VOLKSWAGEN AG v. AUTEC AG AND ANOTHER

HCA 76/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 76 OF 2006

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BETWEEN

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J U D G M E N T

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1.  I have before me a summons by the Plaintiff applying to strike out the defence and counterclaim and for final judgment to be entered for the Plaintiff as a result of the defendants’ failure to comply with an unless order. I also have before me an application by the Defendants for relief from the consequences of the unless order and other orders of the court.

2.  Affirmations have been filed by both parties in support of their applications.

3.  I take as the appropriate law the decision of Joseph Fok J in Top One International (China) Property Group Company Limited v Top One Property Group Limited (2011) 1 HKLRD 606.  It is clear from the authorities that are there discussed that there is an evidential burden upon the Defendants to explain how the failure to comply with the unless order came about and to justify why the court should grant them the indulgence that they seek.

4.  Previously, the primary consideration, and usually the only consideration, was whether or not the Defendants’ failure was a deliberate one which evidenced an intention to ignore or flout the order of the court.  The phrase used to describe such conduct was that it was intentional and contumelious.

5.  Since the introduction of Civil Justice Reform, the court is entitled to take into account a broader range of circumstances, including the conduct of the legal representatives of the Defendants, in determining the overall justice of the case.

6.  The material placed before me by the Defendants raises more questions than provides answers, and I have not found it easy to ascertain why the delay that resulted in the non-compliance of the order took place and why there was such a delay in seeking the relief that is now sought.

7.  Despite the unsatisfactory affirmations by the solicitor for the Defendants, I must nevertheless try and assess where the interests of the administration of justice lie.  The solicitor seeks to accept full responsibility for the failure to comply with the unless order and, in terms of the failure to act expeditiously to seek relief from its consequences,  puts before me information in relation to his failure to properly supervise the work of his subordinates and other difficulties associated with the running of his firm.

8.  The affirmations should have been more complete in what they revealed, but I am nevertheless anxious that in adjudicating this application, I not allow my frustration and anger with the conduct of the solicitor to distract me from the task of assessing where the interests of the administration of justice lie.

9.  I am not convinced that the failure, both in terms of non‑compliance with the unless order and the failure to act expeditiously to seek relief from its consequences, was deliberate and intentional by the Defendants themselves, and I am not persuaded that their conduct can be characterised as intentional and contumelious. However, nor am I persuaded that they have demonstrated a seriousness in their attitude to their legal obligation that is incumbent upon them.

10.  I am asked to provide them with one last chance and not to punish them for the conduct of their legal advisers.

11.  Taking into account all the circumstances, I am persuaded that this is the appropriate course for me.

12.  I therefore dismiss the Plaintiff’s summonses filed on 17 March and 7 April 2011 and the Defendants’ summons filed on 12 April 2011 and allow the Defendants’ summons filed on 8 April 2011, but I will hear the parties on costs.