CONVERGE DESIGN AND CONSTRUCTION CO LTD v. MOUNT KELLY INTERNATIONAL LTD

HCCT 72/2018

[2020] HKCFI 2433

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 72 OF 2018

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D E C I S I O N

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1.  The dates for the PTR and for the trial in this case were fixed in July 2019. The trial is to commence on 19 October 2020 for 4 days. Directions had been given in May 2019 for the filing of lists of documents and witness statements. There were 2 rounds of witness statements, the principal statements having been exchanged in August 2019, and reply statements were filed in October 2019. The PTR was scheduled for 14 August 2020, and the Defendant first indicated on 22 July 2020 that it proposed to file a 2^nd supplemental witness statement. On 24 July 2020, the Defendant also filed a supplemental list disclosing 52 pages of new documents. It was only on 11 August 2020, that the Defendant issued its summons for leave to file the 2^nd supplemental witness statement of Mr Edward Wong, referred to hereafter as “New Statement”.

2.  The courts have emphasized on repeated occasions that CJR is about early preparation for trial, in order to achieve the objectives of the Rules.  It needs no further reminder that delay itself is a ground to refuse a late application, either for discovery or for the introduction of new pleadings and evidence, when trial is imminent.  The onus is on the applicant to justify its delay and to show good reason for leave to be granted.  Whilst delay is to be weighed against the probative value and relevance of the pleadings and the evidence sought to be introduced, it need not be emphasized further that the primary aim in the Court’s exercise of its powers is to secure the just resolution of disputes in accordance with the substantive rights of the parties.  Such just resolution of disputes requires due consideration of the time occasioned by last minute applications to introduce amendments to the pleadings and/or evidence on the eve of trial. Prejudice is inevitably caused, in the disruptions in the preparation for trial, the need to consider the new evidence and the need to respond thereto, coupled with the need to locate witnesses at the last minute to consider and if necessary to respond to the new evidence, and the last minute distraction from the proper focus and priority of the due preparation for trial.  This is actual prejudice.

3.  The Defendant had the opportunity in August 2019 to introduce all the necessary evidence to deal with the factual matters raised in the Statement of Claim, the Defence and its Counterclaim for damages.  In this case, the directions given in May 2019 included the filing of reply statements, which gave the parties the full opportunity by October 2019 to respond to factual matters raised in the opponent’s witness statements and evidence.

4.  The New Statement seeks to further explain and allegedly to clarify matters raised in the Defendant’s 1^st statement and supplemental statement.

5.  First and foremost, the Defendant has failed to give any good explanation for the delay in the application to adduce the New Statement.  Change in the legal team and of counsel is not a reason.  It is incumbent on those advising a party at each and every stage on pleadings, discovery and the filing of witness statements to have due regard to the party’s pleaded case, the evidence required for ultimate trial, the party’s readiness for trial and to pay due heed to the duty to comply with the directions made by the Court.  It is no excuse that new or the same counsel instructed late in the day for trial (on a party’s own choice) saw the need to improve the evidence or pleadings at the last minute.

6.  The alleged illness of Mr Wong of the Defendant in July 2020 cannot explain the failure to take action from the time when the 1^st and reply witness statements were filed in August 2019 and October 2019 respectively, if it is alleged that matters were raised in those statements which required further clarification by the New Statement. There was also no reason why the factual matters now raised in the New Statement, all of which relate to matters occurring before October 2019, were not or could not have been raised in Mr Wong’s own statements made in August and October 2019, particularly on essential and fundamental matters such as on proof of his own counterclaim, and must be dealt with now.  It is trite, that witness statements deal only with facts, and not arguments as Mr Wong seeks to raise by the New Statement.  It is also unnecessary to repeat and elaborate on factual matters already raised and dealt with in Mr Wong’s 1^st and reply statements.  I see nothing new in terms of factual matters which only arose after October 2019 which can explain any need to serve the New Statement, even if the delay can be explained.

7.  As the court has endeavored to explain (see Million Decade Limited v Tung Fai, HCA 1062 of 2013, 20 April 2016), it is not the function of witness statements to argue with opposing witnesses, and it is not the proper conduct of litigation to have rounds of statements for point by point rebuttal of the opposing witness statements.

8.  As for the evidence on the loss of revenue, this is an entirely new or changed case on loss of business, which claim was not particularized in the Defence and Counterclaim.  The Defendant seeks, in the New Statement, to rely on particulars and figures to support a claim of “additional revenue” lost, in the sum of $118,020.  It is totally unfair to require the Plaintiff and its advisers to properly consider, test and respond to these particulars in the time available before trial in October.  They should not have to make these last minute preparations and decisions when trial dates had been fixed as early as in July 2019, and if the Defendant had properly taken the time and effort to prepare for its case, instead of taking action only in the last 2 months of trial.

9.  As for lists of documents and discovery made on the eve of trial, it is for the litigant giving discovery at the eleventh hour to establish why the Court should exercise its discretion to permit the late discovery (Hong Lok School Limited v Chow Sai Yiu, HCA 17139/1999, 7 July 2003 and Big Island Construction (HK) Limited v Wu Yi Development Company Limited, HCA 1957/2005, 22 February 2010).  Absent a good and credible explanation, by affidavit, as to why the document was not disclosed earlier, the application may be refused on the ground of delay alone.  Even if there are documents hitherto disclosed, but were not referred to in the witness statements filed for trial, there should be affidavit evidence as to the use proposed to be made of the documents in question, the provenance and the maker of the document, its relevance to the issues before the Court, and the availability or otherwise of the maker of the document to attend trial for cross-examination.  Clearly, this is all to ensure that the opponent in the litigation can fairly prepare for trial, and to enable the Court to properly exercise its discretion in dealing with objections from the opponent.

10.  There is no evidence in this case to explain why the documents in the latest list filed by the Defendant were not disclosed before.  The documents deal with damages and payments required to be made by the Defendant, and their necessity must have been apparent to the Defendant and those advising it from day one of the litigation.  As mentioned earlier, change of Counsel is not an excuse for the introduction of new evidence and documents at the last minute.

11.  For all the above reasons, the Defendant’s application to adduce the New Statement and the documents referred to therein, and to file the Supplemental List, is refused, with costs to be paid by the Defendant to the Plaintiff.

12.  I would record and note however that the Plaintiff, out of co‑operation with its opponent and to assist the Court in deciding the substantive issues at trial, has agreed to the inclusion of the documents referred to in paras 13 (2) and (3) of the New Statement in the trial bundle for use at trial.