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China Trade-omni Development Centre Limited And Others v Ramada International Inc. And Another

Judgment Cited authorities 5 Cited in Precedent Map Related
Vincent
Judgment Date19 December 1988
Year1988
Judgement NumberHCA5341/1988
Subject MatterCivil Action
CourtHigh Court (Hong Kong)
HCA005341/1988 CHINA TRADE-OMNI DEVELOPMENT CENTRE LIMITED AND OTHERS v. RAMADA INTERNATIONAL INC. AND ANOTHER

HCA005341/1988

1988, No. A5341

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

CHINA TRADE-OMNI DEVELOPMENT CENTRE LIMITED 1st Plaintiff
YOUTH ASSOCIATION OF GUANGXI ZHUANG AUTONOMOUS REGION 2nd Plaintiff
GUILIN GARDEN HOTEL 3rd Plaintiff

and
RAMADA INTERNATIONAL INC. 1st Defendant
RAMADA PACIFIC LIMITED 2nd Defendant

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Coram: Deputy Judge Saied in Court

Dates of hearing: 29th & 30th November, 1988

Date of handing down judgment: 19th December, 1988

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JUDGMENT

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1. On the 29th July, 1986 a writ of summons was taken out against the two defendants by three plaintiffs named as the China Trade-Omni Development Centre Ltd (the 1st plaintiff), Youth Association of Guangxi Zhuang Autonomous Region (the 2nd plaintiff) and Guilin Garden Hotel (the 3rd plaintiff), which was amended on the 3rd August with regard to the address of the 2nd defendant, seeking in the indorsement of claim as against the 1st defendant :

"(a) a declaration that a Management Agreement made between the 1st and 2nd plaintiffs in the name of the 3rd plaintiff dated 15th April, 1986 has been terminated by the wrongful repudiation of the 1st defendant; (b) damages for breach of the said Management Agreement; (c) a declaration that the 1st defendant do indemnify the 1st plaintiff against any claim of the 2nd defendant in relation to the Loan Agreement referred to in paragraph 2 below ";

and as against the 2nd defendant :

"(a) a declaration that a Loan Agreement dated 30th May, 1986 between the 1st plaintiff and the 2nd defendant has been terminated by the wrongful repudiation of the 2nd defendant; (b) damages for wrongful breach of the said Loan Agreement; (c) a declaration that the 2nd defendant do indemnify the 1st, 2nd and 3rd plaintiffs against any claim of the 1st defendant in relation to the said Management Agreement. "

2. The defendants acknowledged service on the 16th August and indicated their intention to contest the proceedings.

3. There then followed a spate of various applications made by the parties, which briefly were the following :

1)

Summons of the 2nd plaintiff dated 15th August for amendment of the writ of summons for substituting China Youth Travel Service Guangxi Branch in place of the original 2nd plaintiff;

2)

Summons of the 1st defendant dated 26th August for an order under the provisions of s. 6A(1), Arbitration Ordinance (Cap. 341), that "the proceedings herein against the 1st defendant so far as they relate to the Management Agreement dated 15th April 1986 referred to in the plaintiff's indorsement of claim be stayed";

3)

Defendants' summons dated 30th August for an order that (1) the claims of the 1st and 2nd plaintiffs in para. 1 of the indorsement of the writ be struck out on the ground that it disclosed no reasonable cause of action by either of them against the 1st defendant and/or such claims were frivolous, vexatious and/or otherwise an abuse of the process of the court and that the action by the 1st and 2nd plaintiffs against the 1st defendant be dismissed with costs; (2) the claims of the 2nd and 3rd plaintiffs in para. 2 of the indorsement of writ as against the 2nd defendant be struck out on the same grounds as stated above.

4)

Defendants' summons dated 30th August for an order that the proceedings by the 2nd and 3rd plaintiffs against the defendants be dismissed on the ground that the writ of summons by which they were begun and all subsequent proceedings on the part of the 2nd and 3rd plaintiffs had been taken without their respective authorities.

4. These four applications were returnable before the Master on the 15th September, and he referred the four summonses to a judge in chambers on a date to be fixed, granting leave for the filing of affirmations in opposition and reply.

5. Since the Master's order and these summonses coming before me on the 29th November, various documents and affirmations were filed by both sides in support and in opposition. Also filed were :

1)

The statement of claim dated the 27th September filed and served the same day;

2)

Defendants' summons dated the 13th September (perhaps wrongly dated, filed on the 13th October) seeking two orders that (i) all further proceedings be stayed pending determination of the defendants' summons dated the 26th and the 30th August which had earlier been referred to a judge in chambers; (ii) time for the filing of a defence by the defendants be extended until 14 days after the determination of the said summons. An order in terms in this regard was made by the Master on the 18th October.

3)

Summons dated the 24th November of the 1st and 3rd plaintiffs seeking leave to file further affirmations of Mr Anthony Fung Tak-Shing and Mr K. O. Cheung out of time. The Master dismissed this application on the 25th November.

4)

Plaintiffs' summons dated the 26th November for leave to : (i) re-amend the indorsement of claim as indicated in violet; (ii) amend the statement of claim as shown in red; (iii) time for serving the summons be abridged.

6. These matters coming up before me on the 29th November, I made the following orders :

1)

Plaintiffs' summons of the 15th August - by consent dismissed with costs to the defendant to be paid by the 1st plaintiff;

2)

Defendants' summons of the 30th August - by consent the 2nd plaintiff, be it the Youth Association or the China Youth Travel Service, struck out and costs be the defendants' in any event to be paid by the 1st plaintiff, and dismissed in relation to the 3rd plaintiff and costs in that regard be costs in the cause;

3)

Plaintiffs' summons dated the 26th November - dismissed with regard to the 2nd plaintiff, be it the Youth Association or the China Youth Travel Service and costs be the defendants' in any event to be paid by the 1st plaintiff. The question of whehter or not the remaining plaintiffs should have leave to amend the writ and the statement of claim was deferred with consent of the parties until after the defendants' application for stay had been determined.

7. It might be appropriate if I were to deal first with a submission made by Mr Ho for the plaintiffs to the effect that the 1st defendant was barred from applying for a stay under the provisions of s. 6A(1), Arbitration Ordinance, because he had taken some other steps before making the application to stay. He argued that, although the summons to stay was issued on the 26th August, and there was an appointment to appear before a Master, the actual application was only made during the appearances before me on the 29th and the 30th November, prior to which the defendants had taken out the two summonses on the 30th August : one to strike out the indorsement on the writ, the other to strike out two of the plaintiffs for want of authority, and affidavits in support were filed. He relied on Turner v. McConnell, (1985)1 W. L. R. 899. That was a case where the defendant opposed an application for summary judgment under the Rules of the Supreme Court, Order 14, and it was held that he had taken a step in the proceedings by filing an affidavit showing cause why summary judgment should not be entered against them.

8. Mr Bunting, for the defendants, relying on Eagle Star Insurance Co. Ltd. v. Yuval Insurance Co. Ltd., (1974)1 Lloyds L. R. 357, submitted that the applications referred to, not being an affirmation of the correctness of the proceedings but a disaffirmation of them, did not amount to a "step" in the proceedings.

9. If I understood Mr Ho correctly, it seems that he was seeking to distinguish a summons as such from an "actual" application at the time of the hearing of the summons. With great respect, I find such a distinction spurious in that he ignores the provisions of Order 32, Rules of the Supreme Court. If an application is made by summons, which is all that is required by our rules, then it is before the court from the date it is filed so that the time it takes to come up for hearing is irrelevant in my opinion. I see no merit in this argument.

10. It is true that affirmations were filed in support, and it may suffice to refer to paragraph 4, which is identical, of the second and third affirmations of Mr Alexander David Morrison clearly stating that those two applications were made without prejudice to the application of the 1st defendant to stay.

11. The rationale for the decision in Turner is to be found at p.902 of the report, where Dillon, L. J. said:

"The next point that is clearly established by the authorities so far as this court is concerned is that the step in the action which will preclude an application for a stay for arbitration does not have to be the positive institution of an application to the court by the defendant; it is sufficient if the defendant concurs in an application to the court which is made by the plaintiff."

12. Turner was considered in Sam Yu Construction Co. v. Winning Godown Ltd. & Another (1987)1 H. K. L. R. 570, 575 where Barnett, Dy. J. (as he then was) said :

"The thrust of Turner is certainly against fine distinctions and constitutes a clear signal to a defendant to get on with a substantive application to stay. On the authority of this case I think that what Mr Mumford would like me to say is that virtually any action on the part of the defendant, other than acknowledging service and applying for a stay, will constitute a step in the proceedings....... In my view the acid test...

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