VERON INTERNATIONAL LTD v. RCG HOLDINGS LTD

CACV 126/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 126 OF 2012

(ON APPEAL FROM HCMP NO. 343 OF 2011)

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J U D G M E N T

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Hon Yuen JA (giving the Judgment of the Court):

1. This is the defendant’s summons for extension of time to comply with an order of this court (Yeung VP, Yuen and Lam JJA) made on 30 May 2013 for disclosure of documents.

2. On that day this court handed down judgment allowing the plaintiff’s appeal and making an order in terms of the Amended Originating Summons (with the exception of paras 4, 7 and 9-11 of the Schedule thereto).  The order was for disclosure of certain documents within 7 days.

3. At no stage during the hearing on 1 March 2013 did leading counsel for the defendant indicate that should an order be made, the defendant would have difficulty complying with it within the time period stated in the Amended Originating Summons.

4. The day after the judgment was handed down (31 May) solicitors for the plaintiff asked the defendant through its solicitors for dates for inspection of the documents.

5. There was silence from the defendant’s side for 3 working days.  It was not until 5 June (the eve of the deadline for compliance) that the defendant replied through its solicitors, asking the plaintiff to consent to an extension of time of 2 months for compliance with the order.  The next day the plaintiff’s solicitors replied refusing an extension.

6. On the day compliance was due (and at no stage before), the defendant’s solicitors wrote to the court asking for clarification of the order.  This was declined by the court on 17 June.

7. The day after compliance was due (7 June) the defendant issued a summons for hearing before the master asking for an extension of time of 2 months.  This was subsequently withdrawn by consent.

8. It was not until 19 June that the present summons was issued.  The day before, a notice of intended application for leave to appeal was issued, but the defendant’s solicitors have since indicated that it will be withdrawn. 

9. Nothing was heard from the defendant regarding this summons for a month until the Saturday morning before the hearing, when counsel provided a skeleton submission (having been reminded by the court of the relevant Practice Directions the previous afternoon) and an affirmation from the defendant’s solicitors was filed, exhibiting an affirmation from the defendant’s Chief Executive Officer attaching various documents by which the defendant sought to comply with the order.  

10. The defendant’s conduct is most unsatisfactory. 

10.1 The excuse that it had difficulty locating documents because of a change of directors is unacceptable.  The changes occurred well before the hearing in March (and some directors were in place even before the proceedings were instituted).  Moreover the present CEO and CFO were appointed before the defendant disposed of Vast Base and Strong Aim.

10.2 As mentioned earlier, at no stage during the hearing was it argued by leading counsel for the defendant that it would have difficulty complying with the order within the period set out in the Amended Originating Summons.

10.3 Despite the plaintiff’s request the day after the order for arrangements for inspection, there was silence from the defendant until the eve of the due date for compliance.

10.4 Indeed from the attached documents it would appear that it was not until 3 July that the defendant wrote to its previous lawyers in Malaysia and the PRC for due diligence reports compiled for the acquisition of Vast Base and Strong Aim. Since this was nearly one month after the due date for compliance, it cannot be said that the defendant “had intended at all times to comply with the 30/5/2013 order to the best of its ability and in a timely manner”.   

11. On a separate note, we must also express our dissatisfaction with the defendant’s solicitors in their preparation of the summons. 

11.1 First, no bundles for the hearing were provided until 3:30 the afternoon before the hearing.  Coming so late, the bundles were useless because the court had already read the papers by then. 

11.2 Further, insufficient photocopies of the last-minute affirmation (together with attached documents) were provided until specifically requested by the court.  The affirmation (together with attached documents) was filed on Saturday morning. The solicitors were well aware that the hearing on Tuesday morning was before a two-judge division.  Only one set of working photocopies was provided, which was not adequate for each judge to prepare for the hearing.  When no further working photo-copies were provided by mid-morning on Monday, the court had to make a specific request to the defendant’s solicitors. 

11.3 There is no excuse for this conduct which we hope is not due to deliberate obstructiveness. However it is indicative of a lack of professionalism. 

12. As for the summons, as we are not satisfied with the excuses given for seeking an extension, we decline to make an order extending the time for compliance whether for 2 months (as originally sought) or even to 17 July (as the defendant now seeks). 

(After argument as to costs)

13. The defendant is to pay the costs of the plaintiff on an indemnity basis.