LUEN MING SUPREME FABRICATOR CO LTD AND ANOTHER v. NG CHI WAH AND ANOTHER

HCA 2593/2017

[2020] HKCFI 624

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2593 OF 2017

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DECISION

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1.  The is the 2^nd PTR of the trial scheduled to commence on 5 May 2020.

2.  The 1^st PTR was scheduled to take place on 5 February 2020.  It was adjourned because of the general adjournment of court proceedings (“GAP”) due to the outbreak of COVID‑19. On 26 February 2020, I directed on a nisi basis that the PTR be disposed of on paper.  Having considered parties’ respective submissions subsequently made, I on 17 March 2020 gave on paper a set of directions on the conduct of the trial.  I also directed that there be a 2^nd PTR on 9 April 2020.  I left outstanding one matter.  That was the plaintiffs’ application by summons of 16 January 2020 (the “Summons”) returnable on the date of the original PTR for retrospective leave to file and serve their Supplemental List of Documents dated 3 December 2019 (the “Supplemental List”).  Also on 17 March 2020 I gave directions on the filing of evidence in respect of the Summons.  I also directed that that the Summons be adjourned and be dealt with during the 2^nd PTR.

3.  The Summons is now before me.

The plaintiffs’ claim

4.  The plaintiffs’ case may be summarized as follows.  The parties were ex‑business partners.  They had a business plan (the “Investment Agreement”).  As a result of the misrepresentations made to them by D1 on about 26 February 2015 to the effect that D2 (a HK company held by D1 and a Mr Tan) and a wholly owned subsidiary of D2 (“Shun Sing ZQ”) were dormant and had no asset or liability, the parties agreed to use D2 and Shun Sing ZQ as the business vehicles to further the Investment Agreement.  Monies in the total sum of HK$6 million were paid by the plaintiffs into D2’s account.  Shares of another company (“UCD HK”) acquired for the intended business were also allotted or transferred to inter alios D2.  The shares in D2 were in turn transferred to the plaintiffs.  Subsequently, on about 4 March 2016 [1], D1 told the plaintiffs and other business associates that D2 was in fact holding two mortgaged properties for him and Tan.  D1 requested the plaintiffs to transfer the shares in D2 back to them in return for D1’s undertaking that he would within 6 months caused D2 to transfer all shares in Shun Sing ZQ to UCD HK.  The plaintiffs did as agreed.  D1 did not. Further, from around February 2017, D1 and D2 started to refuse to provide further information to the plaintiffs regarding the business.  The plaintiffs say that the defendants have repudiated the Investment Agreement.  They also rely on the doctrine of fraudulent misrepresentation.  They say there are entitled to have the HK$6 million back.  Alternatively they claim damages.

The Supplemental List

5.  The Supplemental List, when first prepared, contained certain typographical errors.  They have been rectified.  I mention them no more.

6.  The Supplemental List was first filed and served on 3 December 2019.  By then, the plaintiffs had already (1) on 21 June 2019 in their Listing Questionnaire confirmed that that discovery had been completed, and (2) on 27 August 2019 confirmed that the case was ready for trial.

7.  When the plaintiffs filed the Supplemental List, no leave had been obtained.  Subsequently, on 16 January 2020, the Summons was filed seeking an Order that they “do have retrospective leave to” do so. 

8.  The Supplemental List discloses 29 items.  As it turns out, 4 (#68, #82, #89 and #90) of them have previously been fully or partially disclosed.  Application for their disclosure has either been withdrawn or not objected to.  No further issue arises from those items.

9.  What remain are 25 items.

10.  The defendants object to the Summons on the lateness of the application and the alleged irrelevance of those 25 items.

The authorities

11.  I have been referred to Hong Lok School Ltd & Others v Chow Sai Yiu & Others [2003] 2 HKLRD 782 and Liu Chen v Chan Poon Wing and Keung Wai Ming (unrep, HCPI 779/2006, 7 October 2009).  The applicable principles are not in dispute.  I will apply them.

Consideration of the submissions

12.  Mr Lai, counsel for the defendants, submit that the application is “inexcusably late” and that the plaintiffs only made an affidavit on 23 March 2020 (of Mr Stephen Kam (“SK#1”), a legal executive of Messrs Bryan Chan & Co (“BC & Co”, the plaintiff’s solicitors) supporting the Summons and explaining the delay.

13.  That objection has to be considered in context.

14.  BC & Co only came on record as the plaintiffs’ solicitors on 27 August 2019.

15.  According to SK#1, the reasons for the delay in effecting the disclosure are (1) the change of the plaintiffs’ legal advisers, (2) the fact that the only director of P1 being usually in the Mainland, and (3) the end of the employment of the employee of P1 responsible for handling the action.

16.  While those reasons do not necessarily excuse the delay, at least they explain it.

17.  Importantly in my view, the Supplement List was first filed and served, albeit without leave, on 3 December 2019.  That was some 5 months before the scheduled commencement of the trial.

18.  I am not encouraging late discovery.  Late discovery affects expeditious resolution of disputes.  Serious prejudice can be caused.  Late discovery should always be discouraged and frowned upon.  But in this case, at least it is not one of those last minute disclosures effected outside the court room or in the course of the trial (compared with Hong Lok School).

19.  I note further that after the service of the Supplemental List, the defendants did not immediately object.  I am not imposing any duty on them to object.  But the way they approached the matter explains (at least partially) why the Summons and the affirmation in support was filed late.

20.  Having been served the Supplemental List, Messrs Kevin LH Kwong & Co (“KK & Co”, solicitors for the defendants) on 23 December 2019 wrote to BC & Co.  Clarification was sought as to “whether you will seek retrospective leave for filing of the said Supplemental List ”.  They asked for copies of the documents, and said that they “also reserve the right to make appropriate interlocutory application(s) after reviewing the fresh documents … if so doing is just and required ”.

21.  On 27 December 2019, BC & Co replied. They said that retrospective leave would be sought.   They also, save #95, served copies of all the newly disclosed documents upon KK & Co.

22.  The Summons was filed on 16 January 2020.

23.  After being served the Summons, KK & Co only on 27 February 2020 indicated that they would object to the same.

24.  On 17 March 2020, I gave directions on the filing and serving of evidence in support and opposition of the Summons.

25.  On 23 March 2020, SK#1 was served.

26.  Given the chronology outlined above, I am not satisfied that the lateness of the Summons is such that this Court should dismiss the same.

27.  The provenances of the newly disclosed documents are such that their disclosure should not have taken the defendants by surprise.  They are public records or official documents (#69, #80, #84 and #91), text messages, documents or otherwise correspondence between the parties (#70 to #74, #76 to #78, #83, #85 to #88 and #94).  Some were actually from the defendants (eg #81 and #95).

28.  The disclosure or reliance of the newly disclosed items does not require the amendment of any pleadings or the filing of any further witness statements.

29.  I refer to Attachment 1 (“Attachment 1”) appended to the written submissions of Ms Cyndi Ho, counsel for the plaintiffs.  The majority of the items have in fact been referred to on the face of pleadings or witness statements already filed.

30.  The newly disclosed items have been sorted into 3 groups: (A) relevant to dispute facts, (B) relevant to credibility; and (C) other supporting documents.

31.  Mr Lai objects to all of them.  He submits (save a couple) that they are irrelevant.  Regarding Group A, some are objected to on the basis of alleged lack of contemporaneity, and others of their alleged serve‑serving nature.  Category B are said to relate to un‑pleaded facts.

32.  I have considered the relevance of all the items.  I also refer to Attachment 1.  As said, a lot of the items are text‑messages between the parties.  They are sufficiently contemporaneous and proximate to the transactions in issue.  Credibility is also engaged.  Background matter like the employment relationship between Leung & D1 is also obviously relevant.  In my view, they all assist in securing the just resolution of the disputes between the parties in accordance with the substantive rights of the parties.

33.  I have considered the issue of prejudice. Despite some general complaints that the admission of those items would “certainly cause prejudice to Ds’ preparation of the case”[2], the defendants are not able to point to any specifics.  Further, I do not see how the two lines of objections taken on behalf of the defendants (namely irrelevance on the one hand and prejudice to the defendants’ preparation of the case on the other) can be consistently made.

Disposition

34.  Having considered all the relevant circumstances, and for reasons set out above, I grant the plaintiffs retrospective leave to file the Supplemental List.

Costs

35.  I order that the plaintiffs should pay Ds costs of and occasioned by the Summons.  Costs of the hearing this morning be in the cause.