XCHRX INVESTMENT AUSTASIA LTD. v. WAH NAM GROUP LTD.

HCA 15615/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 15615 OF 1999

____________

_____________

D E C I S I O N

_____________

1. The proceedings in this action is in something of a procedural labyrinth at the moment.

2. The Writ was issued in September 1999. It was based on 4 promissory notes having been made by the Defendant in favour of the Plaintiff in September 1998. The Writ with Statement of Claim endorsed pleads that on 15 September 1999, the interest due was not paid by the Defendant company. Accordingly, the Writ was issued on 30 September 1999 for the sum of A$160,000.00 with interest, further or other relief and costs.

3. On 29 October 1999, the Defendant company applied for an extension of time which was granted and on 16 November 1999, the Defendant made a second application for extension of time.

4. On 19 November 1999, Master Kwan made an order to the effect that unless the Defendant do file and serve on the Plaintiff its defence by 4:00 pm on 17 December 1999, the Plaintiff be at liberty to enter judgment against the Defendant for the amount claimed in the Statement of Claim with costs, and for costs of the application to be to the Plaintiff in any event.

5. However, on 14 December 1999, three days before that deadline, the Defendant applied under Order 12 Rule 8 of the Rules of the High Court for a stay of the proceedings under the inherent jurisdiction of the Court or for the dismissal of the action on the ground of forum non conveniens as the Australian Court is the more appropriate forum than Hong Kong for the trial of the action; further or in the alternative, the Hong Kong Court has no jurisdiction over the Defendant in respect of the promissory notes made by the Defendant, i.e. the subject matter of the claim, and the remedy sought in the action.

6. I note, therefore, that this application is made on two bases. First, that Hong Kong courts are not the convenient forum and more importantly, that the Hong Kong courts have no jurisdiction over the Defendant in respect of the promissory notes made.

7. What then happened was that on 17 December 1999, the Registrar stayed Master Kwan's Unless Order pending the hearing of the Order 12 Rule 8 application. There was before then no appeal from the Unless Order.

8. On 17 December 1999, the Defendant took out a "Notice of Appeal" giving an indication that it intended to appeal against the decision of Master Kwan making the Unless Order. It would appear that that appeal, or rather that application for extension of time to appeal, was due to be heard before me today.

9. In the meantime, however, the matters had taken a different turn. Although the Defendant's application under Order 12 Rule 8 (which was taken out on 14 December 1999) was due to be heard today together with the application for extension of time to file Notice of Appeal from Master Kwan's Unless Order, what the Plaintiff did in January 2000 was to separately apply to strike out the Defendant's Order 12 Rule 8 application. That matter was heard in May 2000 by Deputy Judge Wong who gave a decision against the Defendant. That decision is under appeal and I have been informed that the appeal has been set down and is now simply awaiting a date from the Court of Appeal.

10. Meantime, the question arises as to what should be done in relation to the application for extension of time to appeal from Master Kwan's Unless Order, and what should be done in relation to a stay of that.

11. Mr Shipp and Mr Chain have made submissions this morning and it seems to me that what is one of the more important factors for me to take into account is the fact that if the Defendant is right that the Hong Kong Court has no jurisdiction (as it wants to submit under paragraph 2 of its summons) then it would not be right for this court to order a Defence to be filed because that would in effect force the Defendant to submit to the jurisdiction and prejudice their Order 12 Rule 8 application.

12. I have heard what Mr Shipp had to say in relation to the fact that the application for extension of time to file a Notice of Appeal from the Master's Unless Order has been substantially out of time, and it would also appear to be the case that the evidence in support of the Defendant's application has not been as comprehensive as it ought to be but, in my view, substantial prejudice would be caused to the Defendant's application under paragraph 2 of its summons of 14 December 1999 if I were to order it to file a Defence now. Mr Shipp submits that I could order them to file the Defence now but simply stay that order pending the decision of the Court of Appeal as to whether the application should have been struck out.

13. In my view, there is no point doing that and in any event, I think it would be wrong if the Defendant has anything in their contention that the Hong Kong Court has no jurisdiction. Whether they will be successful or not is another matter that cannot be decided by me today but would have to await a decision on a further day if they are successful in their appeal from the decision of the Deputy Judge Wong.

14. I have noted Mr Shipp's submission that in Mr Ting's affirmation of 17 December 1999, he has not said in so many words that the Hong Kong Court has no jurisdiction and has simply said that the Hong Kong Court is a more convenient forum. Be that as it may, at paragraph 2 of the summons it makes it quite clear that it is the Defendant's case that the Hong Kong Court has no jurisdiction over the promissory notes and I cannot prejudge that issue now.

15. Accordingly, what I would do in relation to this application for extension of time to appeal from Master Kwan's Unless Order is to adjourn it pending the determination of the Court of Appeal in the Defendant's appeal from Deputy Judge Wong's order.