SHUI HING INVESTMENT COMPANY LIMITED AND ANOTHER v. KUTEX INTERNATIONAL LIMITED

1984, No, 2468

IN THE HIGH COURT OF JUSTICE

HONG KONG

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JUDGMENT

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1. This is an appeal from a decision of Master Jones made on the 3rd November 1988 when he refused the plaintiffs' application to correct the name of the plaintiff.

2. The facts reveal that Wing Wong Co. Ltd. entered into an agreement with the defendant on the 19th February 1981 for the sale and purchase of Flat A, Block B, Belair Gardens for $2,665,000 which was registered under Memorial No. 199503. The defendant was notified on the 8th February 1982 that a temporary occupation permit in respect of Stage I of Belair Gardens had been issued by the Building Authority on the 7th January 1982, but the defendant failed to complete the purchase despite an extension of time that was granted on the 29th March 1982. Wing Wong Co. Ltd. purported to rescind the agreement by a letter to the defendant dated the 15th November 1982. A writ in the names of the present plaintiffs Shui Hing Investment Company Limited and Yick Fung Estates Limited was issued on the 11th April 1984. By its defence the defendant admits the agreement and that it failed to complete after receiving the letter of the 29th March 1982, but disputes liability on the grounds of misrepresentation.

3. It was not until May 1985 that the plaintiffs solicitors realised that a mistake had been made. A request was then made by the plaintiffs solicitors to the defendant's solicitors to consent to the correction of the name but the request was refused unless an explanation was put forward together with an offer for costs. As no agreement was reached, the plaintiffs issued a summons on the 28th June 1985 to correct the name of the plaintiff. The summons came before a Master on the 5th July 1985 when it was adjourned to a date to be fixed. However no steps were taken to restore the summons until April 1988.

4. In an affidavit dated the 8th June 1988, Miss Wong, the plaintiffs solicitor, states that her firm had been instructed by Wing Wong Co. Ltd. to institute proceedings against the defendant for the reliefs claimed in the amended statement of claim. However, at the same time, the plaintiffs also gave instructions to institute proceedings against other defaulting purchasers of premises in Belair Gardens. She says that due to pressure of work, her firm inadvertently overlooked the names of the parties to the agreement and used the name of the plaintiffs instead of Wing Wong Co. Ltd. Both the two plaintiff companies and Wing Wong Co. Ltd. are members of the Chinachem Group of Companies. The plaintiffs solicitors accept that they were to blame for the mistake due to pressure of work, and that the delay that arose was due to the other proceedings in which they were concerned on behalf of the two plaintiff companies.

5. The plaintiffs seek amendment under Order 20, rule 5 of the Rules of the Supreme court which provides:

 

"5. (1) Subject to Order 15, rules

 

6, 7 and 8 and the following provisions of this rule, the Court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleadings, on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct.

 

    (2)    Where an application to the Court for leave to make the amendment mentioned in paragraph (3), (4) or (5) is made after any relevant period of limitation current at the date of issue of the writ has expired, the Court may nevertheless grant such leave in the circumstances mentioned in that paragraph if it thinks it just to do so.

 

    (3)    An amendment to correct the name of a party may be allowed under paragraph (2) notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party if the Court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identity of the person intending to sue or, as the case may be, intended to be sued."

6. In deciding whether the court should exercise its discretion, it must be established that the mistake was not a genuine mistake, that the defendant was misled or it would be unjust to make the order.

7. In considering the application of Order 20, rule 5(3), my attention was drawn by counsel to Evans Constructions Co. Ltd. v. Charrington & Co. Ltd. and Another [1983] 1Q.B. 810 where Donaldson L.J. at 821 had this to say:

 

"In applying Ord. 20, r. 5(3) it is, in my judgment, important to bear in mind that there is a real distinction between suing A in the mistaken belief that A is the party who is responsible for the matters complained of and seeking to sue B, but mistakenly describing or naming him as A and thereby ending up suing A instead of B. The rule is designed to correct the latter and not the former category of mistake. Which category is involved in any particular case depends upon the intentions of the person making the mistake and they have to be determined on the evidence in the light of all the surrounding circumstances."

8. Although Mr Pennicott who appeared on behalf of the defendant challenged the plaintiffs' contention that the mistake was genuine, he made no application to cross-examine Miss Wong nor was any evidence adduced by the defendant in reply. In the absence of any evidence to the contrary, and having regard to the acceptance by the defendant that there was an agreement between the defendant and Wing Wong Co. Ltd., I accept that the mistake made was genuine. No issue has been taken by the defendant that it has been misled by the mistake.

9. There is a dispute between the parties as to the time from which the period of limitation runs. However, for the purposes of this summons, Miss Yuen, counsel for the plaintiffs, concedes that the limitation period has expired. In fact a protective writ was issued on behalf of Wing along Co. Ltd. on the 24th March 1988. Mr Pennicott submitted that it would be unjust to allow the amendment as the period of limitation had expired and having regard to the inordinate delay caused by the plaintiff's solicitors in restoring the summons.

10. However, it is abundantly clear that Wing Wong Co. Ltd. intended to sue the defendant for breach of the agreement, which agreement has not been disputed. Indeed, by their own pleading, the defendant did not realise that a mistake had been made. The joinder of the two plaintiffs was undoubtedly a genuine mistake which neither misled nor caused any prejudice to the defendant who was well aware that Wing Wong Co. Ltd. was the vendor and the correct plaintiff. The defendant could have been in no doubt as to the identity of the true plaintiff. The issue of delay has no relevance to this application. In a11 the circumstances it would be wholly unjust to disallow the amendment that has been sought.

11. Accordingly, the appeal is allowed with costs to the plaintiffs.