Civil Justice Reform case: Strike out for want of prosecution Nanjing Iron & Steel Group International Trade Co Ltd (HCAJ 177 of 2006)

Introduction

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.

Factual Background

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 provided.

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:

  1. The Plaintiffs had invoked Admiralty procedures to obtain security from the Defendants but failed to advance the proceedings for over 2 years.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. The Court is of the view that, over 2 years, memories are bound to dim. There is substantial prejudice caused by the passage of time.

Conclusion

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.

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