AIR CHARTER SERVICE (HK) LTD v. 美拓国际物流(上海)有限公司 (also known as MEGA TRANSPORTER SHANGHAI CO., LTD.)

HCA 974/2018

[2020] HKCFI 2863

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 974 OF 2018

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D E C I S I O N

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1.  This is the 2^nd PTR of the trial scheduled to commence on 14 December 2020 (with 3 days reserved). Before me is also a summons dated 7 October 2020 taken out by the plaintiff (“P”) under Order 25 rule 6 and the inherent jurisdiction of the Court (the “Summons”) for an unless order that unless the defendant (“D”) informs P by 11 November 2020 whether it intends to defend the action, its Amended Defence be struck out and judgment be entered against it.

2.  The 1^st PTR took place before me on 30 September 2020.

3.  About one week before the 1^st PTR, D sent a letter dated 22 September 2020 to this Court and P.  In that letter, D made reference to a scheduled hearing before a Master on 23 September 2020, the 1^st PTR and the Trial (the “Hearings”).  D indicated that it intended to act in person and would appoint its director 周小峰 (the “Co Rep”) to conduct the defence.  D further said that due to the COVID-19 pandemic and the fact that the Co Rep was not in Hong Kong, the Co Rep could not attend the Hearings or make an application before the Registrar pursuant to Order 5 and Order 12 for leave permitting D to be represented by him.  D sought an adjournment of at least 3 months for the Hearings.  

4.  During the 1^st PTR, I refused the application for adjournment.  I directed inter alia that any application by D to act in person should be made by D without further delay.  I directed that there be a 2^nd PTR on 5 November 2020, giving D some 40 days to put its house in order.

5.  I have read the 6^th affirmation of Chung Wing Yee.  I am satisfied that my Order made during the 1^st PTR has validly been served on D.

6.  Nothing further has been heard from D or the Co Rep.

7.  P subsequently took out the Summons.  It requires on an unless basis D to inform P whether D intends to defend these proceedings, if so whether it intends to instruct lawyers, and if not, when it will seek leave from the Registrar to act in person.  The proposed deadline for D to reply is 11 November 2020.  Despite the issue of the Summons, still nothing has been heard from D or the Co Rep.

8.  Criticisms may legitimately be levelled at D for its conduct.  However, relevant to my consideration of the Summons are also the following wider matters:

(a)  debarring a defendant from defending a claim because of a procedural default or failure to provide information is a draconian one;

(b)  whilst the pandemic should not be permitted to be employed by any defendant as a pretext for its failure to take proper steps to defend the claim it faces, the difficulties it may pose to an overseas litigant should not be entirely ignored;

(c)  P’s claim against D is substantial.  The claim arose from a contract between P as aircraft charter services provider of the one part and D as charterer of the other whereby P agreed to make available a series of aircrafts totaling 107 flights for charter hire to be paid by D.  P claims that D has, in breach of contract, sought to cancel certain flights.  It seeks damages in the sum of US$488,000 or alternatively US$439,200.  In addition, it seeks an order for indemnity in the sum of US$10,062,400, or damages as may be assessed in that regard;

(d)  I note that the trial of P’s claim is not going to be complicated.  It involves one factual witness from P.  The issues raised by way of the defence is primarily the interpretation of the contract concerned;

(e)  Noting the nature of the claim, I hold the view on balance that it is neither unjust nor disproportionate to require P to prove its case during the trial even if D chooses not to take further part in the same.

9.  By reason of the above, and in exercise of my case management power and discretion, I refuse the Summons.  The trial is to proceed as directed during the 1^st PTR.

10.  I make no order as to costs in so far as the Summons is concerned.  The costs of the 2^nd PTR otherwise are to be in the cause.