Civil Justice Reform - Essay Example

Does Justice Reyes approach differ from pre Civil Justice Reform approach to litigation, and, if so, how? The Pre Civil Justice Reform way of handling cases that were languishing is illustrated in the case In The Matter of Dealing in the Listed Securities of QPL International Holdings Ltd., which was ruled upon December 27, 2007 by the Market Misconduct Tribunal. In this case, Ms. Cheung, who was the party to the case, sought a permanent stay of the proceedings against her, stating that the Securities and Futures Commissions delayed in prosecuting her case. The Securities and Futures Commissions initially conducted enquiries beginning on May 27, 2003, then brought the proceedings against her on August 2007, with the initial tribunal hearing on September 3, 2007 (QPL International, 2007, p. 2). Ms. Cheung sought to have the proceedings stayed because of fundamental unfairness, stating that the conditions were appropriate to stay the proceedings in the interest of justice (Securities and Futures Ordinance, Cap. 571, § 253(1(i); Jago v. District Court of New South Wales (1989) 168 CLR 23). In this case, the tribunal relied upon the rules promulgated at this time in Hong Kong Civil Procedure 2008, which states that “there are two distinct, though related, circumstances in which the action may be dismissed for want of prosecution, namely (a) when a party has been guilty of intentional and contumelious default, and (b) when there has been inordinate and inexcusable delay in the prosecution of the action” (Hong Kong Civil Procedure 2008, order 25, at 25/L/2). The tribunal also relied upon the commentary to this order, which states that “the requirements: (a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial on the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants either as between themselves and the plaintiff or between each other or between them and a third-party” (Hong Kong Civil Procedure 2008, order 25, at 25/L/4). Further, that “the effect of the lapse of time on the memory of witnesses or, in the course of such time of their death or disappearance are the most usual factors…in a case of prolonged culpable delay following long delays in serving of proceedings, the court may readily infer that memories of witnesses has further deteriorated in the period of culpable delay” (Hong Kong Civil Procedure 2008, order 25, at 25/L/7). Thus, the delay must result in the increased risk that the defendant will not have a fair trial on the issues or that serious prejudice will occur to the defendant as the result of the delay, because the witnesses will have decreased memories about the facts regarding the proceedings. The term prejudice has been construed to result when no witness was interviewed at the time the acts that give rise to the proceedings were commenced, so that the witness would have no way of refreshing his or her recollection about the events, or that a witness has since become unavailable because of advanced age or infirmity, and this witness would have been available but-for the inordinate delay (Hornagold v. Fairclough Building Ltd. [1993] P.L.Q.R. 400). Further, the totality of the delay is not necessarily relevant in adducing prejudice to the defendant, but, rather, that any period of delay during any part of the proceedings would be examined to determine prejudice – therefore, if a proceeding began after a period of delay, then no action was taken thereafter, the court can infer from the delay during the latter part of the proceedings is enough to cause the dimming or memories such that the defendant would be prejudiced by the delay (Roebuck v. Mungovin [1994] 2 AC 224). Further, the defendant did not necessarily need to prove that he or she was prejudiced, and did not have to present to the court any example of a specific example of prejudice, ie, the defendant does not necessarily have to show that a particular witness had become infirm or the witnesses have stated to the defendant that they could not recall the facts. Rather, the court can make inferences from the facts and draw its own conclusions (Shtun v. Zalejska [1996] 1 WLR 270). In criminal proceedings, the proceedings can be delayed more than in civil proceedings (A-G v. Cheung Wai Bun [1993] 1 HKCLR 249). This is presumably due to the nature of the system of prosecution, in that a prosecutor often has to handle many cases at once, and the legal system is chronically underfunded. However, the court also cautioned that it was incumbent upon the state that “organize their legal systems as to ensure that the reasonable time requirement is honored” (HKSAR v. Lee Ming Tee (unreported) HCCC 191/1999). In other words, the courts need to absorb the reality that prosecutors tend to be overworked and the system is overburdened, yet even a prosecutor must not abuse this factor and must bring a case within a reasonable time, although the term “reasonable time” would be construed looser than in a civil case. Therefore, the circumstances where a criminal trial could not be brought were narrow, and only in cases where there is serious prejudice to the defendant, such that no fair trial could be held and prosecuting the case would amount to “a misuse of the process of the court” (A-G’s Reference (No. 1 of 1990) [1992] QB 630). Further, another factor is whether the court finds that the delay was so prominent as to constitute an “abuse of process” in that the Court’s “sense of justice and propriety” is so offended that the “entire prosecution was tainted as an abuse of process” (Horseferry Road Magistrates Court ex p. Bennett [1994] 1 AC 42). Another factor that courts looked at before civil justice reform in Hong Kong is the complexity of the case. Courts recognized that cases that are complex take a longer time to come to fruition, as there as a great number of witnesses to prepare and heavy documentation, so preparation would necessarily take longer than simpler cases. Therefore, delays in complex cases were given greater leeway than in simpler cases, although even complex cases could be delayed to the point where the delay would be deemed “inordinate” (Dyer v. Watson [2002] 3 WLR 1488; HKSAR v. Lee Ming Tee (unreported) HCCC 191/199). Other factors that would come into play would be the behavior of the plaintiff – if the plaintiff’s actions delayed the proceedings, the court would take this into account, likewise, the plaintiff might have waived the delay, which would be another factor (Dyer v. Watson). The court must further look to the totality of the circumstances in assessing whether the delay was so unreasonable as to cause serious prejudice to the defendant. Among these factors is a lack of explanation from the prosecution for the delay. However, the court must look at all the circumstances surrounding the delay, and that “this is a question to be considered in the round, and nothing is to be gained by the introduction of shifting burdens of proof, which serves only to break down into formal steps what is in reality a single appreciation of what is or what is not unfair” (Tan v. Judge Cameron [1992] 3 WLR 249). Returning to the QPl International, the SFC first made enquiries about the facts surrounding this case on June 6, 2003, then did not refer the case to the FS until April 2006, with the tribunal hearing not commending until September 2007. The reasons for the delays were difficulties getting documentation from banks regarding the alleged transactions, in that the banks were delaying the requests for documentation, and that there were “layers of bank accounts” that needed to procured; difficulty in obtaining an expert opinion to testify about the alleged conduct; and that legal advice was delayed, in that the legal advice was sought on May 2005, yet not delivered until December 2005 (QPI International, 2007, pp. 14-16). Also cited as the length of work pressures within the SFC, in that the agency was overburdened with complex cases (QPI International, 2007, p. 17). In reviewing the totality of the circumstances, the court found no prejudice to Ms. Cheung, despite the fact that four years had passed since the events in question (QPI International, 2007, p. 52). What the above cases demonstrate is that, prior to the Civil Justice Reforms, there needed to be a significant delay in the proceedings, such that extreme prejudice would result to the defendant, to where justice would be denied if the proceedings were to go forth. This is especially true with criminal trials. The courts needed to look at the totality of circumstances, including the conduct of both the defendant and the plaintiff, the complexity of the case, and the burden on the plaintiff as far as workload with other cases. On the other hand, Justice Reyes in Nanjing Iron & Steel Group International Trade Co. Ltd HCAJ 177/2006, did not seem to follow the rules that were set out before the Civil Justice Reform. In this case, the plaintiff brought a modest claim of $24,000 against the defendant, on account of the fact that the plaintiff ordered goods from the defendant, and these goods arrived to the plaintiff in poor condition – rust-damaged and crushed. The matter occurred in November 2004, and the parties agreed to extend the applicable limitation time, which was one year under the Hague-Visby rules, to November 2006. The plaintiffs then sat on the case until December 2008, at which case they attempted to push the case forward. Justice Reyes stated that the plaintiffs unreasonably delayed their claim, stating that the rationale for there being a one year limitations under the Hague-Visby rules – that the evidentiary trail would grow cold because of the enormous volume of sea-related trade, and it would be “extremely difficult to determine just what happened in relation to any particular consignment” – still applied (Nanjing Iron, 2006, p. 4). While Justice Reyes considered that this was a simple case, not complex, and, indeed, it would not involve witnesses, only documentation, Justice Reyes nevertheless considered the plaintiffs to have unreasonably delayed the proceeding. Moreover, Justice Reyes considered that the delay to be a period of two years, which would be the period from 2006, when the parties originally decided to extend the time period for filing a claim, to 2008, which was when the claim was actually prosecuted. In deciding that the plaintiffs were out of time to prosecute their claim, Justice Reyes looked to the CJR Order 1A, Rule 1(b), which states that the underlying objective of the Order is to “ensure that a case is dealt with as expeditiously as is reasonably practicable” (Civil Justice Reform Order 1A, Rule 1(b)). Justice Reyes applied this reasoning, even though the CJR was not in effect at the time that the facts that gave rise to the case occurred, and even though the action was commenced before the CJR as well. His reasoning for this is that “there is no transitional provision in the rules mandating the Court to ignore the rules (including the underlying objectives) as they are now” (Nanjing Iron & Steel, 2006, p. 4). This case would seem to be a departure from the cases that had come before the Civil Justice Reform. Even though the CJR does not mandate time periods, it does encourage parties to bring cases expeditiously, and states that this is the underlying objective of Order 1A, Rule 1(b). Whereas before, it seems that the burden would fall upon the party who is trying to dismiss the case, and the courts were reluctant to stay proceedings or dismiss case because the proceedings were delayed, and the presumption would be to allow the case to go forward absent egregious circumstances, Justice Reyes’ reasoning in the Nanjing Iron & Steel shows just the opposite. Justice Reyes in Nanjing Iron & Steel instead put the onus on the plaintiff, and the reasoning suggests that the presumption would be that the case was out of time, and it was up to the plaintiff to show why it was not. In other words, prior to the CJR, the defendant had to show the court why the case was out of time, while, after the CJR, the plaintiff has to show why it was not. What is particularly striking is the contrast between Nanjing Iron & Steel and QPL International. In QPL International, the court was very detailed in its findings, going through the facts very carefully and citing many cases in statutes on which it relied. In Nanjing Iron & Steel, the judgment was very short, as very little recitation of facts were reiterated in the opinion, and there was no reliance upon prior cases in making the decision. The only reliance was on the CJR. In QPL International, the court weighed each factor very carefully; the same regard was not taken in Nanjing Iron & Steel. What this suggests is that courts prior to the CJR relied upon prior cases and common law in coming to their conclusions about whether or not a case was unreasonably delayed, whereas courts in the post-CJR era apparently do not feel the need to do the same. This would seem to suggest further that courts post CJR see these cases as more black and white than do courts pre-CJR, finding that the mandate put forward by the CJR to move cases along is the only authority that needs to be cited. Two other factors seem to be striking as well. Whereas in Nanjing Steel the delay was only two years, the delay in QPL International was four years. Yet QPL International did not find the delay unreasonable, and Nanjing Steel did. This further demonstrates the notion that courts post-CJR put the presumption upon moving the case along and dismissing cases, whereas pre-CJR courts put the presumption on allowing cases to continue. The other factor is that the case in Nanjing Steel was not a complex case. As the amount sought was relatively modest, $24,000, and the plaintiffs showed that there would not be a need for witnesses, and there never was a need for witnesses, the case would have been allowed to continue pre CJR, as one of the main bases for dismissing cases in pre CJR is the memory of witnesses. As there would not be a need for witnesses in this case, this would not be a factor, so presumably under pre CJR standards, this case would be allowed to continue for this reason alone. On the other hand, the lack of complexity would not have played in the plaintiffs favor pre-CJR, as another factor is that overly complex cases would have a built-in excuse for delay, due to the complexity. A simple case such as the one in Nanjing Steel would have a more difficult road in showing the court why the delay occurred. Nevertheless, the fact that the case would proceed on documentation alone would be a reason that the case would be allowed to continue pre CJR. 2) Contrast Justice Reyes’ approach with that of the court of appeal in the above dictum. The dictum in question is in line with Justice Reyes’ reasoning. The dictum states that the Rule in question does not direct a court to do a particular act, which means that the court is not bound by the Rule. The Rule merely provides a “guiding principle” (In the Matter of Wing Fai Construction Company Ltd. And In the Matter of Section 276 of the Companies Ordinance CACV 273/2009). In other words, this is a principle that is set out to the court and it is up to the court to interpret the principle in light of the facts of the different cases that come before it. It also acknowledges that there are various steps within the Rules in the Civil Justice Reforms that also deal with bringing a case expeditiously to trial, although none of these rules were applicable in this particular circumstance. Likewise, Justice Reyes in Nanjing Iron & Steel Group also acknowledged that there was not a specific act that he was required to perform, referring to the “underlying objective of Order 1A, Rule 1(b)” (Nanjing Iron & Steel Group, 2006, p. 4). In other words, Justice Reyes was interpreting the facts according to the underlying objective of the Order, as was the court in Wing Fai. Neither of the courts state that they were required to do a certain act, and both courts acknowledge that they were to interpret the Order as putting the incumbency on them to move cases along expeditiously. Both courts acknowledge that this is to be determined on a case by case basis and that this is up to the discretion of the court. Therefore the approaches between Justice Reyes in Nanjing is identical to the approach taking in the dictum in Wing Fai. 3) What in your view should count as a compelling reason? I would take the approach of the courts in the pre CJR era in deciding what would be a compelling reason. Specifically, I would look at the complexity of the case and the actions of the defendant. If the actions of the defendant delayed the proceeding in any way, then this would be a factor in allowing the case to go forward even after a considerable delay. For instance, if the defendant was out of the country for a time during the proceedings, this would be a factor. If the defendant was evading service, this would be a factor. Etc. As for complexity, I would look for a variety of factors. Is there an expert witness that needs to be procured? Is there voluminous evidence? How many witnesses? How much documentation needs to be procured, and from whom? Also, if the documentation is to be procured from an agency that is notoriously slow, such as any governmental agency, this would also be a factor. The more complex the case, the more likely that there will be delays, and the more excusable these delays would be. I would, however, make sure that the defendant was actively working on the case at all times, not sitting on it for a period of months or years before commencing with its investigation. As long as the delays are good-faith delays, then this would be compelling in my view. Other than these instances, there really would not be a compelling reason to continue a case that has been delayed. For instance, although the court in QPL International seemed to indicate that there would be a reasonable excuse for a delay if the defendant was a prosecutor who is swamped with cases, this would not be a reason for delay in my view. The reason for this is because it is not the defendant’s fault that the prosecutor is swamped with cases, so the defendant should not have to suffer because of this. 4) How to the above relate to the orders in Order 1 1b and Order 2 1, 4 and 5? Order 1B states that the list of powers in the rule is in addition to the powers that the courts previously had, not in substitution, and it also gives a list of powers that are specifically given to the court. Among these powers are the power to stay the proceedings, shorten the time for compliance with the a rule, adjourn or bring forth a hearing, dismiss a judgment on a preliminary issue, exclude an issue for consideration, consolidate proceedings and “take any other step or make any other order for the purpose of managing the case and furthering the underlying objectives set out in RHC 0.1A” (CJR Order 1B). Order 2 Rule 1 states that the failure to comply with any rule would be treated as an irregularity and does not void the proceedings, although a court may set aside the proceedings where the failure occurred. Order 2 Rule 4 states that parties may be sanctioned for not complying with the rules or court orders, and Order 2 Rule 5 states that a party may have the sanction set aside and gives the court factors to consider in setting aside these sanctions. The way that these rules relate is that they give the court structure as to how it is to carry out the mandate that they are to deal with cases expeditiously, as well as gives the court a way to handle the cases when they are not dealt expeditiously. One of the ways is sanctions, which could include dismissal. One contradiction would be Order 2 Rule 1, which states that failure to abide by the rules would not be a reason to void the proceedings. In the cases that were discussed previously, the failure to follow the rules did void the proceedings, so this would seem to be in conflict with Order 2 Rule 1. However, as the court is free to sanction, then this would mean that the court would have discretion to dismiss a case for the failure to prosecute if it so saw fit to do so. Therefore these rules give the courts a bases for doing what they did. Sources Used In The Matter of Dealing in the Listed Securities of QPL International Holdings Ltd. Accessed 7 January 2011. Available at: http://www.mmt.gov.hk/eng/rulings/QPL. Application.for.Permanent.Stay. of.the.Proceedings.pdf Jago v. District Court of New South Wales (1989) 168 CLR 23 Securities and Futures Ordinance, Cap. 571, § 253(1(i) Hong Kong Civil Procedure 2008, order 25, at 25/L/2 Hong Kong Civil Procedure 2008, order 25, at 25/L/4 Hong Kong Civil Procedure 2008, order 25, at 25/L/7 Hornagold v. Fairclough Building Ltd. [1993] P.L.Q.R. 400 Roebuck v. Mungovin [1994] 2 AC 224 Shtun v. Zalejska [1996] 1 WLR 270 A-G v. Cheung Wai Bun [1993] 1 HKCLR 249 HKSAR v. Lee Ming Tee (unreported) HCCC 191/1999 A-G’s Reference (No. 1 of 1990) [1992] QB 630 Horseferry Road Magistrates Court ex p. Bennett [1994] 1 AC 42 Dyer v. Watson [2002] 3 WLR 1488; HKSAR v. Lee Ming Tee (unreported) HCCC 191/199 Tan v. Judge Cameron [1992] 3 WLR 249 Nanjing Iron & Steel Group International Trade Co. Ltd HCAJ 177/2006 Civil Justice Reform Order 1A, Rule 1(b) Civil Justice Reform Order 2, Rule 1 Civil Justice Reform Order 2, Rule 4 Civil Justice Reform Order 2, Rule 5 In the Matter of Wing Fai Construction Company Ltd. And In the Matter of Section 276 of the Companies Ordinance CACV 273/2009 Read More