PACIFIC CENTURY INSURANCE CO LTD v. LI WAI CHUNG

DCCJ5708/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 5708 OF 2004

  PACIFIC CENTURY INSURANCE COMPANY LIMITED Plaintiff
  (formerly known as THE NEW ZEALAND INSURANCE LIFE (BERMUDA) LIMITED and TOP GLORY INSURANCE COMPANY (BERMUDA) LIMITED)  
and
LI WAI CHUNG Defendant

Coram: H H Judge H C Wong in Chambers

Date of Hearing: 6 January 2006

Date of Delivery of Decision: 6 January 2006

D E C I S I O N

1. The plaintiff applies for leave to appeal against my decision on 8 August 2005 striking out the plaintiff’s claim against thedefendant for abuse of process and/or want of prosecution and refusing the plaintiff’s application for summary judgment.

2. The plaintiff’s draft grounds of appeal stated that I have equated inordinate delay with abuse of process and the prejudice sufferedby the defendant. I have been referred to the authority of New China Hong Kong Group Ltd & Anor v AIG Asian Infrastructure Fund L.P. Limited [2005] 1 HKEC 178, and the decision of Master Wong in the case of Asia-Pac Securities Limited v Mo Chun Wai & Ors HCA 4863 of 2002, and the English Court of Appeal decision of Hornagold v Fairclough Building Limited and Industrial Development Norwich Limited [1993] PIQR 400.

3. All of the aforesaid cases referred to the authority of Birkett v James. Although the approach in the Birkett v James principle may have been amended in the later case of Grovit v Doctor [1997] 2 All.ER. 417. The Birkett v James principle remains good law and is binding authority. It is summarised in the Hong Kong Civil Procedure 2004 Order 25 Practice noteL/4 on page 461, and I quote:

“(a) If there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay willgive 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 likelyto cause or to have caused serious prejudice to the defendants either as between themselves and the plaintiff or between each otheror between them and a third party.”

4. In the case of Grovit v Doctor [1997] 2 All ER 417, Lord Woolf said, at page 424:

“The courts exist to enable parties to have their disputes resolved. To commence and to continue litigation which you have no intentionto bring to conclusion can amount to an abuse of process. Where this is the situation the party against whom the proceedings isbrought is entitled to apply to have the action struck out and if justice so requires (which will frequently be the case) the courtswill dismiss the action. The evidence which was relied upon to establish an abuse of process may be the plaintiff’s inactivity. The same evidence will then no doubt be capable of supporting an application to dismiss for want of prosecution. However, if thereis an abuse of process, it is not strictly necessary to establish want of prosecution under either of the limbs identified by LordDiplock in Birkett v James. In this case once the conclusion was reached that the reason for the delay was one which involved abusing the process of the courtin maintaining proceedings when there was no intention of carrying the case to trial the court was entitled to dismiss the proceedings.”

5. This approach has been accepted by the Hong Kong Court of Appeal in the case of New China that the party with no intention of carrying it to trial and to a conclusion had committed an abuse of process and the claim is liableto be struck out; and that the consequences of inordinate delay to other litigants and to the courts was an increasingly significantconsideration. And furthermore, mere delay without more would not amount to an abuse of process. The Birkett v James principle remains applicable and the court has to see if there was any inordinate and inexcusable delay and then to see if therewas any prejudice caused.

6. It has been set out in my decision and the reasons given on 8 August 2005, the overall delay was over 10 years; from the date ofthe cause of action as pleaded to the issue of the writ, there was a delay of four years; from the date of writ to the amendmentof the Statement of Claim, six years. Although the relevant period in issue is the post-writ delay, the overall delay should betaken into consideration when assessing the overall prejudice to the defendant. There was clearly a long period of inactivity bythe plaintiff. This inactivity of six years after the writ was issued, indicated a failure or reluctance to carry on the actionto its conclusion. The inaction came after 25 September 1998 after the defendant filed the defence, it was not until 28 February2004 when a Notice of Intention to Proceed was filed. Then eight months of inaction followed, until an Application to Amend theStatement of Claim was made in the High Court. No explanations had been offered as to why these periods of delay were caused. Noreasons were given.

7. The defendant, on the other hand, had clearly stated in his affidavit the prejudice to him, that he could no longer recall the detailsas he had no record or documents of the transactions after he left the employ of the plaintiff. It is also difficult for him totrace the witnesses who worked under him after 10 years had elapsed.

8. I am satisfied that the plaintiff, after such a long lapse of time, knew full well the consequences of the delay and the prejudicethat would be caused to the defendant for its failure to take out a summons for summons for direction in October 1998. I am furthersatisfied that the plaintiff has little or no prospect of success in the appeal of my order to strike out. I refer in this regardto Lord Diplock’s dictum in Birkett v James, page 317E of the 1978 AC Report page 297:

“Where leave is granted an appellate court ought not to substitute its own ‘discretion’ for that of the judge merely becauseits members would themselves have regarded the balance as tipped against the way in which he had decided the matter. They shouldregard that function as primarily a reviewing function and should reverse his decision only in cases either (1) where they are satisfiedthat the judge has erred in principle by giving weight to something which he ought not to have taken into account or by failing togive weight to something which he ought to take into account; or (2) as in Ward v James, in order to promote consistency in the exercise of their discretion by the judges as a whole where there appear, in closely comparablecircumstances, to be two conflicting schools of judicial opinion as to the relative weight to be given particular considerations.”

9. With regard to this particular application for leave to appeal and for reasons stated in my decision of 8 August 2005, I cannotsee the plaintiff has raised any valid reason or grounds that I have failed to take into account any matter or erred in principlethat I should apply in weighing the factors that should be weighed in reaching my decision to support an appeal that would haveany prospect of success. In this case I find the plaintiff has no realistic prospect of success and therefore I refuse the plaintiff’sapplication with costs to the defendant, to be taxed if not agreed with certificate for counsel.

  (H C Wong)
District Court Judge

Miss Lorinda C.W. Lau, instructed by Messrs Betty Chan & Co., for the Plaintiff

Mr Sher Hon-piu, instructed by Messrs Francis Kong & Co., for the Defendant