Nanjing Iron & Steel Group International Trade Co Ltd (HCAJ
177 of 2006)
One of the underlying objectives of
the Civil Justice Reform ("CJR") is to
ensure that a case is dealt with as expeditiously as is reasonably
practicable (Order 1A, rule 1(b) of the Rules of High Court). The
recent judgment delivered by The Honourable Mr Justice Reyes in
Nanjing Iron & Steel Group International Trade Co Ltd and
others v STX Pan Ocean Co Ltd and others (judgment dated 7
September 2009) demonstrates the Court has less tolerance in
respect of delays caused by the parties in progressing a case under
the new regime.
Nanjing Iron & Steel Group involves a cargo claim
for damage allegedly caused by lack of proper care on the part of
shipowners in the course of stowage and carriage. A Writ with a
general endorsement was issued in August 2006 and a sister ship of
the subject vessel was arrested at around the same time.
Nothing happened in the proceedings
until, in December 2008, the Plaintiffs' solicitors asked the
Defendants' solicitors to give consent for an extension of time
for filing of a Statement of Claim. No draft Statement of Claim was
Then, on 25 March 2009, the
Plaintiffs' solicitors filed a Notice of Intention to Proceed.
Such notice is required for a party to proceed in a case when there
has been inaction for over a period of 12 months (see Order 3 rule
6 of the Rules of High Court).
An application was made by the
Plaintiffs' solicitors for filing a Statement of Claim out of
time on 14 May 2009. Again, no draft Statement of Claim was annexed
to the Summons for the application. Then, on 25 May 2009, the
Defendants' solicitors made an application to strike out the
claim for want of prosecution.
Reasoning of judgment
The Court allowed the
Defendants' strike-out application. The Court highlighted the
following reasons for striking out the claim:
The Plaintiffs had invoked Admiralty procedures to obtain
security from the Defendants but failed to advance the proceedings
for over 2 years.
It was stressed by the Judge that, in the absence of some
compelling reason, it is contrary to the underlying objective of
the CJR for a party to allow an action to languish for 2 years once
the same has been commenced. The Judge failed to identify any
compelling reason in that case.
The Judge rejected the submission that the new CJR rules should
not be applied because the action was commenced long before CJR
came into effect. The Judge was of the view that the Court is bound
to apply the rules as they are when a case is heard before it.
The claim would be struck out even if only old principles were
applied. The Court criticized the practice to initiate proceedings
and then do nothing about it while dealing with other matters. It
is an abuse of procedure to "warehouse" a case.
Negotiation cannot be an excuse for doing nothing after the
Court proceedings commenced. It is particularly the case when the
opponent party was clearly not interested in the settlement.
The Court is of the view that, over 2 years, memories are bound
to dim. There is substantial prejudice caused by the passage of
Although Nanjing Iron &
Steel is a shipping case where there are special
considerations which are not applicable to other kinds of
litigation matters, it is noteworthy that, under the CJR, the Court
is prepared to strike out a claim for want of prosecution on the
sole basis that there has been an inordinate delay. The Judge in
Nanjing Iron & Steel particularly pointed out that,
under the CJR regime, delay of 2 years by itself is a sufficient
cause to strike out a claim. This, we consider, can be applied
generally to all civil litigation matters. Litigants should bear in
mind the Court's approach under the new regime before a Writ is
issued. It is generally not advisable to "warehouse" a
case or to adopt a "wait-and-see" approach.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The claim followed the conclusion of two years of litigation (ORD 12/0035 & ORD 12/0034) between the parties in respect of the Bank's contractual claim for amounts owed by TSEL to the Bank pursuant to certain business loans.
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