CHINA RAILWAY INVESTMENTS GROUP (HONG KONG) LTD v. ETERNITY PROFIT INVESTMENTS LTD AND ANOTHER

HCA 701/2013

[2018] HKCFI 1928

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 701 OF 2013

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D E C I S I O N

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Background

1.  This action was commenced in April 2013, but has not progressed beyond amendments to the Statement of Claim, despite a checkered history.

2.  The Writ of Summons was issued by the Plaintiff on 26 April 2013 against 2 named Defendants.  A Chinese Statement of Claim was served with the Writ (“SOC”).  The subsequent steps taken by the 2^nd Defendant to strike out the claims against it may partly be attributable to the manner in which the claims were pleaded in Chinese, in a prolix manner.  Prolixity, repetition and unnecessary references in pleadings to matters of evidence often distract from the essential elements of the claim and the proper focus thereon.

3.  On 30 July 2013, the 2^nd Defendant applied to strike out the SOC, on the ground that (inter alia) it discloses no reasonable cause of action, is frivolous and vexatious by pleading irrelevant and scandalous particulars, and is embarrassing because of its prolixity but lack of the essential particulars.  Shortly before the hearing of the striking out application, the Plaintiff applied to amend the SOC on 13 May 2014, by deleting the SOC in its entirety and replacing it with an Amended Statement of Claim in English (“ASC”).  On 20 May 2014, the Plaintiff was ordered to pay the costs of the amendment of the SOC.

4.  Further and better particulars of the ASC was filed on 4 August 2014.  On 15 August 2014, the 2^nd Defendant applied again to strike out the ASC (“2^nd Striking Out”), this time on the ground that the amendments made should be disallowed and struck out as they add or substitute new causes of action pleaded to have occurred more than 6 years before the date of the amendments, and further, that the ASC discloses no reasonable cause of action against the 2^nd Defendant.  On 3 June 2015, the Master ordered that the amendments in the ASC be struck out in so far as they relate to the causes of action against the 2^nd Defendant, and further ordered that unless the Plaintiff applies to re-amend the ASC by 4 pm on 17 June 2015, the claim against the 2^nd Defendant be struck out with costs.

5.  Before the expiry date of 17 June 2015, the Plaintiff filed notice of appeal against the Master’s decision, and at the same time issued its summons for leave to amend the ASC, by filing a draft Re-Amended Statement of Claim (“RSC”).  In the draft, the ASC was crossed out again in entirety, with a new pleading of the claims.

6.  The appeal was dismissed by Deputy High Court Judge Kwok SC on 9 December 2015.  The learned judge held that the cause of action as sought to be pleaded in the ASC was a new cause of action for breach of oral agreement, which bears no resemblance to the original SOC and does not arise out of the same facts or substantially the same facts as those pleaded in the original SOC, such that the SOC should be struck out.  The judge considered that the appeal and the Plaintiff’s steps in the action constituted an abuse of process, and ordered costs to be paid by the Plaintiff on indemnity basis.

7.  Despite the issue of the summons to re-amend the SOC on 17 June 2015 (“RSCSummons”), the Plaintiff took no further steps in the action.  It was not until 12 October 2017 that the 2^nd Defendant served Notice of its intention to proceed with the action, and arranged for the hearing of the RSC Summons to be restored.  On 29 December 2017, the 2^nd Defendant also issued its 3^rd summons to strike out the Writ and the RSC, on the ground that they disclose no reasonable cause of action, are frivolous and vexatious, embarrassing, and constitute an abuse of process by want of prosecution, inordinate and inexcusable delay, and procedural abuse.  The hearing of the RSC Summons and the striking out application were fixed for hearing on 14 June 2018, with further submissions filed on 1 August 2018.

8.  Stripped to their essentials, the claims sought to be made by the Plaintiff against the 2^nd Defendant relate to an oral agreement allegedly made in November 2006, in relation to a joint venture to operate a railway logistics business on the Mainland, pursuant to which oral agreement various written agreements were signed by the Plaintiff and the 1^st Defendant (and not the 2^nd Defendant).  The Plaintiff claims various relief against the Defendants, including (as against the 2^nd Defendant) damages for breach of contract, a sum of HK $100 million, and the value of 100 million new shares of the 2^nd Defendant.

9.  The Plaintiff accepts that the re-amendments made in the RSC were introduced after the expiry of the limitation period in this case.  On behalf of the Plaintiff, Leading Counsel seeks to argue that the amendments made in the RSC should be allowed as they do not introduce any new claim, but in any event, any new claim arises out of the same or substantially the same facts as were originally pleaded in the SOC and which are already in issue in the existing proceedings, and that there is no abuse to warrant striking out the entirety of the Plaintiff’s action against the 2^nd Defendant.

The RSC Amendments

10.  The 2^nd Defendant argued that the amendments named in the RSC constitute a new claim for the purposes of s 35 (3) of the Limitation Ordinance, as the oral agreement now pleaded in paragraph 5 of the RSC is fundamentally different to the agreement originally pleaded in the SOC. 

11.  The SOC pleads, in paragraph 11, as follows:

“2006 年11月中旬，原告人代表王精與第一被告及第二被告的實際控制人韓明光˴劉益東˴雙方就中鐵自備列物流專案的合作原則達成了以下部分口頭協定及部分書面協定的合約。口頭協定內容是以下6條 ...”

12.  In comparison, the alleged agreement is pleaded in paragraph 5 of the RSC as follows:

“After discussion, an oral agreement was reached between Mr Wang on behalf of the Plaintiff and Mr Hon and Mr Liu of the 1^st and 2^nd Defendants, in the presence of Mr Tsang Chi Hin, in or about November 2006 (“the Oral Agreement”) with the following terms…”

13.  The 2^nd Defendant seeks to place emphasis and reliance on the fact that the Plaintiff had indicated, in the course of the hearing before the Master, that the purpose of the RSC Summons was to “restore” the Writ and the claim made in the original SOC, such that if the RSC constituted any departure from the Writ and the SOC, that would be an abuse of the order of the Master whereby leave was given to the Plaintiff, to apply to re-amend the SOC.

14.  The 2^nd Defendant argued that material differences exist in the RSC, so far as they relate to the parties to the alleged agreement and/or their representative capacity, the terms and the breaches of the alleged agreement.

15.  I do not agree that there are material differences in the pleading made in the SOC and in the RSC, so far as they relate to the terms and breach of the alleged agreement made in November 2006 (“Agreement”).  As Mr Wong SC argued on behalf of the Plaintiff, only facts which are material to be proved should be taken into account in considering whether a “new cause of action” has been added by amendments, whereas the addition of further instances or the provision of better particulars do not amount to the introduction of a new cause of action.

16.  The same claims of the substantial terms and effect of the Agreement are made in the SOC and RSC, and the same pleading of alleged breach of the Agreement can be found by comparing paragraphs 41 of the SOC and 26 of the RSC, and paragraphs 43 of the SOC and 27 of the RSC.  Essentially, the pleading is of the same Agreement, the same breach of failure to make payment of the sum of $100 million claimed, failure to issue the 100 million shares, and the 2^nd Defendant’s sale of its shareholding in the 1^st Defendant, showing an intention no longer to be bound by the Agreement.

17.  I also accept the submissions of Mr Wong, that the Plaintiff’s pleaded case (in paragraphs 26 and 27 of RSC) of the breach of the Agreement (by the 2^nd Defendant’s sale of its shareholding in the 1^st Defendant in November/December 2008) was sought to be made before the expiry of the relevant limitation period of 6 years.

18.  As for the parties to the Agreement, paragraph 11 of the SOC originally pleaded, in Chinese, that the Agreement made in November 2006 was between Wang of the Plaintiff, and Hon and Liu, the de facto controllers of the 2^nd Defendant and the 1^st Defendant, and further, that the Agreement was made partly orally and partly in writing. 

19.  In my view, there is ambiguity in the Chinese language as used in paragraph 11 - as it is uncertain whether the pleading is to be read as stating that the Agreement was made:

(1)   between Wang acting for the Plaintiff on the 1^st part, the 1^st Defendant on the 2^nd part, and “the 2^nd Defendant’s Hon and Liu” (ie Hon and Liu acting for the 2^nd Defendant) on the 3^rd part; or

(2)   between Wang acting for the Plaintiff on the 1^st part, the 1^st Defendant on the 2^nd part, and Hon and Liu, the de facto controllers of the 2^nd Defendant personally on the 3^rd part; or

(3)   between Wang acting for the Plaintiff on the 1^st part, and Hon and Liu, the de facto controllers of the 1^st Defendant and of the 2^nd Defendant, personally, on the 2^nd part.

20.  The Deputy High Court Judge stated (in paragraph 13 of the Reasons for Decision) that the Agreement was pleaded in the SOC to have been made between the Plaintiff and the de facto controllers of the 2^nd Defendant, with no mention of the 1^st Defendant, which appears to be consistent with either (2) or (3) above.

21.  In the further submissions filed on the Court’s direction after the hearing, Mr Wong SC pointed out that the 2^nd Defendant itself had understood paragraph 11 of the SOC as meaning that the Agreement was concluded between the Plaintiff and Hon and Liu on behalf of both the 1^st and 2^nd Defendants (consistent with (1) above).  That was so stated in the 2^nd Defendant’s skeleton submissions filed before the Master at the hearing of the 2^nd Striking Out application.  The distinction had been made, by the 2^nd Defendant, that contrary to what was pleaded in paragraph 11 of the SOC, the ASC pleads that the Agreement was made between the Plaintiff “and a group of directors of the 2^nd Defendant, on behalf of the 2^nd Defendant” (emphasis added), only, and not with the 1^st Defendant.  Mr Wong also pointed out that at the hearing before the Deputy Judge, the 2^nd Defendant also confirmed that Hon and Liu were pleaded as an agent of the 2^nd Defendant in the SOC.

22.  In my view, it cannot be concluded with certainty that paragraph 11 of the SOC was, and should be, confined to pleading that the Agreement was made with Hon and Liu personally, as opposed to its being construed as an agreement being made with Hon and Liu of the 2^nd Defendant, or “the 2^nd Defendant’s Hon and Liu” (as generally used when pleading in English, to mean that Hon and Liu were representing the 2^nd Defendant).

23.  I also accept the submissions made by Mr Wong, that to the extent that DHCJ Kwok SC had found that the Agreement pleaded in paragraph 11 of the SOC was made between the representatives of the Plaintiff and “the de facto controllers of the 1^st and 2^nd Defendants”, and that it was not alleged that the oral Agreement was made on behalf of the 2^nd Defendant, this does not create an issue estoppel between the parties.  As Mr Wong argued, such finding made in the 2^nd Striking Out application was at an interlocutory hearing, related to a procedural application, when the issue of whether the Agreement was made with the 2^nd Defendant, or with Hon and Liu personally and not as agent of the 2^nd Defendant, had not been distinctly raised, nor fully investigated or argued, to have been determined with certainty against the 2^nd Defendant, in order to create an issue estoppel (New Brunswick Railway Company v British and French Trust Corporation Limited [1939] AC 1, Re Chime Corp Ltd [2003] 2 HKLRD 945).  In my view, although the decision made at the 2^nd Striking Out application was based on the finding made by the learned Judge as to the parties to the Agreement as pleaded in paragraph 11 of the SOC, such finding was not sufficiently clear and precise, and was not determined on the merits, to create an issue estoppel when this Court decides on whether the RSC pleads a new cause of action different to that pleaded in the SOC.

24.  On my reading of the SOC and the RSC, I take the view that the RSC pleads the same Agreement as that pleaded in the SOC, the oral aspect of the Agreement being made between the Plaintiff (acting through Wang) and the 2^nd Defendant (acting through Hon and Liu).  The cause of action remains to be alleged breach of contractual duties.  The same terms are relied on and pleaded: as to the establishment of a joint venture company in Hong Kong, the parties’ duties to make capital contribution for the joint venture company and the Mainland operating company, the shareholding structure proposed, the injection of the joint venture business into the 2^nd Defendant, and the 2^nd Defendant’s acquisition of the Plaintiff’s shareholding in the joint venture company for HK$100 million and the issue of 100 million new shares of the 2^nd Defendant.  The same breaches of the contractual duty are relied upon and pleaded: the 2^nd Defendant’s sale of its shareholding in the 1^st Defendant in November/December 2008, the failure to complete the transfer of the relevant shares in the joint venture company, and its failure to pay the sum of $100 million and to issue 100 million shares to the Plaintiff.  The same nature of remedies is sought, for loss and damages sustained as a result of the alleged breach of contract.

25.  In any event, I am satisfied that any new claim asserted in the RSC arises out of the same facts, or substantially the same facts as those relied upon and pleaded in the SOC.  The presence of an additional witness at the time of the making of the Agreement (as now pleaded in the RSC) cannot render the cause of action in contract a new one.  Nor does the alleged presence of an additional witness necessitate any major investigation, not hitherto required, into the facts constituting the cause of action and which will be the subject of enquiry at trial.  The substance of the dispute, and the investigation to be undertaken, remain unchanged from the time of commencement of these proceedings and the filing of the SOC: namely, the events, meetings and discussions which allegedly took place in June, July and November 2006, whether there was an agreement between the Plaintiff and the 2^nd Defendant in relation to the joint venture proposed involving the joint venture company and the Mainland operating company, the capital contribution required from the parties for the joint venture,  the manner of implementing that joint venture, and whether there was breach of the Agreement as alleged to have been made between the parties, including any involvement by the 2^nd Defendant (through its representatives) in the written agreements made between the Plaintiff and the 1^st Defendant.

26.  For these reasons, I am prepared to allow the amendments sought to be made by the RSC Summons.  It cannot be disputed that the guiding principle on the question of amendment is that all such amendments are to be made for the purpose of determining the real question in controversy between the parties, or of correcting any defect or error in any proceedings (Re Playmates Investments Ltd [1996] 4 HKC 577, 582).  Leave to amend is readily granted by the Court before trial, unless it can be shown that the new claim based on the amendment is bound to fail.  At this stage, the Court would not investigate into the merits of the case unless they are readily apparent.  Any prejudice to the other party which can be compensated by appropriate orders as to costs should not be a bar to amendment.  The question of delay, and the need for “re-investigation” into the facts asserted as a result of the lapse of time, will be dealt with below.

Whether the Writ and RSC should be struck out for abuse

27.  The 2^nd Defendant claims that the Plaintiff had abused the process of the court, by causing to be filed 3 inconsistent sets of pleadings as to the Agreement, by abusing the leave granted by the Master to amend the ASC, and further, by misrepresenting to the Court at the appeal hearing before the Deputy Judge that it had no intention to proceed with the RSC.

28.  Any inconsistency in the ASC has already been struck out.  To that extent, any abuse by the filing of the ASC has been addressed. 

29.  On my reading of the RSC as compared with the SOC, I have in the preceding paragraphs set out the reasons for my finding that the RSC and the SOC are based essentially on the same claims, and the same or substantially the same sets of facts.  I do not consider there to be such contradictions or inconsistencies between the SOC and the RSC as to justify any finding that the filing of and reliance on the RSC constitutes an abuse of process. 

30.  The leave granted by the Master for the Plaintiff to amend the ASC, on the basis of any representation made by Counsel for the Plaintiff to “restore” or “bring back” the SOC, or to make further amendments to “(add) the part that has been struck out”, and/or to “tally with the original” agreement pleaded in the SOC, cannot reasonably be taken to mean leave being granted to the Plaintiff only to reproduce the SOC word-for-word, or to insert “the part that has been struck out” (which would make no sense in view of the striking out of the ASC).  As Mr Wong highlighted, the Master had indicated at the hearing that it would be a matter for the Plaintiff how they would “revise the old statement of claim”, although he was going to make (and did make) an unless order that the application to re-amend the ASC should be made by a certain date, failing which the claim against the 2^nd Defendant would be struck out and dismissed.  The Plaintiff was accordingly free to decide how to plead the amendments in the RSC.

31.  The 2^nd Defendant seeks to place reliance on the fact that at the hearing of the appeal before the Deputy Judge, Counsel for the Plaintiff had indicated that it had no intention to proceed with the RSC and that it is an abuse for the Plaintiff, after the appeal, to pursue the amendments.  Having read the relevant passages, I do not consider that there was any misrepresentation or abuse.  What Counsel was stating was simply that if the Plaintiff should succeed on its appeal against the Master’s decision to strike out the ASC, the Plaintiff would not then be relying on the RSC to plead another case, as it would be unnecessary so to do.  However, since the Plaintiff’s appeal was not successful, and the ASC was struck out by the Deputy Judge, the Plaintiff cannot be said to have been estopped from pursuing the further amendments (as the 2^nd Defendant alleges).  Nor can the Plaintiff’s reliance on the RSC be regarded as abuse of process, or misrepresentation to the Court.

Whether the RSC should be struck out on the ground of inordinate and excusable delay or want of prosecution

32.  As I indicated at the commencement of the hearing, it is inexcusable that the RSC Summons for leave to amend, which was issued on 17 June 2015, should only be scheduled for hearing nearly 3 years later, on 14 June 2018. That, in my view, constitutes inordinate delay in the context of the nature of the RSC Summons and the history of the action.  As the 2^nd Defendant emphasized, the Plaintiff had taken no steps in the action between the dismissal of the appeal by the Deputy Judge on 9 December 2015, until the 2^nd Defendant applied to strike out on 29 December 2017, and steps were taken in late November 2017 to restore the hearing of the RSC Summons.

33.  The only reason for the inactivity was that set out in the affirmation of Wang Jing (“WJ”), the director of the Plaintiff, which was filed on 7 March 2018.  According to WJ, it was his brother, Wang Wai (“WW”), the sole shareholder of the Plaintiff, who had been the chief coordinator of the business project with the 1^st and 2^nd Defendants and who had handled most of the dealings with the various parties.  As a result of what WJ alleged to be false accusations and complaints made by the 2^nd Defendant to the Mainland authorities, that WW and WJ were implicated in fraud concerning the transactions which are the subject matter of these proceedings, WW was convicted of fraud on the Mainland in November 2010, and sentenced to 13 years of imprisonment.  It was not until 22 February 2018 that WW was released from prison.  A warrant for arrest had also been issued against WJ, such that he had not been able to return to the Mainland.  According to WJ, WW had been in possession of many of the documents which relate to the case, and WJ had to wait for WW’s release from prison before he could go through the documents in his possession.  WW is (apparently) appealing against his conviction, and also applying to the Mainland authorities for copies of the witness statements which outlined the dealings between the Plaintiff and the 2^nd Defendant throughout the joint venture, and are relevant to the present proceedings.

34.  The reason for the delay as offered by WW rings hollow.  The imprisonment of WW since November 2010 did not prevent the Plaintiff from instituting the present proceedings in April 2013.  The Plaintiff had been able to give instructions for the preparation of the original SOC in April 2013, the ASC in May 2014 and the proposed RSC in June 2015, verified by statements of truth.  There was no good excuse not to proceed with the action on the basis of the SOC or the RSC after the dismissal of the appeal before the Deputy Judge in December 2015.  The delay from December 2015 to November 2017 (when steps were taken to restore the hearing of the RSC Summons) was inexcusable.

35.  However, whether the RSC and the Plaintiff’s claim against the 2^nd Defendant should be struck out on the ground of such inordinate and inexcusable delay depends, not just on the existence of the delay, but on whether there is overall abuse, prejudice, contumelious conduct such as inexcusable non-compliance with or wholesale disregard of an order of the court or rules of the court, and consideration of the conduct of both the Plaintiff and the 2^nd Defendant (Wing Fai Construction Co Ltd v Yip Kwong Robert (2011) for HKCFAR 935). 

36.  In Wing Fai, the Chief Justice made it clear that the CJR brings about an entire change in litigation culture, that one of the main objectives is to enable parties to proceedings to have their dispute resolved as expeditiously, effectively and efficiently as reasonably practicable, and that the primary responsibility of the court is to secure the just resolution of disputes in accordance with the substantive rights of the parties.  The role of the court is therefore not to prevent actions being litigated, but to encourage and facilitate the expeditious and just resolution of such disputes in litigation.  The applicable principles for striking out are amply set out in paragraphs 64 to 80 of the judgment, and need not be repeated here.  Suffices it to highlight, for the present case, that the foundation for the jurisdiction to strike out for delay must be predicated on an abuse of the process of the court by the plaintiff - inordinate and inexcusable delay causing prejudice to a defendant, contumelious conduct or initiating proceedings without any intention to bring them to a conclusion being examples of abuse.  The Chief Justice also stressed that under the CJR regime, the combination of greater case management by the courts and the obligation on all parties to assist the court in achieving the underlying objectives, should ensure that delays are kept to a minimum, and that under the CJR regime, there should be no (or very few) applications to strike out for delay, unless pre-emptory orders have not been complied with.  The rationale is that no proceedings should get to the stage where there is such delay as to prompt an action to strike out for want of prosecution - when parties have the obligation to progress an action, and the court exercises its case management powers and duties to proceed with the action to trial (see paragraphs 66, 70 and 72 of the judgment).  When delays do occur, Wing Fai made it clear that greater use of the court’s powers should be made rather than an application to strike out (paragraph 73 of the judgment).

37.  In the present case, there is no evidence of prejudice caused to the 2^nd Defendant as a result of the inordinate and inexcusable delay on the part of the Plaintiff from December 2015 to October 2017 (when the 2^nd Defendant filed notice of its intention to proceed) and early 2018 (when the first hearing of the RSC Summons took place).  The only evidence adduced on behalf of the 2^nd Defendant is that the action has been lingering and has to be disclosed and reported because the 2^nd Defendant is listed on the Stock Exchange in Hong Kong.  It is said that this action has induced and may further induce potential investors to have an adverse view over the prospects of the 2^nd Defendant, which is unjustified. 

38.  Any adverse view taken of the 2^nd Defendant would have been caused by the commencement of the action, rather than the lack of progress of the action and the delay.  The 2^nd Defendant could have applied to strike out these proceedings immediately after December 2015 when the Plaintiff failed to restore the hearing of the RSC Summons, but it failed to do so until December 2017, apparently happy to let sleeping dogs lie (an attitude expressly frowned upon and discouraged in Wing Fai). 

39.  In the context of its opposition to the RSC Summons, the 2^nd Defendant argued that due to the lapse of time and the delay, there would be difficulties in the 2^nd Defendant’s “re-investigation” into the circumstances of the alleged making of the oral aspect of the Agreement in November 2006.  New inquiries would have to be made as to the witness said to be present at the time of the discussions: whether any agreement made had been approved and/or ratified by him, or the 2^nd Defendant.

40.  Attainment of the objectives of the CJR is premised on the parties’ early preparations for trial and their identification, at an early stage of the proceedings, of the issues in dispute for determination by the Court.  If prejudice is alleged to have been sustained as a result of any alleged delay, the Court would expect to be informed of the steps which had been taken by the 2^nd Defendant’s solicitors to take instructions from the 2^nd Defendant and to locate witnesses,  to obtain affidavits or witness statements from the essential witnesses as to the discussions and meetings alleged by the Plaintiff to have taken place, and whether these would be adequate to safeguard the interests of the 2^nd Defendant, and to remedy any prejudice alleged to have been caused by the delay.  None was forthcoming from the 2^nd Defendant, and no other form of prejudice has been asserted.  There is no adequate evidence presented, that the delay has caused a substantial risk that a fair trial is not possible.

41.  The Plaintiff issued the RSC Summons within time as stipulated in the unless order of the Master.  There has been no other breach of any order of the Court.  WJ claims in his affirmation that with his brother’s release and the efforts made to obtain the relevant documents, the Plaintiff has every intention to proceed with the action and to have its claims tried on the merits.  Whether that can be demonstrated to be true will no doubt be monitored by the Defendants, and by the Court.

42.  In all, I am not satisfied at this stage that there is any contumelious conduct of the Plaintiff constituting abuse, nor any clear evidence that the Plaintiff has no intention to proceed with the action, so as to justify the exercise of the draconian order to strike out the Plaintiff’s claims against the 2^nd Defendant.

43.  Whilst the Plaintiff is guilty of inordinate delay between December 2015 and November 2017, the 2^nd Defendant is likewise to be blamed for having failed to take steps before 2017, to seek the appropriate orders of the Court to progress the action (such as on its own to set a date for the hearing of the RSC Summons), to apply for directions for trial upon procuring the service of the RSC, and/or to seek payment into court as a condition for progressing with the action, or to strike out the Plaintiff’s claims should it fail to comply with the orders made on the 2^nd Defendant’s applications.  The Chief Justice made it clear in Wing Fai that the failure on the part of the parties to further the underlying objectives and their obligation to prosecute the proceedings is highly relevant (pp 971-972 of the judgment).

44.  For all the above reasons, I find no sufficient basis to strike out the Plaintiff’s action and claims against the 2^nd Defendant, and I allow the amendments sought to be made in the RSC.

Disposition

45.  The RSC Summons is allowed, and the striking out application is dismissed. 

46.  The costs of the RSC Summons, by which the Plaintiff seeks the indulgence of the Court to grant leave for it to file the RSC, are to be paid by the Plaintiff to the 2^nd Defendant, on an indemnity basis to reflect the Court’s disapproval of its delay in the setting down of the hearing for determination.

47.  The costs of the unsuccessful striking out summons are to be paid by the 2^nd Defendant to the Plaintiff.

48.  Half of the time and costs of the hearing on 14 June 2018 are to be apportioned to the RSC Summons, and half to the striking out summons.

49.  There will be an order that unless the RSC is filed and served by 4 pm on 24 August 2018, the Plaintiff will be debarred from serving any statement of claim in this action.  It will then be open to the Defendants to take such action as they may be advised in the event of the Plaintiff’s default.

50.  Needless to say, after such inordinate delay on the part of the parties in this case, this Court expects the pleadings to be served without further protraction, and a case management summons pursuant to Order 25 RHC to be issued by 30 November 2018, unless the Court otherwise directs.

HCA 701/2013

ACTION NO 701 OF 2013

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REASONS FOR DECISION
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Introduction

1.  On 26 April 2013, the plaintiff issued the writ in this action.  The Statement of Claim (“SC”) endorsed on the writ runs to 31 pages and was drafted by “黃約翰律師事務所” in Chinese.

2.  On 30 July 2013, the 2^nd defendant issued a summons to strike out the SC.

3.  On 13 May 2014 the plaintiff amended the SC under Order 20, rule 3 of The Rules of the High Court, Cap 4A.  What the plaintiff did was to cross out the SC in its entirety.  The Amended Statement of Claim (“ASC”) was drafted by Mr Damian Wong and Mr Alexsander(?) Wong. Their instructing solicitors were Simon Chan & Co.  It ran to 17 pages plus a one‑page “Annexed [sic] l”.

4.  On 20 May 2014, the 30 July 2013 summons came up for hearing and on 16 July 2014 the plaintiff was ordered to pay full costs.

5.  On 15 August 2014, the 2^nd defendant issued two summonses to:

(1) strike out the ASC read together with the Further and Better Particulars dated 4 August 2014 (“the Particulars”) and to “dismiss” the plaintiff’s writ; and

(2) disallow the amendments made to the SC read with the Particulars.

6.  On 3 June 2015, the master ordered that:

(1) “The amendments by addition in the Amended Statement of Claim in so far as it relates to the causes of action against the 2^nd Defendant be struck out under Order 20 Rule 4 of the Rules of the High Court (Cap. 4A)”;

(2) “Unless the Plaintiff do make application to re-amend the Amended Statement of Claim by 4:00 p.m. on 17^th June 2015, the claim against the 2^nd Defendant be struck out and dismissed with costs together with all costs reserved”; and

(3) “Costs of the 2 Summons together with 2 certificates to Counsel be paid by the Plaintiff to the 2^nd Defendant summarily assessed at HK$550,000.00 payable forthwith”.

7.  On 17 June 2015, the plaintiff:

(1) gave notice of appeal against the 3 June 2015 decision of the master; and

(2) also issued a summons for leave to “amend the Amended Statement of Claim filed on 13^th May 2014 as per copy attached”

8.  The draft Re‑Amended Statement of Claim crosses out the ASC in its entirety.  Only the one‑page “Annexed [sic] l” remains.  The Re‑Amended Statement of Claim (“RSC”) was also drafted by Mr Damian Wong and Mr Alexsander Wong in English.  Their instructing solicitors were Simon Chan & Co.  It ran to 17 pages plus a one‑page “Annexed [sic] 1”.

9.  On 2 July 2015, the master ordered by consent of the plaintiff and the 2^nd defendant that the hearing of this summons “be adjourned sine die with liberty to restore pending the determination of the Plaintiff’s Appeal”.

10.  On 9 December 2015, I heard the appeal and dismissed it with costs on indemnity basis.

11.  I said I would give my reasons in due course which I now do.

Section 35, Limitation Ordinance, Cap 347

12.  Section 35, Limitation Ordinance, Cap 347 (“the Ordinance”) provides that:

“(1) For the purposes of this Ordinance, any new claim made in the course of any action shall be deemed to be a separate action and to have been commenced-

…

(b) in the case of any other new claim, on the same date as the original action.”

(2) In this section a new claim means any claim by way of set-off or counterclaim, and any claim involving either-

(a) the addition or substitution of a new cause of action; or

…

(3) Except as provided by section 30 or by rules of court, the court shall not allow a new claim within subsection (1)(b), other than an original set-off or counterclaim, to be made in the course of any action after the expiry of any time limit under this Ordinance which would affect a new action to enforce that claim.

…

(5) Rules of court may provide for allowing a new claim to which subsection (3) applies to be made as there mentioned, but only if the conditions specified in subsection (6) are satisfied, and subject to any further restrictions the rules may impose.

(6) The conditions referred to in subsection (5) are-

(a) in the case of a claim involving a new cause of action, if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment;

  …”

Order 20, rule 5(2) and (5)

13.  Order 20, rule 5(2) and (5) of The Rules of the High Court, provide:

“(2) Where an application to the Court for leave to make the amendment mentioned in paragraph (3), (4) or (5) is made after any relevant period of limitation current at the date of issue of the writ has expired, the Court may nevertheless grant such leave in the circumstances mentioned in that paragraph if it thinks it just to do so.

…

(5) An amendment may be allowed under paragraph (2) notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment.”

Plaintiff’s skeleton submission

14.  Paragraphs 5 and 13 of the “Skeleton Submission of the Plaintiff” dated 4 December 2015 by Mr Damian Wong and Mr Alexsander Wong read as follows:

“5. For the purposes of this appeal hearing, P will proceed on the basis that the claims in the ASOC represent a new claim for the purposes of LO. However, P submits the amendments in the ASOC should be allow (sic) on the grounds that:

(1) The ASOC was filed within the limitation period and hence s. 35 LO and O. 20, r. 5 have no application; and

(2) Even if the ASOC was filed outside the limitation period, it arises substantially on the same facts as the claims in the SOC.

…

13. In the present case, P submits that for reasons below that the breach of the Oral Agreement occurred on 13 October 2008.  As the ASOC was filed on 13 May 2014, the limitation period had not expired at the time when it was filed.”

13 October 2008 as the date of accrual of the cause of action

15.  The argument that 13 October 2008 was the date of accrual of the cause of action should never have been put forward.

16.  A party is bound by its own pleadings.

17.  By para 24 of the ASC, Mr Damain Wong and Mr Alexsander Wong pleaded “breach of the Oral Agreement”.  The Particulars drafted by Simon Chan & Co stated categorically that the breach occurred on 31 July 2007.  On the plaintiff’s own pleaded case, more than six years had elapsed since the accrual of the cause of it when it amended its SC on 13 May 2014.  The plaintiff is bound by its own pleadings.  It is not open to the plaintiff to argue that the cause of action accrued on 13 October 2008.

18.  At the hearing, Mr Damain Wong said that after reading the 2^nd defendant’s skeleton submission, they had decided not to pursue the first point — they would not pursue the point relating to the limitation period.

The prescribed condition

19.  The plaintiff conceded that the claims in the ASC are new claims for the purposes of the Ordinance.

20.  At the hearing, the plaintiff abandoned the attempt to argue that the limitation period for the claim in the ASC had not expired.

21.  I have already found in para 15 above that on the plaintiff’s own pleaded case, more than six years had elapsed since the accrual of the cause of it when it amended its SC on 13 May 2014.

22.  Thus, by virtue of section 35(3) of the Ordinance, the court shall not allow a new claim except as provided by rules of court.  Sub‑section (5) goes on to provide that rules of court may provide for allowing a new claim to be made only if the conditions specified in sub-section (6) are satisfied.  The relevant condition in sub-section (6) is that:

“if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment;” (emphasis added??)

23.  Order 20, rule 5 is to the same effect and makes it clear that:

“An amendment may be allowed under paragraph (2) notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment.”

24.  The relevant issue, as prescribed by both the Limitation Ordinance, Cap 347, and The Rules of the High Court, Cap 4A, is whether:

“… the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed.”

25.  Unless a plaintiff succeeds on this issue, the court may not allow the amendment.

26.  The relevant issue is not, as contended by the plaintiff:

(1) whether the new agreement and the old agreement “essentially arose from the same set of negotiations between Wang, Liu and Hon, together with the involvement of senior management of D2” (§28 of Skeleton Submissions of the plaintiff); or

(2) whether “the circumstances in which the Old Agreement would have been the subject of inquiry at trial in any event” (§30(1)); or

(3) whether “we are dealing with agreements that arose from the same set of negotiations” (§33).

Statute refers to “facts as a cause of action”, not “negotiations”, not the “subject of inquiry”.  Moreover, evidence on negotiations may not be admissible on the terms of an oral contract or on construction of the terms of the contract.

27.  What the plaintiff is seeking to do is to re-write the statutory condition and this is not permissible.

28.  If the new cause of action in the amended claim arose out of the same facts or substantially the same facts as the cause of action in respect of which relief has already been claimed in the original claim, I wonder why the pleaders of the ASC chose to take the drastic step of crossing out the whole of the SC.  Mr Damain Wong repeatedly said that the SC was in Chinese while the ASC was in English.  Importantly, he put forward no reason for the change in language.

29.  The cause of action in respect of which relief has already been claimed in the original claim is breach of the oral agreement pleaded in para 11 of the SC.

30.  Paragraph 11 of the SC pleads the oral agreement made between the representative of the plaintiff with “the de facto controllers of the 1^st and 2^nd defendants”.  Significantly, it was not alleged that the oral agreement was made on behalf of the 2^nd defendant.  The pleading read as follows:

「2006年11月中旬, 原告人代表王精與第一被告及第二被告的實際控制人韓明光、劉益東，雙方就中鐵自備列物流專案的合作原則達成了以下部分口頭協定及部分書面協定的合約。口頭協定的內容是以下6條...」

31.  The facts alleged in respect of the oral part of the agreement in the SC are:

(1) The time of agreement is mid‑November 2006.

(2) The counter-party to the agreement with the plaintiff was Hon and Liu who were described as the de facto controllers of the 1^st and 2^nd defendants.  Neither the 2^nd defendant nor the 1^st and 2^nd defendants is or are alleged to be a party to the agreement.

(3) No officer of the 2^nd defendant is alleged to be involved in the making of the oral agreement.

32.  Does the new cause of action in the ASC arise out of the same facts or substantially the same facts as those referred to in para __ above?

33.  In the ASC:

(1) The oral agreement is pleaded under the section “The Oral Agreement with the 2^nd Defendant” in the ASC.

(2) Paragraph 2 alleges the incorporation of the plaintiff in or about May 2002.

(3) Paragraph 3 alleges that “from June 2006 onwards, … the managing director of the Plaintiff, met the following persons at various meetings”, followed by a list of eight persons, including Liu and Hon.

(4) Paragraph 4 alleges that during those meetings:

(a) Wang introduced the persons to various commercial projects in China;

(b) Wang explained that investors were welcome to participate in those projects;

(c) Liu and Hon represented to Wang that they were the controlling shareholders of the 2^nd defendant; and

(d) they further represented that they had vast experience in such financial transactions and were interested in investing in the railway logistics project through the 2^nd defendant.

(5) Paragraph 5 alleges that:

“After discussion, an oral agreement was reached between the Plaintiff and the 2^nd Defendant (‘the Oral Agreement’) with the following terms …”

(6) This section in the ASC contains numerous allegations which should have no place in a pleading.  On the other hand, material particulars on the Oral Agreement are conspicuous in their absence.  They include:

(a) The natural person or persons who made the Oral Agreement on behalf of the plaintiff;

(b) The natural person or persons who made the Oral Agreement on behalf of the 2^nd defendant;

(c) The date when the Oral Agreement was made.

34.  Plainly, the new cause of action in the ASC does not, and is not shown to, arise out of the same facts or substantially the same facts as those referred to in para 27 above.  Paragraph 5 of the ASC bears no resemblance to para 11 of the SC.  The burden is on the plaintiff to persuade the court that the statutory condition is satisfied.  The plaintiff has not begun to do that.  The plaintiff’s appeal fails and must be dismissed.

Costs

35.  The following is my decision on costs:

(1) This is a hopeless appeal which should never have been brought.

(2) The attempt to argue that 13 October 2008 was the date of accrual of the cause of action was bad.

(3) By its appeal, the plaintiff seeks dismissal of the 2^nd defendant’s two summonses, both issued on 15 August 2015.  If the plaintiff had succeeded in this appeal, the ASC would be restored upon dismissal of the 2^nd defendant’s summonses.

(4) The plaintiff also seeks leave to re‑amend the SC.  The draft re‑amendment shows deletion of the ASC in its entirety (except the one‑page “Annexed [sic] l”).  The plaintiff would be seeking deletion of the ASC restored upon success in its appeal.  To argue for its restoration and at the same time to argue for its deletion is a complete waste of costs and time.

(5) To express court’s disapproval of the abuse of process, I dismissed the appeal with costs on indemnity basis.

HCA 701/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 701 OF 2013

______________________

BETWEEN

______________________

_________________________

R U L I N G   O N   C O S T S

_________________________

Introduction

1.  Before the court was an application by D2 made on 30 July 2013 to strike out the statement of claim (“Striking Out Summons”).

2.  The Striking Out Summons was eventually fixed before this court for a hearing for argument on 20 May 2014 (“Hearing”).

3.  7 days prior to the Hearing, on 13 Mary 2014, P amended the statement of claim, pursuant to Order 20 Rule 3.

4.  At the Hearing, the parties agreed to no order being made in relation to the striking out part in the Striking Out Summons and the only matter to be determined by this court was in relation to costs.

5.  P did not oppose to pay all costs thrown away to D2 with certificate for 2 counsel, such costs to be assessed summarily and paid forthwith.

6.  The only issue was the basis on which such costs should be assessed, whether on party and party basis, or on indemnity basis.

Brief Background

7.  P, a company incorporated in Hong Kong, is a 100% subsidiary of Guangdong China Railway Television Media Limited, a company incorporated in the PRC.

8.  D1 is a company incorporated in Bermuda, and was a 100% subsidiary of a company called Dragon Billion Limited (“Dragon”) incorporated in Hong Kong, until 26 November 2008.

9.  Dragon is a 100% subsidiary of D2, which is a company incorporated in Bermuda and its shares are listed on the GEM of the Stock Exchange of Hong Kong. 

10.  P and D1 set up a company Onway Logistics Limited (“Onway”), with P holding 38.75% and D1 holding the balance of 61.25% for the purpose of entering into a joint venture.

11.  A joint venture company was  then  incorporated in PRC  (“Joint Venture Company”), 16 % of which is owned by P, 80 % by Onway, and the balance owned by another PRC transportation consulting company.

12.  P’s claims against the defendants, as pleaded in the original Chinese statement of claim, were based mainly on breaches of (i) an alleged oral agreement in relation to the cooperation in the proposed business of the Joint Venture Agreement (“Oral Agreement”); and (ii) various written agreements and Joint Venture Agreements as pleaded (“Written Agreements”).

13.  The Oral Agreement was allegedly entered into by P’s representative and the de facto controllers of D1 and D2 in mid November 2006.

D2’s Grounds for the Striking Out Summons

14.  As submitted by D2’s Senior Counsel, Mr Anderson Chow and as can be seen from the original statement of claim, D2 was not a party to any of the pleaded Written Agreements and thus the causes of action as pleaded about the breaches of the Written Agreements against D2 were unsustainable.

15.  Further, although P had also alleged that various properties or assets belonging to Onway and the Joint Venture Company were taken away or misappropriated by, among others, D2 and its agents, but if P’s claims against D2 based on the Written Agreements were unsustainable, then P, being a shareholder of Onway and an indirect shareholder of the Joint Venture Company would have no claim for any loss or damage suffered by Onway and/or the Joint Venture Company because of the “reflective loss” principle. 

16.  This would leave only the cause of action against D2 based on the alleged breach of the Oral Agreement.

17.  Mr Chow SC submitted that there was no proper basis that the alleged Oral Agreement was made on behalf of D2, as it was only on 12 March 2007 that Dragon entered into an agreement for the acquisition of D1. Thus, the cause of action based on any breach of the Oral Agreement was also unsustainable.

18.  It was based on the above grounds that D2 sought an order that the entirety of the statement of claim as against D2 should be struck out, or alternatively all claims for breaches of the written agreements should be struck out as against D2.

D2’s Case for Indemnity Costs

19.  In P’s amended statement of claim, it had completely deleted the original statement of claim, and replaced it by a new document in English. 

20.  The Striking Out Summons was taken out almost 10 months before the Hearing.

21.  After a call over hearing of the Striking Out Summons before Master K Lo on 6 September 2013, D2’s solicitors wrote to P’s former solicitors on 21 November 2013 asking P to discontinue the action against D2, failing which D2 would proceed to fix a hearing for argument.

22.  Apart from giving a holding reply on 27 November 2013 that they would be taking instructions, no substantive reply was given by P’s then solicitors.

23.  Eventually, on 16 and 17 December 2013, D2’s solicitors wrote to P’s then solicitors in relation to the fixing of the hearing date in consultation with Counsel’s diaries, and it was on 23 December 2013 that the parties fixed the date of the Hearing.

24.  P changed solicitors on 30 April 2014.

25.  On 2 May 2014, P’s new solicitors first wrote to inform D2’s solicitors that P was intending to amend its statement of claim, and eventually it was on 13 May 2014 that P’s solicitors served on D2’s solicitors the amended statement of claim, and in the accompanying letter, D2’s solicitors asked P’s solicitors to withdraw the Striking Out Summons.

26.  Although D2’s Counsel’s first skeleton submissions was dated 14 May 2014, it appeared that they were prepared prior to the service of the amended statement of claim, which resulted in D2’s Counsel having to lodge their amended skeleton submissions.

27.  Mr Chow  SC referred the court to DHCJ M Ng’s decision in  Rightbest International Limited v DBS Bank (Hong Kong) Limited, HCA 1099 of 2011, dated 29 August 2013.  In Rightbest, the plaintiff’s claims against the bank was for mis-selling four types of investments, and the bank applied to strike out certain parts of the statement of claim as having disclosed no reasonable cause of action and were unsustainable.

28.  About a week before the hearing before DHCJ Ng, the plaintiff changed solicitors and 3 days before the hearing, a Saturday after 1 pm the plaintiff’s solicitors sent through to the other side copy of a summons for leave to amend the statement of claim, and the summons was only filed on the Monday before the Tuesday hearing with an application for abridgement of time for service.

29.  A number of new allegations had been added, including an entirely new allegation of dishonesty were added in the draft amended statement of claim and there were new factual allegations in respect of which, the bank’s legal team would need time to take proper instructions and to give careful consideration to the consequent legal and forensic implications.

30.  DHCJ Ng did not consider it appropriate to deal with the strike out summons and the amendment summons separately and adjourned both summonses.  Senior Counsel for the bank asked for costs thrown away by the adjournment on indemnity basis to be taxed and paid forthwith.  The plaintiff’s Senior Counsel made no submissions on the scale of costs but only asked for such costs to be reserved.  DHCJ Ng in the end made the order as sought by the bank’s side.

Discussion

31.  The usual order of costs is one on a party to party basis, although the court has the discretion to award cost on indemnity basis.  There must be some facts in the case that justify costs on indemnity basis, and in general the following principles apply in considering whether to award indemnity costs[1]:

(i) Costs on indemnity basis may be ordered where the proceedings are scandalous or vexatious, or have been initiated or prosecuted maliciously, or for an ulterior motive, or in an oppressive manner (“Established Grounds”);

(ii) Costs on indemnity may be ordered where any proceedings have been instituted or prosecuted in such circumstances as to constitute an affront to the court; and

(iii) The circumstances in which an indemnity award might properly be made are not restricted to the above circumstances or Established Grounds. Further, the discretion to award indemnity costs is not to be fettered beyond the requirement that it must be “appropriate”.

32.  There was no sufficient evidence that the Established Grounds existed in the present proceedings.

33.  The only basis relied on by D2 for seeking indemnity costs was the late filing of the amended statement of claim. P’s Counsel, Mr Alexander Wong submitted that P might well have opposed the striking out by offering to amend the existing pleadings at the Hearing, and had that been the course taken by P, which meant conceding to the striking out, and even if the amendment was to be made after the Hearing, the usual costs order would be one on a party to party basis.

34.  So far as I can see, the cause of action against D2 in the amended statement of claim is still mainly based on the alleged breach of the Oral Agreement.

35.  Mr Wong had distinguished Rightbest from the present case. In that case, the court was unable to dispose of the strike out summons which had to be adjourned and dealt with on another occasion together with the amendment summons, and it was clear that the costs of the hearing had been wasted as nothing was achieved.  Further, the indemnity costs order was limited to the hearing, and costs of the striking out was generally reserved.

36.  I also note that in Rightbest, there was in fact no submissions made by the plaintiff’s Senior Counsel on the scale of costs being on indemnity basis[2].

37.  Mr Wong had submitted that in the present case the amended statement of claim was filed 7 days prior to the Hearing, and it was not “last minute” as in the Rightbest case.

38.  Much of the court time had also saved due to parties’ agreement on most of the matters.

39.  Having considered the circumstances of this case, I find no sufficient grounds justifying costs to be awarded on indemnity basis, and the scale of costs should thus be on party and party basis and this will be the basis upon which I shall summarily assess D2’s skeleton bill of costs.

Summary Assessment  

40.  D2 submitted a draft skeleton bill of costs on 20 May 2014 for a total of HK$1,112,667.

41.  P filed its statement of objections on 3 June 2014, counter-proposing a total of HK$342,000.

42.  There was no objection by P to the Fee Earners’ rates of charges.

43.  Regarding Section B on “Manual Work”, there was no objection on time spent and only to the hourly rate of the litigation clerk. I accept P’s suggestion, and the amount for this section is assessed to be HK$3,865.

44.  So far as Section C on “Communications” was concerned, the amount of hours claimed on attendances on client under Subsection C1 by LKH the partner, namely 16.3 hours seemed to be on the high side for the Striking Out Summons, and I accept P’s suggested 8 hours for LKH which amount to HK$32,000 and HK$5,590 for LHMH/LJJJ.  For time for attendance on other side under Subsection C2, I accept P’s proposed time and amounts, of a total of HK$4,650.  For time for attendance on Counsel under Subsection C3, there seemed to be only one conference.  I allow 2 hours for LKH, and 2 hours for LHMH/LJJJ, of a total of HK$10,600.  Thus, the total amount assessed for the entire Section C is HK$52,840.

45.  Section D is on “Professional Work”.  Subsection D1 is on preparation of documents.  The drafting of the Striking Out Summons and the supporting affirmation appeared to have been prepared by D2’s Junior Counsel Mr Jonathan Kwan.  D2’s supporting affirmation was only about 7 pages long and the reply affirmation only about 3 pages.  It was not clear as to what documents were prepared by LKH or LHMH/LJJJ, but the time spent could not be that high.  I allow 1 hour for LKH, and 2 hours for LHMH/LJJ, totaling HK$6,600 for subsection D1.

46.  As for Subsection D2 on “perusal of documents”, the documents included the writ, statement of claim, advice on merit from counsel, draft affirmation of both parties and exhibits, and also “340 pages of Chinese documents” referred by D2.  There were no exhibits from P in its affirmation.  There were 15 exhibits produced in D2’s affirmations, totaling about 140 pages including 7 Written Agreements and one company’s articles of association.  All in all, I could see only about 67 pages of Chinese documents.  The 340 pages of Chinese documents had not all been produced as evidence in the Striking Out Summons.  I thus accept P’s proposed figures for Subsection D2,  including 2 hours only for perusing Chinese documents, namely 5 hours for LKH in total, and 2 hours for LHMH/LJJJ, making a total of  HK$22,600for Subsection D2.

47.  The call over hearing should not have lasted long.  I am not sure why the Hearing was fixed for 1 day as the matter was not complex.  In any event, with the filing of the amended statement of claim, most matters were agreed shortly before the Hearing, the actual time of the Hearing was only 30 minutes.

48.  For Subsection D3 on preparation for hearing, LKH instructed 2 junior counsel and one senior counsel, and further LKH should know in advance there would be no substantive argument on the question of striking out, and only on costs.  I thus accept there needed to be only half hour preparation by LKH and allow HK$2,000 as suggested by P.  As for Subsection D4, the time for attending the Hearing including the call-over should not be more than 1 hour, and it seemed that the attendances were by LHMH/LJJJ, and thus the time allowed would be HK$1,300.

49.  The total for Section D is HK$32,500.

50.  As for Section E, on “Counsel Fees”, although the Hearing was originally fixed for 1 day, the Striking Out Summons was a simple one and did not involve any complexity.  There were 2 junior counsel assisting Mr Chow SC.  The first skeleton submissions consisted of 9 pages and 5 authorities.  Having considered the matter, HK$250,000 would be necessary or proper for Brief for Senior Counsel.  For Junior Counsel, a total of HK$200,000 would be necessary or proper which would be inclusive of Brief fee and fee for drafting of affirmations, advice on merit, conference and perusal of documents. 

51.  Then there were disbursements claimed under section F of another HK$58,492, being for the translation fee of the 340 pages of Chinese documents and certification fees. As these 340 pages of documents were not actually all exhibited and further for those Chinese documents exhibited, there were no translations.  These disbursements are not allowed.

52.  Thus, the total amount summarily assessed is HK$535,340.

Section C HK$ 52,840

Section D HK$ 32,500

Section E HK$ 450,000

[1] As seen in para 62/App/12, pg 1186, Hong Kong Civil Procedure 2014, Vol 1

[2] Para 26, at pg 10