GOLD BASE IMPORT AND EXPORT CO. LTD. v. ZETECH CO. LTD.

1988, No. A177

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. On 26th June 1991, the Defendant issued a summons seeking the dismissal of this action for want of prosecution. On the 18th October 1991, Master Beeson refused to make the order sought and the Defendant now appeals.

2. The writ is dated the 9th January 1988, and it claims US$19,325 plus interest. The cause of action is based upon a written agreement dated the 14th September 1984 whereby it is said the Defendant agreed to pay commission to the Plaintiff in consideration of the Plaintiff introducing customers to the Defendant. It is alleged that part of the commission was paid on the 23rd May 1985 but nothing since. The Statement of Claim is simplicity itself, and it is difficult to imagine a more straightforward and simple claim.

3. A curious thing happened before the Master. What I am about to recount is an agreed version of events. The Plaintiff had apparently been threatening to seek leave to amend the Statement of Claim and Counsel then appearing for the Defendant mentioned this to the Master. At this point, Counsel for the Plaintiff handed to the Master a proposed amendment to the Statement of Claim in respect of which the Master thereupon gave leave to amend. At no stage was this proposed amendment shown to Counsel then appearing for the Defendant. No summons for leave to amend the Statement of Claim was in fact' before the Master.

4. It was most sensibly agreed between Mr. Wong and Mr. Allman-Brown that I should set aside the leave to amend the Statement of Claim, and if I did not strike out this action then there would have to be a hearing on the application to amend at which hearing the Defendant would be able to express their opposition to the amendment including perhaps the argument that a new cause of action was being added after the expiry of the limitation period. I have been shown the proposed amended Statement of Claim which expands from a claim of 3 simple paragraphs taking only half page to one of nearly 6 pages, which are full of references to oral discussions between various people in 1984, and it goes up to 23rd May 1985 when there was an alleged part payment.

5. Both Counsel invited me to approach this case on the basis of the unamended Statement of Claim which I, of course, now do.

6. Mr. Wong who appeared for the Plaintiff sensibly addressed me on the basis that the limitation period had in fact expired, but that there was no inordinate delay nor prejudice to the Defendant. He faintly suggested that there might be an argument that the limitation period had not in fact expired, but his timidity in putting this forward was a sensible recognition that such an argument was in fact hopless as indeed it is. I, therefore, approach this case on the basis that the limitation period has expired and that, if dismissed, the Plaintiff could not start again.

Chronology

7. Mr. Allman-Brown identified 4 periods of delay totalling some 37 months. Firstly, there was 11 months prior to the summons for directions. Secondly, there were 8 months after the order on the summons for directions. Thirdly, there were 16 months after the Defendant's list of documents, and fourthly, there was said to be 2 months inactivity after the service of the notice of intention to proceed.

8. Mr. Wong for the Plaintiff conceded the 11 months period prior to the summons for directions. He questibned the 8 months period after that because the Defendants had not served their list of documents. I am not impressed with that approach. The Plaintiff had the carriage of the action and they should have dealt with their list timeously, and then pressed the Defendant to comply. After the Defendant filed their list, Mr. Wong submits that some time was taken up with discovery and it would not be fair to say that there was 16 months inactivity. However, he was prepared to accept 9 months. I also take into account the observations of Mr. Ng in para. 12 of his affirmation dated 15th July 1991 in relation to the steps taken since July 1990.

9. Whatever way one looks at the chronology in this case, I am quite satisfied that there has been delay, and such delay was both inordinate and inexcusable. In fact no real excuse has been put forward. Mr. Wong asked me to say that the delay did not jump but at me from the papers which was a phrase he borrowed from Hunter J. (as he then was) in Lam Fong v. Kiu May Construction (1985) HKLR 321. Whilst I accept that there are other case's where the delay has been worse, I am quite satisfied. that the delay here was sufficient to be characterised as inordinate and inexcusable. If the action was to come on in late 1992 or early 1993, it will be 9 or 10 years after the agreement sued upon and 5 or 6 years: after the Writ. I see no reason why the Court should tolerate such half-hearted litigation when there are so many litigants desparately trying to get their cases heard as quickly as possible. The case made out in the Statement of Claim is as I have said extremely straightforward, and one would expect this case to be got on for trial extremely quickly indeed.

10. However, it is clear on the authorities, which are too well known to repeat and which are well summarised in the White Book, that I should not strike out this action unless in addition to inordinate and inexcusable delay, I am satisfied that the Defendant would suffer prejudice.

11. I am not impressed with the argument that Mr. Cheuk has left the Defendant's employment as he left in March 1985, and any prejudice suffered by his absence was caused long before the Plaintiff's instituted these proceedings and thus is wholly irrelevant. The fact that the Defendant has wound down their business in China, and have lost contact is a far more material factor. It is clear from the draft amended Statement of Claim that the Plaintiff will wish to adduce evidence of oral conversations in 1984 and the passage of time will have made that very difficult for the Defendant to deal with. These conversations are now set out in this document for the first time 8 years after they took place. I am also told there is an issue about whether the payment made in May 1985 was in a full and final satisfaction of all sums said to be due under the 14th September 1984 Agreement. Again this will have to be dealt with by oral evidence which the passage of time has made most difficult and unreliable.

12. I accept, of course, that the striking out of an action for want of prosecution is a draconian order. However, having given this matter most careful consideration, I am quite satisfied that there is a substantial risk that the Defendant will be prejudiced by the inordinate and inexcuseable delay in this case and thus there is a real risk that a fair trial will not be possible. Therefore, in the exercise of my discretion I am satisfied that this is an appropriate case to be struck out for want of prosecution, and I therefore propose to allow the appeal.

13. There will be a costs order nisi in favour of the Defendants.