The Plaintiff was the administrator of his brother’s estate. During his lifetime, the brother paid certain sums to the Defendant, who agreed to invest them. In breach of their agreement, the Defendant then failed to return this money. In October 2017, the Plaintiff obtained summary judgment against the Defendant for this breach in the sum of c.US$24m (Judgment).

The Defendant appealed the Judgment by notices of appeal filed in November 2017 and February 2018 (Appeal). Thereafter the proceedings dragged on for several years:

• In February 2018, the Defendant obtained a stay of execution of the Judgment pending the Appeal, conditional upon payment of US$12m into Court (Stay Decision). This condition was not satisfied, and the Judgment became effective.
• The Defendant sought leave to appeal the Stay Decision (Leave Application). However, the Leave Application failed when the Defendant failed to file submissions as directed by the Court.
• No steps were then taken in the Appeal by either party until February 2023, when the Plaintiff’s solicitors wrote to the Defendant’s asking if they were still instructed. No response was received.
• After further communications from the Plaintiff to the Court and Defendant regarding the Appeal, the Plaintiff issued a summons to strike out the Appeal in May 2024 (Strike Out Summons).
• The Defendant then missed the deadline to file evidence or submissions opposing the Strike Out Summons. Although he did belatedly file evidence seeking to justify his six year-plus delay in pursuing the Appeal, this was deficient in several respects (e.g. it was unsworn). The Defendant failed to remedy these defects despite repeated reminders by the Court. This defective evidence raised several excuses for his failure to progress the Appeal, including a financial crisis in 2018-2019 and the coronavirus.

On 1 November 2024, the Court handed down its judgment in the Strike Out Summons. In doing so, it summarised the principles underlying its jurisdiction to strike out a case (in this instance, the Appeal) for want of prosecution, citing the leading Hong Kong Court of Final Appeal case of Wing Fai Construction v Yip Kwong Robert  (2011) 14 HKCFAR 935.

The Court highlighted that this jurisdiction is based on the abuse of the processes of the Court by the party who has failed to progress its case. Examples of this abusive conduct include “inordinate and inexcusable” delay causing prejudice, contempt of Court orders, and ‘warehousing’ a claim.

The Plaintiff relied on the first of these grounds in the Strike Out Summons, requiring him to prove two elements: (i) inordinate delay; and (ii) prejudice.

The Court found that there had been an inordinate multi-year period of inaction by the Defendant in his Appeal. It dismissed the various excuses that he raised for his delay.

As for prejudice, the Court advocated taking “a broader view” of this topic and not to confine it merely to considering the prejudice to the party seeking to strike out the proceedings. In particular, this broader view required considering whether the relevant delay caused prejudice to the administration of justice and other Court users.

1. Whilst the delayed Appeal may have caused the Plaintiff prejudice, this was partly his own making. Although the Defendant had failed to advance the Appeal, the Plaintiff had been content to ‘let sleeping dogs lie’ contrary to the principles laid out in Wing Fai Construction. Any prejudice to him accordingly did not warrant the Appeal’s strike out.
2. However, in failing to take any steps to advance the Appeal, and in repeatedly ignoring Court directions and deadlines, the Defendant had “wasted and abused the Court’s limited resources”. This had caused prejudice to the due administration of justice, and required that the Strike Out Summons succeed.

Although largely restating existing common law principles, this decision reinforces that the Courts will take a tough stance when parties unjustifiably drag their feet. The decision is also an important reminder that the Court, when faced with a strike out application alleging delay, will analyse the question of prejudice not only by reference to the interests of the parties to the case at hand, but also the interests of other Court users and the administration of justice overall.

Whilst Harneys does not practise Hong Kong law, this decision is relevant to many of our jurisdictions. Particularly, the Cayman Islands, pays close attention to Hong Kong procedural law developments, and the Cayman Court recently examined similar questions in its own judgment of Burlington v Butterfield Bank.