LI MING CHEONG v. LI WAI KI AND OTHERS

HCA 10334/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 10334 OF 2000

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J U D G M E N T

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1. This is an appeal by the plaintiff from the decision of Master de Souza given on 7 January 2002 in which upon an application by the 3rd defendant, he ordered:

"(1) There be an order disallowing the amendment of the writ made under Order 20 rule 1 RHC on or about 4th September 2001 insofar as such amendment purports to join the 3rd Defendant as a party and insofar as it amends the indorsement so as to plead and claim relief as against the 3rd Defendant;

(2) there be an order that those parts of the Statement of Claim relating exclusively to the 3rd Defendant in particular paragraphs 21 to 30 inclusive and that part of the prayer for relief beginning with the words "Against the 3rd Defendant" be struck out;"

2. The background to these proceedings is a family dispute. The plaintiff is now retired after a career as a merchant seaman. The 1st defendant is his son and the 2nd defendant is his daughter-in-law, the wife of the 1st defendant.

3. In 1995, the plaintiff had recently been widowed and was living with the 1st and the 2nd defendants and their child, his grandson, in a flat in Whampoa Garden in Hung Hom. The flat was registered in the names of the plaintiff and the 1st defendant as joint tenants. On 13 September 1995 the plaintiff executed a Deed of Gift at the offices of the 3rd defendant, a firm of solicitors, which purported to assign his title and interest in the flat to the 2nd defendant as trustee in trust for his grandson as beneficiary until the grandson reach the age of 21. The principal issue in the proceedings against the 1st and 2nd defendants is an allegation that they used undue influence to procure him to execute the deed, alternatively that they induced him to execute the deed by fraudulent misrepresentation.

4. In so far as the 3rd defendant is concerned the plaintiff alleges that it was retained by him and the 1st and 2nd defendants as their solicitor in connection with the transaction and matters incidental thereto. He alleges that it was in breach of its duty to him under the terms of its retainer, alternatively it was negligent and/or in breach of its fiduciary duty to him. Essentially he claims that the 3rd defendant failed to protect his interests by ensuring that he understood the nature of what he was signing and giving him proper legal advice.

5. These allegations are strenuously denied by the 3rd defendant. It is sufficient to say that there is a significant dispute as to certain events, including as to what occurred at the 3rd defendant's offices on 13 September 1995 when the 1st and 2nd defendants were present and when the plaintiff signed the deed.

6. The plaintiff commenced proceedings on 6 December 2000 by the issuing of a generally endorsed writ of summons from the High Court against the 1st and 2nd defendants. No Statement of Claim was issued at that stage nor was the writ served on the 1st or 2nd defendants.

7. On 4 September 2001 the plaintiff amended the writ under Order 20 rule 1 inter alia by adding the 3rd defendant as a defendant and on the same day filed a Statement of Claim against the 1st, 2nd and 3rd defendants. On 6 September 2001 the amended writ of summons and the Statement of Claim were served on the 1st and 2nd defendants' solicitors and on the 3rd defendant by registered post.

8. The plaintiff contends he was entitled to amend the writ in this way and add the 3rd defendant as a defendant without leave by virtue of the terms of Order 20 rule 1.

9. That rule provides that " ... the plaintiff may, without the leave of the court, amend the writ once at any time before the pleadings in the action begun by writ are deemed to be closed." This rule is subject to rule 3 which provides inter alia that:

"This rule shall not apply in relation to an amendment which consists of -

(a) the addition, omission or substitution of a party to the action or an alteration of the capacity in which a party to the action sues or is sued, or

(b) the addition or substitution of a new cause of action, or

(c) (without prejudice to rule 3(1)) an amendment of the statement of claim (if any) indorsed on the writ,

unless the amendment is made before service of the writ on any party to the action." (my underlining)

It is common ground that the writ had not been served on any party prior to the amendment on 4 September 2001 nor is it disputed that the date of the amendment of the writ on 4 September 2001 was within the limitation period for the plaintiff's alleged causes of action.

10. On 20 September 2001 the 1st and 2nd defendants filed an acknowledgment of service through their solicitors. The same day Messrs Clarke and Kong, solicitors for the 3rd defendant, filed an acknowledgment of service and the summons for striking out of the claim against the 3rd defendant with supporting affidavits which resulted in the order of Master de Souza against which the plaintiff now appeals.

11. The primary submission advanced by Mr Clarke for the 3rd defendant is that "amendment" and "joinder" are distinct procedures, the former being governed by Order 20 and the latter by Order 15 rules 6 - 8. He argues that there is therefore a two-stage process. A plaintiff wishing to add or join an additional defendant must always obtain leave of the court under Order 15 rule 6 before amending the writ. The effect of Order 20 rule 1 is simply that the plaintiff having obtained such leave may amend the writ to add or join the defendant without leave provided that the writ has not been amended previously and has not been served on any existing party to the action.

12. He argues that the plaintiff in this action omitted to take this first step. He purported to amend the writ so as to name a new defendant when the court had never given leave for its joinder.

13. He argues that the 3rd defendant's application for disallowance of the amendment under Order 20 rule 4 must succeed because under the terms of Order 20 rule 4(2):

"(2) Where the Court hearing an application under this rule is satisfied that if an application for leave to make the amendment in question had been made under rule 5 at the date when the amendment was made under rule 1(1) .... leave to make the amendment or part of the amendment would have been refused, it shall order the amendment or that part to be struck out."

14. He points out that Order 20 rule 5(1) provides that the court's power to allow a plaintiff to amend his writ is expressly stated to be "subject to Order 15 rules 6, 7 and 8". He argues therefore that if the plaintiff had made an application under Order 20 rule 5 to amend the writ on 4 September 2001, that application would have been bound to fail because the plaintiff had not obtained leave of the court to add the 3rd defendant as a party under Order 15 rule 16.

15. Mr Clarke submits further that the effect of Order 20 rule 1 may be that leave to add or join a defendant under Order 15 rule 6 is not necessary when for instance the name of a party has been wrongly spelt or a Christian name required to be altered provided that the identity of the party is the same. That however is not the situation in the present case where the plaintiff seeks to join a wholly new defendant.

16. He submits that the consequence of his submission is not as cumbersome a procedure as might at first sight appear because a plaintiff (who does not fall within Order 20 rule 1 and who therefore requires leave to amend his writ) can, and would in practice, make his applications for leave under Order 15 rule 6 and Order 20 rule 5 simultaneously.

17. In support of his arguments Mr Clarke relies principally on the following:

(a) certain passages in the commentary to Order 20 rule 1 Hong Kong Civil Procedure 2002;

(b) the terms of Order 15 rule 8 which provides that:

"8. - (1) Where an order is made under rule 6 the writ by which the action in question was begun must be amended accordingly and must be indorsed with -

(a) a reference to the order in pursuance of which the amendment is made, and

(b) the date on which the amendment is made;

and the amendment must be made within such period as may be specified in the order or, if no period is so specified, within 14 days after the making of the order."

He submits that this makes clear that the amendment of a writ so as to name a new defendant is consequential upon and subsequent in time to an order made under rule 6.

(c) Part of a sentence in the commentary to Order 15 rule 6, namely in paragraph 15/6/1 which states that "this rule stands in relation to parties as Order 20 stands in relation to the amendment of pleadings and other documents and as Order 2 stands in relation to non-compliance."

18. Ingenious as Mr Clarke's argument is and attractively and ably as it has been presented, I am satisfied that it is not correct.

19. In so far as the latter point (c) is concerned the sentence in the commentary goes on to read "these are all provisions designed to save rather than to destroy that which is capable of cure (see per Holroyd Pearce LJ in Pontin v Wood [1962] 1 QB 594 at 609)". Mr Clarke's suggested construction can hardly be said to have that effect. The 3rd defendant's contentions are also inconsistent with the passage in paragraph 20/0/2 Hong Kong Civil Procedure to the following effect:

"The general powers of amendment under this Order are supplemented by O.2, r.1, power to amend "any proceedings", and O.15, rr.6, 7 and 8, powers to amend, to add, substitute or strike out a party or to order proceedings to be carried on. All these powers are cumulative and are exercised on the same principles; and they apply when a party is seeking to amend his own proceedings or documents. (See Singh v. Atombrook Ltd [1989] 1 W.L.R. 810; [1989] 1 All E.R. 385, CA)."

20. If Mr Clarke's argument was correct one would expect some reference in the Hong Kong Civil Procedure 2002 to a need, when the writ has been served on a party, to obtain separate "leaves" from the court (i) to add or join a defendant, and (ii) to amend the writ to that effect. Mr Clarke had not been able to bring any such passage to my attention. A fuller reading of Order 15 rule 8 reveals that it runs counter to Mr Clarke's arguments. By Order 15 rule 8(4) it is provided:

"(4) Where by an order under rule 6 or 7 a person is to be added as a party or is to be made a party in substitution for some other party, that person shall not become a party until -

(a) where the order is made under rule 6, the writ has been amended in relation to him under this rule and (if he is a defendant) has been served on him, ...." (my emphasis)

In other words if an application has been made successfully under Order 15 rule 6 to add or join a defendant, the writ may be amended under that rule. There is no two-stage process as Mr Clarke suggests.

21. It follows that when Order 15 rule 8(1) requires the writ to be indorsed with "a reference to the order in pursuance of which the amendment is made", it is referring to the order under Order 15 rule 6, not to an order under Order 20.

22. That part of the commentary to Order 20 rule 1 to which Mr Clarke has referred and upon which he has relied is a passage in 20/1/4 under the heading "Amendment of writ without leave as to parties" which reads "If either party desires to add a new plaintiff or a new defendant he must apply under Order 15 rules 6 and 7 (Kendall v Hamilton (1879) 4 App. Cas 504)" and a passage in 20/1/3 under the heading "Amendment of writ without leave" which reads:

"This rule applies only to amendments the object of which is to correct mere or accidental mistakes, errors, slips or omissions. Thus, where a date or a figure has been wrongly stated or the name of a party has been wrongly spelt, or a Christian name requires to be altered or a description such as "male" or "married woman" to be added or altered provided in all such cases that the identity of the party is the same, or generally where the amendment is merely formal in character or in its effect, the amendment may be made without leave."

23. Both these passages appeared in the Supreme Court Practice prior to an amendment to Order 20 rule 1 on 9 April 1973. Prior to the amendment, Order 20 rule 1 was in its current form without the addition of the ultimate words "unless the amendment is made before service of the writ on any party to the action". On that day the rules were amended to add those words. Prior to the amendment therefore a plaintiff could not without leave amend his writ to add a party. Both the passages were therefore correct and clearly set out the position at that time.

24. I am satisfied that the retention of those passages (in particular, the former) by the editors of later editions of the Supreme Court Practice and the editors of Hong Kong Civil Procedure 2002 after the amendment in 1973 has resulted in confusion which has not been fully dispelled by other passages in the commentary. That confusion may well have resulted in the passages in Odgers on Civil Court Actions (24th ed.) and the current English "Civil Procedure" at paragraph 19.2.2 to which I have been referred.

25. If Mr Clarke's argument was correct, very little would have been achieved by the amendment in 1973 in so far as it dispensed with the need to seek leave to amend the writ to add a party, if an application was still necessary under Order 15 rule 6 for leave to add that party. I consider it most unlikely that it was intended that the amendment should have the very limited effect for which Mr Clarke contends. This would be particularly so if as he also suggests in practice an application for leave to add or join a defendant would be made together with an application for leave to amend to give effect to the first application.

26. I observe that in Leicester Wholesale Fruit Market Ltd v Grundy [1990] 1 WLR 107, which was decided on other grounds, the plaintiff amended his writ without leave on 28 February 1985 before it was served to add 4 additional defendants without apparently making any application for leave for them to be joined. Having referred to the terms of the Rules of the Supreme Court Order 20 rule 1(1)(2)(3), Glidewell LJ (albeit obiter) commented "It is apparent that the amendment of 28 February 1985 complied with those sub rules."

27. I have borne in mind that an application for leave to amend a writ under Order 20 rule 5 is, under the terms of that rule, "subject to Order 15 rules 6, 7 and 8". It is not expressed to be subject to "an application" under Order 15 rule 6. I am satisfied that all that means is that if the application to amend being made is to add a party, then the court in considering an application must do so in accordance with the provisions of Order 15 rule 6. It does not mean that there must be prior leave to add or join a defendant under Order 15 rule 6 before a court can grant an application for leave to amend. There is only one matter before the court, namely whether to give leave to a plaintiff to add or join a defendant by amending his writ.

28. The 3rd defendant in this case made an application under Order 20 rule 4 to disallow the amendment of 4 September 2001 to the writ under Order 20 rule 1. This court must therefore consider (under Order 20 rule 4(2)) whether if an application had been made on that day for leave to amend the writ to add the 3rd defendant, that application would have been refused. There can be no doubt that such an application would have been allowed because there clearly exists "a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause of matter which, in the opinion of the court, it would be just convenient to determine as between him and that party as well as between the parties to the cause or matter", in particular, the events at the 3rd defendant's offices on 13 September 1995.

29. I find that the 3rd defendant was properly joined as a defendant by the plaintiff's amendment of the writ on 4 September 2001, and that there is no grounds for disallowing the amendment under Order 20 rule 4.

30. I accordingly allow the appeal and dismiss the 3rd defendant's summons of 20 September 2001.

31. I order that unless either party applies to be heard on the question of costs within 14 days, the costs of the 3rd defendant's summons, including the costs before Master de Souza and the costs of the appeal be to the plaintiff.