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CAMP 89/2019
[2019] HKCA 877
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
MISCELLANEOUS PROCEEDINGS NO. 89 OF 2019
(ON AN INTENDED APPEAL FROM HCA NO. 878 OF 2011)
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HERAEUS LIMITED |
Plaintiff |
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(賀利氏有限公司) |
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and |
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CHAN YUN MUI |
1 st Defendant |
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CHU KENG MING |
2 nd Defendant |
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Before : Hon Cheung and Chu JJA in Court
Date of 2nd Defendant’s Written Submissions : 10 May 2019
Date of Plaintiff’s Written Submissions : 24 May 2019
Date of Decision : 2 August 2019
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D E C I S I O N
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Hon Cheung JA (giving the Decision of the Court) :
1. Marlene Ng J on 17 December 2018 ordered, amongst other things, the dismissal of the 2nd defendant’s appeal against the decision of Registrar K W Lung by which he refused to allow the 2nd defendant to amend his defence and counterclaim. There had already been two previous amendments by the 2nd defendant. The current proposed amendment is entitled ‘Re‑Re‑Amended Defence and Re‑Re‑Amended Counterclaim of the 2nd defendant’. The 2nd defendant now renews his application for leave to appeal against the Judge’s judgment, his application for leave having been previously refused by the Judge. He also applies for an extension of time to appeal against the judgment of the Judge. We will deal with the application on paper.
I. Leave to appeal
2. The Judge first refused the leave application because leave to appeal is not required by reason of the operation of section 14 AA of the High Court Ordinance (Cap. 4) and Order 59, rule 21(2)(i) of the Rules of the High Court in that it is ‘an order refusing the application to allow an amendment of a pleading to introduce a new claim or defence or any other issue’. The amendment was to introduce for the first time a case of fraud. This clearly falls within the ambit of the Rules. The Judge was clearly right to dismiss the application on the basis of lack of jurisdiction. This point is totally unarguable. In any event the Judge had dealt with the merits of the application which we will discuss below.
II. Extension of time to appeal
1) Length of delay
3.1. The judgment below was handed down on 17 December 2018 and the 28‑day appeal expired on 14 January 2019. The present summons for extension of time was only filed on 10 May 2019. There was a substantial delay of four months.
2) Reason for the delay
3.2. The 2nd defendant’s explanation for the delay is puzzling. Counsel claimed that ‘The 2nd defendant’s acting with circumspection led to the delay, but all along the 2nd defendant dealt with the leave application below pro‑actively and with diligence.’
3.3. We do not accept this so‑called explanation. As stated by the Judge, the plaintiff’s solicitors had drawn to the 2nd defendant’s attention the jurisdictional point on 29 March 2019 (after the 2nd defendant filed his written submission on 26 March 2019) inviting him to withdraw the summons for leave to appeal. The 2nd defendant persisted with the application and did not apply for extension of time there and then.
3) Merits of the application to amend
3.4. The plaintiff is a supplier of precious metals. The 1st defendant is the wife of the 2nd defendant. They were the beneficial owners of Sing Kwong Jewellery & Gold Company Limited (‘SKL’) and guarantors of SKL’s obligations to the plaintiff. By two written guarantees both dated 12 November 2002 it was agreed between the plaintiff and 1st defendant and between the plaintiff and 2nd defendant respectively that in consideration of the plaintiff granting or making available credit facilities to SKL for the precious metals supplied by the plaintiff, the defendants guaranteed to pay on demand all moneys owing to the plaintiff provided the amount shall not exceed $10,000,000 with inter alia interest and expenses (legal or otherwise) incurred by SKL.
3.5. The plaintiff claimed it granted credit facilities to SKL at the defendants’ request and pursuant to the guarantees for a total amount $8,321,486.94 as at 11 May 2011.
3.6. v On 1 December 2008, SKL was wound up by order of the Court.
3.7. v The plaintiff commenced the present action on 25 May 2011 against the defendants for such sum with interest and costs on indemnity basis (pursuant to clause 5 of the guarantees).
3.8. v The original defence and counterclaim of the 2nd defendant was first filed on 10 August 2011, followed by an amendment on 2 December 2014 and a re‑amendment on 21 January 2015 and then two years later on 6 February 2017 with the current proposed amendment.
3.9. v The 2nd defendant’s proposed amendment is that, amongst other things, there was in existence a business practice between the parties in which the accounts of the parties had already been reconciled and the alleged claim of the plaintiff had already been paid for by the defendants. No explanation for the latest proposed amendment was offered why this practice was not raised until now. This practice was well‑known to the 2nd defendant irrespective of whether the 2nd defendant had access to SKL’s documents. There is further inconsistency between what was pleaded in the first version of proposed amendment in February 2017 and the final version in October 2017. Again no explanation was offered. It is also inconsistent with the original settlement of the parties earlier in 2007 whereby the 2nd defendant paid $1.5 million to the plaintiff.
3.10. Fraud is a most serious allegation. It was not pleaded in the first instance and was only raised for the first time nearly five and a half years after the original defence was filed. The Judge was aware of the law on pleading fraud at a late stage of the proceedings. The Judge was clearly entitled to come to the view that the case of fraud is unbelievable.
3.11. The Judge gave a 73‑page judgment, meticulously analysing the proposed amendments and confirming the Registrar’s decision not to allow the amendment. She again in her leave judgment addressed the proposed grounds of appeal, many of which were repetitions of the 2nd defendant’s submission before her in the appeal. The 2nd defendant has not even come close to demonstrating that it is reasonably arguable that the exercise of discretion not to allow amendment by the Judge is plainly wrong.
4) Prejudice
3.12. Plainly there is prejudice to the plaintiff if the amendment is allowed at such a late stage when the plaintiff had already obtained leave to set down the case for trial.
III. Conclusion
4.1. The application is totally devoid of merits and must be dismissed.
4.2. The plaintiff is to have the costs of the application on an indemnity basis which we summarily assessed at $90,000.
| (Peter Cheung) |
(Carlye Chu) |
| Justice of Appeal |
Justice of Appeal |
Mr Adrian Lai, instructed by Lam, Lee & Lai, for the plaintiff
Mr Forest Fong, instructed by David Fong & Co., for the 2nd defendant
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