BUILDTECH LTD v. HUNG WAN CONSTRUCTION CO LTD

DCCJ 1385/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1385 OF 2008

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D E C I S I O N

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1.  At the 16 December 2011 PTR hearing, I made an order allowing the plaintiff’s statement of issues of dispute dated 11 October 2011 to stand as the issues of dispute at the trial and for discovery on the issues and supplemental witness statements on the issues to be filed and served.

2.  The defendant is applying for leave out of time to appeal to the Court of Appeal against my order allowing the third issue on the plaintiff’s statement of issues of dispute at the trial, namely, the amount received by the defendant from the Hong Kong Housing Authority. 

3.  The defendant’s summons for leave to appeal out of time was taken out on 4 January 2012.  It was out of time because the time allowed for interlocutory appeals is 14 days.  The delay was not a long one because it was less than a week, it was out of time, nevertheless.  I will entertain it and consider the grounds of appeal.

4.  The first and second issues of dispute are:

(a) Whether or not there was a settlement agreement made between the parties in May 2003.

(b) Whether the defendant has continued to fail and refuse to pay the plaintiff despite the fact that the defendant received payment from the Hong Kong Housing Authority.

5.  It is not disputed that the plaintiff‘s claim against the defendant is for the sum of $700,000 under an agreement to settle the plaintiff’s loss on the Hong Kong Housing Authority’s cancellation of a contract to supply gondolas in a Hong Kong Housing Authority building project.

6.  The defendant denied there was a settlement agreement to compensate the plaintiff for its loss at $700,000.

7.  The trial date of this action was set down and fixed for 20 March 2012 to 23 March 2012.

8.  The plaintiff’s counsel, Mr Lam, submitted at the 16 December 2011 PTR hearing that the third issue is relevant to the determination of whether there was a settlement agreement in May 2003 for $700,000 because the intention of the parties, the context of the negotiations and the materialisation of events within the contemplation of the parties are essential elements which form the factual matrix of the case, that it is undesirable to exclude issues relating to the circumstances of the underlying dispute which gave rise to the settlement argument.  He submitted at the time and the amount of payment by the Housing Authority to the defendant are relevant to the probity of the defendant’s conduct in its continual refusal to compensate the plaintiff despite discovery of compensations from the Hong Kong Housing Authority.

9.  Mr Shaw representing the defendant submitted that the amount of payment to settle the cancellation of the gondola supply from the Housing Authority is irrelevant to the issue of whether there was a settlement agreement for $700,000 in May 2003, that there were unsuccessful attempts for discovery of documents relating to the issue previously before the Master and Judge Chan in 2009 and 2010, which the plaintiff did not appeal against.

10.  Mr Lam submitted that the plaintiff’s present position and its position on 19 February 2009 at the appeal against the Master’s decision before Judge Chan is different. It is not disputed that the plaintiff assisted the defendant in the preparation of the defendant’s claim for damages suffered in the Housing Authority’s cancellation of the supply of gondolas contract, that it was based on the plaintiff’s contract with the defendant and the plaintiff’s documents that the defendant successfully recovered payments from the Housing Authority. He submitted that the third issue and relating evidence should also determine the creditability of the defendant’s witness or witnesses at the trial.

11.  After careful consideration of the issues in dispute and of the witness statements filed by both parties, in particular the witness statement of Mr Tseng filed in October 2011, I decided at the hearing on 16 December 2011 that the third issue is of relevance to the determination of whether there was a settlement agreement for $700,000 in May 2003 because I find it to be essential to ascertain the motive for settling the plaintiff’s loss at the relevant time and for the relevant amount and what led to the agreement to settle, if there was indeed a settlement. 

12.  I am convinced the background information would assist the court to see the full picture of what was happening in April to May 2003 and to determine whose version is more credible.  That was why I allowed the third issue to be included and with the relevant documents to be disclosed for the purpose of the trial.

13.  The Rules of District Court on discovery and framing of issues are there to help the court to expedite the trial and to assist the court in determining the dispute.  Very often, limiting the number of documents would help the court and the parties to shorten the time required for trial but so long as it would not hinder the determination of the dispute. 

14.  Limiting the issues may lead to difficulties at the trial to determine the issue that is most important.  That is the reason trial judges often have PTRs before the trial to frame the issues. 

15.  The defendant’s late application for leave to appeal have resulted in the delay in the progress of compliance of the order of directions. 

16.  The defendant’s lodging an appeal to the Court of Appeal after the time specified by the rules would only add to the delay.  It has also demonstrated the defendant’s conduct would very likely result in the trial dates, fixed many months ago, would be vacated.  The trial dates set down was for four days, it should be ample time to determine all three issues of dispute.

17.  The parties should not be allowed to vacate the dates for trial.  The case should be determined as soon as possible and the parties should be ready to go to trial if the Court directions have been complied with.

18.  So far as the ground raised by the defendant on the application for leave is concerned, I cannot see the defendant has a realistic prospect of success to lodge the interlocutory appeal.  The trial should take place on the dates set down, it should be delayed no further and should take place on 20 March 2012. 

19.  For the foresaid reason, I refuse the application for leave to appeal with costs, to be taxed if not agreed.

(Discussion re costs)

20.  The application for appeal is not dishonest or malicious; it is a right conferred by the rules.  However, to make it out of time where the parties should have adhered to the timetable specified under the rules is contrary to the essential smooth running of these courts.  There is no stay of proceedings or compliance of the orders of directions.  In any event, costs should follow the event and since I have refused leave, the costs as a result of the application and of today’s hearing should be to the plaintiff, to be taxed if not agreed.  I will grant certificate for counsel.