XCHRX TRIDANT ENGINEERING CO. LTD. v. MANSION HOLDINGS LTD.

1996, No. CON 3

IN THE HIGH COURT OF HONG KONG

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION LIST 1996, No. CON 3

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J U D G M E N T

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Findlay, J:

The Background

1. These actions have been consolidated.

2. In Con 3, Tridant Engineering Company Limited (Tridant) alleges that there were agreements between it and Mansion Holdings Limited (Mansion Holdings) whereby Mansion Holdings agreed to execute some plumbing, drainage and fire services works (the works). Tridant alleges that Mansion Holdings was in breach of these agreements. In its defence, Mansion Holdings says that it signed two letters by which it agreed to undertake the works, but says that Mansion Fire Engineering Company (Mansion Fire) replaced Mansion Holdings as the party to the agreements by "consensual novation". Mansion Holdings particularise this allegation by citing certain facts and documents, including a meeting on 21 October 1994 during which it was agreed that Mansion Fire was Tridant's subcontractor for the works. In its reply, Tridant denies that there was a consensual novation, denies many of the facts upon which Mansion House relies, and particularly denies the agreement of 21 October 1994.

3. In Con 66, commenced some nine months after Con 3, Mansion Fire alleges that it was the subcontractor of Tridant for the works by consensual novation and makes claims for damages and for work done. In its defence, Tridant says that, in the main, its subcontractor was Mansion Holdings, but, if it were to be found that Mansion Fire was the contracting party, Tridant seeks to counterclaim on the same terms as its claim against Mansion Holdings.

4. I have five summonses before me. I will deal with these in turn.

First Summons of 7 July 1997

5. This is a summons by Tridant seeking leave to amend a notice of application dated 30 April 1997 and a summons dated 6 May 1997. This is not opposed. There will be an order in terms of that summons.

Second Summons dated 7 July 1997

6. This is a summons by Tridant seeking an order amending my order of 7 April 1997. The major problem seen by Tridant is that order as sealed requires discovery of technical drawings by preparing a register of them. This is certainly not what I ordered. I remember clearly that I said in court on 7 April 1997 that I could see no need for a separate register of drawings provided that they were properly discovered and identified in the normal way. My recollection is that my order was as is set out in amendments sought by Tridant. Mr Graham says I have no jurisdiction to amend the sealed order. I do have that jurisdiction where there has been a clerical error in drawing up the order, in contrast to a judicial error in making an incorrect order. These errors are clerical, not judicial. Accordingly, I make an order in terms of that summons, save as to costs. Tridant asks for costs to be paid forthwith. I believe that the proper order is that there be no order as to costs because the error was not that of the parties.

First Summons of 6 May 1997

7. This is a summons by Mansion Holdings and Mansion Fire seeking an order that "there be determined a preliminary issue viz: is the party liable to execute the works under the sub-contract and to receive payment from Tridant Engineering Company Limited, Mansion Holdings Limited or Mansion Fire Engineering Company Limited?"

8. This summons is taken out under Order 18, rule 11. This rule relates to a party raising any point of law in its pleading. The issue raised is not solely a point of law. But Mr Graham also points to Order 33, rules 3 and 4, which relate to the court ordering separate trials of issues. This should be done only when it is just and convenient to all parties. Usually, it will be more just and convenient to have all issues tried together, and it is for the party seeking a separate trial to justify this course. The evidence of Mr Kwok, the solicitor for Mansion Holdings and Mansion Fire is that "the issue would be decided on the basis of the undisputed documents issued by one or other of the parties and there would be no need for oral evidence.". This is simply not so. There are clearly factual disputes on this issue that would require the calling of oral evidence. In particular, regarding the agreement allegedly reached on 21 October 1994, which is denied by Tridant, there are, apparently, no fewer than five witnesses who were present. I am told that some five box files of documents would need to be considered.

9. In my view, Mansion Holdings and Mansion Fire have not established that it would be just and convenient to try this issue separately.

10. Accordingly, this summons is dismissed with costs.

Summons of 30 April 1997

11. This is an amended summons by Tridant in which it seeks an order in Con 3 that signed statements of factual witnesses be exchanged within three months.

12. Mr Graham opposes this on the grounds that there are outstanding problems with discovery and inspection, and that the preliminary issue should be considered first. I have already ruled on the matter of the preliminary issue.

13. These matters have been bedevilled with discovery problems. This has been, certainly in the initial stages, caused by the approach adopted by Tridant's solicitors, although I have to say that the solicitors for Mansion Holdings and Mansion Fire have been somewhat niggly. There are some minor problems that should not cause any great difficulties. The major remaining problems seem to be that -

• Documents, including drawings, annexed to other documents have not been separately identified in the lists;

• correspondence is not listed chronologically, but by source; and

• copies of documents supplied by Tridant to Mansion are not numbered.

14. I do not accept Miss Cheng's argument that it is sufficient to list the covering document, and not to mention the enclosures. Discovery is of documents. If a document annexed to a covering note or letter is relevant to an issue it should be listed in the course of discovery. It makes no sense at all, in my view, to list, for example, a covering letter that says only "I enclose a drawing" and mention only that there is an enclosure with this letter, without identifying the drawing. Tridant should identify all relevant documents, not just mention them as an unidentified enclosure.

15. I accept that it somewhat eccentric and inconvenient to list correspondence by source rather than chronologically, but I do not see this as a serious fault in discovery. Once the documents for use at trial are identified, they should be in bundles chronologically.

16. It appears that copies of documents supplied to Mansion's solicitors before my order of 7 April 1997 are not numbered by Tridant solicitors. This makes the process of inspection by Mansion's solicitors very difficult. Tridant's solicitors should number copies of those documents supplied to Mansion's solicitors in the same way as those in the possession of Tridant's solicitors. This is a normal incident of discovery.

17. What I have said here, of course, applies equally to discovery by Mansion to Tridant.

18. I believe that the process of discovery and inspection should be completed before I give further directions in relation to the preparation for trial. Accordingly, this summons is adjourned sine die with leave to bring it back when discovery and inspection are further advanced. I urge both parties to get down to this tedious process in a sensible way so that the trial of this matter can proceed. On balance, the reason for this wasted hearing is that of Tridant, and I order that Tridant pay those wasted costs.

Summons of 6 May 1997

19. This is an amended summons seeking directions towards the trial of this matter. For the same reasons as an adjournment of the summons last mentioned is necessary, this summons is also be adjourned on the same terms, including as to costs.