REALTY TEXTILES CO LTD v. CHING HING WEAVING DYEING & PRINTING FACTORY LTD

Dates of Hearing:  14, 17, 19 & 27 July 2006

Date of Interim Ruling:  13 September 2006

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INTERIM   RULING

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1.  These proceedings concern a dispute between a textile company and a dyeing factory.  In HCA 1880/2005, Ching Hing, the dyeing factory sues Realty, the textile company, for monies due for the dying of cloth.  In HCA 1884/2005, Realty sues Ching Hing for the return of undyed cloth.  Sensibly the proceedings have been consolidated.

2.  In earlier interlocutory proceedings I made an order that upon Realty lodging a bank guarantee, the sum of $2,790,157, Ching Hing should first make application for an export licence to export cloth from the mainland to Hong Kong, and upon receipt of the export licence, return certain cloth to Realty.

3.  Matters did not proceed as simply as one might have hoped.  Realty promptly obtained the necessary bank guarantee.  However, although the application for the export licence has been lodged, for some unknown reason the mainland authorities have not processed it and the cloth has not yet been returned.

4.  On 4 July 2006, Realty filed a summons pursuant to O 29 R 1, for orders:

(i) that Ching Hing inform Realty of the whereabouts of certain cloth, belonging to Realty, and in the possession of Ching Hing, and permit a fabric inspector to undertake an inspection of the cloth;

(ii) that Ching Hing make inquiries with its mainland agent in relation to the export licence to permit the return of the cloth to Hong Kong;

(iii) that Ching Hing cause its representative to accompany a representative of Realty to the mainland customs office to inquire about progress on an application for the export licence;

(iv) consequential orders.

5.  That summons was argued over a series of days, in the course of which the position of Ching Hing progressively, but slowly, advanced towards an indication that the necessary export licence would shortly be obtained.  When the hearing concluded it seemed apparent that the licence was imminent.  I accordingly indicated to counsel that I would defer preparation of a judgement on the summons as matters seemed to be progressing to a solution.  The parties were to advise me if the matter was not resolved and the judgement would then be delivered.  There was no objection to that course.

6.  Since that time I have received copies of a number of letters from each side from which it is apparent that matters are steadily progressing to, if not a complete resolution of the issue of the return of the cloth, but a substantial resolution of that issue, perhaps leaving outstanding questions of damages.  Also outstanding will be the question of costs on Realty’s summons.

7.  Having regard to the manner in which this matter has developed since the conclusion of the hearing I do not intend to deliver a formal judgement on Realty’s summons unless requested to do so by the parties.  Application may be made by either of the parties, on seven days notice, to have the matter restored to argue any remaining issues, and any issue as to costs.  In the event that the only question outstanding is that of costs I direct that Realty shall make submissions in writing on that question, Ching Ming may reply 7 days thereafter, and Realty may respond 7 days after that.  It should not then be necessary to hear Counsel on the question of costs, but if that is required application to set the matter down for argument on costs may be made by either party.