XCHRX TRIDANT ENGINEERING CO. LTD. v. MANSION HOLDINGS LTD.

1996, No. Con 3 & 66

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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JUDGMENT

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1. I have two applications before me by Mansion Holdings. One is for leave to amend its defence and counterclaim in Con 3, and the other is for an order that Tridant serve a further verified list of documents.

2. In Con 3, Tridant alleges that it entered into two agreements with Mansion Holdings for some construction work. Mansion Holdings admits this, but says that Mansion Fire replaced Mansion Holdings as contractor by "consensual novation".

3. In Con 66, Mansion Fire claims against Tridant on the same basis of "consensual novation". In its defence in that action, Tridant says that its contractual relationship was with Mansion Holdings, but if the contractual relationship "were to be found to be between Mansion Fire and Tridant, Tridant seeks to counterclaim against Mansion Fire in the same terms as the claim Tridant made against Mansion Holdings" in Con 3. Tridant also alleges that, in relation to certain contacts with Mansion Fire, Mansion Fire was the "servant or agent of Mansion Holdings". It is clear to me that Tridant is setting up a case that, to the extent that it had dealings with Mansion Fire, Mansion Fire was acting as agent for Mansion Holdings.

4. In its amended defence and counterclaim in Con 3, Mansion Holdings now wishes to allege that, by virtue of various facts, most of which are already pleaded, it was the intention of Tridant, Mansion Holdings and Mansion Fire that Mansion Fire would carry out the work concerned. Mansion Holdings also wishes to say that, if it was the principal of Mansion Fire as alleged by Tridant in Con 66, it makes a counterclaim on that basis, and references to Mansion Fire in the counterclaim are references to Mansion Fire acting as agent for Mansion Holdings. So, the defence and counterclaim of Mansion Holdings, as amended, would say that Mansion Fire was the party to the contract by consensual novation, or that it was the intention of all three parties that Mansion Fire would carry out the work, or that, if Tridant is right in saying that Mansion Fire was the agent of Mansion Holdings, Mansion Holdings is entitled to counterclaim. On the face of it, there is nothing wrong with that pleading. But Tridant opposes the grant of leave to amend.

5. Miss Cheng argues that Mansion Holdings does not supply the material facts to support the agency. But that submission cannot have any merit in the context of a case in which Mansion Holdings says, in essence, there was no agency, but, if Tridant is right in alleging that there was, a counterclaim is justified. A party must supply particulars of an alleged agency when that is its positive case, but not where the party is saying "There is no agency as you allege, but, if there is, these consequences flow."

6. Miss Cheng also says that Mansion Holdings cannot be allowed to plead an inconsistent case. If this means that a party is not allowed to say "This is my primary case, but, if the court accepts what the other side says, then this is my fall-back position.", I cannot agree. Of course a party is entitled to plead what is essentially an alternative case. It happens all the time. Such an alternative case is almost always inconsistent with a party's primary case, but is not bad for that reason.

7. Accordingly, in my view, there is no valid basis for objecting to leave being granted. Mansion Holdings has leave to amend as sought. There will be an order in terms of paragraphs 1 and 2 of the summons of 31 December 1998.

8. Mansion Holdings asks in its summons that I order that costs be in the cause. This does not seem to be the right order. In my view, Mansion Holdings should pay the costs of, and arising from, the application to amend in any event, but only on the basis of an unopposed application. I believe the application should not have been opposed. Accordingly, I think that Tridant should bear the costs of opposing the grant of leave in any event. I make an order nisi accordingly.

9. Mansion Holdings other application is for an order that Tridant make a further list of documents including "as-built construction drawings as approved by the architect, financial documents in support of losses and expenses allegedly suffered".

10. Tridant's answer to the drawings aspect of this matter is that such drawings as approved by the architect do not exist. According to a letter by Tridant's solicitors dated 2 February 1999, it would seem that the drawings have been submitted to the architect for approval, but he has not yet returned them. As-built drawings approved by the architect are, of course, important in the dispute of the nature of this one. They show the work actually done after the job is complete. There is no explanation from Tridant to explain why the architect has not approved the drawings. Tridant has not shown itself to be reliable in the area of disclosing documents. I think Mansion Holdings is entitled to be satisfied as to the existence or otherwise of these approved drawings, and, if indeed the architect has not approved the drawings by the time a list is verified, it is entitled to an explanation as to why they have not been approved.

11. There is also some basis for believing that even the drawings supplied are not complete. Because of Tridant's unreliability in this area, Mansion Holdings is entitled to be satisfied that all drawings have been disclosed.

12. As to the financial records, Tridant says that it has disclosed all these, and Miss Cheng produces copies of some "as examples". But when we look at the list in which it is said that these documents are disclosed, there is no mention of them at all. It is said that they are annexed to certain payment certificates, although the list does not say this. Again, for the reason that Tridant has not shown itself to be dependable when disclosing documents, I believe Mansion Holdings is entitled to be assured as to the existence and whereabouts of these documents.

13. Accordingly, I make an order in terms of paragraphs 1 and 2 of the summons by Mansion Holdings dated 2 February 1999.

14. As to the costs of this application, there seems no obvious reason why costs should not follow the event. I make an order nisi that Tridant pay the costs of this application in any event.