XCHRX MIDLAND REALTY (SHATIN) LTD. v. AU CHUN KIN and Another

1994 No. A9138

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. I propose to allow this appeal. Since I am disagreeing with the view which Master O'Donnell took on the issue before him, I ought to explain why.

2. The only order for the service of statements of the 1st Defendant's witnesses of fact was that of Master Jennings of 6th January. It required the statements to be served within 60 days, i.e. by 7th March. The 1st Defendant's solicitors failed to comply with that order. It may be that the 1st Defendant's solicitors had arguable grounds for applying for an extension of time to do so. After all, on 27th February, the Plaintiff had issued a summons seeking leave to amend its pleadings, and that summons was not due to be heard until 23rd March, i.e. until well after the time for complying with Master Jennings' order of 6th January had expired. Relatively small sums of money are at stake in this action. It would have only added to the costs of the action if, as a result of the Plaintiff having been given leave to amend its pleadings, supplementary statements had to be served.

3. However, the 1st Defendant's solicitors did not apply at the time for an extension of time. Why did they not do that ? They say that it was because of the summons which the Plaintiff's solicitors issued on 17th March. That summons sought a short extension of time for the service of the statements. However, it related only to the statements of the witnesses for the Plaintiff and the 2nd Defendant. It did not relate to the statements of the 1st Defendant's witnesses at all. As a result, the 1st Defendant's solicitors say that they believed that the Plaintiff's solicitors had acceded to their argument that, despite the order of 6th January, the service of the statements of the 1st Defendant's witnesses would be premature. I have no reason to doubt that that is what the 1st Defendant's solicitors believed.

4. However, I do not think that that belief, though genuinely held, was justified. What the 1st Defendant's solicitors should have done was to confirm with the Plaintiff's solicitors that they were content for the statements of the 1st Defendant's witnesses to be served only after the pleadings had closed. Had they done that, they would have been told that their belief was incorrect. They would then have realised that if they wanted time to be extended until after the close of pleadings, they would have to apply to the Court for such an extension.

5. For these reasons, therefore, I agree with what I assume to be the reason underlying the Master's order, namely that the 1st Defendant's solicitors were at fault in not applying for an extension of time sooner than they did.

6. However, I do not see any basis for denying the 1st Defendant the extension of time which his solicitors sought when they eventually filed the summons on 13th June, seeking leave to file the 1st Defendant's statement out of time. I discern no prejudice which the Plaintiff would suffer which could not be compensated for by an order for costs. Mercer v. The Chief Constable of Lancashire [1991] 1 WLR 367 highlights the desirability of the simultaneous exchange of witness statements, and that is emphasised by Ord. 38 r. 2A(4)(c). It is true that the statement of the 1st Defendant was prepared with knowledge of the contents of the statement of the Plaintiff which had already been served. However, in my view, that causes the Plaintiff no prejudice at all. It has, as a result, an even clearer idea of the 1st Defendant's case than it would have had if the 1st Defendant's statement had been prepared without knowing what the Plaintiff's statement contained. Moreover, the Plaintiff will be entitled, without having to seek the judge's leave at trial, to supplement the evidence of Mr. Leung to take account of the 1st Defendant's statement. That is because Ord. 38 r. 2A(7)(b)(ii) provides that leave is not required to adduce evidence from a witness about matters not included in a witness statement in relation to new matters which have arisen since the service of the statement.

7. For these reasons, this appeal must be allowed. The order of Master O'Donnell of 15th June refusing the 1st Defendant leave to file his witness statement out of time must be set aside, and I grant the 1st Defendant leave to serve his witness statement by 11th July, notwithstanding that the time for serving it has now expired. I will hear the parties as to costs.