LAM SAI WAN v. MINLOY LTD

HCA 31/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 31 OF 2014

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D E C I S I O N

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THE APPLICATIONS

1.  The plaintiff (“P”) by Summons of 8 June 2016 (“the summons”) and a summons dated 29 June 2016 for leave to amend it (“the amended summons”) applies for leave:

(a) to amend the Re-Amended Statement of Claim (with draft attached);

(b) to amend the Amended Reply and Defence to Counterclaim (with draft attached); and

(c) to file the 2^nd Supplemental Witness Statement of Lam Sai Wan (with draft attached).

2.  D opposes the applications and the parties are legally represented. [1]

THE FACTUAL BACKGROUND

3.  P claims adverse possession of certain pieces of land at DD 331(“the land”), Lantau Island, New Territories against the defendant (“D”).  P alleges in his original pleadings that at the material time, he has been growing and cultivating various types of crops, plants and trees and has kept different livestock and poultry for sale and consumption over the years since his possession of the land in or about 1959.[2]

THE PROPOSED AMENDMENTS

4.  As far as the application for amendment of the Re-amended Statement of Claim is concerned, the disputed part is prayer (1) where P asks for a declaration.  The original declaration refers to adverse possession of the land for a continuous period of 20 years immediately prior to the commencement of these proceedings.  In the proposed re-amendment, P asks for a declaration of adverse possession of the land of over 20 years prior to the commencement of these proceedings.  The difference between these two versions is the continuous period of adverse possession, the original one refers to continuous period of 20 years whereas the proposed re-amended one refers to continuous period of over 20 years before the commencement of these proceedings (emphasis added).  The next point of dispute is the word “immediately” which is to be deleted in the proposed amendment.  This issue will be discussed below.

5.  The disputed parts of the proposed re-amendment to the Amend Reply and Defence to Counterclaim are in paragraphs 3(1) and (2).[3]  The effects of such proposed re-amendments are to exclude an area described as 嶼南小築 as shown in the plan and to state that P has been operating a farm on the land in the name of 民園農場.

6.  D has no objection to the proposed amendments in paragraph 3(2), relating to the farm.  This will be made an order in terms below.  The only disputed issue is paragraph 3(1) relating to the exclusion of嶼南小築 from the land.

7.  D submits that its objection to P’s 2^nd supplemental witness statement is based upon its objection to P’s proposed amendments in paragraph 3(1).  If the Court allows P’s application, D would have no ground to object P’s application for his 2^nd supplemental witness statement.  If this Court disallows P’s application, the 2^nd supplemental witness statement should not be allowed.

D’S GROUNDS OF OBJECTION

8.  D’s objections are these:

(a) these are the only outstanding matters before trial and D is ready for trial, if not for these applications;

(b) the proposed amendments in relation to the period of occupation of the areas amount to shifting the litigation goal posts in terms of temporal aspect;

(c) the exclusion of 嶼南小築 from the land will change P’s case geographically, for which P has given no particulars and D has to redo all the preparation works for the amended pleaded case, causing delay to the trial of this case;

(d) P’s application for the amendments is late for which P has given no explanation.[4]

THE COURT’S EXERCISE OF ITS DISCRETION

9.  The legal principles on Order 20 rules 5, 7 & 8 can be seen from 20/8/6 of the White Book 2017.

10.  This Court wishes to bring to the parties’ attention the way this Court will exercise its discretion in the application.  This is important because I have found that in recent interlocutory applications, parties are adopting a mechanistic approach in applying the authorities to the cases without proper regard to the context or factual situations.  This will cause a waste of time and costs for their clients, prolonging the waiting time for other appropriate cases.  I shall reiterate that the legal advisors should give proper legal advice to clients in taking out or defending the interlocutory applications.  See my decision in Joytex Development Ltd v Super Homes Ltd (unrep. HCA 18/2012, 16 October 2015).  I hope that, by stating clearly the Court’s approach here, the legal advisors will have a better understanding of the approach that they should adopt in future.

11.  This Court has the primary duty of administering the law on the applications before it.  Interlocutory applications are usually matters for the court’s discretion in case management for a fair trial of the matter.  This Court will bear in mind the following factors in its exercise of discretion:

(a) O.1A, r.2(2): In giving effect to the underlying objectives of these rules, the Court shall always recognize that the primary aim in exercising the powers of the Court is to secure the just resolution of disputes in accordance with the substantive rights of the parties;

(b) the Court’s duty to prevent abuse in order to secure fair administration of justice for the parties;

(c) the Court is guided by the authorities of higher courts.

12.  I shall take the decisions of the Court of Final Appeal, the highest court of our judicial system in Hong Kong. Lord Scott of Foscote NPJ in the landmark case on case management: Wing Fai Construction Company Limited (in Compulsory Liquidation v. Yip Kwong Robert & Others (2011) 14 HKCFAR935 has stated clearly at paragraph 88:

“…The statutory rules applicable to the exercise of the discretion are to be found in the Rules of Court set out in the White Book. Judicial decisions explaining the Rules that relate to strike-out applications and the manner in which those Rules should be given effect should not be treated as a statute replacing the Rules themselves but rather as a very important guide to the exercise of the discretion. The power to strike out remains a discretionary one.”

13.  In paragraph 34 of the judgment, the CJ continued outlining the importance of cooperation between the legal profession and the Court and he said: “Here, O.1A r.3 is of fundamental importance, stating it to be the duty of parties to a litigation and (I would stress) their legal representatives to assist the court in furthering the underlying objectives set out in O.1A r.1.  It is of course important to recognize, as stated in O.1A r.2(2) that the primary aim of exercising its powers is for the court to “secure the just resolution of disputes in accordance with the substantive rights of the parties”.

14.  The Court of Final Appeal in the judgment mentioned above stated that the court should not lose sight of case management to prevent any party from abusing our judicial process.  Taking a drastic example of striking out a party’s case, the CJ said:

“Of course, where a party defaults or abuses the process to such an extent, the court is of the view that ‘enough is enough’, the ultimate sanction of the court may be to strike out an action or the defence, without the matter going to trial...” See §33

15.  But drastic sanction such as striking out the party’s case must be the last resort.  See paragraph 33.

16.  Inordinate and inexcusable delay causing prejudice to a defendant is an example of abuse as held by the Court of Final Appeal.  See paragraph 66.

17.  It will be for the party who suffers prejudice as a result of the applicant’s delay to raise this issue with the court for adjudication.  It is a matter of balancing the respective parties’ interests.  On this balancing exercise, there are, for the assistance to the court, the statutory provisions such as O.2, r.5 for relief from sanctions and the relevant authorities such as the nine factors set out by Lord Neuberger in Annodeus Entertainment Ltd v Gibson (unrep., The Times, 3 March 2000) adopted by the Court of Final Appeal in the above mentioned judgment at §75(5).

18.  Absent any real prejudice, the case must be decided upon the general principle that a court of law seeks to adjudicate on the real issues and disputes between the parties and, if possible, technical and procedural rules should not stand in the way of allowing the parties to raise their real claims or defences before the court for adjudication.  See paragraph 22 of VSC Building Products Co Ltd v Kono Insurance Ltd (unreported, HCA 947/2005, 9 September 2009 per A. Cheung J. (as he then was))

19.  This Court will adopt the above approaches as in these applications as discussed below.

DISCUSSION

Change of temporal aspect of the case

20.  D complains that the proposed amendments will change the temporal aspect of the case and they lack particulars.  D further submits that allowing the proposed amendment, which has the effect of changing the precise temporal limit of 1994 to 2014 to a vague and unspecified 55-year period, is tantamount to blurring the limits of P’s claim and rendering difficult, if not impossible, D’s preparation and conducting of the present case.[5]

21.  D argues that the original version confines P’s claim of 20 years adverse possession of the land counting back from 2014, the date of the proceedings whereas the proposed amendments will extend the time to cover the time from 2014 back to 1959.  This is because of the word “immediately” which is to be deleted.

22.  I do not accept that the proposed amendment will expand the temporal aspect of P’s claim.  The original pleaded case is that P has been in possession of the land for a continuous period of 20 years immediately prior to the commencement of these proceedings.  The amended version is that Plaintiff has been in possession of the land for a continuous period of over 20 years prior to the commencement of these proceedings.  Both versions start from the time in about 1959.  For the original version starting from 1959 to the commencement of the proceedings in 2014, a period of 55 years, P claims for a continuous period of 20 years without specifying which period of continuous time.  Therefore, on the original version, the examination of the whole period of 55 years is still required.  D’s interpretation of the period without regard to the “continuous period” is too narrow.  Now the proposed amendments will clarify the positions.

23.  In fact, I learn from the parties that their respective experts had compiled their expert reports on the basis that the whole period from 1963 to 2014 should be covered.  Since they agreed to the terms on which their experts should compile their reports, I do not accept that the proposed amendment will take D by surprise.  Nor do I accept that further expert evidence will be required for the amended version.

Lack of particulars

24.  As to lack of particulars for the possession of the land and the period, it applies to P’s original claim. D will face the same ambiguities as it has complained on the original pleadings of P.  If D has to clarify with P for the particulars requested for the original claim, it defies common sense to disallow the proposed amendments for the same ambiguities.  As I have observed, the proposed amendments to the time will clarify P’s claim.

25.  D’s complaints on the change of the temporal aspect of P’s claim do not stand.

Change of geographical aspect of the case

26.  D further complains that the proposed amendment will cause geographical change of his claim.  It complains: “It was only until the joint statement of the parties’ experts dated 25 May 2016 that P was made aware of the fact that嶼南小築 was enclosed and insulated from the rest of the Disputed Lots. In this light, this attempt to amend his pleadings is an attempt on P’s part to tailor his case around evidence obtained and smacks of an afterthought.”[6]

27.  It should be noted that D opposes P’s inclusion of 嶼南小築 in his Defence.  It is difficult to see why D should oppose the retraction of P’s claim.  Amendments are frequently made upon afterthought, which is not a ground of objection by itself.  The costs of and occasioned by the amendments can be provided for.  I can see no valid reason for D’s objection.

Delay

28.  As to delay, time and again, I have reiterated that it should be raised within context.  Those cases where the courts refused to exercise their discretion to allow the applications for amendments are cases where trial dates had been fixed and the applications were made near the trial dates.  See Li Xiao Yun and others v China Gas Holdings Ltd (unrep. CACV 38/2013, 11 March 2013) and Crane World Asia Pte Ltd v Hontrade Engineering Ltd (unreported, HCA 109/2014, DHCJ E. Fung, SC, 17 June 2016).  For some of the cases, the court even found that the proposed amendments should have been within the knowledge of the applicant long time ago.  See Subba Alvin also known as Gurung Yadap Chandra v Houng Kee (Asia) Ltd & Others [2012] 4 HKLRD 640 Bharwaney J §§9-11).  To allow such applications will disrupt the trial dates. It was under those circumstances that the courts say that the applications should not be entertained.  This case has not been set down for trial.  It is nowhere similar to those cases.  This complaint has no foundation in support.

CONCLUSION

29.  P’s application for the proposed amendments to the Re-Amended Statement of Claim and the Amended Reply as per the summons should be allowed.  As such, leave should also be granted to P to serve the 2^nd supplemental witness statement as proposed.

COSTS AND ORDER

30.  As to the costs of the applications and for the hearing today, the costs for the applications for amendments and occasioned by it shall be to D, to be taxed if not agreed in any event.  The costs for today’s hearing, including the costs for leave to serve the 2^nd supplemental witness statement and the costs reserved are, by consent of D (with counsel’s certificate), awarded to P, summarily assessed under O.62, r.9A RHC at $67,978, to be paid by D within 14 days from the date hereof.

31.  This court shall make an order in terms as follows:

(a) The summons for the amendments to the Re-Amended Statement of Claim and the Amended Reply and Defence to Counterclaim and for leave to serve the 2^nd supplemental witness statement;

(b) Leave to P to amend the summons as per the annexed to the amended summons; and

(c) Costs of the applications and for today be as per paragraph 30 above.

CASE MANAGEMENT CONFERENCE

32.  By consent of the parties, the Court gives the following directions:

(a) The parties are at liberty to obtain Counsel's advice on the whole of the matter within 28 days from the date hereof;

(b) All interlocutory applications as may be advised shall be taken out within 28 days thereafter; such applications, if contested, shall be fixed before the Registrar for argument;

(c) The matter shall be adjourned to 11:30 am on 22 March 2017 for the 4^th Case Management Conference;

(d) The parties are to file and serve the Listing Questionnaires to confirm whether they are ready for trial;

(e) Liberty to apply;

(f) The costs of the Case Management Conference be in the cause.