XCHRX TRADE ADVISERS CO. LTD. AND OTHERS v. SILKART LTD. AND ANOTHER

HCA 20671/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 20671 OF 1998

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R U L I N G

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1. This is my ruling on the preliminary point taken by Mr Patrick Fung, SC who appeared on behalf of the Defendants in this action. The Plaintiffs had issued a summons on 12 April 2000 for further directions under an order made by Deputy Judge Z E Li on 28 January 2000 ("the January Order"). In the January Order, there was provision for "general liberty to apply" and the order was made by consent. In it, the court made various declarations, having heard the evidence and read the documentary evidence placed before the court and was satisfied that certain declarations should be made regarding various rights of way relating to a footpath and a concrete road. In their summons, the Plaintiffs sought further directions relating in particular to paragraph 3 of the January Order which provided that there be specific performance of "the Agreement between the 1st Plaintiff and the Defendants for the grant of mutual rights of way as shown [in a plan annexed to the order] including the preparation and execution of a Deed of Mutual Grant of Right of Way within 35 days from the date [of the order] and the construction of a concrete Common Access Road pursuant to [the plan]". I should mention that the Agreement referred to in the order must have been a reference to the agreement as pleaded in paragraph 10 of the Amended Statement of Claim. Two points were taken by Mr Fung in his objection to the court dealing with this because he submitted that the court lacks jurisdiction in making the various directions sought by the Plaintiffs. The first point relates to the working out of the January Order and the other point relates to an alleged new agreement made between the parties on 29 February 2000.

2. On the first point, there are two grounds relied on by Mr Fung. The first ground was that the order made by the court in January was too vague. For instance, there was no provision in the order as regards the dimensions or width of the road, the plan annexed to the order was merely indicative and not definitive, there was no provision for the terms of the deed of mutual grant of right of way, and there was no mention as to who was to construct the concrete road, who to pay for it and who to maintain the road.

3. I have been referred by Mr Fung to two cases dealing with Tomlin Orders and the relevant passages in Foskett on Compromise.

4. I would say that looking at the terms of the order itself, I do not think the terms are so vague as to be incapable of enforcement. Of course, the court accepts that it cannot rewrite the order or rewrite the agreement for the parties. What was court is obliged to do is to work within the ambit of the order and if directions could be given on the working out of the order in case the parties disagree, this is what the court should do. Further, I think there is a valid point made by Mr Warren Chan, SC, who appeared on behalf of the Plaintiffs, that this objection as to the vagueness of the order really came too late. No point was made about the uncertainty of any agreement which was to be the subject of an order for specific performance when the parties appeared before the Judge in January this year. As I mentioned earlier, the order was made by the court after hearing submissions and after considering some of the evidence put forward by the parties to the court.

5. What I have to rule at this stage relates to jurisdiction to deal with the Plaintiffs' summons, I say nothing about the merits of the directions sought by the Plaintiffs or the details of the terms to be included in the draft deed placed before the court. That is a matter on which I would hear submissions from the parties later.

6. The next ground relied on by Mr Fung relates to various non-parties to the action sought to be included as parties to the draft deed. It may be that the Plaintiffs can rely on the mechanism provided in O. 44 r. 3(1)(c), or may be not. In any event, I do not think this is an insuperable difficulty. If this provision cannot be relied on by the Plaintiffs, no doubt the Plaintiffs would put forward an alternative method for resolving the deadlock, as contemplated in paragraph 1 of the amended summons, in which they seek execution of the deed as annexed or any other deed or plan that the court deems fit.

7. Hence, on the first point relating to the work out of the order, I rule against Mr Fung and I hold that the court does have jurisdiction to make further directions under the provision of general liberty to apply.

8. As for the second point taken by Mr Fung regarding the new agreement, the Defendants' position is that by an oral agreement on 29 February 2000, it was agreed inter alia that the Plaintiffs were to give up the right of way of the upper portion of the footpath in return for a right of way of an additional footpath provided by the Defendants outside Lot No. 946A. The Plaintiffs have denied that there was any such agreement.

9. The practice as to what usually happens if there is an alleged agreement to compromise in pending proceedings is that a summons would be taken out by the party alleging compromise to stay the action and the dispute as to whether there is a settlement agreement would then be tried in the same action. In this instance, there was a final order made by the court disposing of the rights and obligations between the parties and it was recited in the order which was made by consent that the Defendants had submitted to judgment. The court gave general liberty to apply, but as would appear from the authority cited by Mr Fung, Ng Dai Choy Chan v Ng Li Yun Ying [1958] HKLR 252, it would seem that the court's power in that situation is limited to the working out of the final order. I am not satisfied I have jurisdiction in this situation to try the disputed issue of fact whether there was a new agreement to alter in part the January Order. As I understand Mr Chan's submissions, he is not seeking to argue to the contrary that the court does have jurisdiction to try the disputed issue of fact. He would prefer to "play safe". My ruling here is that the court does not have jurisdiction to try the disputed issue of fact of the alleged new agreement, having made an order disposing of the rights and obligations of the parties in the January Order. The jurisdiction under the liberty to apply provision is limited to the working out of that order and it does not cover any power to try the disputed issue of fact which would have the effect of altering in part the January Order.

10. The net outcome of this is that I can give directions on the working out of the January Order relating to the specific performance of the Agreement and that covers the road in question. As to the footpath, I cannot try the issue of fact relating to the new agreement which affects the right of way over the footpath. I can however give directions if there are difficulties relating to the working out of the declaration by the court concerning the footpath. Whether it is appropriate for me to do so is another matter and it does not relate to jurisdiction.