WONG KAM WING v. CHENG PUI LUN AND OTHERS

DCCJ3878/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3878 OF 2002

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R U L I N G

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1.  Today is the first day of a three-day “trial”.  The reason why I have put the word “trial” in inverted commas is because parties are still in dispute as to what we are here for.  The plaintiff submits that we are here for two things:  (1) the trial of this action including the plaintiff's claim and the defendants' counterclaim; plus, (2) the taking of account.  The defendants disagree and submit that we are here for the taking of account only. The issue that requires determination is what is the nature of this three-day proceeding.

2.  The issue arose out of the plaintiff's counsel's opening and in the context of the plaintiff's application for judgment on admission.  The issue has since taken on more significance and it is now clear as the matter stood that it requires a determination.

3.  As I understand the situation, this issue is significant at least in two regards. First, if the plaintiff is correct, the issues in dispute which require determination in this three-day proceeding is defined in two sets of documents, namely, the pleadings filed in this action and the documents filed for the purpose of the taking of account.  If the defendants are correct, then the issue is defined in the documents filed for the purpose of the taking of account only, namely, the plaintiff's third affirmation and the notice of objections filed by the defendants. Secondly, the plaintiff's application for judgment on admission is apparently based on an alleged admission in the defendants' Amended Defence and Counterclaim filed herein.  The determination of this preliminary issue may affect the course of that application. 

4.  As remarked by His Honour Judge Muttrie before, this case does have a curious procedural history.  For the part of the proceedings up to and including the hearing before His Honour Judge Muttrie on 31 May 2004, this has been fully and succinctly set out in paragraphs 2 to 4 in his Honour Judge Muttrie's ruling dated 9 June 2004.  It should be taken that I have adopted these paragraphs in this ruling of mine.

5.  What happened after his Honour Judge Muttrie's said ruling which is relevant to this preliminary issue are two court orders.  By the order of His Honour Judge Muttrie dated 9 June 2004, the learned judge gave directions for the taking of account.  There is another order by Deputy Judge Chan dated 23 June 2005. 

6.  As the matter stood before the order of Deputy Judge Chan dated 23 June 2005, I think it is clear that His Honour Judge Muttrie had ordered account to be taken and, until that had been completed, all further proceedings in this action be stayed.

7.  Then comes the order of the learned Deputy Judge.  Paragraph 1 of the said order stated, and I quote,

“The trial of this action, including the account of the receipts and payments in relation to the joint venture between the plaintiff and the 1st defendant for investment of the properties...be taken before a judge in open court with three days reserved.”

8.  Defence counsel informs me that this part of the order was made by consent of the parties and the matter was not in fact argued before the learned Deputy Judge.  In particular, he regrets the use of the word “trial” in paragraph 1 of the said order by the parties and submits that it was the common intention of the parties that there should be a three-day hearing for the taking of account only.  In any event, he submits that parties may not by consent proceed with the trial of this action given the clear order of the Court of Appeal in CACV21/2003 dated 11 July 2003 for an account to be taken, and the directions of his Honour Judge Muttrie dated 9 June 2004 including the staying of all further proceedings until the completion of the account is taken.

9.  Defence counsel has also referred me to various passages in Hong Kong Civil Procedure 2004 which sets out the established procedure and practice on taking of account.

10.  The plaintiff's counsel expresses concern that there has been no order extinguishing the plaintiff's claim and that the defendants should be bound by their own pleadings filed.  In reply, defence counsel observes that there is nothing to stop the plaintiff from referring to the pleadings and the documents filed by the defendants, either in cross-examination or otherwise.  However, strictly speaking, the issues to be determined in this three-day proceeding is per the plaintiff's third affirmation and the notice of objections filed by the defendants.

11.  Having had the benefit of argument, I think the defence counsel must be correct.  His view is supported by both the observations in the White Book and the forms in Atkins Court Forms and Queen's Bench Forms.  Most importantly, his view is consistent with the orders of the Court of Appeal and His Honour Judge Muttrie. 

12.  The whole basis of His Honour Judge Muttrie's ruling is that the parties had somehow not followed the order of the Court of Appeal but proceeded to prepare this action for trial.  That was wrong and the learned Judge had no option but to give fresh directions for the purpose of account taking, notwithstanding the pleadings and other documents already filed by the parties.  In particular, the learned Judge at paragraph 16 of his ruling refused to accept the plaintiff's counsel's suggestion that the case should simply went to trial given the pleadings and affidavits already filed.  Contrary to the plaintiff's counsel's submission, the learned judge went even further by ordering a stay of all further proceedings herein until the completion of the taking of account.  There has been no appeal against His Honour Muttrie's order.

13.  I cannot imagine the subsequent order of the learned Deputy Judge to have the effect of setting aside both the order of the Court of Appeal and His Honour Judge Muttrie and resurrecting the trial.  This is all the more so as, after the taking of account, paragraphs 1(e) and 1(f) of His Honour Judge Muttrie's order will bite, so to speak, obliging whoever is found to be owing money to the other side pays the sums certified due.

14.  For the above reasons, I am of the firm view that there should only be a taking of account in this three-day proceeding and that the action has otherwise been stayed. In other words, I rule against the plaintiff on this preliminary issue.