TAN KAH ENG v. TAN ENG KHIAM

HCA 9640/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 9640 OF 1999

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D E C I S I O N

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Introduction

1.  This is an appeal by the Defendant against the order of Master S Kwang dated 14 October 2008 dismissing the Defendant’s application to strike out this action for want of prosecution with costs of the hearing to the Plaintiff.  The sole ground for striking out which was argued before the master was the Plaintiff’s inordinate and inexcusable delay.  However, in this appeal, the Defendant also seeks to rely on an alternative ground of abuse of process.

The background

2.  The Plaintiff’s case is that between late 1997 and early 1998, he advanced six loans totalling S$3,120,190 and HK$3,000,000 to the Defendant, who is his uncle.  The loans were interest free and repayable on demand.  Each loan was evidenced by a payment voucher signed by the Defendant setting out the amount and stating that the payment was a loan.  In addition, in a letter dated 3 May 1998 the Defendant confirmed receipt of the six loans and undertook to repay them upon demand.  By an undated letter signed at the Hong Kong Park Hotel and a further letter dated 12 February 1999, the Defendant again acknowledged that he had borrowed substantial sums from the Plaintiff, alleged that he was in great financial difficulties and offered to repay the loans later or by instalments. 

3.  The Defendant denies that he had ever borrowed money from the Plaintiff.  His case is that in 1997 he entered into a business joint venture in the Republic of China (“PRC”) with the Plaintiff through Wai Wai Private Limited (“Wai Wai”), which was a company incorporated in Hong Kong.  He and the Plaintiff are the sole shareholders and directors of Wai Wai.  He handed over cash amounting to HK$2,700,000 to the Plaintiff on various occasions in 1997 as his contribution to the share capital of Wai Wai.  Wai Wai never commenced business and it was decided in April 1998 that Wai Wai be wound up and that the Defendant be repaid his capital contribution.  The Defendant was told by the Plaintiff to sign the payment vouchers for the purpose of remitting his contribution back to Singapore upon liquidation of Wai Wai.  It should be noted that on this account, the amount written on the payment vouchers far exceeded his alleged contribution.  Then, the Defendant altered his case by saying that a payment voucher in the sum of S$1,732,330 should have been in Hong Kong dollars in respect of money taken into the PRC for buying an apartment there through Wai Wai.  He also denied the signature on the letter dated 3 May 1998 was his and alleged that it was a forgery.

4.  On 17 May 1999, the Plaintiff’s former solicitors, Messrs Livasiri & Co (“Livasiri”), demanded repayment from the Defendant, but the Defendant did not respond.  On 5 June 1999, the Plaintiff issued another letter of demand to the Defendant.  Upon the Defendant’s failure to repay, the Plaintiff commenced this action on 11 June 1999 with a concurrent writ together with a statement of claim served on the Defendant in Singapore on 11 November 1999.

5.  The Defendant did not file a defence but instead applied for stay of the action on the ground of forum non conveniens on 25 January 2000 (“FNC Summons”).  He filed two affidavits in support of the FNC Summons, setting out in detail his case, the documentary evidence he relied on and his answers to the factual matters raised in the Plaintiff’s affidavit in opposition challenging the veracity of the defence.  The FNC Summons was heard and dismissed by Master Barnes, as she then was, on 2 June 2000.  The family members then commenced negotiation.

6.  Thereafter, the litigation progressed with reasonable despatch.  The Defendant filed his defence on 22 June 2000.  Usual directions were given by the master on 16 August 2000.  On 11 September 2000, Master Poon, as he then was, gave directions for discovery and filing of witness statements within 60 days.  The Plaintiff’s list of documents was filed on 13 October 2000.  On 8 November 2000, Livasiri provided copies of  the Plaintiff’s documents to the Defendant’s solicitors as requested.  The Defendant filed his list of documents on 11 November 2000, followed by an amended list on 20 April 2001. 

7.  By July 2001, the family negotiation broke down.  The Plaintiff changed to his present solicitors, Messrs Danny Lau & Lam (“DL&L”) and sought release of his documents from Livasiri.  On 6 August 2001, Livasiri refused to release the Plaintiff’s documents in their possession to DL&L by asserting a lien.  On the following day, the Plaintiff was arrested and detained by the police in Zhuhai in the PRC. 

8.  For the ensuing six years from 7 August 2001 to 6 July 2006, the Plaintiff was detained in the PRC.  He said that he was arrested and prosecuted for having offended someone important in Zhuhai.  He was prosecuted and convicted of conspiracy to defraud.  He was sentenced to fourteen years of imprisonment and fined RMB 500,000 by the Intermediate People’s Court of Zhuhai.  He appealed to the Higher People’s Court of Guangdong Province.  His conviction was quashed and his case was remitted back to the Intermediate People’s Court of Zhuhai for re-trial.  However, no re-trial took place.  Instead, the Higher People’s Court of Guangdong Province substituted his sentence and fine with a sentence of five years’ imprisonment.  On 17 May 2005, while still in detention, the limitation period for recovery of the loans expired.  The Plaintiff was released from prison on 6 July 2006.

9.  The Plaintiff took no action in relation to this litigation during the first six months of his release from detention.  He then liaised with the PRC police for the release of documents relevant to this case.

10.  In February 2007, the Plaintiff resumed action in this litigation.  He contacted DL&L and instructed them to enforce the Allocatur on costs on the FNC Summons obtained on 26 March 2001.  On 19 March 2007, he instructed Singaporean lawyers to advise on the enforcement of the Allocatur against the Defendant in Singaporean.  Two months later, the Defendant filed a notice of intention to proceed on 19 May 2007.  On 21 May 2007, DL&L demanded the Defendant to pay costs as per Allocatur.  The Defendant did not pay.

11.  Between June 2007 and March 2008, the Plaintiff liaised with Livasiri for release of his documents in their possession but without success.  In the meantime, in June 2007, the PRC police released some documents to the Plaintiff.  In July 2007, the Plaintiff instructed DL&L to consider possible bankruptcy proceedings against the Defendant by reason of his non-payment of the Allocator.  He was advised not to commence bankruptcy proceedings against the Defendant as the Defendant was not a resident in Hong Kong.  Unknown to the Plaintiff then, the Defendant suffered a stroke and became mentally incapacitated on 4 October 2007.

12.  Between February and March 2008, the Plaintiff sought advice from DL&L on how to proceed with the action in the absence of relevant documents.  DL&L also obtained some documents from the court.  Upon obtaining the material documents, the Plaintiff filed a notice of intention to proceed on 2 April 2008.

13.  In May 2008, DL&L sought inspection of documents from the Defendant’s solicitors, Messrs John Ip & Co (“JI”).  JI replied that time for inspection had long passed and intimated that an application to strike out the Plaintiff’s action for want of prosecution was under active consideration.  Then the Plaintiff issued a summons for inspection of documents which was followed by the Defendant’s summons to strike out this action for want of prosecution.  On 27 June 2008, JI informed the Plaintiff of the Defendant’s mental condition.  On 21 July 2008, the Defendant’s brother was appointed guardian ad litem of the Defendant.  The parties filed affidavits in support of their summonses.  On 14 October 2008, Master Kwang allowed the Plaintiff’s summons for inspection and dismissed the Defendant’s Summons to strike out.

14.  It was recently discovered that the original of the payment vouchers and the three acknowledgement letters which had been in the possession of Livasiri who asserted a lien over them cannot be found, though copies were available.

The applicable legal principles - inordinate and inexcusable delay

15.  The applicable legal principles which govern an application to dismiss an action for want of prosecution were laid down by Lord Diplock in the House of Lords in Birkett v James [1978] AC 297.  His Lordship said at 318:

“The power should be exercised only where the court is satisfied either (1) that the default has been intentional and contumelious, e.g., disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court; or (2) (a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to caused or to have cause serious prejudice to the defendants either as between themselves and the plaintiff or between each other or between them and a third party.”

16.  The Defendant is seeking to strike out the Plaintiff’s action on the second ground expounded in Birkett v James.  Three requirements have to be satisfied:

(1) that there has been inordinate delay;

(2)  that such inordinate delay is inexcusable; and

(3) that such inordinate and inexcusable delay -

    (a)   will give rise to a substantial risk that it is not  possible to have a fair trial of the issues in the action; or

    (b)   is such as is likely to cause or to have caused   serious prejudice to the defendant.

17.  It is only to be expected that the burden of proving inordinate delay rests on the applicant, i.e. the defendant, seeking to strike out the action.  Inordinate delay is prima facie inexcusable.  Whether the facts are such as to excuse an inordinate delay are exclusively known to the respondent, i.e. the plaintiff.  Thus, once inordinate delay is proved, it is up to the plaintiff to show such delay is inexcusable.  If the plaintiff fails to discharge that burden, the action shall be struck out.  If the plaintiff succeeds, the defendant has to prove either the delay will give rise to a risk that a fair trial is not possible or that he is likely to suffer or has suffered serious prejudice: see Trill v Sacher [1993] 1 All ER 961 per Neill LJ at 980 and Gobind Mohan & Anor v McElney & Ors [1981] HKC 518.  A causal link must be proved between the delay and the inability to have a fair trial or other prejudice as the case may be: see Rath v CS Lawrence & Partners [1991] 3 All ER 679.

18.  Miss Sit, counsel for the Plaintiff, submits that the Writ of Summons and the Statement of Claim in this action was issued shortly after the cause of action accrued on 17 May 1999 when Livasiri formally demanded repayment of the loan and that since then the action progressed with reasonable despatch until the Plaintiff’s arrest in Zhuhai on 7 August 2001.  It can hardly be disputed that there was a period of inaction for six years and eight months between then and 2 April 2008 when the Plaintiff filed his notice of intention to proceed.  Such delay must be inordinate.  The issues are therefore whether such delay was inexcusable and as a result there is a risk that a fair trial is not possible or that the Defendant is likely to suffer serious prejudice.

Whether the delay was inexcusable

19.  Miss Sit divides the delay since 7 August 2001 until 2 April 2008 into three periods:

(1)   the first period: from 7 August 2001 until 6 July 2006 which was four years and eleven months when the Plaintiff was incarcerated in the PRC;

(2)   the second period: from 7 July 2006 to January 2007 which was about six months after the Plaintiff was released from prison in the PRC; and

(3)   the third period: from January 2007 to 2 April 2008 when the Plaintiff took his first steps in resuming the present action until he filed a notice of intention to proceed.

While I agree that it is convenient and helpful to divide the delay into three distinct periods and consider if the delay in respect of each period was excusable, the question whether the delay as a whole was excusable must be looked at in the round.  Thus, even if the delay in respect of each period was excusable, if viewed separately, it does not necessarily follow that the delay as a whole was excusable.

20.  In respect of the first period (i.e. 7 August 2001 till to 6 July 2006), Miss Sit submits that the delay was clearly excusable as the Plaintiff was in detention and had no access to his solicitors in Hong Kong.  Mr Liu, counsel for the Defendant, argues to the contrary.  I was referred to a number of apparently conflicting authorities.

21.  In Peeling v Guidice 186 EG 113 [1963] EGD 499, a tenant, who was serving a term of eighteen months’ imprisonment, failed to give notice to his landlady to extend the term of his lease.  The trial judge rejected the tenant’s argument that the notice he gave on the first day of his release from prison was effective.  The tenant’s appeal was dismissed by the English Court of Appeal.  It seems that the appeal was dismissed by Lord Denning MR on the basis that being in prison was no reason whatever for the tenant not giving notice to renew in time. 

22.  In Gobind Mohan & Anor v McElney & Ors, Rhind J followed Peeling v Guidice and held obiter at 524B that being in prison did not suffice to excuse delay.  For my part, I would hesitate to apply considerations relevant to relief against strictness of time in the case of an option to renew a lease to striking out for want of prosecution.  The real reason for the delay in that case, which the court found was inexcusable, was the plaintiff’s lack of finance.  That, of course, could not be faulted.

23.  In Konstantin M Eyermann Gmbh v Brown (1992) (unreported), the English Court of Appeal regarded a delay of fourteen months occasioned by the plaintiff’s imprisonment in Germany as excusable.

24.  In Prosperfield Ventures Ltd v Tripole Trading Ltd & Ors; Panco Industrial Holdings Ltd v Ding Peng & Ors [2002] 4 HKC, Stone J had to consider whether imprisonment in the PRC coupled with post-imprisonment illness was sufficient to excuse a delay of six years.  Stone J did not consider Mohan v McElney and Konstantin M Eyermann Gmbh v Brown as having conclusively established as a matter of broad principle that being in prison necessarily suffices or does not suffice to excuse delay.  He held, which I respectfully agree, that the answer must depend on the specific circumstances which the court is required to evaluate in order to arrive at a result in any particular case.  In Mohan v McElney, the plaintiff was serving a prison within the jurisdiction.  In Konstantin M Eyermann Gmbh v Brown, the plaintiff was serving a sentence abroad.  The distinction is certainly important in terms of the degree and ease of access which the detainee has to his lawyers, quite apart from the question whether access is at all allowed.  In addition, the detainee’s health, mental and other conditions, if relevant, during and immediately after his term of imprisonment may also be relevant.  On the facts of the case before his Lordship, Stone J considered the delay of six years as a result of imprisonment and ill-health after release from the detention was not inexcusable.  I respectfully agree.

25.  In the present case, the Plaintiff was imprisoned for a period of four years and eleven months.  The Plaintiff said that during his detention he was not allowed to contact anyone other than his PRC lawyers.  This assertion is not challenged by the Defendant.  I am in no position to form any view about the truthfulness of the Plaintiff’s assertion.  While there are signs that the judicial process and correctional services in the PRC are become more transparent, there is, nevertheless, an air of mystery surrounding the Plaintiff’s prosecution.  Despite that his conviction and sentence ordered by the Intermediate People’s Court of Zhuhai were quashed by the Higher People’s Court of Guangdong Province and a re-trial ordered, the Plaintiff’s case was never remitted back to Intermediate People’s Court of Zhuhai for re-trial.  Instead, the Higher People’s Court of Guangdong Province imposed a sentence of five years’ imprisonment on the Plaintiff.  The Plaintiff’s assertion that he was not allowed to contact anyone other than his PRC lawyers cannot be disregarded. 

26.  Miss Sit submits that in the circumstances, it was impossible for the Plaintiff to give instructions or meaningful instructions to DL&L for the further conduct of this action.  Mr Liu submits that the Plaintiff was not held incommunicado and could have given instructions to DL&L through his PRC lawyers.  It should be recalled that the Plaintiff had only retained DL&L for not more than two weeks before he was arrested and detained in Zhuhai.  At the time, Livasiri was refusing to release documents to the Plaintiff.  In other words, DL&L lost contact with the Plaintiff before they were properly briefed.  In the circumstances, what could the Plaintiff have done?  What instructions could he have given to DL&L?  How could DL&L have sought instructions from the Plaintiff?  How could the Plaintiff have made an affidavit, if so required?  How could the Plaintiff have made available documents not previously provided to DL&L?  I think it is unrealistic to argue that the Plaintiff could have given any meaningful instruction to DL&L in the circumstances, even if the need to do so had occurred to him.  I find that the delay is excusable.

27.  In respect of the second period (i.e. 7 July 2006 till to January 2007), the Plaintiff explained that he took six months to recover from the aftermath of his detention and to tidy up his family and business affairs.  Miss Sit submits that it was entirely reasonable for the Plaintiff after five years of incarceration in a foreign prison to take a few months to recuperate and tidy up his affairs.  Hence, she submits that this period is likewise excusable.  It is impossible to define what is a reasonable period for one to recuperate after a long period of incarceration in a foreign prison.  It depends on a multitude of factors which are impossible to enumerate.  Those factors are largely psychological, emotional and include the reason for the detention, the age and personal make up of the detainee and most importantly the traumatic experience the detainee had been subjected to.  The Plaintiff asserts that he had been prosecuted for having offended someone important in Zhuhai, tortured, forced to confess to something he had not done and wrongly convicted.  He was not permitted to communicate with anyone other than his PRC lawyers.  Though he does not claim to have suffered any post-imprisonment illness, those factors must have an impact on him.  He is a businessman of some substance, being able to make an unsecured loan of HK$20 million to his uncle.  He must have quite some business loose ends to tie up and more urgent matters to attend to after his release.  A period of inaction for six months cannot be castigated as inexcusable.

28.  During the third period (i.e. January 2007 till to 2 April 2008), the first thing the Plaintiff did was to liaise with the PRC police for release of documents relevant to this action.  Then he instructed DL&L to enforce the Allocatur against the Defendant in respect of the costs of the FNC Summons.  He also sought his Singaporean lawyers’ advice on enforcement of the Allocatur.  In June 2007, the PRC police released some documents to the Plaintiff.  None of those steps taken during those six months can be said to be directly related to the further conduct of this action.  However, his liaison with the PRC police for documents is a preparatory act related to this action.  He started liaison and could only wait for response from the PRC police.  While waiting, he received the Defendant’s notice of intention to proceed.  In the meantime, he obtained legal advice from his Singaporean lawyers and sought to enforce the Allocatur for the purpose of testing the water to ascertain if it was still worthwhile to pursue his substantial claim against the Defendant.  The Defendant did not pay.  That is not conclusive of the Defendant’s lack of means.  Though the test proved futile, the steps taken are not unreasonable or not worth taking.

29.  Upon the Defendant filing his notice of intention to proceed in May 2007, the Plaintiff clearly stepped up his effort in preparation for the trial of this action.  The Plaintiff liaised with Livasiri in June 2007 for release of his documents, but without success.  Again, he could only wait, though he should have started taking that step much earlier.  It is clear from the Plaintiff’s List of Document filed by Livasiri on 13 October 2000 that Livasiri had the original of the six payment vouchers, the three letters of acknowledgment allegedly signed by the Defendant dated 3 May 1998, an undated letter signed at the Hong Kong Park Hotel and another letter dated 12 February 1999.  Livasiri persistently declined confirming if the documents were lost.  That must have delayed the Plaintiff from taking any further steps in this action.  When it became obvious that Livasiri could not produce the documents, the Plaintiff sought advice from DL&L in February and March 2008 on how to proceed with the action in the absence of those documents.  DL&L then obtained copies of material documents from the court, but those documents did not include the original documents withheld by Livasiri.  Then the Plaintiff filed the notice of intention to proceed on 2 April 2008.  There is no inaction during this period. 

30.  Mr Liu submits that a delay of one year and nine months for the second and third periods taken together was far too long and inexcusable.  During the combined period, the Plaintiff was assembling all necessary documents and taking preparatory steps for the trial of the action.  With hindsight, some of the steps taken by the Plaintiff during the third period could have been taken earlier or in parallel with other steps.  Obviously, negotiation with Livasiri was the Plaintiff’s best option and surest means to repossess the six payment vouchers and three letters of acknowledgment signed by the Defendant.  The Plaintiff could not be blamed for putting all his hopes in Livasiri.  But as the events turned out, even if the Plaintiff were prepared to pay whatever Livasiri demanded, Livasiri could not produce the documents.  Livasiri was equivocal even as of December 2008 (which was well after the hearing before the master) as to the whereabouts of the documents.  It was only until January 2009 that Livasiri impliedly admitted that the documents were lost as not being in their possession and imputed the blame on the handling solicitor who had left their employ.  Given the rather irresponsible and dilatory attitude of Livasiri, the Plaintiff could not be blamed for the delay caused by Livasiri.  Even if the second and third periods are taken together, I do not consider the delay inexcusable.

31.  When viewed in the round, I would not castigate the delay since the Plaintiff’s release from detention in the PRC until the time he filed his notice of intention to proceed inexcusable. 

Risk of no fair trial and prejudice to the Defendant

32.  Having found the delay not inexcusable, the burden is on the Defendant to prove either that the delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or that the delay is such as is likely to cause or to have caused serious prejudice to the Defendant. 

33.  The risk and/or prejudice suffered by the Defendant is that he is now aged 71 and has suffered a massive heart stroke resulting in a vegetative state.  He is now acting by his guardian ad litem.  As such, he will not be able to give instructions to his solicitors both before and during trial on factual matters or to assist in cross-examination of the Plaintiff’s witnesses.  In addition, he is being prejudiced by the witness statement of Cheng Qiming purportedly signed in March 2001 but which the Defendant never had an opportunity to respond or to give instructions to his solicitors. 

34.  The pleadings in this action are closed.  The Plaintiff’s case is very straightforward.  He advanced six loans to the Defendant as evidence by six payment vouchers signed by the Defendant.  The Defendant denies ever receiving the loans.  He tendered an explanation how he came to sign the payment vouchers.  He did not dispute the authenticity of his signatures on those payment vouchers.  He said that the letter of acknowledgement dated 3 May 1998 allegedly signed by him was a forgery.  The main issue which arises for determination in the present case is very simple and straightforward, i.e. whether the Plaintiff did advance the six loans to the Defendant as evidenced by the six payment vouchers and the three acknowledgement letters.  There are other side issues related to the truth or falsity of the Defendant’s explanation, i.e. whether he invested with the Plaintiff in Wai Wai and signed the payment vouchers for the purpose of refunding his investment in Wai Wai.  There are also side issues related to the truth or falsity of the Plaintiff’s version, i.e. whether the money allegedly advanced to the Defendant was for various purposes, including buying an apartment in the PRC for the Defendant’s girlfriend.

35.  The Defendant has pleaded a very detailed defence, which is supported by his two affidavits filed for the purpose of the FNC Summons.  Even though those affidavits were filed for the purpose of supporting the FNC Summons, they were very detailed and exactly mirrored the defence subsequently pleaded.  The Defendant’s second affidavit also dealt with the Plaintiff’s response to his first affidavit.  No evidence is needed to support his denial which has already been pleaded.  As for his explanation about signing the payment vouchers, it is already set out in great details in his affidavits which are amply supported by documentary exhibits.  Those exhibits have been disclosed in the Defendant’s List of Documents.  Though by reason of his incapacity he will be unable to give evidence, the evidence he needs are already contained in his defence and affidavits which will stand as his evidence at trial.

36.  Mr Liu argued that the Defendant has not prepared a witness statement.  There was an order made as early as 11 September 2000 directing preparation and filing of witness statements.  The Defendant failed to comply.  It is not open to him now to rely on his own default.  In any event, there will be no prejudice to him as his two affidavits will stand as evidence at trial.

37.  In addition, his guardian ad litem claimed that he is very close to the Defendant, that the Defendant confided in him all his personal and financial affairs, including full information on the present dispute and that he attended all the Defendant’s meetings with his lawyers when the Defendant gave instructions on the background and dealings between the parties.  As such, not only will the guardian ad litem be able to give evidence on behalf of the Defendant, he will be able to give full and effective instructions to counsel on the conduct of the trial including cross-examination of the Plaintiff and his witnesses.  It is argued that the guardian ad litem may not have knowledge about the Defendant’s affairs with his girlfriends which are side issues in the trial.  These are not matters which the court will not be able to resolve on the assumption that the allegation is denied by the Defendant.  Furthermore, the Defendant’s family members had participated in negotiation with the Plaintiff for settlement of the dispute.  The family members must have some details about the Defendant’s case.

38.  Mr Liu submits that according to the Defendant’s handwriting expert, it is essential to examine the original of the three acknowledgement letters.  Hence, Mr Liu submits that the Defendant is deprived of the benefit of having his alleged signatures on the letters examined by a handwriting expert as the original documents are no longer available.  But, according to the Plaintiff’s expert, as long as clearly legible copies of the signatures are available an opinion as to their authenticity could still be formed by comparison with other sample signatures from the same period.  Mr Liu further argues that it is not clear whether Livasiri indeed had the original documents and the signatures on the copies of the letters could have been forged by photocopying from a genuine signature and the expert would have difficulties in testifying on their genuineness.  On 11 September 2000, Master Poon, as he then was, ordered filing of lists of documents and inspection within seven days thereafter.  The Defendant requested for and was provided with copies of the letters on 8 November 2000 but did not seek to inspect the three original acknowledgement letters, which were then available.  He did not even see fit to obtain expert evidence.  The Defendant is alleging forgery and bears the burden of proof.  If he is at all serious in that defence, he should have examined the three original acknowledgement letters or obtained expert evidence on the first available opportunity.  He cannot now complain for risk of no fair trial or prejudice when the situation was created by his own default. Examining copies certainly affects the quality of the expert evidence.  Ultimately, that is a question of weight for the court.  Lastly, on the question of the genuineness of the signatures, it is argued that no fair trial is possible and the Defendant is prejudiced as he is now unable to give any sample signatures for the expert’s analysis.  This argument can be readily dismissed as it is well known that control signature samples are only to be taken from signatures created at around the same time as the questioned signatures.  Sample signatures to be given by the Defendant now almost eleven years later will only be rejected by an expert.  By not seeking expert evidence back in 2000, he forwent his benefit of adducing meaningful expert evidence.

39.  As for the risk of no fair trial or prejudice to the Defendant caused by the evidence to be given by Cheng Qiming which the Defendant had no opportunity to respond to, that is a matter which the trial judge will no doubt be able to avoid.

40.  The Defendant has completely failed to condescend onto particulars on what evidence is said to be relevant and to which issues, and whether such evidence is no longer available.  Counsel is only able to advance some arguments based on the inability of the Defendant to testify in the witness box and the loss of the opportunity for his expert to examine the three original acknowledgement letters caused by his own default.  He may not benefit from his own default.  I am quite unable to find that the delay will give rise to any substantial risk that it is not possible to have a fair trial of the issues in the action or that the delay is such as is likely to cause or to have caused serious prejudice to the Defendant.

Defendant estopped from striking out the Plaintiff’s action

41.  To reinforce the Plaintiff’s position, Miss Sit relies on estoppel.  The principle has been very succinctly summarised by Lord Denning MR as approved by Lord Browne-Wilkinson in Roebuck v Mungovin [1994] 2 AC 224 at 236F-237B as follows:

“Where a plaintiff has been guilty of inordinate and inexcusable delay which has prejudiced the defendant, subsequent conduct by the defendant which induces the plaintiff to incur further expense in pursuing the action does not, in law, constitute an absolute bar preventing the defendant from obtaining a striking-out order.  Such conduct of the defendant is, of course, a relevant factor to be taken into account by the judge in exercising his discretion whether or not to strike out the claim, the weight to be attached to such conduct depending upon all the circumstances of the particular case.  At one extreme, there will be cases like the present where the defendant’s action are minor (as compared with the inordinate delay by the plaintiff) and cannot have lulled the plaintiff into any major additional expenditure: in such a case a judge exercising his discretion will be likely to attach only slight weight to the defendant’s action.  At the other extreme one can conceive of a case where, the plaintiff having been guilty of inordinate delay, the defendant has for years thereafter continued with the action thereby leading the plaintiff to incur substantial legal costs: in such a case the judge may attach considerable weight to the defendant’s activities.  But it is for the judge in each case in exercising his discretion to decide what weight to attaché in all the circumstances of the case to the defendant’s action …”

42.  The Defendant’s conduct relied on by the Plaintiff is the filing of his notice of intention to proceed on 19 May 2007.  The Plaintiff alleges that the Defendant was aware of his release from prison and hence filed the notice.  As a result, he was led into the belief that the Defendant would go ahead with the action.  Hence, he stepped up his preparation for the action and incurred significant costs in instructing DL&L and his Singaporean lawyers in taking various steps and advising on different matters arising from his claim.

43.  According to the Defendant’s brother, the guardian ad litem, the Defendant filed the notice in preparation for the striking out application and then waited to see how the Plaintiff would react.  It is trite that such notice needs not be filed if the only action contemplated is to strike out an action want of prosecution: see Hong Kong Civil Procedure 2008: paragraph 3/6/1.  In the circumstances, it is not open to the Defendant to argue that he could not have meant that he intended to proceed with the action.  Hence, Miss Sit argues that by filing the notice, the Defendant took the risk that the Plaintiff would take steps to proceed with the action and if the Plaintiff did take any such steps the Defendant should not be allowed to have the action struck out.

44.  A notice of intention to proceed is not a step in the action, but simply a notice to indicate that a step in the action is going to be taken: see Hongkong & Shanghai Banking Corp Ltd and Kuan Tao Sheng & Others, [1998]2 HKLRD 585.  The expression of such an intention is nevertheless a conduct which the Plaintiff is entitled to act upon.  What steps has that conduct induced the Plaintiff to take?  Prior to receiving the notice, the Plaintiff had already initiated preparatory steps in re-activaing this action.  He had liaised with the PRC police for release of documents seized from him, instructed DL&L to enforce the Allocatur and sought advice from his Singaporean lawyers.  He had initiated those steps even without being provoked by the notice.  With or without the notice, he would have continued on his course just the same.  The only more significant steps he took since receipt of the notice were to liaise with Livasiri for the return of his documents and obtaining copies of documents from the court.  He would have taken those steps in any event if he intended to proceed.  As for the other steps, such as instructing DL&L to demand payment of the Allocatur and considering bankruptcy proceedings against the Defendant, they were just follow up steps already initiated prior to his receipt of the notice.  On balance, I think the Defendant’s filing of the notice was so trivial that the Plaintiff could have adopted the attitude of wait and see and taken no steps if he was not himself desirous of re-activating this action.  I am unable to conclude that he was led into taking the steps he took and incurring the costs as a result of the Defendant’s filing of the notice of intention to proceed.

Abuse of process

45.  Lastly, Mr Liu seeks to strike out the Plaintiff’s action on the ground of abuse of process.  This is not a ground relied on in the Defendant’s Summons for striking out and Miss Sit objects to the Defendant’s belated reliance on this ground.  I shall, nevertheless, deal with it.

46.  Mr Liu submits that it is an abuse of process for a plaintiff to maintain an action when he has no intention of carrying it to trial and such an action is liable to be struck out.  He quoted the following dicta of Lord Woolf in Grovit v Doctor [1997] 1 WLR 640 at 643B-F in support of his proportion: 

“The requirement laid down by the second principle that the delay has to cause “serious prejudice” to the defendants can and has been the subject of criticism.  It is suggested (1) the effectiveness of the court’s power to strike out proceedings as a sanction against delay is undermined by the need to show prejudice to the defendants.  This requirement prevents the court taking into account the adverse effect which delay can have on the reputation and efficiency of the civil justice system as a whole.  Defendants (for reasons which will be explained later) find it difficult to establish prejudice, so the requirements of the Rules of the Supreme Court and the County Court Rules as to time can usually be ignored with a reasonable degree of confidence that nothing very serious will happen in consequence.  Actions therefore take much longer to come to trial than they should and the general impression given to the public is that litigation is a very long drawn-out process with which they should try to avoid becoming involved.  (2) What is regarded as capable of amounting to prejudice is too restricted.  Normally little regard is paid to the anxiety caused to litigants as a result of litigation.  The fact that a defendant will normally recover his costs if he succeeds is regarded as providing a sufficient protection to the defendant for the consequence of being involved in the proceedings.  This is far from being the position, the costs payable do not usually indemnify the defendant for the cost actually incurred and their recovery is delayed.  (3) In order to establish prejudice a defendant is required usually to show that the delay has prejudiced him in the conduct of his defence.  This will involve him in having to demonstrate, for example, that his witnesses’ recollection has been adversely affected.  Relying on this sort of ground is all right from the defendant’s point of view if the action is struck out but can be unfortunate if the action is not struck out since he has undermined his own case by his comments about his witnesses.”

The purpose of Mr Liu’s reliance on Grovit v Doctor obviously is to avoid the need of proving risk of no fair trial or prejudice to the Defendant which he may have difficulties in establishing.

47.  The above dicta were just Lord Woolf’s criticisms of the traditional approach in Birkett v James.  They are not intended to be a statement of legal principle.  The principle of striking out for abuse of process is to be found in Lord Woolf’s speech at 647F-648A, as follows:

“… I am satisfied that both the deputy judge and the Court of Appeal were entitled to come to the conclusion which they did as to the reason for the appellant’s inactivity in the libel action for a period of over two years.  This conduct on the part of the appellant constituted an abuse of process.  The courts exist to enable parties to have their disputes resolved.  To commence and to continue litigation which you have no intention to bring to conclusion can amount to an abuse of process.  Where this is the situation the party against whom the proceedings is brought is entitled to apply to have the action struck out and if justice so requires (which will frequently be the case) the courts will dismiss the action.  The evidence which was relied upon to establish the abuse of process may be the plaintiff’s inactivity.  The same evidence will then no doubt be capable of supporting an application to dismiss for want of prosecution.  However, if there is an abuse of process, it is not strictly necessary to establish want of prosecution under either of the limbs identified by Lord Diplock in Birkett v James [1978] AC 297.  In this case once the conclusion was reached that the reason for the delay was one which involved abusing the process of the court in maintaining proceedings when there was no intention of carrying the case to trial the court was entitled to dismiss the proceedings (emphasis added).”

The principle is clear.  It is an abuse of process to commence and to continue litigation which one has no intention to bring to conclusion and such action is liable to be dismissed for want of prosecution.  Though Lord Woolf expressly stated at 644G that the appeal before the House of Lords was not an appropriate vehicle for making significant inroads on the principles endorsed by Lord Diplock in Birkett v James, as observed by Woo V-P in New China Hong Kong Group Ltd & Another and AIG Asian Infrastructure Fund LP & Others [2005] 1 HKLRD 383 at 392, the practical effect of Lord Woolf’s dicta is that where there is abuse of process, it is no longer necessary to prove risk of no fair trial or likely prejudice suffered by the defendant under the second limb of Birkett v James.  However, Woo V-P was of the opinion that Grovit v Doctor should be regarded as an identification of a facet of abuse of process.  His Lordship then went on to consider other conduct amounting to abuse of process, such as a series of inordinate and inexcusable delays in complete disregard of the rules of the court and with full awareness of the consequences. 

48.  I respectfully adopt that view.  The rationale for the doctrine in Grovit v Doctor is simple.  The process of the court must be used bona fide and properly, for example, in resolving disputes between the parties.  The process must not be abused.  If someone invokes the process of the court for purposes other than those which are bona fide and proper, it is an abuse of process.  Where appropriate, the court will summarily prevent its machinery from being used as a means of vexation and oppression in the process of litigation by having the proceeding struck out as an abuse of process.  The court may strike out pleadings which are abuse of the process of the court and in appropriate case may order the action stayed or dismissed either under Order 18 rule 19(1)(d) of the Rules of the High Court or in the exercise of its inherent jurisdiction.  The conduct which may amount to abuse of process may take many different forms and the categories of such conduct is never closed.  Delay, however inordinate and inexcusable alone, does not amount to abuse of process: see Choraria v Sethia [1998] CLC 625 per Nourse LJ after referring to Birkett v James and Grovit v Doctor.  But, where the reason for the delay is because of a total lack of intention to bring the proceeding to its conclusion, it amounts to an abuse of process.  A specific instance of such an abuse of process is, as described by Lord Woolf, where a plaintiff commenced and continued the proceeding without any intention whatever of bringing it to its conclusion.  If a plaintiff had no intention of prosecuting his claim right at the inception of the proceeding or while maintaining the proceeding, the proper reason for striking out such an action is want of prosecution. 

49.  While the need to prove risk of no fair trial and prejudice under the second limb in Birkett v James is rendered unnecessary, that requirement is replaced by a requirement which is no less stringent of proving an abuse of process in maintaining proceedings when there was no intention of carrying the case to trial when the proceeding was commenced as well as during the course when it was continued.  Except in cases with very peculiar facts, one seldom finds expressed statement of such lack of intention from the plaintiff.  This lack of intention is usually to be inferred from inordinate delay which is inexcusable and all the circumstances.  Where the delay is inexcusable, the longer the delay the more readily the inference of lack of intention to prosecute the claim can be inferred.  But, if the delay is not inexcusable, there is no room for any inference of such lack of intention to be drawn.  Furthermore, of necessity, the burden of proving abuse of process is a very high one. 

50.  The factual basis relied on by the Defendant as proving abuse of process are: (1) the long delay on the part of the Plaintiff since October 2000; (2) the Plaintiff’s knowledge of the consequence of long delay without action as reminded by Livasiri’s letter dated 21 November 2001; and (3) the inaction on the part of the Plaintiff for a period of 22 months since his release from prison in July 2006 until May 2008.  However one looks at the delay, whether as separate periods or as a whole, I do not find the delay inexcusable.  The remaining question is whether the lack of intention to prosecute the action could be inferred from the delay when considered together with the advice given in Livasiri’s letter.

51.  In that letter, Livasiri wrote to DL&L informing that they would not release the Plaintiff’s documents until their costs were settled.  In passing, Livasiri added:

“Obviously it is undesirable for this Action to be left in abeyance indefinitely and it may even be detrimental to your client’s interest if any delay becomes inordinate.  We now therefore request you to urge your client to settle all our costs with no further delay, upon which all documents and papers of this Action will be released to you.”

This letter was addressed and sent to DL&L on 21 November 2001.  That was three and half months after the Plaintiff was incarcerated in Zhuhai when he had lost contact with DL&L.  Certainly, the Plaintiff had no knowledge of that letter.  That letter adds nothing to the circumstances.  In the circumstances, I am unable to draw from Livasiri’s letter and the delay, which I have found to be not inexcusable, the inference that the Plaintiff had no intention to carry the action to trial when he commenced or continued the action.  The Defendant therefore fails in proving abuse of process.

Conclusion

52.  Although the delay is inordinate, it cannot be castigated as inexcusable.  Even if it were, the Defendant has failed to prove that the delay will give rise to a substantial risk that a fair trial of the issues in the action is not possible or is such as is likely to cause or has caused serious prejudice to the Defendant.  The Defendant has also failed to prove that the reason for the delay involved abusing the process of court.  Master S Kwang was therefore right in dismissing the Defendant’s Summons to strike out the Plaintiff’s action for want of prosecution.  Accordingly, the appeal is dismissed with costs to the Plaintiff and certificate for counsel.