DENNIX PANEL WALL LTD v. SHUI ON BUILDING CONTRACTORS LTD

DCCJ5501/2005 and DCCJ5502/2005
(heard together)

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NOS. 5501 OF 2005 AND 5502 OF 2005

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D E C I S I O N

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1.  These are applications under Order 18, rule 19 of the Rules of the District Court to strike out the Statement of Claim and to dismiss the action on the ground that the plaintiff’s causes of actions are time barred under the Limitation Ordinance. 

2.  There are two summonses issued in the two actions, DCCJ5501/2005 and DCCJ5502/2005, the facts of which are substantially the same and the pleadings are almost identical, save for the amounts claimed.

3.  In 5501/2005, the Plaintiff’s claims are for sums allegedly due under an invoice dated 13 July 1998, issued under a Chinese subcontract dated 6 October 1997, and for damages for the Defendant’s alleged repudiation of the subcontract on 26 June 1998.

4.  In 5502/2005, the subcontract was dated 18 September 1997 and the plaintiff’s claim is for sums due under an invoice dated 29 June 1998, and for damages for the Defendant’s alleged repudiation and the plaintiff’s acceptance of this repudiation in July 1998.

5.  The Plaintiff’s actions are therefore founded on simple contract.  Under section 4 of the Limitation Ordinance, Cap.347 of the Laws of Hong Kong, the actions which were brought only on 7 November 2005, more than 6 years from the dates on which the causes of action accrued in 1998, are clearly time barred. 

6.  The Plaintiff claims that the subcontracts were signed under seal and that the claims in the actions are therefore actions on a specialty, the time limitation for which is 12 years.  However, I can find nothing on the evidence before me to show that the contracts were executed under seal or that both parties intended to execute the subcontracts as deeds under seal.  The common seals of the companies were not affixed, neither of the subcontracts makes it clear on its face that it was intended by the parties to be a deed, they were not described as deeds, nor were they expressed to be executed or signed as deeds.  The words “signed as a deed” or “executed as a deed” do not appear.

7.  The plaintiff raised the question of estoppel, relying on the case of HCA 1904 of 2001 Chuang, Eugene Yue Chien v Kevin Ho Yau Kwong.  However, I have seen no evidence of any unambiguous representation or unequivocal conduct by the defendant which influenced the plaintiff or which was relied and acted upon by the plaintiff, which led the plaintiff to change or alter its position to its detriment.  The plaintiff referred to a letter of demand issued by the defendant on 28 November 2005.  Even if that letter in any way constituted some representation by the defendant that the debts and sums due under the subcontracts were still not time barred, the letter did not lead the plaintiff to alter its position in any way to its detriment.  In November 2005, the debts were already time barred.

8.  The plaintiff tried to argue that section 26(1)(c) of the Limitation Ordinance is somehow applicable.  That is misconceived.  The plaintiff’s action is not for any relief from the consequences of any mistake.  That is not pleaded.  The plaintiff’s own mistake, if any, that the subcontracts were signed under seal would not be an operative mistake which would have any effect on the binding effect of the subcontracts. 

9.  Accordingly, I grant the defendant’s applications for striking out and for the actions to be dismissed under Order 18, rule 19(1)(a) as disclosing no reasonable cause of action.  There is therefore no need to determine the alternative applications under Order 14A. 

10.  The costs of the applications and the costs of both actions be to the defendant, to be taxed if not agreed.

(Discussion re costs order of Master Ko)

11.  The costs reserved under the order of Master Ko made on 6 March 2006 are also awarded to the defendant.

(Discussion re alternative order for Order 14A)

12.  As the parties referred to the affidavit evidence, I will allow the costs of the Order 14A application to the defendant.