SOUND INDUSTRIAL LTD v. KIM YI PROPERTY AGENCY LTD

DCCJ3222/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3222 OF 2008

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R U L I N G

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1.  In this action the Plaintiff sues the Defendant for damages for breach of duty of care. The Plaintiff’s pleaded case was that the Defendant, as an estate agent, owed a duty to the Plaintiff to confirm that there were no unauthorised structures in relation to the property to be rented by the Plaintiff as a tenant.

2.  The Plaintiff complains that a pre-existing floor extension which had been constructed outside the property let - and to be precise, it was on a public pavement - was made the subject of a Building Order for removal, and the Plaintiff chose to leave the premises before the end of the lease, it says, as a result of the building order.

3.  The Plaintiff complains that the Defendant should have informed the Plaintiff that the floor extension was an unauthorised structure.  In the Judgment which I delivered earlier in which I dismissed the Plaintiff’s action, I held that there was no such general duty.  But in that Judgment I also accepted that there was a conversation between Mr Yu of the Plaintiff and Miss Ng of the Defendant, in which Mr Yu asked, pointing to the floor extension, saying, “Is that a problem,” and Miss Ng answered, “No problem.  It’s always been like this.” 

4.  In deference to counsel, Mr Victor Chu, who appeared for the Plaintiff at the trial, I dealt in the Judgment with some of the cases that Mr Chu had helpfully cited to the court to the effect that where an estate agent, knowing that he was being relied upon, chose to answer an enquiry posed by his principal, he owed a duty to take reasonable care in his answer.  I added, however, that there was no claim based on misrepresentation, and that in any event even had there been such a claim, in the particular circumstances of this case it was very doubtful that the Plaintiff would have been able to show reliance on the alleged misstatement as the floor extension was sitting on a public pavement.

5.  Mr Henry Fung, who now appears on behalf of the Plaintiff at this hearing, has put two summonses before me.  One is an application to re-amend the Statement of Claim, and the second summons is for leave to appeal.  Mr Fung applies now to re-amend the Statement of Claim to include a claim of misrepresentation based on the evidence of the conversation I have referred to above.  He also applies for leave to appeal.  Mr Fung submits that the court should allow the amendment despite the very late stage in which it is being made, and he submits that with or without that amendment there should be leave to appeal to the Court of Appeal, saying that there is a reasonable prospect of success for the appeal. I should add that it is not clear from the draft grounds of appeal how the appeal would be presented if an amendment is not allowed at this stage, or how I may have erred in my judgment without an amendment being allowed.

6.  I will first deal with the application to re-amend the Statement of Claim.  The court does have a discretion to allow amendments even after judgment has been given, but obviously that would be exceptional, especially after a trial on the merits, which was contested.  One important consideration is whether there will be any prejudice caused to the other party which cannot be cured by an award of costs.

7.  In this case, as I stated in the Judgment, counsel for the Plaintiff who appeared at the trial had been aware that his pleaded case, or rather the pleaded case that he had taken up to present in court, did not include a claim for misrepresentation based on the conversation referred to above.  I say that because Mr Chung, who appears before me now and also represented the Defendant at the trial, specifically drew this matter to the attention of the court at the start of the trial, and a decision was made by the Plaintiff not to amend the Statement of Claim to include that particular basis of claim.  It was probably not an easy decision to make.  But, as I said, that was the decision.

8.  To allow such an amendment now would cause prejudice to the Defendant. Specifically I can think of the issue of reliance, that is whether the Plaintiff actually did rely on the misstatement.  That issue would have been far from being a foregone conclusion if such a claim had been presented, given that the location of the unauthorised structure was obvious to everyone.  I would add that both parties seemed to agree, in their final submissions on this point, that it was quite apparent that the floor extension was constructed on a public pavement.  Therefore, had such a claim been presented on the basis that is being made a subject of the present application to amend, the cross-examination of Mr Yu for the Plaintiff might have been quite different. 

9.  In any event, and as a result, the court now does not have the evidence that it would require to determine the question.  For these reasons I refuse leave to re-amend the Statement of Claim.

10.  As to the application for leave to appeal, as I said, looking at the draft grounds I cannot really see any ground for upsetting my earlier Judgment because the intended appeal, it would appear from the draft grounds of appeal, is on the basis that the court will allow an amendment of the Statement of Claim at this stage.

11.  Although Mr Fung submits that even without the amendment I should give leave to appeal, I really do not see where the ground is.  For that reason I would refuse leave to appeal.

12.  I would also add that, apart from the above consideration that I mentioned, that is, that the floor extension was sitting on what was obvious to everyone, a public pavement, there is also an additional difficulty that the Plaintiff would have faced, and that is, that it was agreed under the formal tenancy agreement that the area let did not, in any event, include the area covered by the floor extension.  That can be seen from the floor plan.  So that is the other difficulty that the Plaintiff would have faced with or without the amendment.  Therefore I do not find that this proposed appeal carries with it any reasonable prospect of success.  I will dismiss both summonses.

13.  Unless there are any specific submissions, I am minded to dismiss the two summonses with costs, to be taxed if not agreed.

(Discussion re costs)

14.  I order the costs of today, summarily assessed at $20,000, to be paid by the Plaintiff.