XCHRX The Incorporated Owners of Wah Fat Industrial Building v. Lap Shing Investment (HK) Ltd.

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2620 OF 2001

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R U L I N G

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1. This is an order 14 summons. This hearing date was appointed in April and now Mr Wan, who appears for the defendants, is applying to file an affirmation by him, affirmed on 9 June and also another affirmation by a Mr Law, who is a director of the defendants. Both of those affirmations relate to a proposed counterclaim in this matter.

2. This counterclaim, I should observe, was promised in the defence which was filed in July of last year and nothing has been forthcoming since then.

3. The matter has been dealt with extremely slowly by the defendants and what is said by Mr Wan in justification of all this, is that apparently there was a fire at the defendants' offices before these proceedings were started, so some time in the early part of last year, and a number of documents were believed to have been destroyed in that fire.

4. At all events, the defendants' staff have had considerable difficulty in locating these documents and Mr Law, the principal director of the defendants, has also been out of Hong Kong for some time. The fact that Mr Law may have been out of Hong Kong for some time I do not think begins to justify this sort of delay. The fact that there was a fire is a more substantial reason but even so, the defendants appear to have dealt with this in a rather leisurely manner.

5. The counterclaim I can see is an important matter here. It is said in fact to exceed the value of the claim by a considerable amount. And if I were to refuse this application, I would effectively be shutting the defendants out. The plaintiffs say that if I were to let this evidence in, they would wish to apply for an adjournment and that they would be prejudiced because of course this matter would result in further delay, although I am bound to say the plaintiffs for their part have also taken a fairly leisurely approach to the litigation.

6. The statement of claim is dated June of last year and they waited until March of this year before taking out this order 14 summons. There would have been absolutely nothing to prevent them doing that in July of last year. Mr Hout, who appears for them, says that the reason for this is that they were waiting for the change in the District Court's jurisdiction and the expected transfer of the action to the District Court. But all of that would have provided no reason for delay in issuing the order 14 proceedings. That could have been done and everything could have been transferred in one go once it became possible for that course to be taken.

7. It is a balancing exercise. No one likes delay in these things where there has already been a history of delay. The defendants, who are inviting me to exercise an indulgence in their favour, have been guilty of really rather bad delay here.

8. But I am told that this matter can come back into my list on 19th July. And if I were to prevent the defendants from putting in this affirmation, I think I would be taking away a considerable limb of their case from them and I think, on balance, the justice of the situation is to let them put these affidavits in.

9. So I shall allow the defendants to file Mr Wan's affirmation, which is his second affirmation, together with its exhibits of course, and that of Mr Law and his affirmation also exhibits the proposed defence and counterclaim. The matter now will be adjourned to the 19th July at 2.30 pm.

8. I would have thought that the costs of and occasioned by this adjournment must be to the plaintiffs in any event.

9. Leave to the plaintiff to reply to these affirmations within 28 days if so advised.

(Discussion re exhibits)