XCHRX WILLIAM YOUNG HONG YUI and others v. BANK OF CREDIT AND COMMERCE HONG KONG LTD.

IN THE COURT OF APPEAL

1993, No. 185
(Civil)

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J U D G M E N T

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Penlington, J.A. :

1. On 6th May 1994, this court dismissed the appellants' appeal against an order made by Barnett, J. on 29th September 1993. The matter in contention concerned a guarantee given by the 1st plaintiff to the respondent and as to whether it imposed an immediate or contingent liability. It was a complex matter and was argued before this court by leading counsel from London and there were unquestionably difficult questions of law to be decided. It was also not in dispute that there were many other persons such as the 1st plaintiff who are in a similar position.

2. Not surprisingly therefore the plaintiffs applied to this court for an order granting them leave to appeal to Her Majesty in Council. The respondents consented to such an order and accordingly on 20th September 1994 I made an order by consent in the following terms:

"1. pursuant to Rule 2(a), 4 and 6 of the Order in Council Regulating Appeals from the Supreme Court or Court of Appeal for Hong Kong to Her Majesty in Council, the Plaintiffs be granted leave to appeal to Her Majesty in Council from the formal judgment herein of the Court of Appeal dated the 6th day of May 1994 on condition that:

(a) the 1st, 2nd & 3rd Plaintiffs within 2 months provide security in the sum of HK$200,000 and;

(b) the record be prepared and despatched within 3 months.

2. the hearing set down for 22nd September, 1994 be vacated and the costs of the Notice of Motion be costs in the Appeal.

3. there be liberty to apply."

3. It is not in dispute that the plaintiffs failed to comply with the terms of that order in that the HK$200,000 security was not paid within two months of the order and the record was not prepared and despatched within 3 months. The plaintiffs now seek leave to extend the time for both paying the security into court and preparing and despatching the record.

4. An affidavit in support of the application has been filed from Mr. A.F. Hill, which is to the effect that in late October the plaintiffs instructed him to explore the possibility of a settlement of this matter. While not happy with that course he was instructed to write to the respondent's solicitors, Messrs. Johnson Stokes & Master, inquiring whether such a settlement was possible. Accordingly on 21st November 1994, a "without prejudice" letter was sent. It should however be noted that the 21st November was the last day for complying with the order as regards lodging security for the appeal. Mr. Hill then goes on to say that there were negotiations between his firm and Messrs. Johnson Stokes & Master which however came to nothing and on 15th February 1995, Messrs. Johnson Stokes & Master were advised that the appeal to the Privy Council would go ahead and they were then asked if they were consent to an extension of time for payment of security into court and for despatch of the record. No such consent was received.

5. Mr. Hill says that the funds are available for payment of the security and that the record can now be processed by word-processor quickly and despatched.

6. On behalf of the respondents, Mr. Gabriel Tam has filed an affidavit in which he simply says that following the decision of this court the respondent will have to bring action against various debtor-customers who have however deposits with the respondent. This would be on the basis that those customers were not entitled to claim their debts as a set-off against the amounts they have guaranteed to pay the bank.

7. In the Incorporated Owners of Chungking Mansions v. Shamdasani, Civil App. 199 of 1991, Godfrey, J., as he then was, set out the factors which should be considered when the court exercised its discretion to extend the time for taking any step in connection with an appeal to the Privy Council. He said:

"This Court must consider before doing so (the extending time): (1) the length of the delay; (2) the reasons for the delay; (3) the chances of the appeal succeeding if an extension of time is granted; and (4) the degree of prejudice to the respondent if the application is granted."

He referred to the decisions in Norwich & Peterborough Building Society v. Steed [1991] 1 WLR 449 and Mallory v. Butler [1991] 1 WLR 458.

8. The decision was in relation to an application to file the initial application to appeal but in my view the same principles apply here.

9. This question was also considered in "the Adhiguna Meranti" [1988] 1 HKLR 410. There it was also a factor urged on the court to extend time that the matter was of great public importance. The same consideration is put forward here by Mr. Barlow, who appears for the plaintiffs.

10. Here the delay is substantial. Security should have been lodged on 21st November but it would seem that it was until 14th February that it was realised that time had expired and consent was sought from the other side.

11. The explanation given for the non-compliance with the time-table laid down is simply that discussions were going on between the solicitors and their clients regarding the prospect of coming to a settlement of the matter. There was not even negotiations with the other side on foot until the period of two months had expired.

12. It is difficult to say what the chances of success of this appeal are save that clearly it is a difficult matter and Mr. Barlow contends that it was always contemplated by all parties that the matter would eventually go to the Privy Council because it is a difficult matter and it affects not only these plaintiffs but many others with a total amount involved of some $700 million.

13. The respondent says that it has been prejudiced by the delay in this matter in that it has not been able to take action against the other depositors until there was some finality in this matter.

14. Mr. Harris for the respondent submits that as the order in council provides for a maximum period for lodging security of 3 months, this court should not extend the time to, in effect, give the respondents 5½ months to do so. However his main argument is that the affidavit from the plaintiffs' solicitors simply does not in any way explain why the payment for security was not made in time. There was when time expired no negotiations going on as to a settlement, the only steps that were being taken was internal discussions between the solicitor and his clients. He put forward similar arguments in relation to the delay in forwarding the record of proceedings.

15. In the Adhiguna Meranti, Cons, V.P. in refusing the application there, cited with the approval dicta of Lord Guest in Ratnam v. Cumarasamy [1965] 1 WLR 8 where he said:

"Litigants should not be given an unqualified right to an extension of time which would defeat the purpose of the rules, which is to provide a timetable for the conduct of litigation."

16. Cons, V.P. then said:

"In our view a timetable provided by the court, as it was in this particular instance, is equally important."

17. In my view precisely the same considerations apply here. I do take into account what has been strongly argued by Mr. Barlow that this is an important matter and that it was in the contemplation of the parties that it would eventually go to the Privy Council. I also take into account that there are other depositors who are in a similar situation to the plaintiffs here. Nevertheless the delay was by no means minor and I cannot regard the explanation put forward for that delay as forming any basis at all upon which I could exercise my discretion to extend the time which has been laid down for the doing of the various steps required in this matter. The application is therefore refused. The respondent is entitled to the costs of this application.