HESSON DEVELOPMENT LTD v. TANG KI FAN TSO

HCA5584/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.5584 OF 1998

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D E C I S I O N

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1. This is the defendant's application by summons for leave to amend the re-amended defence and counterclaim and for consequential directions on filing of supplemental witness statements.

Delay

2. By way of preliminary observation, this case has a history of delay. Although the Writ was issued in April 1998, the action has not yet gone to trial on its fifth anniversary. And although leave to set down was given in as early as September 1998, the case did not come to be set down until February 2002. The last time it came close to the door of the trial court was the pre-trial review on 3 March 2003, when the trial was then scheduled for 31 March 2003. Despite that the need for the defendant to file and serve expert report out of time had been the subject matter of extensive solicitors' correspondence copied to the court since January 2002, an application for filing expert evidence was only made at the pre-trial review on 3 March 2003. With no surprise, the trial had to be vacated with the defendant being visited by an indemnity cost order.

3. Also at the pre-trial review, it was intimated to the judge that an amendment to the defendant's pleading would be required to which the judge directed that a formal application had to be made. But in fact, according to the affidavit leading the application, the amendment was occasioned by instructions obtained at counsel's conference with the defendant and the draft was said to have been be ready by the time of the pre-trial review. Yet, no reason has been given as to why the application to amend could not and was not properly formulated in a summons made returnable before the judge at the pre-trial review.

4. Eventually on 8 April 2003, more than a month after the pre-trial review, the defendant took out the present summons. It went before the Listing Master on9 April 2003, who directed the matter be adjourned for argument before the Listing Judge. Notwithstanding that and despite a series of correspondence between the solicitors and the court, the defendant did not restore the summons for hearing. The summons was only fixed for argument after the plaintiff wrote on 3 September 2003 requesting to restore the summons for hearing.

No explanation for late application to amend

5. Delay is a relevant consideration when the court considered how to exercise its discretion on an application to amend pleadings. It is a particularly pertinent consideration in the present application, not only because of the long and undue delay in bringing the action to trial and that the trial date had once been aborted as outlined above, but because there was a conspicuous absence as to the reasons for this very late application to amend.

6. Other than stating that it was as a result of instructions obtained and advice given by counsel that the amendment was put forward, nothing else was offered, whether by way of affidavit evidence or counsel's submission. Plainly, the facts relied upon for the proposed amendments happened before the agreement entered in November 1997. They must have been within the defendant's knowledge when the Defence and Counterclaim was filed in 1998. There is no explanation as to the delay in making the amendment to pleadings. The lack of explanation is particularly objectionable in view of the fact that the defendant was legally represented and advised throughout. In fact the counsel who appeared at the pre--trial review was the same counsel who drafted the Defence and Counterclaim.

7. Miss Lee who appears for the defendants today submits that the proposed amendment is a matter that had been touched upon in the defendant's witness statement filed in 1999. It is also said that this is a very important part of the defendant's case. In my view, it is all the more incumbent upon the defendant to explain the late application to amend. The defendant's failure to explain the delay means that the court cannot even begin to consider whether the considerations set out in cases such as Kettleman v. Hansel Properties Ltd [1987] 1 AC 189 at 212F-H : see also Hong Kong Civil Procedure 2002, Vol. 1, para. 20/8/11, at p.337. Similarly, while I accept that a party is not to be penalized for genuine mistakes so that amendment ought to be allowed if the prejudice occasioned by the amendment can be compensated by appropriate orders of costs, I am unable to establish whether this amendment was occasioned by genuine mistakes or otherwise.

The proposed amendment

8. As to the substantial merits of the application, the proposed amendment involves adding a new paragraph 2(b) to the Re-Amended Defence and Counterclaim. The new paragraph effectively covers the following pleas :

(1)	A plea of pre-contractual representation and agreement that the plaintiff would take the property irrespective of the structures on it and its legality or otherwise.
(2)	A plea that the obligation to show title has to be construed against such representation or promise.
(3)	A plea of estoppel.
(4)	A plea that the plaintiff should have taken up the defendant's invitation for an offer by the plaintiff for an extension of time to complete, instead of insisting on completion with a perfect title by the contractual completion date.

Mr Lin has commented on the ambiguity of this last plea, but for the present purpose, I am content to assume that it means that the plaintiff should have opted for an extension of time to complete.

9. To substantiate the proposed amendments, the defendant seeks at the same time to put in two additional or supplemental witness statements.

10. The plaintiff has taken a number of objections to the proposed amendment. Primarily, the plaintiff says that the proposed amendment is lacking in particulars, vague and bad as a matter of law. In my view, the criticism that the amendments lack material particulars is a valid one. No particulars of the date, occasion, persons involved in the alleged representations were set out. The representation said to have been made was also set out in very loose terms. Miss Lee meets this criticism by saying that the defendant has the remedy of seeking further and better particulars. She asks the court to give directions for this if considers that particulars ought to be administered. That is hardly a good answer, especially when this is a late application to amend. In Perak Pioneer Ltd v. Carrian Holdings Ltd (unreported), CA 59/1985, Fuad JA (as he then was) said :

"As regards particulars, in my view, it is no answer to an objection that a proposed amendment lack particulars, to say that particulars can later be given. Of course, if a pleading lack particulars, particulars can be asked for in the usual way and ordered by the court if necessary, but where an amendment is applied for it would be an unusual case where the court would consider it appropriate to allow an amendment to be made which lacks particularity, and might cause embarrassment."

See also Wellfit Investments Limited v. Poly Commence Ltd [1995] 3 HKC 56, at 61-62.

11. Equally, it is not sufficient to say that the proposed supplementary witness statement had contained factual foundations for the proposed amendment. Pleadings and the particulars in pleadings have their own purposes to serve that cannot be readily replaced by witness statements. At this late stage in the proceedings, there is no justification for putting the plaintiff to the burden of guessing or trying to piece out the defendant's case.

12. As to the viability of these new pleas as a matter of law, I reckon the force in Mr Lin's criticism, especially in the context of estoppel by representation. But I am not prepared at this stage to go to so far as to say that the proposed amendment is thoroughly bad so that it is bound to fail, such that it would be a futile exercise of the court's discretion to allow the amendment. What I do readily accept is that the proposed amendment has been drafted in rather vague and loose terms and there are doubts with regard to the merits in law.

Exercise of court's discretion

13. As a general principle, pure undue delay will not be sufficient to bar an application to amend : Tang Shun Hay v Jetline Co. Ltd & Ors [2000] 1 HKC 417, at 423B-424C, per Godfrey JA. But in the present case, the undue delay aside, the unsatisfactory nature of the proposed amendment and the doubts over its soundness mean that if the amendment were allowed, a number of further interlocutory steps would have to be undertaken before the case can be brought to trial again. In this regard, I note that the dispute arose in 1998, and the alleged oral representation was made in 1997. The amendment was proposed five years after the Defence and Counterclaim was first filed, without any explanation for the delay in introducing the new averment. I consider that it is a prejudice to the plaintiff to be subject to a fresh line of defence at this very late stage of the litigation. As commented by Rogers JA (as he then was) in Tang Shun Hay v. Jetline Co Ltd, at 421I-422C : "the plaintiff is entitled to proceed and deal with the defendant on the basis that the point will not be raised."

14. Having regard to all the circumstances of this case and the matters that I have referred to above, I consider that the court's discretion ought to be exercised against the amendment to be allowed. Both as a matter of proper administration of justice and as a matter of good and effective case management, parties cannot be allowed without bounds to reopen and dwell on the interlocutory stage of a piece of litigation. It is the court's duty to see that interlocutory steps are properly taken and not disproportionate to the dispute in issue. A party should not be asked to wait forever for the other side to be ready and similarly the court would not and should not condone this.

Conclusion

15. For the reasons indicated above, the defendant's application to amend is dismissed. Accordingly, the orders I make are as follows :

(1)	Paragraphs 1 to 3 and 5 of the defendant's summons are dismissed.
(2)	Order in terms of paragraph 4 of the defendant's summons.
(3)	Leave to the plaintiff to file and serve expert evidence in reply within 14 days from the date hereof.
(4)	Leave to the parties to within 21 days from the date hereof fix a date for the trial of this action in consultation with counsel's diaries. Estimated length of trial is seven days.
(5)	Costs of the defendant's summons be to the plaintiff against the defendant in any event, to be taxed if not agreed.