LAW KWOK FAI PAUL AND OTHERS v. WELLMEI (HK) PLASTICS & ELECTRONICS INDUSTRIAL LTD AND ANOTHER

HCA 184/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 184OF 2012

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J U D G M E N T

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Introduction

1.  This is an application by the 9 plaintiffs for leave to amend their statementof claim under Order 20 rule 5 of Rules of the High Court, to include particulars in support of the plaintiffs’ claims for damages.

2.  The two defendants (respectively “D1” and “D2”) object to the plaintiffs’ application initially on the basis that the plaintiffs are estopped from pursuing all their claims for damages (both general and special) by reason of their conduct in these proceedings.

Relevant Background

3.  The case arises out of debt collection activities initiated by the defendants against the plaintiffs in respect of an alleged debt due from a company called Tomei Shoji Ltd (“TSL”) to D1for outstanding payment of goods.  The defendants’ case was the sum owed to D1was HK$12,335,442.

4.  Instead of pursuing the alleged debt form TSL through proper channels, the defendants resorted to the use of debt collectors to makeunwelcomed direct approaches to the plaintiffs, who were respectively a former director of TSL, officers of TSL’s former indirect parent company, their family and a former colleague, at their workplaces and homes, as well as through continuous telephone and text messages.

5.  This led to the plaintiffs issuing the writ in these proceedings on 4 February 2012.

6.  On 6 February 2012, the plaintiffs obtained an ex parte injunction order restraining the defendants from threatening, assaulting, intimidating, molesting or harassing the plaintiffs, their family or any of their co-workers at their residences or places of work as set out in the order[1].  The ex parte order was later continued after the inter partes hearing on 10 February 2012, with a further interim injunction that the defendants be restrained until further order from publishing or causing or authorizing to be published certain words defamatory of the plaintiffs .

7.  The plaintiffs served their statement of claim on 21 March 2012 and they sought, among other things, (1)a declaration that the plaintiffs were not liable for the alleged debt to D1 (“Declaration”), and (2)an injunction to restrain the defendants from (a) threatening, assaulting, intimidating, molesting or harassing the plaintiffs, their family or any of their co-workers at the residences or places of work set out; and (b) further publishing or causing or authorizing to be published defamatory words of the plaintiffs and each of them (“Injunctions”).

8.  In the plaintiffs’ statement of claim, apart from the Declaration and the Injunction, they also claimed the following damages, interests and costs:

(i) Damages for nuisance;

(ii) Damages for assault and harassment;

(iii) Damages for libel;

(iv) Damages for negligence;

9.  Save that the plaintiffs pleaded that they suffered general damages, namely loss, damage, distress, anxiety and/or embarrassment under the above different causes of action, no other particulars were pleaded.  In particular, no amounts nor any special damages were pleaded.

10.  The defendants filed their defence on 10 May 2012 denying the plaintiffs’ claims.

11.  The plaintiffs then filed a Timetabling Questionnaire on 20 June 2012 (“Timetabling Questionnaire”).

12.  In the meantime, the plaintiffs had issued a summons for discovery against the Police in March 2012, which led to the Police filing a Notice to Act and this matter was eventually resolvedon 24 August 2012 by way of a consent summons between the parties and the Police.

13.  On 24 September 2012, the plaintiffs’ solicitors wrote to the defendants’ solicitors asking whether the defendants would agree to judgment be entered against them for the Declaration and the Injunctions (“P’s 1^stLetter”),failing which they would proceed to apply for summary judgment under Order 14[2].  There was no mention in P’s 1^st Letter in relation to their claims for damages or for any assessment of damages.

14.  On 6 October 2012, the defendants’ solicitors replied in a letter marked ‘without prejudice save as to costs’, that the defendants would only consent to a judgment for the Injunctions, with no order as to costs (“D’s 1^st Calderbank Letter”)[3].

15.  Nothing seemed to happen thereafter for more than 2 months.  Then on 31 December 2013, the plaintiffs issued an Order 14 summons (dated 19 December 2013) to seek final judgment for the Declaration and the Injunctions (“Order 14 Summons”).  There was no order sought in the Order 14 Summons in relation to any claim for damages.

16.  On 12 January 2013, the defendants’ solicitors sent another Calderbank letter offering an amicable settlement for the whole proceedings, including the Order 14 Summons, by offering an undertaking in terms of the Injunctions sought, and consenting to the Declaration, with no order as to costs of the whole proceedings including the costs of the Order 14 Summons (“D’s 2^nd Calderbank Letter”)[4].

17.  There seemed to be no reply from the plaintiffs.  On 21 January 2013, the defendants’s solicitors  then sent a further Calderbank letter, saying that, without admitting any liability on their part, the defendants would consent to  final judgment be entered against them in terms of the Order 14 Summons for the Declaration and the Injunctions (“D’s 3^rd  Calderbank Letter”)[5].

18.  There seemed to be no letter from the plaintiffs’ solicitors in reply to D’s 3^rd Calderbank Letter, save that aconsent summons was sent to the defendants’ solicitors for final judgment in the action for the Declaration and the Injunctions (“Final Judgment”), and this was duly signed by the parties’ respective solicitors and filed on 23 January 2013(“Consent Summons”)[6].  There wasagain nothing mentioned about any claim for damages nor was any order sought for any assessment of damages.

19.  As a result of the Consent Summons, Final Judgment was entered for the Declaration and the Injunctions on 23 January 2013 (“Consent Order”)[7].

20.  Nothing happened for another two months.  Then there was a dispute about costs.  On 25 March 2013, the plaintiffs sent a sanctioned offer in relation to costs when they made an offer of a sum of HK$42,000,said to be representing 2/3 of the plaintiff’s costs in the action, in full and final settlement of the whole of the plaintiffs’ costs in the action (“Sanctioned Offer”)[8].  The defendants were given 14 days to accept the Sanctioned Offer.  On 5 April 2013 at 12:01, the plaintiffs’ solicitors suddenly sent another letter to clarify that the Sanctioned Offer was only limited to the costs of the Order 14 Judgment.  At 12:59 on the same day, by a faxed letter, the defendants purported to accept the Sanctioned Offer in full and final settlement of the costs of the whole action.

21.  It was 3 days thereafter, on 8 April 2013,that the plaintiffs indicated for the first time that the whole action had not been finalized, and that they would proceed with the other claims in their statement of claim.

22.  The defendants responded on 9 April 2013 by stating that Final Judgment had been entered under the Consent Order and the proceedings were concluded save and except costs.

23.  Eventually, on 27 May 2013, the plaintiffs issued their present application for leave to amend their statement of claim.

24.  The effect of the amendments which the plaintiffs sought leave for would be to set out particulars of damages, summarized as follows:-

(1) Particulars of damages under the claims of assault, intimidation, harassment and/or nuisance:

(i) Costs of hiring security guards HK$1,905,432.38 from January to September 2012; and

(ii) Costs incurred in engaging a Close Protection Unit HK$8,665,598.70 from January 2012 to 31 March 2013; and

(iii) A sum equivalent to loss of amenity as regards stress, distress, anxiety and worry

(2)   Particulars of damages under claims in negiligence:

(i) Insofar as not recoverable above

(ii) Damages for personal injury, for pain, suffering and loss of amenity generally, and further and in particular, as regards stress, distress, anxiety and worry.

25.  The defendants’ initial case was that they and plaintiffs reached a compromise on 23 January 2013 by the Consent Summons and settled the whole action, and that at no time or at all did the plaintiffs’ solicitors ever indicate, whether by correspondence, or otherwise, that the compromise the plaintiffs struck with the defendants was a mere partial compromise and that the plaintiffs did not forgo the claim on damages.  The defendants further said that they would definitely not be agreeable to compromise only part of these proceedings leaving the residue to be determined, and in particular, there had not been a scintilla of the magnitude of the claim on damages, and that it was only after the plaintiffs issued the present application that the plaintiffs set out the amounts sought for the first time for their loss and damage for nuisance, assault and harassment. Notwithstanding the defendants’ initial case, at the hearing, the defendants’ Counsel Mr Cheung indicated that he would have no quarrel if the plaintiffs were content only to proceed with their claim for general damages, but he strongly objected to the proposed amendments.

Discussion

26.  The plaintiffs’ Counsel Ms Lam submitted that the proposed amendments only sought to provide particulars in support of the plaintiffs’ existing claims for damages.

27.  Ms Lam submitted that it was well established that an applicant was entitled under Order 14 rule 1 to apply for (1) the whole of the claim in the writ;(2) one of several claims; or (3) a particular part of the claim or of one of several claims in the writ, and further that the plaintiff’s form for the Consent Order was in line with the standard form set out in the Atkin’s Encyclopaedia of Court Forms in Civil Proceedings (1991 Issue)[9].

28.  It was not disputed by Mr Cheung that under Order 14 rule 1, the plaintiffs could, on the ground that the defendants had no defence to a claim in the writ, or to a particular part of such a claim, or had no defence to such a claim or part except as to the amount of any damages claimed, apply to the court for judgment against the defendants.

29.  The defendants’ complaint was that there was nothing in the Order 14 Summons, or in the supporting affirmation of the 1^st plaintiff of 19 December 2012 made on behalf of all the plaintiffs, which indicated that apart from seeking summary judgment for the Declaration and the Injunctions as sought in the statement of claim, the plaintiffs intended that they would be proceeding with their claim for damages and more importantly, there was  simply no indication at all as to the amount of damages alleged to have been incurred by the plaintiffs.

30.  As pointed out by Mr Cheung, the plaintiffs had in fact earlier in the Timetabling Questionnaire indicated that they did not intend to amend their pleadings.  This was notwithstanding that, as seen from the proposed amendments, the damages being now claimed by the plaintiffs, namely the costs of hiring security guards commenced as early as January 2012, which was two months before they issued the writ and 6 months before the Timetabling Questionnaire.

31.  Mr Cheung referred this court to what was said by Diplock LJ in Ilkiw v Samuels [1963] 1 WLR 991 that:

“Special damage, in the sense of a monetary loss which the plaintiff has sustained up to the date of trial, must be pleaded and particularized[10]”

32.  Mr Cheung further referred this court to the case of Perestrello E Companhia Limitada v United Paint Co Ltd (1969) 1 WLR 570 where it was said by Lord Donovan that:

“Accordingly, if a plaintiff has suffered damage of a kind which is not the necessary and immediate consequence of the wrongful act, he must warn the defendant in the pleadings that the compensation claimed will extend to this damage, thus showing the defendant the case he has to meet and assisting him in computing a payment into court[11].”

33.  Mr Cheung also referred to the case of Etacol (HK) Ltd v Sinomast Ltd [2006] 4 HKC 572, where the 1^st defendant alleged that the 1^st plaintiff owed him a sum of money and the recovery of the sum was put into the hands of the 2^nd defendant, a debt collection agency.  The plaintiffs took out a summons to enter final judgment against the 1^st defendant under Order 14 with damages to be assessed, in respect of the claim for harassment, nuisance and an injunction (emphasis added), and Mr Cheung submitted what the plaintiffs should have done in the present case was to issue the Order 14 Summons in similar terms, to make their intention clear if it was indeed their intention to seek assessment of damages after Final Judgment.

34.  Under Order 20 rule 5(1) of RHC, this court has power to allow any party to amend its pleadings, at any stage of the proceedings, on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct.

35.  The case of Wing Han Trading Co Ltd v Tang Yan-kit and Another [1991]1 HKLR 494 concerned  a consent order granting leave to the plaintiff to enter judgment against the defendants for damages to be assessed, and provided for the costs to date.  Godfrey J had commented in that case that although the order recited that it was made by consent, he did not find it possible to spell out of the correspondence a real contract between the parties, or rather it only evidenced that the defendants were prepared to submit to judgment being entered against them for damages to be assessed[12].  Anyway, in that case, the plaintiff applied to amend its statement of claim after the consent order as it had discovered facts which would support a claim against the defendants for exemplary damages and the plaintiff wanted to amend its statement of claim to plead those facts and the claim for exemplary damages.

36.  In the above case, the plaintiff’s application for leave to amend was refused by the Master.  The plaintiff appealed and the appeal was subsequently dismissed by Godfrey J who held, among other things, that:

“1. The court has power, at any stage of the proceedings, to allow any party to amend its pleading (Order 20, rule 5(1)). While it is unlikely to exercise this power after entry of final judgment, there seems to be no good reason why, assuming it to be in the interests of justice, leave to amend ought to be refused in this case...

2. The scales of justice come down in favour of the defendants.  There is a very important public interest in the finality of litigation.  Secondly, the claim for exemplary damages for breach of contract is an entirely novel claim and remote in the extreme…[13]”

37.  Godfrey J had further commented that although in the abovecase, it might not be a case of election in the true sense, the defendants might well have decided to object to an order in the form to which they in fact submitted, had they known that such an order would involve them in an assessment of exemplary damages[14].

38.  Mr Cheung had emphasized the underlying objectives in Order 1A of RHC, and referred the court to a decision from the High Court of Australia Aon Risk Services Australia Ltd and Australian National University [2009] HCA 27, 5 August 2009 C1/2009 on their approach in relation to an application for leave to amend a pleadings in light of their ‘case management principles’.  In that case, it was said that:-

“An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend[15].”

39.  It is stated in paragraph 20/8/4 of the Hong Kong Civil Procedure 2013 that an affidavit is not required as a rule to an application for leave to amend, except in cases of amendment of a writ issued out of the jurisdiction, or where an allegation of fraud or a plea of justification in a defamation action is sought to be added, or where any delay or special circumstances required explanation, or where the application is made after the expiry of the limitation period.

40.  Mr Cheung submitted that this was a case whether the delay and special circumstances required explanation and referred the court to the case of Wong Hing Faat v Hong Kong and Yaumati Ferry Co Ltd [1992] 1 HKC 497.  In that case, the Master allowed an application by the defendants to amend their defence to raise a limitation of liability defence 11 years after an accident on their ferry.  The plaintiff appealed and the appeal was allowed by Kaplan J.  One of the matters said by Kaplan J in that case was that he considered it most surprising that the defendant did not place before the court an affidavit explaining why that defence was sought so late in the day and more importantly, why no outline of the factual basis relied upon had been given.  Kaplan J further said that it was incumbent upon the defendants to explain the delay and substance of that defence to the court and that was not done.

41.  The plaintiffs in the present application did not file any affirmation to support their application to amend.  It was only after the defendant’s solicitor Mr Yip filed an affirmation opposing the application that the plaintiffs’ solicitor Mr Yam filed an affirmation to reply.  All Mr Yam did in reply was to exhibit all the correspondence between the solicitors, in particular D’s 3^rd Calderbank Letter, to say that there could be no or little doubt that the defendants “well knew” the whole action had not been concluded and there remained outstanding claims to be dealt with after the Consent Summons.

42.  Although in D’s 2^nd Calderbank Letter, the defendants stated that they were prepared to offer an amicable settlement for the whole proceedings the Declaration and an undertaking in terms of the Injunctions, with no order as to costs of the whole proceedings, there did not seem to be any reply to this letter from the plaintiffs within the 5 days imposed by the defendants.  In the end, the defendants sent D’s 3^rd Calderbank Letter to say that they would consent to Final Judgment beentered in terms of the plaintiffs’ Order 14 Summons.

43.  Ms Lam had said that in the Order 14 Summons it was clear to the defendants that the plaintiffs only identified the two reliefs sought in the statement of claim in that there were other claims for which summary judgment was not being sought.  I do not find that the Order 14 Summons, or the supporting affirmation, had made it as clear as Ms Lam submitted, since there was no mention about proceeding with other claims in the supporting affirmation.  However, on the other hand, I am unable to conclude from the correspondence between the parties that there had been any concluded agreement that the Consent Summons signed by the parties was in full and final settlement of the whole action, or that the plaintiffs had abandoned their claim for damages. In any event, Order 14 does not apply to a claim for libel.

44.  Although the delay in the present case was 15 months and not 11 years as in the case of Wong Hing Faat, in my view, the plaintiffs ought to have provided an explanation as to the delay and why there was no mention at all, whether in pleadings or in any of the affirmations filed on their behalf, that they had been employing security guards and engaging a Close Protection Unit, the total costs of which was over HK$10m.

45.  As Mr Cheung had submitted during the hearing, the defendants might have decided to “throw in the towel” right from the beginning or the defendants might have considered to make a payment into court early in the proceedings, had they known about the continuing costs of security guards or the magnitude of the claims in damages.

46.  The plaintiffs had all along instructed the same solicitors and same Counsel and Ms Lam settled the statement of claim of some 25 pages.  As submitted by Mr Cheung, the whole objective of the Civil Justice Reform is to show your opponents all the cards on the table and that the plaintiffs were doing the opposite.  There was no explanation as to why the plaintiffs did not plead in the first place in their statement of claim the proposed amendments.  There was also no explanation why they had to wait about 4 months after the Final Judgment to spring the surprise on the defendants.

47.  Having considered all the circumstances of this case, I am of the view that in the interests of justice, the plaintiffs’ application for leave to amend should not be allowed.

Conclusion

48.  The plaintiffs’ summons of 27 May 2013 is hereby dismissed with costs to the defendants, to be summarily assessed.  Thedefendantsto file their statement of costs with 14 days, and any opposition to be filed by the plaintiffs within 14 days thereafter.