HUNG HING ENGINEERING CO LTD v. HUNG WAI MING AND ANOTHER

DCCJ 3959/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3959 OF 2014

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REASONS FOR DECISION

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1.  This is another reminder of the discipline to amend one’s pleading to accommodate one’s evidence before proceeding to trial and the difficulties faced by all concerned if one fails to do so.

2.  At adjourned pre-trial review (“PTR”) of the captioned action, I gave leave to defendants to amend its Amended Defence & Counterclaim conditional on their paying into court of the full amount the plaintiff claims, gave directions and timetable for, inter alia, vacating the scheduled trial date, filing and service of consequential pleadings and further witness statements, taking out case management summons, and ordering defendants to pay, in the event of such payment into court, plaintiff’s costs of and thrown away by such amendments and the said adjournment of trial.

3.  I also gave another set of directions for the trial to proceed as scheduled before me and for the dismissal of the summons to amend with costs to the plaintiff in the event of any late or non-payment into court of such sum by the defendants.

4.  I now give my reasons.

Pre-trial review

5.  The trial is scheduled to begin before me on 13 Feb 2017 and it is fixed for 5 days. It first came before me on PTR held on 3Jan 2017. At that time, the state of pleadings and the state of evidence on the various witness statements exchanged between the parties are roughly as follows.

The pleadings

6.  The plaintiff’s case is a simple. It sued the 2 defendant partners trading in name of Wui Tung Metallic Engineering Company (“the firm”) for the sum of $575,317.12, being unpaid balance payment under 12 invoices particularized in para 3 of the Statement of Claim (“the 12 invoices”) for renovation and building materials it had sold and delivered to the firm.

7.  By Amended Defence & Counterclaim filed 17 Mar 2015, the defence advanced 2 construction projects at Ko Shan Road Park (“the Park project”) and Clearwater Bay (“the Clearwater Bay project” and collectively “the 2 projects”) which the firm had undertaken as subcontractor to Luen Lam Engineering Company (“Luen Lam”) and to Creative Engineering Co. (“Creative”) respectively.

8.  For the purpose of the 2 projects it had undertaken, the firm, in turn, entered into agreements to purchase materials from the plaintiff (“the Park agreement”, “the Clearwater Bay agreement”, and collectively, “the 2 agreements”).

9.  Terms of the 2 agreements are said to be made in writing, made orally and made by way of mutual understanding of the parties.

10.  Various drawings, quotations, specifications and code of practice etc. (including those issued and prepared by Architectural Services Department for the Park project and by Creative for the Clearwater Bay project) are said to form the written terms of the 2 agreements.

11.  Certain paragraphs and clauses of the above written materials were pleaded verbatim to suggest that the materials concerned must be of specified quality and/or grade and, in one clause 15.17 pleaded, “manufacturer’s certificates may be accepted as proof of quality in lieu of sampling on site”.

12.  For oral terms of the Park agreement, it was allegedly agreed upon during negotiation that original manufacturer certificates such as “Mill Certificates” (“MC”) had to be provided as proof of quality, and payments under the Park agreement were subject to provision of such certificates.

13.  Implied conditions to the 2 agreements, inter alia, that payments under the same were subject to provision of MCs for all structural steelworks provided were said to arise by mutual understanding of the parties and/or to give business efficacy.

14.  Between Jan to Mar 2013, the plaintiff delivered various structural steelworks including railings and handrails to the site of the Park project. In breach of the Park agreement, it is said that plaintiff had failed to provide specified MCs to defendant and despite demands, still failed and refused to so provide.

15.  As a result of such breach, Luen Lam withheld payment to defendants for the Park project and other projects it had subcontracted to defendant in total sum of $627,000 and defendant was threatened with legal proceedings for failing to provide MCs.

16.  Between Jan to Mar 2013, the plaintiff delivered items including metal gates and railings to the site of the Clearwater Bay project. In breach of the Clearwater Bay agreement, it is said that the plaintiff failed to provide MCs for all steelworks supplied under the said agreement.

17.  Due to plaintiff’s breaches of the 2 agreements, it is pleaded that the plaintiff is not entitled to such relief it claimed against the defendant (but it appears that only 3, and not all, of the 12 invoices related to the 2 agreements).

18.  Set-off by reason of the Counterclaim was also raised. The Counterclaim repeated aforesaid breaches of the 2 agreements for failure to provide MCs. It is alleged that the firm had suffered loss and damage as a result, including such sums it may be held liable to pay to Luen Lam.

19.  In terms of prayers, defendant counterclaims for a) plaintiff’s delivery of MCs for the 2 agreements to defendants forthwith; b) indemnity in respect of Luen Lam‘s claim against defendants; and c) damages for breach of contract to be assessed.

20.  In Reply & Defence to Counterclaim, plaintiff denied that it was contractually required to provide defendants MCs under the Park agreement. As for Clearwater Bay agreement, it was averred that defendants had never requested for MCs and that plaintiff knew at all times they were uncalled for.

The witness statements

21.  The first round of exchange of witness statements was made in May 2016. They consist of witness statement of Raymond Chui, a director of plaintiff (“Chui”), witness statement of 1^st defendant (“D1”) and witness statement of Lai Xiang Ping (“Lai”), a former Mainland staff of plaintiff who now acts as defence witness.

22.  The 2^nd round came in June 2016, with second witness statement from D1 and from Chui.

23.  In Oct 2016, a witness statement from Shek Hau Tong (“Shek”), sole shareholder and director of Luen Lam, was filed as another defence witness. In reply, a 3^rd witness statement of Chui was filed in Nov 2016.

24.  I do not intend to outline contents of all the statements. As I had demonstrated to counsels at PTR, by way of example, I highlight again below what I found appearing in D1’s witness statement dated 16 May 2016 but so far not pleaded in the Amended Defence & Counterclaim above.

25.  D1 said in his statement that the firm undertook sub-contract work of structural steelwork for main contractor or sub-contractor. The 12 invoices related to 6 projects. The firm had entered into various supply contracts with plaintiff for structural steelwork and/or other metal works in order to complete its subcontract for the 6 projects.

26.  D1 went on to list out the corresponding quotations and project sites of the 12 invoices. They included not only Ko Shan Road Park, Clearwater Bay, but also Kwun Tong Police Station, Lai King Estate, Tin Shui Wai, Ting Kau Wan and Tin Kau Wan Toilet (“the other 4 projects” and collectively “the 6 projects”).

27.  For the 6 projects, the firm subcontracted either from Creative, the main contractor of Clearwater Bay project, or from Luen Lam, the sub-contractor to the rest of the 6 projects.

28.  D1 went on to explain how the Park project and the Park agreement were made. He referred to negotiations of the terms of the supply contracts between him for the firm and Lai on behalf of plaintiff. For each quotation, “the major terms followed the express terms stipulated in the drawings, the trade practices in the construction industry and the past dealings” between the parties.

29.  D1 then devoted entire paragraphs 19 and 20 to “trade practice to provide MC”, and entire paragraphs 21 to 24 to “past dealings to provide MC”.

30.  At paragraph 25, D1 said the negotiation and terms of other 5 projects than the Park project followed the same process as that of the Park project. At paragraph 27(1), (2) & (3), he identified and listed out certain drawings which referred in turn to other notes and specifications said to form the written terms of the projects at Kwun Tong Police Station, Ting Kau Wan and Lai King Estate.

31.  At paragraph 29, D1 complained of non-provision of MCs under the supply contract for all 6 projects on the part of the plaintiff. From paragraphs 32 to 34, he listed out specified MCs that plaintiff had failed to provide at project sites of Lai King Estate, Tin Shui Wai and Ting Kau Wan & Ting Kau Wan Toilet.

32.  As a result, D1 said the firm was in turn unable to supply MCs to Luen Lam or Creative under its sub-contracts and the two had withheld a total of $663,646.63 from payments due to it and he believed that the firm could set off the said sum withheld against the total amount due to plaintiff under the 12 invoices.

33.  And D1 ended at paragraph 38 by saying that the sums due under the 12 invoices “should not be paid until the plaintiff provides all the MC for the 6 projects under the supply contracts”.

34.  I should add that the 3 large trial bundles provided to me at the PTR contained voluminous and substantial number of documents ranging from contract drawings, specifications, quotations, delivery orders to invoices not confining to the 2 projects as pleaded but extending to all 6 projects as said by D1 in witness statement.

Issues defined by pleadings and not by evidence

35.  In view of the aforesaid mass of evidence sought to be adduced at trial but plainly unpleaded for so far, I indicated at PTR to Mr Justin Ho (“Mr Ho”) appearing for plaintiff and to Mr Derek Fung (“Mr Fung”) appearing for defendants that such unpleaded materials should either be expunged or covered by proper amendments.

36.  It is worth repeating what Ribeiro PJ had stressed at para 30 & 34 of Sinoearn International Ltd v Hyundai-CCECC Joint Venture (2013) 16 HKCFAR 632:

“A party must raise all the issues he wishes to raise to be dealt with at the trial. Parties are not entitled to have issues recently thought up dealt with separately and piecemeal. The other party is entitled to know from a clear pleading what is the entire case he has to meet so that he can decide whether particulars should be sought; how he should plead in response; what discovery he is entitled to; what evidence he should adduce to meet it; and what points of law should be taken.”

“Pleadings are not mere formalities. They impose a necessary discipline and are fundamental to enabling every procedural facet of the adversarial system to operate fairly.”

37.  Ma CJ also made it clear at para 21 of Kwok Chin Wing v 21 Holdings Ltd (2013) 16 HKCFAR 663 that:

“It should by now really be quite unnecessary to issue yet another reminder on the rationale behind pleadings. The basic objective is fairly and precisely to inform the other party or parties in the litigation of the stance of the pleading party (in other words, that party’s case) so that proper preparation is made possible, and to ensure that time and effort are not expended unnecessarily on other issues … It is the pleadings that will define the issues in a trial and dictate the course of proceedings both before and at trial. Where witnesses are involved, it will be the pleaded issues that define the scope of the evidence, and not the other way round. In other words, it will not be acceptable for unpleaded issues to be raised out of the evidence which is to be or has been adduced.”

38.  Any evidence in witness statements which was irrelevant to the pleaded issues in dispute was scandalous and inadmissible and thus liable to be struck out. Evidence adduced by way of witness statements would not make admissible evidence which was otherwise inadmissible: Talent Weaving Dyeing & Printing Ltd v Able Billion Textiles Ltd [2013] 2 HKLRD 479, 481-2, per Registrar Lung.

The amendment summons

39.  At PTR, Mr Fung at once indicated to me that he had instructions to take out amendment application. I therefore gave deadline to either party to take out such application as it sees fit and also gave directions for the filing of affidavits.

40.  At the end, only the defence took out a summons on 9 Jan 2017 to amend the Amended Defence & Counterclaim (“the summons”) as per the draft annexed thereto (“the draft”) returnable before me on the adjourned PTR date.

41.  In terms of affidavit evidence for the summons, D1 filed an affirmation dated 9 Jan 2017 in support of the summons while Chui filed an affirmation in opposition on 12Jan 2017. And D1 filed a second affirmation in reply on 16 Jan 2017.

The draft

42.  Not surprisingly, the draft Re-Amended Defence advances the case that plaintiff and defendants were parties to a series of steelwork supply contracts for various government and private projects since 2007 (“the supply contracts”). It is pleaded that the supply contracts included not only the 2 agreements on the 2 projects, but also the other 4 agreements on the other 4 projects all involving Luen Lam as the other party to the sub-contract.

43.  During negotiations of the supply contracts, it is said to be parties’ mutual understanding and agreement that their terms shall follow the project requirements of individual project, and past dealings of similar steelwork contracts completed in other project sites of government and private projects (“past dealings”).

44.  Such aforesaid terms, it was pleaded in the draft, include the express terms shown/stated in project requirements of project drawings and specifications, and the terms agreed orally and/or implied from past dealings and trade practice of the construction industry to provide MCs for structural steelwork in so far they are relevant as proof of quality and grades of steelwork delivered/erected in project sites (“trade practice”).

45.  It is averred in the draft that plaintiff breached the terms of the supply contract for the 6 projects in failing to provide defendant with MCs despite repeated requests.

46.  On the oral terms of the Park agreement, it was added that D1 had expressly and repeatedly indicated to plaintiff during negotiation that, since the Park project was a government project, parties shall follow past dealings of government projects.

47.  On the oral terms of the Clearwater Bay agreement, it was added that during negotiation that MCs had to be provided as proof of quality and the payments under the said agreement were subject to provision of such certificate.

48.  Implied terms from trade practice that MCs for all structural steelworks provided should be provided upon respective delivery of structural steelworks were pleaded for the 2 agreements, according to the draft.

49.  As a result of plaintiff’s breach of the Clearwater Bay agreement, Creative withheld payment to defendants for the Clearwater Bay project in sum of $11,300.

50.  In relation to supply contracts for the other 4 projects, it was pleaded in the draft that the terms are “similar” to those of the 2 projects, except for different projects drawings and specifications more particularized thereto.

51.  It was further alleged that plaintiff had been in breach of the supply contracts for the other 4 projects in that it failed to provide defendants MCs or specified MCs as agreed.

52.  Due to such breaches of the supply contract for all 6 projects, it is averred in the draft that any sum on the 12 invoices relating to the 6 projects is not due for payment until all the MCs are delivered by plaintiff to defendants.

53.  By same token, the draft Re-Amended Counterclaim adopted aforesaid breaches of the supply contract over all 6 projects in failing to provide defendants MCs or specified MCs.

54.  By reasons thereof, the defendants, it was pleaded in the draft, had suffered loss and damage, namely such sums they may be held liable to pay Luen Lam and/or Creative.

55.  In terms of relief on the draft Re-Amended Counterclaim, prayer a) was expanded to demand plaintiff’s delivery of MCs under supply contract for all 6 projects and a prayer was added to set-off against plaintiff’s claim the total sum of $663,646.63 allegedly due to defendants but withheld by Luen Lam and Creative.

Applicable principles on amendments

56.  The starting point must of course be O.20 r. 5 & 8 of Rules of District Court, Cap.336H (“RDC”).

57.  I bear fully in mind the following most-oft-cited dissenting speech of Lord Brandon at Ketteman v Hansel Properties Ltd [1987] AC 189, 212F-H:

“With regard to the principles on which his discretion to allow or refuse the applications to amend should be exercised, the judge referred to the notes to R.S.C., Ord. 20, r. 5, in The Supreme Court Practice 1982 and to the authorities there cited. The effect of these authorities can, I think, be summarised in the following four propositions. First, all such amendments should be made as are necessary to enable the real questions in controversy between the parties to be decided. Secondly, amendments should not be refused solely because they have been made necessary by the honest fault or mistake of the party applying for leave to make them: it is not the function of the court to punish parties for mistakes which they have made in the conduct of their cases by deciding otherwise than in accordance with their rights. Thirdly, however blameworthy (short of bad faith) may have been a party's failure to plead the subject matter of a proposed amendment earlier, and however late the application for leave to make such amendment may have been, the application should, in general, be allowed, provided that allowing it will not prejudice the other party. Fourthly, there is no injustice to the other party if he can be compensated by appropriate orders as to costs.”

58.  Mr Fung reminded me of the above principles by referring me to para 56-58 of the judgment of Godfrey Lam J. in Zebra Industries (Orogenesis Nova) Ltd v Wah Tong Paper Products Group Ltd, unreported, HCMP 436/2013, 27 Oct 2014.

59.  But, as Godfrey Lam J. went on to point out at para 59 to 61 of his judgment, other factors referred by Lord Griffiths in his speech at 220D-G of Ketteman, supra, have become prominent after the Civil Justice Reform (“CJR”):

“Whether an amendment should be granted is a matter for the discretion of the trial judge and he should be guided in the exercise of the discretion by his assessment of where justice lies. Many and diverse factors will bear upon the exercise of this discretion. I do not think it possible to enumerate them all or wise to attempt to do so. But justice cannot always be measured in terms of money and in my view a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues, the raising of false hopes, and the legitimate expectation that the trial will determine the issues one way or the other. Furthermore to allow an amendment before a trial begins is quite different from allowing it at the end of the trial to give an apparently unsuccessful defendant an opportunity to renew the fight on an entirely different defence.

Another factor that a judge must weigh in the balance is the pressure on the courts caused by the great increase in litigation and the consequent necessity that, in the interests of the whole community, legal business should be conducted efficiently.  We can no longer afford to show the same indulgence towards the negligent conduct of litigation as was perhaps possible in a more leisured age. There will be cases in which justice will be better served by allowing the consequences of the negligence of the lawyers to fall upon their own heads rather than by allowing an amendment at a very late stage of the proceedings.”

60.  Hong Kong courts have, said Godfrey Lam J., generally continued to apply the principles of Lord Brandon after CJR subject however to the underlying objectives (see O.1A r.1, RDC) and the importance of not disturbing a milestone date. In addition, the court must “recognise 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”: see also O.1A r. 2(2), RDC.

61.  After further reminding me the above additional passages of judgment from Godfrey Lam J., Mr Ho reminded me that a caveat had been put on the Ketteman principles by Lok DHCJ (as he then was) in Li Shiu To v Li Shiu Tsang & Others, unreported, HCA 416/2003, 14 Aug 2012, where his lordship said at para 16 & 17:

“I agree that the Ketteman principles remain good law after the CRJ, but I must put a caveat here. First, the new O 1A of the RHC makes it clear that the court shall give effect to the underlying objectives when it exercises its power or interprets the RHC… If the amendment application is made in circumstances offending these underlying objectives, the court may have to balance all the factors in the case in determining whether to grant the application.

Second, there is a heightened concern to guard against late applications after the implementation of the CJR.  For case management purposes, there are now certain milestone dates in the course of litigation, and one of which would be the trial date. If a party makes a late application to amend the pleading with the effect that the trial date may have to be adjourned, the court would be very reluctant in allowing the application unless there are exceptional circumstances.  Indeed, adjournment of the trial is now considered as a serious prejudice to the parties involved in litigations.  Hence, one should not assume that, once the Ketteman principles are satisfied, the court would automatically grant an application for amendment of pleading in particular at a very late stage of the proceedings.”

62.  At para 24 of the judgment of DBS Bank (Hong Kong) Ltd v Sit Pan Jit, unreported, HCA 382/2009, 6 Feb 2014, referred to me by Mr Ho, Marlene Ng DHCJ not only agreed with the aforesaid view of Lok DHCJ (as he then was), but went on to point out that such general principles of amendments “must be viewed through the prism of delay (especially when it is unexplained and/or unjustified) in the case of a late application made at the eleventh hour before trial”.

63.  Marlene Ng DHCJ explained at para 26 of her judgment:

“Post-CJR case management recognises that the closer to trial an application to amend pleadings is made the more likely it is to cause real prejudice to the other party, especially when the trial (which is an immovable milestone event unless there are exceptional circumstances) may be compromised by insufficient remaining time until the commencement of trial to accommodate the other party’s reaction to the new pleas if the application is granted, or by the even greater danger of putting the milestone trial at risk.”

64.  As one shall see below, these words above are certainly pertinent in the circumstances of this case.

Discussion

Late application without satisfactory explanation

65.  The summons is no doubt a very late application at 11^th hour before trial and the defence does not contend otherwise.

66.  Regarding reasons for such delay, D1 offered in his 1^st affirmation his ill health, difficulty to locate project documents and his mistake as the explanation.

67.  D1 said that the firm, as a small company, disposed most project drawings upon completion of work at site. The Amended Defence & Counterclaim was prepared and filed in March 2015 when only project drawings for the 2 projects were found. D1 understood it unsatisfactory then and knew that information for other 4 projects was required to be located to be included in the pleadings.

68.  D1 added that he unfortunately suffered from left eye injury at work and was given sick leave from April to Oct 2015, and he also suffered from heat stroke and brain problem, and given further sick leave, from July to Aug 2016.

69.  It was, said, D1, not until May 2016 that he obtained assistance from Shek to locate more information on related project drawings and documents and not until Aug 2016 that he obtained consent from Shek to be his defence witness.

70.  The delay in 2016 not to make a timely application is, said by D1, his own mistake.

71.  During D1’s periods of sickness and leave, I beg to ask if 2^nd defendant, and staff of the firm, could not be trusted with the task of finding such related drawings and documents, and, more importantly, whether indeed allegations in the draft for failure to provide MCs on other 4 projects could not be pleaded in their absence. The defence might, I think, not be able to provide particulars of written documents recording alleged written terms, but there should not be any or significant obstacle for pleading alleged express oral terms and implied terms, whatever their bases of implication.

72.  In any event, one finds from D1’s witness statement filed in May 2016 reference to most, if not all, of these so-called missing contract drawings and documents for other 4 projects and other allegations now found in the draft. As and when D1’s witness statement was exchanged in May 2016, proper amendments should, I think, be made to the Amended Defence & Counterclaim to reflect these matters.

73.  Whether Shek agreed or not to be defence witness is, I think, no excuse delaying such amendments.

74.  On my probing, Mr Fung revealed that he was instructed shortly before exchange of 1^st round of witness statements. He had then indicated that amendments to defence pleadings are required. Shortly before Aug 2015, he again indicated the same need but his advice was, regrettably, again not taken up.

75.  One should, in this respect, note that leave was given by Master at hearing of case management summons on 8 Aug 2016 to set this case down for trial commencing 13 Feb 2017 with 5 days reserved. In timetabling questionnaire filed on behalf of both defendants for the same on 1 Aug 2016, defendant’s solicitors confirmed that they do not intend to amend their pleadings.

76.  For the foregoing, I cannot but conclude that it was a conscious and deliberate decision of defendants not to amend its Amended Defence. Mistake is, I think, an under-statement on the part of D1. Had I not raised the matter with counsels at PTR, one imagines defence would never have taken out the summons and proceeded with trial as if no amendments are required.

77.  Such explanation for delay offered by D1 is, in my view, wholly unsatisfactory.

Substantive and sizable amendments

78.  Mr Fung submitted (and D1 said) that the draft amendments are merely technical ones. I disagree.

79.  Significantly, one first notes the draft expands defence case of plaintiff’s alleged breach of the 2 agreements for the 2 projects only to alleged breach of the supply contracts on all 6 projects, though the alleged breach was allegedly the same in not providing MCs or specified MCs to defendants.

80.  Again, significantly, two new bases for alleging terms for provision of MCs or provision of MCs against payment are added for the first time in the draft i.e. past dealings between the parties and trade practice in the construction industry.

81.  To avoid any confusion, while implied terms to aforesaid effect were already pleaded, they are said in Amended Defence to arise from mutual understanding of the parties and/or to give business efficacy to the 2 agreements only.

82.  In terms of written terms, numerous specified drawings, notes, specifications etc were pleaded in the draft for the 1^st time for other 4 projects newly added.

83.  As such, the draft made, I think, significant, sizable and important amendments of substance to the Amended Defence & Counterclaim.

Unpleaded materials known to plaintiff earlier

84.  By the exchange of witness statements, Mr Fung submitted that these unpleaded matters must have been known earlier to the plaintiff by such process. I agree.

85.  Indeed, as was pointed out by Mr Fung, Chui had in his witness statements responded to some of these unpleaded matters and allegations.

86.  For example, at para 18 to 21, 23 and 26 of his 2^nd witness statement, Chui denied D1’s description of past dealings and rebutted the same by the production of documents in 3 other additional projects at Sheung Shui Police Station, Luen Wo Hui Park at Fanling, and police driving and training school.

87.  At para 22 of his 2^nd witness statement, Chui denied existence of alleged trade practice of free provision of MCs. Even if it existed at all, said Chui, the said trade practice never applied to the business dealings between the parties.

88.  Of course, as was emphasized by Mr Ho, Chui on some occasions only made “short” reply to D1’s unpleaded allegations. For instance, at para 28(a), (b) & (c) and 29(d) & (e) of his 2^nd witness statement, he replied briefly to the other 4 projects.

89.  Chui explained at para 34 of his affirmation that he always thought that the unpleaded matters were irrelevant to the issues to be tried but responded to some of them “for the sake of completeness”.

90.  At law, as was emphasized by Ma CJ at Kwok Chin Wing, supra, Chui was, I think, right to say that these unpleaded matters would remain irrelevant at trial. He is not obliged to respond to them as they are not live issues at trial and they cannot be deployed to run an unpleaded case against plaintiff at trial.

91.  But the sensible and preferable course for an opposite party to take, in my humble view, is to have them removed by consent and, if not, by application of striking out if necessary. Such a “time bomb”, if not defused earlier, will most likely exploded at trial, if not earlier, to the detriment of all concerned.

Dealing with the real controversy

92.  Sensibly, Mr Ho recognized and conceded that the amendments in the draft enable the real question in controversy between the parties to be determined. Had the summons been taken out months earlier, he would have no ground to oppose the same. In my view, such concession was validly made.

Minor aspects of the draft to be sorted out

93.  On top of complaining lateness of the summons, Mr Ho took issue with adequacy of particulars in the draft and its preciseness. I do not intend to go over each of these point here. Suffice to say I have sought clarification, if any, from Mr Fung. He had provided some and was unable to provide some others. At times, he conceded he needed more time to reformulate his amendments in a more proper or clearer footing than it is now the case.

94.  Overall speaking, the amendments in the draft are not, I think, useless or immaterial. There are some shortcomings, but the same can, I think, be cured by Mr Fung putting further effort on the draft and, if not, by the plaintiff taking out request for further & better particulars (“F&BP”) of the Re-Amended Defence & Counterclaim.

Prejudice to plaintiff

95.  Mr Ho’s strongest submissions are that, given the lateness of the summons, the trial is going to be derailed or being put to such risk if the amendments are allowed. If the summons is allowed, time is still required for plaintiff to request F&BP, to prepare Amended Reply & Defence to Counterclaim, and to prepare and file further witness statement of Chui and of such other witnesses (if any) to respond in details to the unpleaded materials so far.

96.  At the end, they translate, as Chui emphasized in his affirmation, into delay of plaintiff’s day in court (the action began in Oct 2014), delayed recovery of sums due to it, and further efforts to be incurred for the preparation of the trial, all to the prejudice of plaintiff, which, though could be compensated by costs, cannot be fully measured in terms of money. If the trial is not postponed at all, insufficient time would be left for trial preparation.

Further preparation required of plaintiff

97.  Mr Fung took issue with these submissions. He repeatedly stressed that, save for amending the Reply & Defence to Counterclaim, no other further interlocutory steps are required on the part of plaintiff and the trial can proceed as scheduled with 5 days allocated sufficient enough to cover unpleaded materials so far. Such milestone date will not be affected if the amendments are allowed.

98.  I agree with Mr Ho. Though plaintiff’s solicitors were supplied with the draft on 6 Jan 2017, given that further time is required by defence to reformulate it further, the mere preparation and filing of Amended Reply & Defence to Counterclaim (the consequential amendments would unlikely, I think, be minor) would at least, I think, bring everyone very close to the commencement of trial and leave none with sufficient time to prepare this 5-day trial.

99.  In my view, there is a real and substantial risk that the trial will be derailed.

100.  If necessary, I further agreed with Mr Ho that the plaintiff is fully entitled to (and it would be prudent) to review the complete picture after the amendments are allowed to see if any request for F&BP or filing of further witness statements are called for to respond adequately to defendant’s sizable and substantive amendments to the Amended Defence & Counterclaim. These cannot be accommodated without vacating the milestone date in question.

Multiple proceedings to be avoided

101.  If the trial goes ahead without amendments, it would, I think, not be in the interest of justice to let the real controversy between the parties only partially solved.

102.  While plaintiff had its day in court, defendants’ claim on the other 4 projects may, I think, still be hanging over its head for the days to come. If not time-barred, defendants could take fresh action over them against plaintiff. If Luen Lam took proceedings against defendants on the 4 projects, they could equally take out third party proceedings against plaintiff. In all such circumstances, the plaintiff could in future be burdened with multiple proceedings from defendants dealing with similar subject matters of this case.

103.  In the longer term, it would, I think, be in the interest of plaintiff, defendants, their witnesses and the court to have all the real controversy between the plaintiff and the defendants to be fully resolved in one single trial.

Conclusion

104.  All things considered and balancing one against another, while milestone date should, I am aware, not be varied save for exceptional circumstances and that defendants’ application offends some of the underlying objectives, I think the interest of justice lies in giving them one last chance to amend their pleadings on terms of full payment of plaintiff’s claim into court.

105.  I have exercised my discretion accordingly and made the orders as I did in para 2 & 3 above.

106.  To avoid any doubt, such payments of plaintiff’s claim into court by defendants, if complied with, are not to be released to plaintiff. They are to remain in court pending final disposal of this action or further order of the court.

Costs

107.  While Mr Fung agreed to pay costs of and occasioned by the amendments and suggested any costs thrown away by any adjournment of trial be costs in the cause, for reasons I gave above, the defendants were mostly, if not wholly, to blame for difficulties caused to all by this 11^th hour application.

108.  As such, I acceded to Mr Ho’s applications and made the costs orders as I did in para 2 & 3 above.

109.  Finally, it remains for me to thank Mr Ho and Mr Fung for their submissions and efforts.