RESOURCE DEVELOPMENT LTD v. SWANBRIDGE LTD

HCA 1873/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1873 OF 2009

(Transferred from DCCJ 1456/2009)

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Reasons for Decision

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The application

1.  This is a joint application of both parties to this court for directions under the Practice Direction 31 for Mediation and in particular, under paragraph 13 in relation to the following issues:

(1)  The choice of the mediators: Mr. Yeung Kwong, Sunny nominated by the plaintiff and Mr. Budge, John, nominated by the defendant;

(2)  The minimum level of participation under paragraph 5 of P.D. 31; and

(3)  Whether there should be a stay of the proceedings until after the result of the mediation.

Jurisdiction

2.  Both Mr. Yip acting for the plaintiff and Mr. Chan acting for the defendant agree that if this is a joint application under P.D. 31 paragraph 13(1), this court has the jurisdiction to make an order, which will be binding by the agreement of the parties.  It is on this basis that this court hears the application and makes the directions in the following paragraphs.

The choice of mediator

3.  In respect of the choice of the mediator, both solicitors agree that they have no question on the impartiality of the nominated mediators.  Mr. Yip’s concern is the cost because Mr. Budge is charging $5,000 per hour whereas Mr. Yeung is charge $2,500.00 per hour.

4.  As far as competence is concerned, Mr. Chan says that this case involves easement, a special area in land law.  He takes the view that Mr. Budge will have a better knowledge on this subject.  But on the other hand, he says that he cannot make any adverse comments on Mr. Yeung’s competence in this area because Mr. Yeung has the qualification of being a barrister.  However, Mr. Yeung is not a practicing barrister for the time being.  Mr. Yip says that he considers Mr. Yeung’s professional qualification is good enough for this matter.

5.  As far as experience as a mediator is concerned, Mr. Yip submits that Mr. Yeung has at least 2 occasions, in which he had attended himself, as the mediator and Mr. Budge, as according to the C.V. submitted by the defendant, has only one mediation experience.  Mr. Chan does not put forth any further argument on this issue.

6.  Having taken all the above factors into consideration, I consider that Mr. Yeung should be the preferred mediator for this case.  The only question is his professional experience on land law, which is uncertain, given the materials before me today.  Mr. Chan has preference for Mr. Budge.  But he has given me no particular reference by which I can decide that Mr. Budge’s knowledge in land law is better than that of Mr. Yeung. Every thing being equal, the discrepancy in the costs between these mediators becomes the most significant factor for the choice of the mediator.  This factor alone has decided that Mr. Yeung is the better choice, in particular, as Mr. Yip submits, which Mr. Chan does not dispute, the amount involved for this matter is not very substantial.

The minimum level of participation

7.  As to the minimum level of participation, Mr. Chan proposes that at least there should be 2 sessions of mediation because that arrangement will better ensure that the parties can reach a settlement.  Mr. Yip prefers to leave this to the discretion of the mediator.  He prefers to the proposed direction in footnote 4 of Appendix C of the P.D. 31, which provides that the participation can be up to and including at least one substantive mediation session (of a duration determined by the mediator) with the mediator.  I tend to agree with Mr. Yip.  The whole purpose of having the minimum level of participation is to ensure that parties are going to have the mediation in a sincere manner.  The court should not impose anything that is more than necessary for the parties to participate as mediation is voluntary and any party may decide to terminate it at any stage of the mediation.  To make a direction so inflexible for the minimum level of participation may germinate other unnecessary disputes between the parties.  Whether one party is acting reasonably in the mediation is something for the determination of the trial judge when he/she has to determine the costs of the matter.

8.  I therefore accede to Mr. Yip’s proposal that the minimum level of participation should be “Agreement as to the terms of the appointment of the mediator and participation by the parties in the mediation up to and including one substantive mediation session (of a duration determined by the mediator) with the mediator”.

Whether there should be a stay of the proceedings

9.  As to the issue whether there should be a stay of the proceedings until after the result of mediation, Mr. Yip opposes to this proposal.  He submits that the court has given leave to the plaintiff to set the matter down for trial.  The deadline for the plaintiff to set down is 14 July 2010.  He does not agree to stay the proceedings because of mediation.  He wants both litigation and mediation to proceed in parallel.

10.  The main question for me to determine whether there should be a stay is “what is the practical effect of a stay of the proceedings?”  Since the parties are ready for trial, the stay will not save any costs for either party.  Whether the parties should brief counsel for the trial is something that can be left to the solicitors to decide.  If the mediation is taking place smoothly with some glimpse of success, a reasonable solicitor will not deliver brief to counsel for the trial, or some other arrangement can be made with counsel, with the result of mediation in mind.  For these reasons, I decide that the proceedings should not be stayed.

11.  This court will, by consent, give the following directions:

(1)  The parties shall agree the terms of the appointment of Mr. Yeung as the mediator within 14 days from the date hereof;

(2)  The solicitors for both parties shall arrange with Mr. Yeung to fix the time for the mediation within 7 days thereafter;

(3)  The solicitors for the plaintiff shall report in writing to Master Lung the result of mediation as soon as practicable.

12.  By consent, the costs of this application shall be in the cause of the Action.

13.  With the consent of the parties, this Decision will be published for reference.