TSANG SIU TUNG v. THE INCORPORATED OWNERS OF ARGYLE HOUSE (No 43 Argyle Street)(sued on its own behalf and representing all owners of Argyle House, No 43 Argyle Street erected on the remaining portion of Kowloon Inland Lot No 2245)

HCA 166/2012

[2019] HKCFI 464

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 166 OF 2012

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DECISION

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1.  This is the adjourned Pre-trial Review (“PTR”) of the trial of the action commenced by the plaintiff (“P”) against the IO of Argyle House (“D”). The cause of action is adverse possession. An issue has arisen as to whether leave should be granted to D to amend its Defence and Counterclaim at this late stage.

The original PTR

2.  The PTR was originally fixed to be conducted on 25 January 2019.  One day before that on 24 January 2019, D filed two summonses for essentially the same Order, namely leave to file (1) an Amended Defence and Counterclaim; (2) a supplemental witness statement of Chiu Sui Fong, said to be the Chairlady of the defendant during the period relevant to the claim, and (3) a 2^ndSupplemental List of Documents.

3.  The Writ was issued on 2 February 2012 indorsed with a Statement of Claim dated 17 January 2012. 

4.  The Defence and Counterclaim was filed on 27 June 2012.

5.  As early as 14 February 2014, Master Au-yeung ordered that any application for amendment of D’s Defence and Counterclaim should be taken out within 28 days after the lift of stay for mediation on 16 June 2014.  None had been taken out.  On the same occasion, the learned Master further gave directions for the filing of List of Documents and witness statements.  It was ordered that “Any party who is unable to comply with any of the above directions shall take out an application for extension of time within 7 days after the due date for compliance.”  No such application for extension had been taken out.

6.  On 15 June 2017, having reviewed the Listing Questionnaires of the parties, Master Ho ordered and directed that the parties should on or before 31 October 2017 obtain Counsel’s advice on the matter, and that all interlocutory application as may be advised, including application for further amendment of pleadings and/or for leave to adduce supplemental witness statement, shall be taken out within 14 days thereafter.  No such application has been taken out by D.

7.  During the 2^nd Case Management Conference on 4 January 2018 before Master Ho, legal representatives for the parties confirmed that counsel advice had been obtained, and the case was ready for trial.  No application for amendment was taken out.

8.  Despite the history of the matter, less than 24 hours before the original PTR, those two summonses were taken out.

9.  Those summonses, I regret to observe, were poorly prepared.  There is no reason why two summonses need to be taken out for essentially the same Order.  One of them (“Summons 1”) has a paragraph 5 handwritten on it.  In respect of the other summons (“Summons 2”), the proposed Amended Defence and Counterclaim is attached thereto (“AD&C Draft 1”).  Pages 5 and 6 of the proposed draft are however missing.  Further, the contents of those pages that are attached are not the same as the contents of the version of the proposed Amended Defence and Counterclaim attached to the written submissions of Mr Lam (counsel for D) filed for the original PTR (“AD&C Draft 2”).  I note further that the proposed supplemental witness statement of Chiu Sui Fong or the proposed 2^ndSupplemental List of Documents are not attached to any of the two summonses.

10.  During the original PTR, I was told by Mr Lam that Summons 1 was filed by mistake.  No acceptable explanation was given as to why different versions of the proposed Amended Defence and Counterclaim had been placed before me.  Then, I was informed by Mr Tam, counsel for P, that service of the two Summonses, which was only attempted late the day before, was defective. 

11.  I formed the view that in those circumstances, and to do fairnessto P, I ought not proceed with the hearing of the PTR and the summonses that day.  I adjourned the matters.  Noting that trial was imminent, I directed parties to come back to me on 1 February 2019 at 9:15 am.  They now do.

Summons 3

12.  On 29 January 2019, D took out another summons (“Summons 3”).  It is meant to supersede Summonses 1 and 2.  The proposed supplemental witness statement of Chiu Sui Fong and the proposed 2^ndSupplemental List of Documents are attached.  A proposed amended Defence and Counterclaim is attached.  I call it AD&C Draft 3, because it is different from the two earlier drafts.

Consideration of the application

13.  Paragraph 9(2) of AD&C Draft 3:

   (a)   D proposes to add the new defence of “imputed or constructive licence or consent”;

   (b)   Mr Lam refers me to Wallis’s Cayton Bay Holiday Camp Ltd v Shell-Mex and BP Ltd [1975] QB 94 which he submits supports his case in this regard.  He at the same time also refers me to Man Kam-tong v Man Lin-tai [1984] HKLR 181 in which Hunter J (as he then was) refused to apply Wallis’s;

   (c)   Mr Chan, counsel appearing for P this morning, has also submitted to me a number of authorities which suggest that Wallis’s has ceased to be good law in the UK, and that it has not been applied in Hong Kong;

   (d)   The reason why Wallis’s has ceased to be good law in the UK is statute-based.  In respect of its applicability in Hong Kong,I have not been cited any authority form our Court of Appeal relevant to the issue.  I am not prepared at this stage to shut D out purely on the basis that Wallis’s has no application in Hong Kong;

   (e)   D’s problem lies in the particulars ((a) to (e) under paragraph 9(2)) it seeks to rely on in support of that defence;

   (f)   I note first of all that the particulars now in AD&C Draft 3 are not in any of the earlier drafts.  They are newly inserted;

   (g)   It is proposed to be pleaded that “[P] knew or must have known that his occupation was subject to [D’s] and/or the owners of No. 43’s consent …” and “Ever since March 1989 at the time when [P] (and Tsui) came into possession, [D] had full knowledge that [P’s] occupation was illegal and without express consent given by [D].  Tacit permission was given by [D] to [P]”.  However, the bases of P’s or Tsui’s alleged knowledge have not been pleaded.  The meaning of “tacit permission”, or the reason for the implication of such “tacit permission”, has not been pleaded;

   (h)   It is the duty of D to provide proper particulars in support of its plea.  This is particularly important when an application for amendment is made late;

   (i)   In my view, given the lack of proper particulars at this stage, the proposed addition of the new plea will cause embarrassment to P.  These are important considerations against the exercise of my discretion to grant leave to amend at this late stage.

14.  Paragraph 12:

   (a)   D proposes thereunder to add a new line of defence, namely, theexistence of an agreement in the form of a specific permission granted by D to P (and/or Tat Cheong, a company beneficially owned and controlled by P) to occupy the shop in question (called the Shop South) as a bare licensee.  The agreement is alleged to be reached in about 2001 when D agreed to withdraw a legal action against Tat Cheong.  That has not been pleaded before, and no explanation has been tendered as to why that was so;

   (b)   I have read the proposed supplemental witness statement of Chiu Sui Fong.  I agree with Mr Chan’s written submission in this regard that there is nothing in it which supports this plea of express agreement;

   (c)   On this basis only, the proposed addition of this paragraph ought to be refused.

15.  Paragraph 12B:

   (a)   D proposes to add that “[D] contends that [P] has effectively acknowledged [D’s] and/or all the co-owners’ title or ownership of the Shop ….”;

   (b)   I agree with Mr Chan’s submissions that the meaning of the word of “effective” is vague and unspecified.

16.  Paragraphs 12C, 12D and 13C:

   (a)   I agree with Mr Chan’s submissions that those factual matters concerning management fees, applications for water and electricity supplies, cleaning fees etc have been in D’s knowledge for a long time.  They have not been pleaded until attempt to do so is made today.  As those matters relate to facts which spanned over 15 years, it would be arduous on P to now deal with them.  P will suffer prejudice if the proposed amendments were allowed;

   (b)   I note also that particulars are lacking, in that who from D did the acts alleged in paragraph 13C has not been pleaded.

17.  I have considered all the matters before me together with the authorities cited to me.  I have considered the underlying objectives.  I am of the view that the scheduled trial will most probably be delayed if I were togrant the application to amend.  I repeat the procedural history of the matterset out above.  There is no excuse for D not to have made these applications before.  In any event, no explanation has been placed before me in any attempt to explain that.  In all the circumstances, and also for the specific and additional reasons set out above, I refuse the application to amend paragraphs 9(2) (together with all particulars thereunder), 12, 12B, 12C, 12D and 13C.  I allow the rest, which Mr Chan does not seek to oppose (save the last sentence in paragraph 11, which I allow despite his objection.  His main objection in that regard is inconsistency with paragraph 9(2).  But as I have refused the addition of paragraph 9(2), that objection goes).

18.  The applications to file a supplemental witness statement of Chiu Sui Fong and a 2^nd Supplemental List of Documents go hand-in-hand with D’s application to amend.  They are accordingly also dismissed.

19.  I will proceed to hear parties on costs and directions on trial.