XCHRX CHOY SZE FAI v. PRETTY FULL DEVELOPMENT LTD. AND OTHERS

HCA10132/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.10132 OF 1998

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J U D G M E N T

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1. This is an appeal against the decision of a master by which he dismissed an application by the defendants that they be granted leave to file and serve their defence and counterclaim, if any, within 14 days.

2. The plaintiff acts in person, purportedly as trustee for one Lam Lai Kuen. I say 'purportedly' because he is an undischarged bankrupt and the suggestion by the defendants is that the trusteeship is a sham to enable the plaintiff to bring these proceedings. That, however, is not an issue which arises for my decision.

3. The plaintiff instituted these proceedings in June 1998. The Statement of Claim was amended in November 1998, and re-amended on 23rd April 1999. The Statement of Claim runs to some 30 pages. The essence of the claim arises from an agreement in 1992 for the purchase by the plaintiff from the 1st defendant of property in Thailand. The plaintiff says that he has paid monies under that agreement which should be returned to him since the 1st defendant, who sold the property, did not fulfill its terms, and that the other defendants were party to a deception material to the question of fulfillment of the 1st defendant's liabilities.

4. There is on the papers a draft Defence, stating that the 1st defendant has fulfilled its obligations but that the plaintiff has simply not paid the monies due for the sale of the property to him. There is also a claim in that draft Defence that the courts of Hong Kong have no jurisdiction to try the case because of a term in the agreement that the parties should submit to the exclusive jurisdiction of the Thai courts.

5. This is a case with a complex procedural history. There have been numerous hearings before masters and there are a number of outstanding applications.

6. In 1998, there were proceedings to strike out the Statement of Claim and, in November, it was struck out as against the 2nd to the 6th defendants but the plaintiff was given leave to amend the Statement of Claim to state further his case against these defendants. In December, the defendants took out a summons to stay the proceedings on the basis that the plaintiff was an undischarged bankrupt and had commenced the proceedings without the knowledge or consent of the Official Receiver. That was returnable on 17th March 1999, and on that day, Master Poon gave leave to the defendants to amend that summons and ordered that the Statement of Claim be struck out, and he dismissed the summons by the plaintiff for judgment in default of defence. The plaintiff appealed successfully, and the judge permitted the plaintiff to amend his Statement of Claim to plead the issue of trust.

7. In April, namely 23rd April, 1999, the Re-amended Statement of Claim was filed. After that re-amendment, the defendants filed a time summons which was heard on 10th May, at which date, they were given 14 days with which to file their Defence. But at the same time, they took out a summons for security for costs, the basis for which was that the plaintiff is a nominal plaintiff. That summons for security for costs is returnable on 31st May 1999. Accordingly, a fresh time summons was taken out, returnable before Master Barnes for an order that the time for filing of the Defence be extended to the determination of the application for security for costs.

8. Master Barnes dismissed that summons. In evidence filed before me, the reasons for that dismissal are provided and they are that the master took the view that the defendants should file the Defence without delay because it would be appropriate and desirable for the defendants to disclose their case, and that it would be difficult for a court to assess the merits of the defendants' case on the security for costs application without the benefit of the Defence. Further, the application for time as framed would effectively mean an interim stay of the application, and she suggested, according to this evidence, that the appropriate way forward was for the defence to issue a fresh time summons, not allied to the application for security for costs. The original time summons which was before Master Barnes was for an order that the time for the filing and service of the defence and counterclaim, if any, be extended until the determination of the defendants' summons for security for costs.

9. Accordingly, a new time summons was taken out and it is the one which is presently the subject of this appeal. In its terms, it applies for an order that leave be granted to the defendants to file and serve their defence and counterclaim "within 14 days from the date of the order to be made herein". That was taken out on the same day as the decision of Master Barnes, so it can hardly be said that the defendants then dragged their feet, and was returnable the next day, namely 25th May. In the meantime, namely on 24th May, the plaintiff took out a summons for final judgment against the defendants which the defendants now say was irregular in so far as 14 days had not expired.

10. On 25th May, the specific time summons, asking for an extra 14 days, came before Master Kwan. Quite what happened in front of Master Kwan is not agreed in all its details but the evidence filed by Miss Chan, the solicitor who then appeared and who appears in front of me today, is to the effect that the master dismissed the summons because the wording of the two summonses, namely that which had engaged the attention of Master Barnes and that which was placed before Master Kwan, were the same.

11. That, however, was not the end of these multifarious interlocutory applications because on 31st May 1999, there came before another master three summonses for determination. The first was that of the plaintiff seeking judgment against the defendants; the second was that of the defendants seeking security for costs; and the defendants, as a matter of caution, took out a summons for leave to file a defence, that summons being returnable that day. The master adjourned all three summonses to be heard together. However, 31st May 1999 was the last day upon which the defendants could properly appeal against Master Kwan's decision of 25th May. In order to preserve their position, they filed this appeal which now comes before me.

12. The plaintiff opposes this application. It appears that he is saying that the draft Defence is defective and that the masters had discretion to act as they did, that it has been almost one year since the original Statement of Claim was filed, and that there is, in any event, an adjourned hearing to deal with another time summons for extending the period in which the Defence should be filed.

13. I do not quite understand nor has it been explained to me why the Defence is said to be defective. As for the question of discretion of the masters, this appeal is by way of re-hearing. As for the one year delay, the answer is that the interim has been riddled with activity by the defendants and the plaintiff's claim was not fully formulated until April of this year. As for waiting until the adjourned hearing of the summons, which adjournment was granted on 31st May 1991, I see no point. It seems to me of prime importance to get on with this case and the best way of doing that is to allow this appeal.

14. Accordingly, I shall order that the order of Master Kwan dated 25th May 1999 be set aside, that the 1st to the 6th defendants shall be at liberty to file and serve their Defence within three days from the date of this order.

15. [Submissions on Costs. Order that costs of the application before the master and of this appeal be costs in the cause.]