BUILDWELL CONSTRUCTION CO LTD v. MAK KWOK WAI t/a WILLEY CONSTRUCTION AND ENGINEERING CO

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HEADNOTE

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Practice and Procedure - order by consent extending time for filing defence - not complied with due to mistake - whether Court has power to extend time further. Held that even if previous order was by consent, time would be further extended.

IN THE HIGH COURT OF JUSTICE

HONG KONG

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BETWEEN

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JUDGMENT

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1. This is an appeal from an order made by Master Perrior on the 14th May 1987 whereby he ordered that the plaintiffs provide further and better particulars of the statement of claim as set out in a request from the defendants' solicitors filed on the l0th April 1987, that the plaintiffs permit the defendants solicitors to inspect and take copies of documents and that pending compliance with these requirements all proceedings be stayed. He finally dismissed the plaintiffs' summons of 13th May 1987 seeking orders that the defence, as filed, be struck out and that if a further defence was not filed within seven days, the plaintiffs to be at liberty to enter final judgment.

Background

2. The history of this matter was that the plaintiffs filed a writ on the 20th February 1987. The statement of claim is in respect of building work done by the plaintiffs for the defendants at three different sites, namely, Fung House in Connaught Road Central, at Ting Kok Road, Taipo, and at Silver Cord in Canton Road, Kowloon. The statement of claim consists of some 24 paragraphs contained in 11 pages. In each case particulars are given showing how the amount claimed in respect of each site is made up. The total amount claimed is approximately $1.5M and there are the usual claims for interests and costs. The writ was served by post on 23rd February and an acknowledgement of service was filed by the defendants on the 12th March. No defence was, however, filed in time and on the 31st March, the plaintiffs' solicitors advised the defendants' solicitors that they would enter judgment at the end of 48 hours if no defence was filed. In reply, the defendants' solicitors asked for an extension of time to the 15th April and requested copies of all documents referred to in the statement of claim. Some of these documents are clearly voluminous.

3. The next step was that, on the 10th April, the defendants' solicitors simultaneously delivered to the plaintiffs' solicitors a letter requesting further and better particulars and also issued a summons requiring that such particulars be supplied. These particulars are very detailed and run to some eight pages.

4. At the hearing before the Master there is some doubt as to exactly what transpired. The plaintiffs were represented by Mr Lai of S.H. Chan and Co. and the defendants by a Mr Curlewis, an articledclerk employed by the defendants' solicitors. The defendants were seeking an order that the plaintiffs produce the documents which had been requested and supply the further and better particulars and that the time for filing the defence be extended to 28th days after compliance by the plaintiffs with both those requirements. The decision made by the Master was that leave was granted to extend the filing of the defence to the 30th April and that the plaintiff should have costs of the hearing. There is no note as to whether this was done by consent and there is no reference to the request for the production of documents or for the further and better particulars. At this hearing Mr King for the defendant says that while he does not concede that this was a consent order, he is in no position to dispute the statement made in Mr Lai's affidavit that it was such order.

5. It would seem from Mr King's affidavit that there was then a mistake made in his office because he was away on leave at the time. On his return, he inquired as to what was the position with the matter and was informed that there had been an order made in terms of the plaintiffs' summons. That being so, they were required to take no further steps until the defendant had complied with the requirements referred to above. This, in fact, was of course not correct. This was discovered by Mr King when a d aft order was returned by the Clerk of Court on about the 5th May. He then became aware that the time for filing a defence had simply been extended to the 30th April. He then wrote to the plaintiffs' solicitors explaining that there had been a mistake and requesting an extension of a further seven days for the filing of the defence. The defendants' solicitors replied to that saying that they could not grant such an extension as they had already applied for judgment by default. A certificate that no defence had been filed by the defendants was filed by the solicitors for the plaintiffs on the 4th May.

6. On the 6th May, a "holding" defence was filed by the plaintiffs' solicitors. It is the defendants' complaint that as this was out of time and as there had not been any extension or consent, that document should not have been filed. It is a very brief defence indeed simply saying that no admission is made of the plaintiffs' claim and it is put to straight proof thereof. It is not disputed that this defence does not comply with the requirements of 0.18, r. 13(3).

7. A further summons was then issued by the defendants that the plaintiffs supply the photocopies requested of every document referred to in the statement of claim and the further and better particulars which had been requested on the 10th April and that all proceedings be stayed until those requirements had been complied with. This was fundamentally the same summons as had been heard on the 14th April. This summons was heard on the 14th of May. The orders requested were made and the plaintiffs' summons for striking out was dismissed. It is from these two orders that the plaintiffs now appeal.

8. It is the case for the plaintiff that the order of the 14th April having been made by consent, that is an end of the matter. There was no power to further extend time or to order the copies of documents and the further and better particulars which were then sought. They further say that because the defence does not comply with the rules of Court and was filed out of time, it should be struck out. They did not, however, seek to then enter judgment by default but required that the defendants file a proper defence within seven days.

9. It is the case of the defendants that the plaintiffs are seeking to take advantage of a regrettable mistake but that this should not penalise the parties to the matter. They say that they are not able to prepare a proper defence until they have a sight of the various documents and are supplied with the further and better particulars which had been requested. Mr King argues that an exten ion of time by consent does not preclude a further application being made.

10. It is by no means certain that the order made on the 14th April was by consent but assuming that it was, I am satisfied that this does not bar a further application for extension of time. The plaintiffs relied on the two decisions of Ip Cheng-tong v. Liu Yiu ⁽¹⁾ and Ho Shiu-kwong v. On Chuen Kam Koon Shoes Shop ⁽²⁾ In that latter case there had been a consent order that if the defendants did not pay certain sum as damages by a certain date, the plaintiff could enter final judgment. Default was made in payment by this stipulated date and accordingly judgment was entered. It was held that the defendants could not then apply to have the judgment set aside even though by then payment had been made. At p.55 Blair-kerr S.P. cited with approval a decision of Huggins, J., as he then was, in F. Hoffmann-La Roache & Co. v. T.W. Wu & Co. (H.K.) Ltd.⁽³⁾ when he said:

"...Thus whilst in general it is possible to extend the time limited by a judgment or order it would appear that such a time limit in a consent order cannot be extended except by consent of both parties."

In both of these cases however, the parties had laid down a date for the doing of something, failing which, judgment could be entered. Clearly there was an agreement between the parties that if there was failure to comply with that requirement, the plaintiffs were at liberty to enter judgment. Here, however, there was simply an extension of time for filing a defence. Mr Lai who appears for the plaintiffs very fairly referred me to another decision, that of David T. V. Lieu   & Others v. Cargocean Shipping Co. Ltd. ⁽⁴⁾. Having referred to the previous decisions, Lit J., as he then was, said at p. 43:

"In the present case the condition precedent of Payment had been complied within the prescribed time. What had been done out of time is something not as a condition precedent but as an agreement between the parties viz: to file a defence in time. I do not think that the cases cited by learned counsel for the defendant are directly on the point. However, the example he gives is typical. He says that time and again solicitors for the parties have agreed to filing of documents within a certain time. When one party cannot file the documents within the time agreed there is nothing to prevent that party to apply to Court for an extension of time despite the refusal of the other party to consent to extend time. I am of the opinion that there is substance in this example."

He concluded:

"I am of the opinion that the present case is different in fact from the Ip Cheng-tong's case (1972) H.K.L.R. 46 and that the Court has jurisdiction to exercise its discretion to extend the time where the time limit in this instance is not a condition for leave to file the defence."

I agree with that decision. It is of course, a decision at first instance and if I felt that the other cases which were decided in the then Full Court, were in conflict with it, I would be obliged to follow them. While there are dicta in those cases which lends support to the plaintiffs' case, I am satisfied that here there was simply an agreement that the defence should be filed by the 30th of April. There was no agreement that if by that order could not be complied with, the defendants would not seek a further extension. I am therefore satisfied that the plaintiffs' argument on this point must fail.

11. There is authority that a Court should only exercise a discretion to order discovery of documents before the service of pleadings in exceptional circumstances. (R.H.M. Foods Ltd. v. Bovril Ltd.⁽⁵⁾. Here, this is a complicated building dispute and I am prepared to accept that the drawing of the defence requires sight of some of the documents. These documents are the ones referred to in the plaintiffs' solicitors letter to the defendants' solicitors dated the 3rd April under paragraphs 3, 4, 5, 13, 18, 20, 20(l), 20(3) and 24 but not the ones requested under paragraphs 11 and 17.

12. Order 18, r. 12(5) provides that further and better particulars should not be ordered before service of the defence unless in the opinion of the Court, the order is necessary or desirable to enable the defendant to plead or for some other special reasons. Having been taken through the very detailed further and better particulars which have been requested by the defendants, I agree with counsel for the plaintiffs that they are not so necessary or desirable. They can of course be applied for at a later stage, but it seems to me that the particulars as contained in the statement of claim are sufficiently detailed for the defendants to be able to plead to them.

13. The appeal is therefore allowed to the extend that there would be an order that :

14. I consider that there had been mistakes on both sides in this matter but predominately it has been caused by the defendant's solicitors, which indeed is not denied. The plaintiffs will therefore have two-thirds of its costs here and before the Master in any event.

(1)    [1972] H.K.L.R. 47

(2)    [1971] H.K.L.R. 34

(3)    (1966) H.K.L.R. 306

(4)    [1975] H.K.L.R. 39

(5)    [1982] 1 W.L.R 661