THE WORLD FOOD FAIR LTD AND ANOTHER v. HONG KONG ISLAND DEVELOPMENT LTD

HCA4602/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 4602 OF 2000

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R U L I N G

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1. Objection has been taken by the plaintiffs to the proposed amendments to the defence, which also include the addition of a counterclaim. This is all consequent upon my ruling on 8 August, giving the plaintiff leave to add the 2nd plaintiff and to make further amendments to its statement of claim.

2. It is axiomatic that a party against whom the pleaded case has been amended is entitled to counter such amendments by amending its own pleading. The general rule is that it will only be allowed to make such amendments as are necessary to deal with its opponents amendments. Unless specific leave is given, it cannot make use of such an occasion to add further allegations which go outside the general permission of making such necessary amendments as are designed to meet the new amended case.

3. In this matter, I allowed late amendments to be made for reasons given in my ruling of 8 August. Inevitably, where I considered it right to afford the plaintiff such an indulgence and where the defendant has been afforded little time to respond, the plaintiffs will have to bear a degree of discomfiture where, a fortiori, they will have been given even less time to take all this in. Where their amendments have rather "squeezed" the defence in terms of time, they must expect to be "squeezed back" even more tightly, if I can describe it in this way. So that is the background.

4. I now turn to the amendments that Miss Lau objects to. It really comes to two matters. First, paragraph 7(c), which is in these terms:

"Further or alternatively there was no note or memorandum in writing of the alleged agreement as required by section 3 of the Conveyancing and Property Ordinance, Cap.219. The premises the agreement referred to in the re-amended statement of claim, if any, which is denied, is not enforceable against the defendant."

5. Mr Lin has instructions to confine this to a defence only on behalf of the new 2nd plaintiff. Miss Lau says that is much too late to be pleading this defence now. Initially, she had sought to say that it should have been pleaded at the outset as against the original plaintiff and that she cannot begin to deal with such a matter now which will require further amendments to the statement of claim and perhaps additional evidence to be called.

6. My judgment of this is, that where the defendant is having to meet a case by another plaintiff, it should have the right to run such defence as it considers is in its best interests. This largely raised a matter of law and I have decided that where I have felt it right to allow a late amendment by Miss Lau, she will have to bear the consequences of that lateness. Accordingly, I will allow this amendment.

7. Next, the counterclaim. This is a claim for mesne profits. I need to read paragraphs 25 and 26:

"Paragraph 25: The 2nd plaintiff, or alternatively the 1st plaintiff, was in occupation of the shops as from 3 or 5 July 1997 until December 1997, or alternatively the end of July 1997, in anticipation of and subject to the making and/or signing of the formal lease as aforesaid.

Paragraph 26: In the premises, the 2nd plaintiff, or alternatively the 1st plaintiff, is liable to pay to the defendant mesne profits, or alternatively occupation, rent for the occupation of the shops for the period from 3 or 5 July 1997 until December 1997, or alternatively the end of July 1997, or alternatively until the possession was delivered up at the monthly rate of $276,912.50, namely $236,790 and $40,122.50, being the sums alleged by the plaintiffs to be the monthly rental and management fee for the shops."

8. Again, Mr Lin is disposed to advance this only against the 2nd plaintiff.

9. I find this aspect particularly finely balanced.

10. Miss Lau says that this has always been available to the defendant against the 1st plaintiff. Why now and so late? This plea gives rise to questions of limitation as well as evidence from a witness or witnesses who may need to be recalled. Mr Lin submits that his client should be allowed to defend itself properly against the new 2nd plaintiff in any legitimate way, including the bringing of this counterclaim.

11. I do not consider that it would be right to restrict the defendant by shutting out this counterclaim when it has been put in a position by my order to face a new plaintiff in addition to the original plaintiff. The counterclaim would have the effect of placing before the court all the matters that are potentially in controversy between the parties so that they may be disposed of.

12. I do not consider it an answer to say that this should have been done earlier by bringing the counterclaim against the 1st plaintiff at the outset and by joining the 2nd plaintiff at the start as a defendant to such a counterclaim. The defendant was perfectly entitled to adopt the stance that it did as to parties and pleadings at the outset. Now, with the introduction of the more powerful, in financial and substantive terms, 2nd plaintiff, the defendant must be allowed to take this course where I am satisfied that the plaintiffs will be able to deal with the counterclaim in terms of pleadings and in terms of a defence to the counterclaim and deciding on any evidential strategy in terms of recalling any witness that may be required, before I am in a position to bring this trial to a conclusion. I will therefore allow the defence to be amended in its proposed terms, and give leave to the plaintiffs to file their own pleading in reply as may be necessary.