GEMA METAL CEILINGS (CHINA) LTD. v. MBM (HK) LTD.

HCA9378/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 9378 OF 1998

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J U D G M E N T

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1. This is an application by the defendant to transfer the present action which comprises the plaintiff's claim for the price of goods sold and delivered and a counterclaim by the defendant arising out of allegations against the plaintiff in relation to the materials supplied in question and related matters, from the General List to the Construction and Arbitration List.

2. As I said, the plaintiff's case as pleaded in the statement of claim is simple. This is simply a goods-sold-and-delivered claim; but the case of the defendant, as it appears from the pleading, as well as the subsequent documents including affidavits and other expert reports and documents exhibited to the affidavits, is not that simple.

3. It is the defendant's case that the plaintiff agreed to design, manufacture and deliver to the defendant a podium suspended metal ceiling system in a building then under construction at the material time. It is the defendant's case that the plaintiff made late and disorderly delivery of a defective ceiling system to the defendant, and that resulted in the total rejection of the system by the architect and main contractor, and there were demands for substantial remedial work which the plaintiff failed to meet.

4. At one stage, there was a suggestion that the plaintiff was responsible for installing the system but that allegation does not appear in the pleading, at least in its present form, although Mr Turner, appearing for the defendant, indicated to me this morning that there might be a future amendment in this regard.

5. But in any event, it does appear to me that the issues raised at least from the side of the defendant concern building and construction work and indeed, as I have mentioned, expert reports dealing with highly technical matters, have been put in by both sides pursuant to directions previously given.

6. I should also mention that although the action was commenced in 1998, nothing much has been done in relation to the proper prosecution of the claim or for that matter, the defence, of the case. This can be seen from the quality of discovery made by the parties as well as the fact that notwithstanding the order for the exchange of witness statements, nothing apparently has been done along those lines, although to be fair, I should repeat that the parties have put in expert reports. I was told this morning that perhaps further expert reports would be required.

7. I mentioned all this because Mr Turner told me that it is not too late given the stage of the proceedings for the case to be transferred from the General List to the Construction and Arbitration List. I agree on the assumption that this is a case fit and proper for the specialist list. According to Practice Direction 6.1 para.2:

"The classes of action within the Construction and Arbitration list shall include those concerning the following matters, namely:

(a) civil or mechanical engineering;

(b) building or other construction work;

..."

8. This is couched in very wide language. Certainly it is not meant to be exhaustive. And secondly, the use of the word "concerning" suggests that if the matters or issues raised in the pleadings or in the evidence, concern building or construction work or, for that matter, civil and mechanical engineering work, then potentially the list applies.

9. I do not agree with the approach of Mr Chung, appearing for the plaintiff and resisting this application, that one should apply a strict construction approach to words used in a Practice Direction, after all it is only meant to be a Practice Direction and nothing more than that, and there is indeed a place for the exercise of one's common sense in deciding this sort of application. As I mentioned to Mr Chung during submission, no one would think it proper to transfer a property title dispute involving an illegal structure to the Construction and Arbitration List on the ground that it "concerns" illegal "building or construction work."

10. Mr Chung used the example of the supplier of window-type air-conditioning units or a wallpaper supplier to say that his client was really one of those suppliers for construction work to be done by others. I do not agree. The present work involves the design and manufacture of a highly technical metal ceiling system, the overall design of which was done by the architect in charge of the building under construction in question.

11. So all in all, I am of the view that the case clearly falls within the ambit of the Construction and Arbitration List. I can see no prejudice to either side in transferring the case even at this present stage to the list. In fact, I can see every advantage to both sides in making an order for transfer. I do not agree that the transfer of the case to the list would in any way prejudice the stance maintained by the plaintiff, i.e., that this is a simple goods-sold-and-delivered case. If it was indeed such a case, I am sure the judge in charge of the list and hearing the case would be in a good position to decide the matter accordingly.

12. But if, on the other hand, the defendant is correct then of course the judge would be well-placed to deal with all technical matters.

13. So I am in favour of making an order for transfer and it only remains for me to mention one matter, i.e., that according to Practice Direction 6.1, paragraph 4(b), a transfer would appear to have to be done "with the consent of both parties". This would suggest that in the absence of the consent of both parties, a judge cannot make an order for transfer of a case not commenced in the Construction and Arbitration List.

14. The wording of the present Practice Direction is apparently borrowed or copied from the previous Practice Direction faced by Kaplan J in Jones Lang Wootten v Sun Plastic Supplies Limited, unreported HCA10878/1993 decided on 28 March 1994. In that case, the learned judge was faced with a similarly-worded Practice Direction, the predecessor of the present Practice Direction. And his Lordship held that insofar as the Practice Direction suggested that the consent of both parties was required, it conflicted with Order 72, r5 of the then Rules of the Supreme Court (and now Rules of the High Court), and his Lordship held that the wording of the rules must take precedence over the wording of the Practice Direction which does not have the force of law.

15. I respectfully agree and adopt the same approach and conclude that I have the power to make the order of transfer. So for all these reasons, I order that the action be transferred from the General List to the Construction and Arbitration List.