LI YUQI v. CLARIDEN LEU ASSET MANAGEMENT (HONG KONG) LTD

HCCL 31/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO. 31 OF 2004

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BETWEEN

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J U D G M E N T

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1.  This is a Commercial List 2004 action, HCCL 31 of 2004. The writ was issued on 4 June 2004, which is six and a half years ago. In commercial terms, it could not be a simpler case. Basically, it is a claim by the plaintiff investor against an investment adviser, where it is said that the plaintiff has been caused loss by the defendant’s failure to act on the plaintiff’s instructions to sell a certain block of United States listed shares.

2.  Interestingly enough, there is in the writ no claim for a quantified sum of damages.  It simply says “damages to be assessed”, although the reader is told that the assessment of damages should be the difference between the market value of the shares as at January 2004 and the market value of the shares as at the date of the writ.  One does not need to be a rocket scientist to work out that the shares have dropped in value.  Therefore, why on earth the plaintiff could not have pleaded the relevant quantification, I have no idea.

3.  But I repeat, this strikes me as the simplest type of Commercial List case.  The pleadings are in short form.  The Statement of Claim was issued and served, presumably, on 4 June 2004.  The defence was filed on 23 July 2004.  I am informed by Mr Tibbo, who appears for the plaintiff and who is, as usual, of assistance to the court, that in September 2004 this court gave leave to file and serve a Reply.

4.  I have no idea whether the time limit for such service of a Reply in 2004, which is a lifetime away, was 14 days or 21 days, but it does not really matter because in effect the last juridical act in this case was the filing of the Defence on 23 July 2004.

5.  Since that time the matter appears to have stagnated completely.  A number of reasons have been advanced for this, the primary ones appearing to be, first, that there were opportunities ‑ in, I think, 2006 and subsequently ‑ to try and settle the case, which came to nothing, and second, that it was extremely difficult for the plaintiff’s solicitors, who I am sure did not have an easy client, to track him down and to obtain instructions.

6.  I am sorry, but that latter excuse does not wash with me.  In these days of digital communication wherein one can get hold of someone who is standing in the Amazon River Basin on a mobile phone, I really do not see why it is so difficult to get the plaintiff’s instructions, wherever he was in the world.

7.  As for the second set of negotiations, it is eminently clear from the correspondence that the only two issues that were discussed were, first, whether the plaintiff should pay the defendant’s costs and, second, whether the present action should be dismissed or discontinued.

8.  After the order of Stone J, extending the time for the filing of the Reply, which I see from the chronology helpfully provided was on 22 September 2004, three Notices of Intention to Proceed subsequently were filed by the plaintiff.  They were, the index to the hearing bundle tells me, on 22 September 2005, on 27 May 2007, and on 1 April 2009.

9.  This was followed by a summons to strike out the application on 14 October 2010.  It is noteworthy that in the latter set of the negotiations between the plaintiff to bring this litigation to an end, on 27 July 2010, there is a proposed draft consent order which reads:

“All proceedings in this action be dismissed and there be no order as to costs of this action.”

10.  Mr Tibbo says, entirely correctly, that in so negotiating, his client was not giving up his rights to continue with the action.  I am sure that technically this is the case.  However, to an experienced court, and after 15 years this court feels entitled to consider itself as such, this case now is all about costs, and costs alone.

11.  Had the plaintiff agreed that there be ‘no order as to costs’, this entire matter would have been done and dusted, and the court clearly would not have been troubled with this application.  So that is all that there is in the case.  As I have said, it could not be easier in terms of the facts, and I repeat that this is possibly the simplest Commercial List case I have ever seen.

12.  I should at this stage also mention the evidence.  The present application for the defendant is backed by three affidavits of Peter So, respectively dated 14 October 2010, 1 December 2010, and 16 December 2010, and the plaintiff opposes the application with two affidavits of Simon Cheung, respectively dated 17 November 2010 and 14 December 2010.

13.  In those affidavits, Mr Cheung, whom I apprehend is the plaintiff’s solicitor and is in charge of the litigation, emphasises a key factor in the delay is the two sets of negotiations between the parties:  once in 2006, which yielded no fruit, and once in October 2010 ‑ although as I have earlier mentioned, that latter occasion seems to have been no more than a row over whether there should be a discontinuance or a dismissal and the obvious key to this case, which is who should pay the costs ‑ although it is eminently clear to me that had there been agreement as to ‘no order as to costs’, the plaintiff would simply have walked away, by now having completely lost interest.

14.  This brings me to the legal principles involved.  Mr Tibbo says ‑ again, I think that he is right ‑ that one should not lose sight of Birkett v James’ principles in light of the subsequent case of Grovit v Doctor, a case which this court has commented upon at some length in other cases before it, and as I think this court has already said, and I reaffirm that view, that Grovit v Doctor should not now take over, if you like, from established Birkett v James’ principles.

15.  I do not resile from that view.  However, in this case, I think that both sets of principles have been established.  Mr Tibbo says ‑ and he can say nothing else ‑ that there has been, of course, inordinate delay. But he maintains that there is no prejudice at all by his client’s obvious inaction, because the case is all documentary and documented.

16.  On the other hand, it is said by Mr Chan in his skeleton under the heading “Want of Prosecution”, that “there is a serious risk that it is not possible to have a fair trial and it is prejudicial to the defendant because” (at paragraphs 43.1 to 43.5), he makes reference to oral instructions on the telephone which took place at the end of 2003.  He further says (at paragraph 43.3 of the skeleton) that the case likely would turn on the competing oral evidence of Mr Qu Liangqin and Ms Joannes Ho, and their ability to recall events.

17.  Then Mr Chan goes on to comment upon matters occurring 6 to 7 years ago, which have no direct relationship with the alleged telephone conversations, but from which it is clear that the loss of or the fading of memories of these matters may well adversely affect the interest of the defendant.  With respect, that is obvious.  This court cannot remember what it did last week, so how anyone now can be expected to testify with any certainty over oral conversations taking place in 2003 is quite beyond me.

18.  As far as I am concerned, Birkett v James is well-grounded on these facts.  I also think ‑ for what it be worth and without prejudice to and having regard to Mr Tibbo’s caution, which I share, that Grovit v Doctor should not take the place of Birkett v James’ conceptually ‑ that here indeed there has been something which comes within the category of an abuse of process.  Clearly there has been no intention whatever by this plaintiff, in the most simply of cases, to proceed with it with any reasonable degree of expedition.

19.  As I earlier have observed, the last juristic act was the filing of the Defence on 23 July 2004, and the last juristic act by the plaintiff was to get leave to reply ‑ a leave he did not seek to exercise because no Reply was ever put in. So we have the extraordinary spectacle, in an entirely straightforward case, of two very brief pleadings, respectively dated June and July 2004.

20.  Mr Anthony Chan for the defendant has said all that he can in his skeleton argument and Mr Tibbo has said all that he can in his helpful skeleton.  This is not a case that need now further test the patience of the court.  It is about as straightforward as I have ever seen, and I have no hesitation whatever in striking it out, whether such be on the Birkett v James’ line or on the Grovit v Doctor line.

21.  It is as plain as a pikestaff that the only difference between these parties, the plaintiff apparently having lost interest, is as to who should pay the costs.  Effectively I have now decided that.  Accordingly, I make an order in terms of the defendant’s summons dated 14 October 2010, namely that the plaintiff’s action be dismissed on the ground of want of prosecution and/or as an abuse of the process.

22.  I make a consequential order that the costs of the application and of this action, including the costs of and occasioned by the striking out, be to the defendant; absent agreement, such costs to be taxed if not agreed.

23.  This action is now at an end, and in my judgment rightly so.  The message that should go out clearly to all plaintiffs in the position of this plaintiff is that if you bring a 2004 action on a very simple basis, and if you sit on it till the end of 2010, and then if all you appear concerned about is as to who should pay the residual costs, then the axe will fall fairly quickly when this situation is drawn to the attention of the Commercial Court.

24.  Both counsel have done their best.  As I observed to Mr Tibbo, sometimes you have the analytical case, sometimes you do not.  That is all the Commercial Court is interested in.  In this case, he did not.  Therefore, he loses.

25.  Accordingly, the plaintiff is struck out for the reasons given.