CHINA NONFERROUS METALS (HONG KONG) FINANCE CO LTD (In Liquidation) AND ANOTHER v. SOUTH-EAST ASIA INVESTMENT HOLDING COMPANY LTD AND ANOTHER

CACV 253/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 253 OF 2012

(On Appeal from HCCL NO. 20 of 2002)

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REASONS FOR DECISION

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1. The defendants applied for leave to appeal to the Court of Final Appeal against our judgment dated 16 May 2013.

2. The defendants contended that the following question of great general or public importance ought to be considered by the Court of Final Appeal, namely,

‘ Whether a victim of inordinate and inexcusable delay amounting to an abuse of process is required to prove prejudice before the Court will dismiss or strike out the defaulting party’s claim.’

3. The defendants also relied on the ‘or otherwise’ limb.

4. We refused leave for the following reasons :

1) Our judgment was fact specific and dealt with an appeal from a discretionary remedy.

2) The lower court’s judgment on the issue of abuse should be, as we have pointed out in our judgment, properly considered in its context and the Judge had properly taken prejudice into account.

3) The issue of abuse was at large at the hearing before this Court and the discussion on prejudice was not predicated on the basis that abuse had already been established.

4) The issue of who carried the burden of proof on prejudice is a non-starter since in situations where the abuse involves delay and prejudice to the defendant, the defendant’s burden in establishing abuse will necessarily include the burden of establishing prejudice as well.

5) As it is, the question as framed is not engaged.

6) In so far as our judgment dealt with prejudice on the basis that the Judge had found abuse by reason of the plaintiff not intending to bring the present case to conclusion, we are still of the opinion that the question as framed is not engaged because of, first, paragraph 75(7) of the judgment of Wing Fai Construction Co. Ltd (in compulsory Liquidation) v. Yip Kwong Robert & Ors [2012] 1 HKLRD 589 (cited at paragraph 17(3) of our judgment) on the requirement of prejudice and, second, it was not the position of the defendants (as represented by their then counsel) that it was not necessary to consider prejudice at all after abuse had been found. 

7) In any event, we are of the view that, the defendants have no real prospect of success in respect of the question as framed.

8) Neither is the ‘or otherwise’ ground satisfied in this case.

5.   Accordingly the application was refused with costs to the plaintiffs together with certificate for two counsel.