TANFORY LTD. t/a VOLVO NIGHTCLUB v. CHINA CITY NIGHT CLUB LTD. AND OTHERS

1987, No. A2482

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

---------------

---------------------

D E C I S I O N

---------------------

1. The defendants in these proceedings have made, in the past, defaults in "particulars" as well as "lists of documents". The description used by Master Perrior, "unhappy background is fairly accurate.

2. Came 16th December last year when the parties to this action, well represented, attended at the Chambers of Master Perrior. The defendants were ordered to make and serve further and better lists of documents within 14 days. Master Perrior raised the question of time. Counsel for the defendants suggested liberty to apply to extend time for complying with the order made. The Master found the suggestion of Counsel agreeable and an order was accordingly made. When the order of the 16th December was finally processed, perfected and filed, leave to apply for further time was not included.

3. Then the defendants found themselves in difficulty and more time was sought. The request made to the legal advisers of the plaintiff was not favourably received. Two applications were made by the defendants, one to have the order perfected and filed, amended under the slip rule and a further application, following to have an extension of time to make and serve the requisite further lists of documents.

4. The application for extension of time was filed within the 14 days' period allowed by Master Perrior for the making and serving of the lists of documents by the defendants. But that application for further time was not entertained and determined by the learned master until quite some time after the expiration of the said 14 days.

5. It is common ground that the master's order of the 16th December should have contained a provision for liberty to the defendants to apply for an extension of time. The application to have that order so amended was acceded to with full cooperation of the parties to this action.

6. When the application for an extension of time came to be heard by Master Perrior, it was strongly resisted by counsel for the plaintiff.

7. I have been reminded by Mr Swaine, leading counsel for the plaintiff, that in an application for an indulgence under an "unless" order, the applicant would virtually be at the mercy of the court. It was so graphically stated by Roskill L.J. in Samuels v. Linzi Dresses Ltd. [1981]1 Q.B 115 at p.126, Letter G. Relief would not likely be granted otherwise than upon stringent terms. Mr. Swaine further draws my attention to the proper manner in which judicial discretion should be exercised on a like application, as suggested in John Walker & Sons Ltd. v. Henry Ost & Co. Ltd. [1970] R.P.C. 151. Counsel leans heavily on the common sense approach of Fenton Atkinson, L.J. at p.156, line 15, where the Lord Justice said :

"I am quite satisfied that Mr Brightman is right in his submission that, to put it mildly, the second defendants are not really trying, and that it would be quite wrong to let them back into the case without an affidavit such as my Lord had outlined in his judgment."

8. Terms, so Counsel argues, should be more readily imposed on an applicant when he applies for an indulgence of this kind, particularly when he was in lack of due diligence.

9. The various provisions in O.24. r.2 and O.24 r.3(1) & (2) RSC would seem to suggest a somewhat narrow discretion in the courts to refuse an invitation to impose a term of verification when ordering discovery after default.

10. Insofar as the common sense approach of Fenton Atkinson, L.J. is to be understood in the sense that terms should readily be imposed if an applicant has not been shot in to have made a real effort in his preparation of a list of documents, with usual care and sincerity, I find the observation of the Lord Justice very helpful. But what must not be lost sight of is that on the 15th February this year, when the matter was argued before Master Perrior, verification was not independently applied for. It was then sought as a condition or term to be imposed on the defendants for granting an extension. No case was made out before the master of any deliberate or culpable delay; none has successfully been made out before me toady.

11. When verification was suggested to the master, I am told that no separate reason was advanced, save for the past conduct of the defendants in complying with court orders in this case. The request for verification was met by a casual remark of leading Counsel for the defendants that it was quite unnecessary but that if it should be done, verification should come from both parties.

12. In counsel's notes taken of the decision of Master Perrior, the master was recorded as having given reasons for not ordering verification. Quoting from the notes taken by counsel : "As to verification of this by affidavit, there is no good purpose to be served. This would be a minor irritant." Be that as it may, the order of the 16th December made last year by master Perrior gave liberty to apply for further time. I have commented that no case of deliberate or culpable delay has been made out, and indeed from counsel's record of what was said by Master Perrior, the view he expressed was :

"On balance, I am satisfied that the defendants are doing their best to comply with the terms of the order."

13. The master, no doubt, had jurisdiction to extend time; leave was expressly provided for in his order of the 16th December. There was no shortfall on the part of the defendants. On the contrary, the master was satisfied that the defendants had used their best endeavours to file the further and better list of documents.

14. Without neglect or culpability it would be, in my view, open to Master Perrior to refuse to impose any terms on the extension so granted by him on the 15th February when the parties returned under "liberty to apply".

15. Mr Swaine for the plaintiff seeks to draw a distinction between his client and the defendants as regards verification. The distinction is sought to be drawn principally because of the letters exchanged shortly before the hearing today. Mr Swaine submits that the defendants were in default but not the plaintiff; hence the defendants were at the mercy of the court as, so Counsel complains, the defendants "were not really trying" in complying with the order of Master Perrior. But that is not the conclusion reached by the master. Consequently, it cannot be legitimately contended, even on, the authorities as interpreted by Mr Swaine, that the defendants were in anyway at the mercy of the master on the 15th February.

16. Shortly before the hearing today, it was suggested by solicitors for the plaintiff that the appeal be, by consent, withdrawn with no order as to costs subject to the defendants agreeing to provide verification of their respective further lists of documents already filed and served. The suggestion on verification was acceptable to the defendants provided that the plaintiff reciprocated in the same direction. The defendants through their solicitors were at pains to point out to the solicitors of the plaintiff that the matter of verification, mutual or unilateral, was not a proper matter to be linked to the pending appeal against the order made by Master Perrior on the 15th February.

17. When the appeal was opened before me this morning Mr Swaine confined the plaintiff exclusively to the alternative prayer (ii) in the Notice of Appeal, which reads : "that each of the defendants do verify on affidavit or affirmation its respective further lists of documents."

18. I do not believe that verification could be a live issue between the plaintiff and the defendants after these events, but insofar as it was sought and is sought today as a term for the further time granted to the defendants on the 15th February, the plaintiff cannot succeed.

19. In the course of the arguments, criticisms were levelled at the late hearing of the summons for extension of time. There is no evidence as to how that application summons was fixed for hearing. I have not heard evidence that anyone had pressed for an eariler date. On the face of it, apparently it must have been treated as one of the run-of-the-mill fixed without opposition, objection or much ado. In those circumstances, it would be impossible for me to attach any blame to any of the parties to this action.

20. The rest of the Notice of Appeal has not been pursued. As for prayer (ii) in the alternative, I have held in favour of the defendants.

21. In conclusion, the appeal or what is left of it must be dismissed with costs to the defendants. Subject to what counsel have to say, I propose to order, saving time and the need for a fresh formal application from one or both parties, that the plaintiff and the defendants do, respectively, within 21 days, verify the lists or further lists of documents by a partner or a director or officer of the party concerned. If I do not have consensus on the matter, verification would have to be left to the plaintiff and the defendants on further applications to be made to the court. I order therefore (1) appeal dismissed, (2) costs to the defendants.

22. Mr Swaine for the plaintiff is not prepared to have his client subjected to the proposed order of verification, and I will, therefore, make no such order in respect to as well the plaintiff as the defendants. The formal order that I make is (1) Appeal dismissed, (2) Costs to the defendants in any event, (3) Certified fit for two counsel.