XCHRX YUNG SAI CHOI v. CHAN YUK YING

HCA 14636/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 14636 OF 1999

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D E C I S I O N

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1. This is the Plaintiff's appeal against the Master's order dated 30 October 2000 whereby she ordered inter alia this action to be stayed pending the determination of Matrimonial Causes Action No. 9551 of 1998 in the Family Court. The Plaintiff asks in this appeal for the Defendant's application for stay of proceedings to be dismissed.

2. The Defendant, on the other hand, cross-appeals against that order dated 30 October 2000 insofar as it ordered that the Plaintiff's summonses respectively dated 31 May 2000 (issued under Order 86), 1 June 2000 (issued under Order 18 rule 19) and dated 4 October 2000 (issued under Orders 14, 14A & 86) be stayed with costs reserved. The Defendant asks in the cross-appeal for these summonses to be dismissed with costs to her.

3. The Plaintiff brings this action based on a settlement agreement reached between him and the Defendant. It is undisputed that the Plaintiff and the Defendant were husband and wife. It is also undisputed that the settlement agreement was reached in the course of a series of without prejudice correspondent between the parties' respective solicitors with a view to settle the matrimonial dispute between the parties.

4. One of the matters in dispute in the matrimonial proceedings is the way in which the Family Court is to exercise its powers regarding "financial provision" under the Matrimonial Proceedings and Property Ordinance Cap. 192 (especially sections 4 to 7 thereof). It is undisputed that as regards that aspect of the matrimonial proceedings, there will be an overlap of the issues to be raised in these proceedings and those in the matrimonial proceedings relating to the settlement agreement. Further, the powers of the Family Court in relation to "financial provision" are discretionary in nature and the matters which the Family Court can considered are more wide-ranging than those which can properly be raised in these proceedings. With these matters in mind, it is clearly more appropriate for the dispute to be resolved by the Family Court than the Court of First Instance.

5. Whether or not to stay these proceedings is a matter of discretion. These proceedings have not gone beyond the filing and service of pleadings and the taking out of the interlocutory applications before the Master. I disagree with the Plaintiff's suggestion that the Court has no power to entertain a stay application in the factual context of this case. I also disagree with the argument that there was delay on the Defendant's part and therefore the stay application ought to be refused. In these circumstances, I consider that it is appropriate to order these proceedings to be stayed leaving the dispute to be resolved in the matrimonial proceedings.

6. I now turn to the Defendant's cross-appeal which relates to 2 main areas:-

(a) whether the Plaintiff's application for striking out the Defendant's pleadings should be dismissed;

(b) whether the Plaintiff's application for summary judgment should be dismissed.

7. It appears that the Defendant is arguing that whether these proceedings were stayed or not, the Plaintiff's 3 applications were wrongly taken out and therefore ought to be dismissed by the Master rather than being stayed. The Plaintiff contended in his striking out application that this is a plain and obvious case that the Defendant's pleas are unsustainable. The Defence and Counterclaim avers in short that it was the Plaintiff who breached the settlement agreement and he did so by failing to perform his obligations under the settlement agreement (see paragraph 14 of the Defence) or to respond to the letters from the Defendant's former solicitors (see paragraph 13 of the Defence). The Plaintiff argues that his obligations thereunder were not yet due for performance. Further, he argues that mere silence could not amount to a repudiation of the settlement agreement. There is no need to go into the details regarding these save to say that the issues raised in the pleadings show that this is not a plain and obvious case which warrants the striking out of the Defence.

8. Apart from the above 2 issues of whether or not the Plaintiff's obligations under the agreement were already due for performance or whether his failure to respond to the Defendant's request amounted to a repudiation, the issues raised by the pleadings also include (a) whether the Plaintiff's obligations to perform term 3 of the agreement were divisible from his other obligations under the other terms and (b) whether the Plaintiff was in repudiatory breach (at opposed to a mere breach) of the agreement when he did not perform his obligations under term 3 within 7 days from the conclusion of the agreement. The last-mentioned issue would involve the questions of (1) whether time was of the essence of the agreement and (2) whether term 3 of the agreement provided for 2 alternative modes of performance, or only one mode of performance coupled with a provision for an agreed quantum of damages in case of non-performance by the Plaintiff.

9. By reason of the matters set out above, in relation to the Order 14, Order 14A and Order 86 summonses, I consider that the Defence and Counterclaim has raised matters which ought to be tried. Because these issues were already raised in the Defendant's pleadings served in October 1999, the Plaintiff knew in May 2000 and October 2000 (when the Order 14, Order 14A and Order 86 applications were taken out) that the Defendant relied on a contention which would entitle her to unconditional leave to defend within the meaning of Order 14 rule 7(1) and Order 86 rule 6.

10. To conclude:

(1) the Plaintiff's appeal is dismissed;

(2) the Defendant's cross-appeal is allowed and the Master's order for stay of the Plaintiff's summonses (with costs reserved) is set aside;

(3) the Plaintiff's 3 summonses are dismissed with costs to the Defendant to be taxed if not agreed with certificate for counsel for the hearing before the Master.