Carolan says is that where the judgment is silent on a claim that was before me and upon which I was addressed by both counsel, that I should at least have made reference to it and on the merits have awarded the plaintiff a further US$115,500. Putting aside the merits and the arithmetic which is said to justify the sum of US$115,500 as dividends, I need to consider the nature of the jurisdiction which I am being asked to exercise.

8. Mr Stokes, who of course resists this application, has drawn my attention to the cases which bear on the exercise of my powers in such circumstances. But before I refer to two of the modern cases, I should indicate the status of my judgment and the order that comes from it.

9. Although the judgment itself is complete, the order has not been drawn up, perfected nor entered in the record of the court. In such circumstances it is open to me to recall my order for amendment or rectification and make any consequential alterations to my judgment. (See Re: Harrison's Shares (1955) Chancery 260 and Hong Kong Civil Procedure 2002 Order 42/1/3 page 617, 42/1/19 page 620 and Order 20/8/6 page 349.) It follows, as Jenkins LJ said in Re: Harrison's Shares supra at page 284, that the court should only exercise its discretion to do so "judicially and not capriciously".

10. The first of the more recent cases which indicate when that power should be exercised is Stewart v Engel [2000] 3 All ER 518. It is not necessary to refer to the facts of that matter but Sir Christopher Slade who gave the leading judgment of the majority made clear that whilst this power served a very useful purpose, it was one which should be exercised cautiously and sparingly. He adopted at page 524b-c some "helpful examples" given by Neuberger J in Re: Blenheim Leisure (Restaurants) Limited (No. 3) [1999] Times 9 November which were the following: "a plain mistake on the part of the court, a failure of the parties to draw to the court's attention a fact or point of law that was plainly relevant or discovery of new facts subsequent to the judgment being given. Another good reason was if the applicant could argue that he was taken by surprise by a particular application from which the court ruled adversely to him and that he did not have a fair opportunity to consider."

11. The headnote to the report summarises the effect of the judgment. "In such circumstances, if the court had no power to reconsider its order before it was drawn up, the prejudiced party's only remedy would be by way of appeal from that order. Although an appeal in those circumstances would itself have a good chance of success, common sense suggested that in such cases the judge who had made the order should himself have the power to vary it before the appeal procedure had to be set in motion.....The existence of exceptional circumstances was a prerequisite to the exercise of the jurisdiction."

12. The other decision was that of Rix LJ sitting at first instance in the Commercial Court in Noga v Abacha [2001] 3 All ER 513. Rix LJ was even more emphatic is in his observations that the court's jurisdiction to reconsider its judgment (I quote from the headnote of the report) "could only be exercised in a case which raised considerations in the interests of justice which were out of the ordinary, extraordinary or exceptional. An exceptional case did not have to be uniquely special and "strong reasons" was perhaps an acceptable alternative to "exceptional circumstances"."

13. He further observed that there were cases "where an error of fact or law might be too plain for argument and it was better that the error was corrected without imposing on the parties the need for an appeal". I pause here to observe that the failure by me to give the plaintiff credit for the US$60,000 is a clear example of that sort of situation. Rix LJ then observed that "it was wrong, however, for a judge to be treated to an exposition such as would be presented to a Court of Appeal. If in such circumstances a judge should be tempted to open up reconsideration of his judgment, an appeal would not be avoided: it would be inevitable. Every case would become subject to an unending process of reconsideration followed by appeal, both on the issues of reconsideration and on the merits."

14. Whilst recognising the effect of these judgments, Mr Carolan submits that where the judgment is silent on the matter of dividends, I should revisit my judgment and deal with this issue one way or the other and, as I have said, preferably, in his client's favour.

15. Mr Stokes submits that judgments commonly do not deal with every matter which is in controversy between the parties. That would not justify a party coming back before the judge and applying to him to pronounce on a particular aspect of the case upon which he has said nothing in his judgment. I agree with Mr Stokes.

16. Unless there is something which clearly amounts to an oversight or error of the type that I have just cured, the court should be slow in going back over the arguments and, in effect, ruling on something which is not expressly apparent in the judgment. Save for what are intended to be "exceptional circumstances" or for "strong reasons", whichever label one cares to attach to it, I should not go back over the argument. Ultimately a judgment, right or wrong, must stand on its merits and the appropriate forum for that discussion is the Court of Appeal.

17. I do not intend to embark on what would amount to an unseemly exercise in self-justification. The judgment is there for examination as a whole and in the event of an appeal the Court of Appeal will have to deal with any shortcomings that it is said to contain. I therefore decline to go further than I already have.

18. Accordingly, paragraph 40 will be amended to read as follows: "Accordingly, there must be judgment to the plaintiff in the sum of $555,750. This is arrived at by multiplying $26.525 by 30,000 shares which equals $795,750, less the $300,000 which the plaintiff would have had to pay for the shares. But credit must also be given to him for the $60,000 which he has already paid. Interest must also be added to this from the date of the writ until judgment, 1 per cent above United States prime rate. Costs will follow the event. The defendant pay the plaintiff's costs of the action, to be taxed if not agreed, on a party and party basis. This will be an order nisi."

19. As to the costs of this application, I have already heard argument on this issue on, inter alia, the basis of the order that I have just made. Whilst it seems to me that the plaintiff has had to come to get this order, the defendant has also had to appear to resist, successfully, as matters have turned out, on the argument as to the dividends. My order on costs should therefore reflect both of these aspects. I will say that the defendant should pay half of the plaintiff's costs of this application.