ASM ASSEMBLY AUTOMATION LTD AND ANOTHER v. CHAN LO KWAN AND ANOTHER

HCA 7622/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 7622 OF 1999

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Coram : Before Master Kwan in Chambers

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Review of Taxation

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1. This Review of Taxation raised the question about the extent to which the receiving party’s counsel’s fees can be allowed under an order for costs in these terms “Costs of and occasioned by this adjournment be to the 1^st and 2^nd Defendants with certificate for 2 Counsels and such to be taxed ifnot agreed and be paid forthwith”.  The costs order was made by the Judge at the start of a hearing of the defendant’s Summons when he allowed the plaintiff’s application for an adjournment.

2. I taxed as much of the Bill as possible, but adjourned to consider the effects of the phrase “Costs of and occasioned by this adjournment”. I eventually handed down a Decision.

3. In my written Decision dated 21 March 2006 I reminded the parties that I had not received the assistance to be expected, and had been put in a difficult position because no cases or authorities were cited in argument as to the meaning and effect of the phrase “costs of and occasioned by theadjournment”.

4. I was driven to conducting my own research, and to formulate my own “test”.  I framed that the test to decide whether an item can be regarded as “costs of and occasioned by theadjournment” in this way:

“Would this item of costs have been incurred by the receiving party irrespective of whether there was an adjournment?” If the answer is “Yes”, then the paying party should not be liable for that item of costs. But if the answer is “No”, then the paying party should be liable for it.”

5. Applying the test, I concluded that the receiving party’s counsel’s fees (items 45 & 46) were not “costs of and occasioned by theadjournment” and disallowed the same.  I stated that both senior and junior counsel would have attended the hearing on 28 January 2005 in any event, and those counsels’ fees would have been incurred irrespective of whether the Summons was adjourned.  (See paragraph 16 of the Decision dated 21 March 2006.)

6. The receiving party had no quarrel with, and accepted the test that I had formulated for phrase “costs of and occasioned by theadjournment”.  However, the receiving still sought to argue that counsel’s fees ought should be allowed within the terms of the costs order made by the Judge.

7. The receiving party brought this review only in relation to Counsel’s fees.

The argument of the receiving party

8. Put briefly, the argument of the receiving party is this.  It must be inherent in the Judge’s order for such costs to be allowed because the Judge made a point of certifying the matter to be fit for 2 counsels.  It would not be unfair to allow an amount in relation to counsel’s brief fees for attending on 28 January 2005 since the paying party’s objection only went to quantum.  The paying party had suggested that counsels’ fees be allowed on the basis of refreshers.  Therefore it was the understanding of both sides that the costs order provided for an amount to be allowed for counsels’ fees, the only issue was the appropriate sum to be allowed.    

9. The receiving party had confirmed at the review that he accepted the test formulated at paragraph 13 of the Decision dated 21 March 2006.  He merely objected to the result when the test was applied to counsel’s fees.  As I understand it, the receiving party was saying that, in the ambit of the order, the words of the test as applied to counsels’ fees should have the effect of extension and inclusion rather than restriction and exclusion of counsels’ fees.

10. I could not accept that submission.  It is not logical and necessitated an unwarranted contortion or unnecessary violence to the language of the test.

11. But even though I did not agree with the submission of the receiving party, I could see that the proverbial man on the Clapham Omnibus (or the man on the MTR bound for Chai Wan) might find it unfair if the “innocent party” to the adjournment was to be totally denied his counsels’ fees in the light of the Judge’s costs order.  The proverbial man on the Clapham Omnibus would ask (not unreasonably) why the Judge would bother to provide a certificate for the fees of two counsels if he had not intended to permit the taxing master to allow this.

12. Revisiting the costs order made, I decided that it was possible for the order to be interpreted so as to allow for counsel’s fees, but without contorting the language as suggested by the receiving party.

13. I decided that it was possible to look at the costs order made by the Judge to be comprised of two separate and distinct parts.  The first part would comprise of the words “Costs of and occasioned by this adjournment be to the 1^st and 2^nd Defendants”; and the second part of order would comprise of the words “ with certificate for 2 Counsels…”.

14. Looked at in this manner, the formulated test would apply to all items of costs and disbursements saving and excepting counsels fees.

15. Having reached the conclusion that, applied in such a manner would not cause unfairness to the paying party, I decided to review my decisions as to Items 45 & 46, where sums of $300,000 and $50,000 were claimed for senior and junior counsel’s fees as I am now satisfied that counsels’ fees can be viewed as a discrete and separate item, and not be subjected to scrutiny as either “costs of the adjournment” or “costs occasioned by the adjournment”.

16. In the circumstances, the claims for counsel’s fees can be allowed and the appropriate quantums to be scrutinized afresh.

17. In deciding on the appropriate amounts to be allowed, I have recalled the arguments on quantum by the parties as argued in the hearing on 17 February 2006; I bear in mind that this decision is made in a review of taxation; and I bear in mind all the submissions made since the original taxation hearing.

18. In all the circumstances I find that in relation to Item 45 the sum of $164,000 should be allowed for senior counsel’s fees.  I accept and agree with all the reasons put forward in the receiving party’s application for review.

19. In all the circumstances I find that in relation to Item 46 the sum of $50,000 should be allowed for junior counsel’s fees.  I did not think it fair to allow $60,000 on review when only $50,000 was claimed originally.

20. As to the costs of the Review, I believe the fairest order would be “No Order as to the costs of the Review”.  I believe that it is fair because the review was necessitated because both sides were inadequately prepared to argue the phrase “the costs of and occasioned by theadjournment”.  If solicitors for the parties had researched the issue and had attended at taxation to assist, then I am certain the Review would not have been necessary.

HCA 7622 /1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 7622 OF 1999

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DECISION

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Background

1. In this action, in essence the plaintiffs’ claim against the defendants is for breach of copyright of the plaintiffs’ design of a device known as an aluminium border.  It was alleged that 1^st Defendant and several other members of the dramatis personae were originally employed by the plaintiffs, and when they left, they took certain information and/or drawings with them.

2. The action commenced in 1999, and after a period of inactivity, the defendants took out an interlocutory Summons dated 25 August 2004 to strike out the plaintiffs’ action because of their inexcusable delay in proceeding with it, to the prejudice of the defendants.  That Summons was fixed for hearing before Deputy Judge Muttrie on 28 January 2005.  On that day, the plaintiffs’ counsel sought an adjournment.  The plaintiffs told the judge that an important witness had “surfaced”, and the plaintiffs wanted to put in another affirmation.

3. The adjournment was granted by the judge on terms.  The Order given was in the following terms:

“	1.	Leave be granted for the 1st and 2nd plaintiffs to file and serve further affidavit in opposition within 7 days from the date hereof;
	2.	Leave be granted for the 1st and 2nd defendants to file their affidavit in reply, if so advised by counsel within 14 days thereafter;
	3.	The hearing for the 1st and 2nd defendants’ Summons be adjourned to a date to be fixed in consultation with counsel’s diary with one day reserved;
	4.	Costs of and occasioned by this adjournment be to the 1st and 2nd Defendants with certificate for 2 Counsels and such to be taxed if not agreed and be paid forthwith.”

4. The taxation of that Order came before me on 17 February 2006.  The parties could not agree upon the meaning, definition or effect of the phrase “costs of and occasioned by”, even though this phrase is used practically every day in the courts.  Neither side thought it fit to provide me with any authority in support of their respective interpretations of the phrase “costs of and occasioned by”.  In order not to waste the hearing, I went on to tax as many items as possible in the circumstances.

5. I gave directions for the parties to supply me with authorities in support of their respective interpretations of the phrase “costs of and occasioned by” within 14 days.  I indicated that having considered their authorities, I would decide on Items 5, 6, 45 and 46 of the Bill and then hand down a written decision.  As the receiving party had argued that the skeleton submissions had to be substantially re-done for the adjourned, I asked the receiving party to “prepare a chart showing the differences, if any, in the skeleton submissions for 28 January 2005 and 28 September 2005.”

6. It should be recalled that in the action, the defendants alleged that no question of infringement arose as they had separately and independently developed their own project for the aluminium bonder.  Unfortunately, due to passage of time, 3 key members of the defendants’ development team would not now be available as witnesses.  These were : Mr Tan who passed away in 2003; Mr Yan (“Yan”) who had emigrated to Australia in 2001; and a Mr CC Chan whom the defendants had lost touch with since 1999.  The defendants argued that they were prejudiced as a consequence, and took out the Summons to Strike out the plaintiffs’ claim.  The Summons was scheduled to be heard before Deputy Judge Muttrie on 28 January 2005.  On that day, the plaintiffs applied for an adjournment on the basis that fresh information had come to light in relation to Yan, one of the so-called “missing witnesses”.  The adjournment which was granted, but the plaintiff was ordered to the bear costs I was called upon to tax.

7. After the adjournment, and in compliance with Judge Muttrie’s Order dated 28 January 2005 the paying party (the plaintiffs) filed the 2^nd Affirmation of Fung Shu Kan, the Financial Director of P1. In essence that affirmation said that Yan was previously employed by the plaintiff; Yan’s work did not involve the development of aluminium bonders; but records showed that Yan’s wife, another former employee of the plaintiff did have access to the technical drawings of the aluminium bonders.  The Affirmation concluded that it could not have been possible for the defendants to have independently developed their own aluminium bonders.  The other affirmation filed that day (of Ching Lit Mei Assistant solicitor of plaintiffs’ solicitors) was for the sole purpose of adducing the English translation of a document exhibited to Mr Fung Shu Kan’s 2^nd Affirmation.

8. On 7 March 2005 the receiving party (the defendants) filed the 3^rd affirmation of 1^st Defendant in response to Mr Fung Shu Kan’s 2^nd Affirmation.  After that the plaintiffs filed 2 more affirmations (Liu Chou Kee Peter 14 May 2005) and (Leung Wing Kin Simon 14 May 2005).  It is not readily apparent how the last 2 affirmations come within Deputy Judge Muttrie’s Order dated 28 January 2005 but that objection was not taken before me.

The phrase “costs of and occasioned by”

9. A pithy definition of the meaning of the phrase “costs of and occasioned by” was given by Hill J in The Lord Strathcona (No 2) [Probate, Divorce and Admiralty Division] [1926] P18.  His Lordship stated that ““costs of andoccasioned by the intervention” means all plaintiff’s costs subsequent to the intervention except such as the plaintiffs would have incurred if there had been no intervention.”

10. The case of The “Nyland” Admiralty Division [1964] 1 Lloyd’s Rep 319 contains a lengthy and useful discussion between court and counsel on the meaning of the scope of “costs of and occasioned by”.  I shall endeavour to give a summary of that case, as the discussion therein is very helpful in the application of the phrase “costs of and occasioned by” in our present taxation.

11. The “Nyland” concerned a claim for collision damage. The tanker Tectus was damaged due to the Nyland’s negligence.  During the hearing, and after many witnesses had given evidence, the defendant sought to amend its pleadings in relation to damages.  Having heard counsel, the judge Hewson J allowed the defendant’s application to amend, but on terms. Hewson J first made an order that the plaintiff was to pay the costs of the action generally. The judge then ordered the defendant to “pay the plaintiff the costs of and occasioned by the amendment” (of the defendant’s particulars of disputed damage.)  The matter then went to taxation.  The taxing Master took the view that “costs of and occasioned by” included the costs of determining the issues raised by the amendment.  It came back before the judge. Hewson J declared that the taxing master was wrong, as “costs of and occasioned by” did not include the costs of determining the issues raised by the amendment.  He explained that, although the plaintiff had been ordered to pay defendant’s costs of the action generally, the plaintiff should not be responsible for certain costs.  For convenience I have summarized them below.  According to Hewson J. the plaintiff (in his action) would not be responsible for:

	The costs of the defendant’s amendments or the plaintiff’s consequential amendments;
	Any costs due to the amendments being raised late;
	Any costs due to having to deal with the amendments separately instead of concurrently with other matters;
	Consultation with counsel as to the future conduct of the case in the light of the amendments;
	Enquiries of witnesses who had already given evidence at trial; and
	Additional expenses in consultation with experts because of amended matters.

12. Hewson J then stated that it was not possible to foresee or catalogue all the additional expenses that might arise incidental to such a situation, but that the plaintiffs are “entitled to such additional costs as would not have been incurred if the defendant had delivered their pleadings originally in the amended form”.

The test to be applied

13. Guided by the principles elucidated from the cases above, I have formulated a test to decide whether an item can be regarded “costs of and occasioned by” the adjournment.  The test is in the following terms: “Would this item of costs have been incurred by the receiving party irrespective ofwhether there was an adjournment on 28.1.05?  If the answer is “Yes”, then the paying party would not be liable for that item of costs, as that item of costs cannot be regarded as “costs of and occasioned by” the adjournment.  But if the answer is “No”, that item of costs will be regarded as “costs of and occasioned by” the adjournment, and the paying party would be liable for it.

Items 5 & 6

14. Item 5 is described in the Bill as “6 December 2004 Attending conference with junior counsel Mr Edward Shum and the client to prepare for the hearing (1 hour-PM)”.  Item 6 relates to payment of counsel’s fees of that conference.

15. Applying the test formulated in paragraph 13 above, the paying party would not be liable for Items 5 & 6 because a conference with junior counsel would have taken place in any event on 6 December 2004.  These costs are not “costs of and occasioned by” the adjournment on 28 January 2005.

Items 45 and 46

16. These relate to the fees of Senior Counsel for the receiving party, Mr Andrew Liao SC, and for junior counsel for attending the hearing on 28 January 2005.  The fees cannot be regarded as “costs of the adjournmentand occasioned by the adjournment”.  The short answer is that both counsels would have attended the hearing on 28 January 2005 in any event. Counsels’ fees would have been incurred irrespective of whether there was an adjournment.  It must be noted that the application for the adjournment was made on the day of the hearing itself, and there is nothing before me to indicate that the receiving party knew in advance that the plaintiffs would be seeking an adjournment before Deputy Judge Muttrie on 28.1.05.

The fresh skeleton Submissions for 28.9.05

17. Applying the test formulated in paragraph 13 above, “Would this item of costs have been incurred by the receiving party irrespective ofwhether there was an adjournment on 28.1.05?  The answer must be “No”, because there would not have been any need to attend again in September 2005.  The arguments would have concluded in January 2005.  Could the paying party argue that there should be an apportionment, in the sense that some parts of the January skeleton could be re-used in September?  In my view it would not be appropriate to allow such an argument.  The skeleton submissions of counsel are the outlines of the arguments they intend to advance at the hearing.  They represent the fruits of counsel’s deliberations and strategy.  Skeleton submissions are not analogous to a piece of handicraft and susceptible to “cut and paste” technique, and therefore it would be wrong in principle to compare the skeleton submissions to see whether there are “new” parts.  An adjournment must necessitate a re-assessment of the receiving party’s position by c1ounsel in the light of new information.  Therefore it will be irrelevant if some matters have already been mentioned in the January skeletons.

18. I do not think that it would be appropriate of me to award any costs for the “research” done after the hearing on 17 February 2006 in relation to authorities on the meaning of, or decided cases on the phrase “costs of and occasioned by”.  The work should have been done in preparation for the hearing on 17 February 2006.  Furthermore, the material sent into the court by both sides subsequent to the taxation hearing was not useful.

19. The parties should now be in a position to calculate the remaining items in the Bill and proceed to the issuance of an Allocatur. Out of an abundance of caution, I give liberty to apply within 14 days if necessary.  Parties are reminded of the importance of adhering to paragraph 3 of Practice Direction 4.3.

HCA 7622/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 7622 OF 1999

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J U D G M E N T

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1.  The defendants by this application seek to strike out the plaintiffs’ action because of their inexcusable delay in proceeding with it, to the prejudice of the defendants.

2.  The plaintiffs are subsidiaries in the ASM group of companies, whose primary activity is to design, develop and produce micro-electronic equipment.  At the material time, this included a device known as an aluminium bonder.

3.  From 1980 until his resignation in 1995, the 1^st defendant (Mr Chan) was employed variously with the plaintiffs holding senior positions; latterly he was a director and then technical director of the 1^st plaintiff and in charge of design and development of micro-electronic equipment.  His contracts of employment recognized the sensitive nature of what he was doing, for they included clauses restraining him from disclosing confidential information during and after termination of his employment.

4.  In 1995, the year of Mr Chan’s resignation from ASM, a group of companies known as Intra-Tech came to be founded.  Mr Chan had a significant financial interest, and upon his departure from the ASM group he took up with Intra-Tech.  He was appointed a director of the 2^nd defendant (Intra-Tech Mechatronics) which was and remains one of the group.

5.  In or about October 1997, management of ASM Assembly came to learn of an aluminium bonder that was being promoted by the Intra-Tech group as Bonda 100.  Subsequent enquiry came to satisfy them that this was a copy of an aluminium bonder that had been developed by the ASM Group; that their product incorporated trade secrets and confidential information known to Mr Chan; that the emergence of the Bonda 100 in its similar format indicated that Mr Chan had divulged to his new employer secrets that he should not have.

6.  By a writ filed in May 1999, the plaintiffs began this action, claiming against Mr Chan breach of his contract, and of his fiduciary duties of confidence and copyright.  Against Intra-Tech Mechatronics they claim wrongful use of confidential information and breach of copyright.

7.  In their defence, the defendants plead that the Bonda 100 was a product which resulted from research and development undertaken by Intra-Tech Mechatronics.  Mr Chan specifically denies making use of any information that he may have acquired whilst with the ASM group.  Further, componentry that the plaintiffs allege were made using trade secrets and confidential information were freely available on the open market.

8.  The proceedings having begun in May 1999, various interlocutory matters were applied for and dealt with until May 2001, when a Master turned down an application by the plaintiffs for further and better particulars of an amended defence.  Then the action stagnated.  There was nothing further until June 2004, more than 3 years later.  Then the plaintiffs by new solicitors filed a notice of intention to proceed followed by in July 2004 a summons for directions.  This precipitated the application which is now before me, brought by the defendants in August 2004, for dismissal of the action for want of prosecution under the inherent jurisdiction of the court, upon the ground that the plaintiffs have been guilty of inordinate and inexcusable delay to their prejudice.  A second ground founded in abuse of process is not now being pursued.

The Law

9.  This is a discretionary exercise, in terms which are well settled, and not contested, as formulated by Lord Diplock in Birkett v James [1978] AC 297 at p. 318:

“The power … should be exercised only where the court is satisfied either (1) that the default has been intentional and contumelious, eg disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court; or (2)(a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants either as between themselves and the plaintiff or between each other or between them and a third party.”

 From this emerges the issues in this application.

The Issues

10.  Has there been on the part of the plaintiffs’ inordinate and inexcusable delay?  If so, is it such as may cause serious prejudice to the defendants, or give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action?

11.  I shall consider these in turn.

Delay

12.  Evidence adduced by the defendants includes a chronology which, it submits, highlights the delay it now complains of.  Summarised, this is as follows:

August 1997 –  The 2^nd defendant sent its ‘Bonda 100’ to Taiwan for a trial run.

October 1997 – The plaintiffs were first alerted to the existence of the Bonda 100.

January 1999 – The plaintiffs sent a letter before action.

May 1999 – The writ was filed and served.

July-November 1999 –   The defendants made several requests for further and better particulars; an amended statement of claim was filed.

December 1999 – The defence was filed.

March-December 2000 –  The parties made various applications for further and better particulars; amended pleadings resulted.

March 2001 –  A summons by the plaintiffs for particulars of the amended defence was filed.

May 2001 – An order was made dismissing that application.

June 2004 – The plaintiffs filed notice of intention to proceed.

13.  The period of delay giving rise to this application is that of the 3 years and 1 month between May 2001 and June 2004.  During that time, there was no activity whatsoever on the court file.  There is also a secondary period of delay about which the defence complains; namely, that the plaintiffs having found out about the Bonda 100 then waited for some 19 months before filing their writ.  It is accepted by the defence that delay pre-writ does not count; only post-writ is it relevant.  However, the point has been made that in considering the extent and consequence of delay suffered once the action has begun, the court may factor in significant delay in getting things under way; the longer this has taken, the higher the duty to prosecute diligently.  I accept this to be so; see the White Book I, 25/L/5.

14.  The plaintiffs have sought to justify the time taken in the litigation by their own chronology.  During the pre-writ period, they undertook the following, namely, they:

(a)     employed commercial investigators to carry out an investigation;

(b)     sought counsel’s advice;

(c)     engaged the Hong Kong Productivity Council (HKPC) to carry out tests;

(d)     retained counsel to prepare a statement of claim;

(e)     sent a letter before action.

15.  To explain the time lag complained of post-writ the following matters were dealt with during this period:

June 2001 –   The first drafts of the statements of four potential witnesses were settled.

June 2001 –   A Mr Poon of HKPC (apparently he was responsible for the pre-writ report) was engaged to undertake another report comparing the bonders of the parties.

June 2002 –  Mr Poon was asked for a progress report.  He responded ‘it is not ready’.

April 2002-March 2004 –   Periodic requests were made to Mr Poon for a progress report.  A meaningful response in September 2003 finally emerged: ‘the report will be ready in one week’.

May 2004 – Mr Poon’s report became available.

June 2004 – The plaintiffs filed a notice of change of solicitors, and they filed the continuance.

16.  It is conceded by the plaintiffs that there was a delay, but that was neither inexcusable or inordinate, given the amount of work that had to be carried out.

17.  With due respect to those putting forward that proposition, it is difficult to see how it could be justified.  No explanation has been proffered for Mr Poon’s tardiness and I should have thought he could, and should, have been given an ultimatum and then sacked within, say, six months of his engagement.  After all, he was not new to the history.  And to promise finality in a week after more than 2 years on the job and then delay a further 9 months is unprofessional and inexcusable.  Furthermore, there has been no reason given why the case could not have been further advanced in the meantime; why for instance discovery, the exchange of witness statements and other pre-trial activity could not have been pursued.

18.  As to the time frame pre-writ, to the extent that it may be factored in overall; I find the plaintiffs to have been somewhat unhurried during the stage, but not to the extent that what resulted was unwarranted delay.  Indeed, the time and activity then spent should have permitted the post-writ activity to have been seamlessly pursued, which quite apparently did not happen.

19.  The delay complained of was, as I find, both inordinate and inexcusable.

Serious Prejudice – Is This The Result?

20.  Waung J in Lui Chun Kwong v Kier Hong Kong Limited [1995] 1 HKC 695 reviewed leading cases on what amounts to prejudice and how it is to be established.  I adopt his synopsis at p. 704:

“	(1)	To justify dismissal some additional prejudice (over and above the prejudice caused by pre-writ delay) to the defendant flowing from the plaintiff’s post-writ delay must be shown.
	(2)	The additional prejudice need not be great but must be more than minimal.
	(3)	A casual link must be proved between delay and prejudice.
	(4)	The burden of proving prejudice is on the defendant as only the defendant can satisfactorily explain the prejudice suffered.
	(5)	To justify dismissal, more than a bald assertion that delay had prejudiced the defendants is required.  There had to be some indication of some specified prejudice on some specified issue.
	(6)	where loss of memory on a particular issue by a particular witness is concerned, the court is free to draw the necessary inference of further loss of memory from lapse on time.
	(7)	The prejudicial effect of delay depends largely on the nature of the issues in the case.”

21.  The defence claim of prejudice as advanced by Mr Liao, SC derives primarily from the unavailability of key witnesses.  Their case is that Bonda 100 was the result of independent research by members of the design team of Intra-Tech Mechatronics; thus material to its defence will be oral evidence as to how and when and otherwise in what circumstances their designs came into being.  A bare denial without positive assertions from these people may not be convincing.  With 8 or 9 years having elapsed, some members of the design team cannot be contacted or are otherwise not available.  Three key members have been identified as being Yan Cheung Hung, a mechanical engineer, Chan Chi Cheung, another mechanical engineer and Tam Sun Hoi, described as service manager and one who , it is said, spent a lot of time in developing the bonding process and in the evaluating the Bonda 100.

22.  According to the evidence, Mr Yan left his employ in April 2001 and emigrated to Australia.  His current whereabouts are, it is said, unknown, despite diligent enquiries.  Mr C C Chan left in July 1999 and his whereabouts are also unknown.  Mr Tam died in September 2003.  It is said that he was one of the most important members of the design team, with personal knowledge from the time the development of the project began.

23.  Needless to say, the other Mr Chan, the 1^st defendant, is still available to advance his and his co-defendant’s cause.

24.  What emerges from the evidence adduced for ASM in reply is the interesting fact that Mr Tam, now deceased, was in fact employed by ASM Assembly, the 1^st plaintiff; that he was so employed until July 1997, just 1 month before Intra-Tech Mechatronics sent the Bonda 100 to Taiwan for testing.  This, of course, puts into perspective his so-called involvement in the design and development of the Bonda 100 and, in particular, the testimony that he had personal knowledge of the design process since it began.

25.  Similarly, Mr Yan had also spent time at ASM, from where he resigned in September 1996.  During his time there, it is said that he did not participate in the development of bonders, calling into question his ability to have become a key player in the development of the Bonda 100 not long before its emergence.

26.  Mr Yan’s role being a contested issue is not a matter for me to determine, at least not at this time.

27.  But what is apparent are the following:

(a)	The componentry in question could only have originated in drawings.  This case must be about those drawings.  That must be where the emphasis lies.  Discovery has not yet been pursued, but one can assume that in the development of its own device, Intra-Tech Mechatronics (and Mr Chan) will have their own drawings, and specifications;
(b)	Mr Tam (deceased) could not have materially assisted in having first hand knowledge of the research and development, having arrived so soon before its emergence as a finished entity, at least not in a way that might have supported the defence case; and
(c)	even had the proceedings developed timeously, Messrs C C Chan and Yan would have been long gone by the time the matter would have been ready for trial.

28.  I make the further observation that with the writ under way by May 1999, Intra-Tech Mechatronics on advice may well have deemed it prudent to begin gathering its evidence and, in particular, to keep in touch with those of its design team who were planning to leave and then did so.

29.  Mr Liao submitted that a defendant is under no obligation until directed to prepare for trial.  Of course that must be so.  But if he chooses not to do so and loses touch with his former employees that is not of itself a matter that can be blamed on his adversary.

30.  What defeats the defence claim of prejudice is, as I find, that there is no causal link between what the defendant claims to be a significant difficulty in its defence and the plaintiffs’ delay.

A Fair Trial, Is That No Longer Possible?

31.  There has been much legal discussion but not much authority as to what is meant by a fair trial and when, because of the risk of that not being possible, the proceedings should be terminated.  It seems to me that it is very much a matter of commonsense; can in the factual circumstances of the case the matter be fully and properly analysed by the trial judge, leading to a decision that is fair?

32.  As a direct result of the plaintiffs’ inexcusable delay, might it be that vital oral or significant documentary testimony has gone for good?

33.  Waung J in Lui Chun Kwong said at page 712:

“As can be seen from the remark of Lord Salmond in Birkett v James (p 327G), impossibility of fair trial is more likely to be established in an action wholly involving oral evidence dependant on memory of events rather than dependant on assessment of credibility of witnesses.  Further, in an action where part or large part of the evidence is documentary, the difficulty of establishing [that a] fair trial [may be] not possible is considerably increased so that in many cases especially commercial cases involving substantial documentation the court could not conclude that no fair trial is possible even after very very long period of delay.”

34.  In the circumstances of this case, I fail to find on the evidence before me that there is a risk of unfairness should this matter proceed to trial.

Conclusion

35.  I have found that there has been inexcusable and inordinate delay by the plaintiffs in pursuing this action but that the defendants have failed to establish that they are to be seriously prejudiced as a result ; further, that such delay will not render a fair trial impossible.

36.  I exercise my discretion by ruling that the application fails and is dismissed.  Costs (nisi at first instance) are to the plaintiffs in any event.

Mr P Garland, SC leading Mr A. Chow, instructed by Messrs William W L Fan & Co for the 1^st and 2^nd Plaintiffs

Mr A Liao, SC leading Mr E Shum, instructed by Messrs K M Lai & Li, for the 1^st and 2^nd Defendants