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Goh Soo Siah v Au Yeung Tin Wah And Others

Judgment Cited authorities 7 Cited in Precedent Map Related
Vincent
Judgment Date22 December 2015
Year2015
Judgement NumberHCA1100/2014
Subject MatterCivil Action
CourtHigh Court (Hong Kong)
HCA1100/2014 GOH SOO SIAH v. AU YEUNG TIN WAH AND OTHERS

HCA 1100/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1100 OF 2014

_________________________

BETWEEN

GOH SOO SIAH Plaintiff
and
AU YEUNG TIN WAH（歐陽天華） 1st Defendant
TAM CHI FAI（譚志輝） 2nd Defendant
TARGET WAY PROPERTIES LIMITED 3rd Defendant
FAITHOUSE DEVELOPMENT LIMITED 4th Defendant

_________________________

Before: Mr Registrar K.W. Lung in Chambers (Open to the public)
Date of Hearing: 22 December 2015
Date of Decision: 22 December 2015

_____________

D E C I S I O N

_____________

THE APPLICATIONS

1. There are three summonses before the Court:

(1) The 1st defendant’s and the 2nd defendant’s (“the 1st defendant and the 2nd defendant are called the defendants”) summons dated 15 July 2015 (“Summons for Relief regarding Witness Statements”) seeking relief of an unless order dated 26 June 2015 made against the defendants for the exchange of witness statements (“June Unless Order”);

(2) The plaintiff’s summons dated 2 September 2015 (“Striking out Summons”) to strike out the defendants’ defences and for judgments to be entered against them for having breached an unless order dated 22 July 2015 (“July Unless Order”) requiring them to provide specific discovery pursuant to the plaintiff’s application; and

(3) The defendants’ summons dated 17 September 2015 (“Summons for Relief Regarding Specific Discovery”) seeking retrospective leave to be given to the defendants to file various affirmations, and lists of documents to serve copies of documents set out in their Supplemental List of Documents dated 11 August 2015 upon the plaintiff.

2. The above summonses are contested and the parties are legally represented.[1]

THE FACTUAL BACKGROUND

3. Briefly stated, the plaintiff was, at the material times, an investor. The plaintiff alleged that the 1st and the 2nd defendants had induced him to enter into a contract for the project to build a columbarium in Sai Kung. The 3rd and the 4th defendants were the corporate vehicles of the project. The plaintiff had made the total investment into the 1st defendant’s account and he had acquired shares in the 3rd defendant. In 2013, the columbarium project was rejected by the Town Planning Board and the plaintiff asked for the return of the total investment. The plaintiff alleged that there was an agreement whereby the defendants agreed to repurchase his shareholding in the 3rd defendant for the amount of the total investment. Pursuant to this repurchase agreement, the 2nd defendant had paid 2 million dollars into the plaintiff’s account by way of cheque. The cheque was dishonoured. Summary judgment had been obtained against the 2nd defendant and the 2nd defendant had made partial payment in satisfaction of the summary judgment.

4. The 1st and the 2nd defendants denied that there had been a repurchase agreement.[2]

5. The plaintiff therefore has made monetary claim for the sum of $20,768,240 and claimed for entitlement to landed properties against the defendants[3] and the 3rd and 4th defendants.

6. An Unless Order by consent was made by Master K. Lo on 26 June 2015, whereby it was ordered “Unless by 4 p.m. on the 14th day from the date of the Order to be made herein, the parties do exchange signed witness statements as to fact in compliance with the order by Master Ho dated 16th January 2015, the defaulting party shall be debarred from adducing evidence at trial”. The deadline for the exchange of the witness statements was therefore on 10 July 2015.[4]

7. The defendants failed to exchange signed witness statements with the plaintiff by 4 p.m. on 10 July 2015.[5]

8. On 13 July, the defendants changed their solicitors to the present firm of solicitors and Notice of change of solicitors was filed on 15 July 2015. The defendants say that now they are ready to file the witness statements and relief should be granted to them to do so.[6]

9. In relation to the striking out summons regarding specific discovery, there was an order by consent made by this Court on 22 July 2015 at the Case Management Conference where both parties were legally represented. The terms of the unless order read:

“Unless by 4:00 pm on 12 August 2015, the 1st and the 2nd Defendants do (i) make and serve affidavits stating whether they have or have not at any time in their possession, custody or power the documents specified in the Schedule hereto, and if not then in their possession, custody or power when they parted with it and what has become of it; and (ii) serve a copy of the documents which are in their possession, custody or power on the Plaintiff in compliance with the Order of Master K Lo dated 26 June 2015, the 1st and 2nd Defendants’ Defences be struck out and judgment be entered against the 1st and 2nd Defendants in favour of the Plaintiff as claimed with costs to the Plaintiff to be taxed if not agreed.”

10. On 11 August 2015, the 2nd defendant filed and served his 3rd affirmation purporting to comply with the “unless order”. The 1st defendant had not served an affirmation. However, the 2nd defendant deposed that he served his 3rd affirmation on behalf of the 1st defendant as well, which was contested by the plaintiff.

11. The plaintiff alleges that the 1st defendant was in breach of the “unless order” and the 2nd defendant’s affirmation has not complied with the terms of the “unless order” as the contents of the affirmation do not give the particulars and information as required under the Schedule attached to the summons. Therefore, he says that both 1st and 2nd defendants have been in breach of the “unless order”. He applies for judgment against the defendants.[7]

12. The defendants seem to admit that they are in breach of the “unless order” as they have already filed a summons for relief under O.2, r.5 of RHC and their counsel’s written submissions do not dispute that they had not complied with the “unless order regarding specific discovery”.[8]

13. However, this morning, the defendants submit that they had attempted to comply with the “unless order” by supplemental affirmations with the 2nd supplemental and 3rd supplemental lists of documents. They further submit that they are not arguing that they had not complied with the order in view of the objections raised by the plaintiff. But they say that such supplemental lists of documents should be taken into consideration in support of their application for relief under O.2, r.5 RHC. Although this Court should take that into consideration under the rule, it has been pointed out by the plaintiff that those supplemental lists of documents do not comply with the requirements under O.24, r.7 for specific discovery as they had not informed the court the whereabouts of the documents and what had become of them. See paragraph 21 of Patriarch Partners Media Holdings LLC v Wong Siu Wah Sammy [2014] HKEC 2072. Therefore, it is beyond argument that the defendants are in breach of the “unless order” for specific discovery.

THE LEGAL PRINCIPLES AND THEIR APPLICATION

14. The defendants rely upon O.2, r.5 of the Rules of the High Court for the relief from the sanctions of the “unless orders”, a judicial discretion of the court, which must be exercised judiciously, taking into account all the circumstances, including those set out under O.2, r.5 RHC. The consequences of the “unless order” are grave for the defendants. This Court must be guided by the law and the relevant legal principles in its exercise of the discretion. I shall therefore set out the relevant legal principles below:

a. The peremptory order or “unless” order must be given due weight and authority it deserves in order to establish the court’s authority in case management. It will be apposite to bear in mind what Ma J. (as he then was) said in Ping Kai Engineering Co Ltd v Hong Kong Teakwood Works Ltd (unrep., HCCT 2/2001, 6 February 2002) at §20 where he adopted the applicable principles contained in the judgment of Sir Nicholas Browne-Wilkinson VC in Re Jokai Tea Holdings Limited (Note) [1992] 1 WLR 1196 at page 1203:

“In my judgment, in cases in which the court has to decide what are the consequences of a failure to comply with an ‘unless’ order, the relevant question is whether such failure is intentional and contumelious. The court should not be astute to find excuses for such failure since obedience to orders of the court is the foundation on which its authority is founded. But if a party can clearly demonstrate that there was no intention to ignore or flout the order and that the failure to obey was due to extraneous circumstances, such failure to obey is not to be treated as contumelious and therefore does not disentitle the litigant to rights which would otherwise have enjoyed.” (emphasis added)

It will be seen that the test of “intentional and contumelious” has been modified after the CJR as discussed below.

b. Order 2, r.5 RHC provides the factors, which the court has to consider in exercising its judicial discretion as to whether relief should be granted to the applicant, who has been in breach of the court order:

(1) On an application for relief from any sanction imposed for a failure to comply with any rule or court order, the Court shall consider all the circumstances including-

(a) the interests of the administration of justice;

(b) whether the application for relief has been made promptly;

(c) whether the failure to comply was intentional;

(d) whether there is a good explanation for the failure to comply;

(e) the extent to which the party in default has complied with other rules and court orders;

(f) whether the failure to comply was caused by the party in default or his legal representative;

(g) in the case where the party in default is...

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