LEE MAN FAI also known as RICHARD LEE v. YIP PAK KEUNG also known as BENJAMIN YIP

HCA 1631/2018

[2021] HKCFI 2264

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1631 OF 2018

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RULING

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1.  This is the Pre‑trial Review of the trial set down to commence on 3 November 2021.

2.  On 22 July 2021, one week before the Pre‑trial Review, the defendant (“D”) took out a summons (the “Summons”) to amend his defence.  He seeks thereby to add to it a defence based on the Limitation Ordinance.  The Summons came to be heard before me during the Pre‑trial Review. 

3.  This is my decision.

4.  The plaintiff (“P”) on 13 July 2018 took out the Writ herein. It is indorsed with a Statement of Claim.

5.  P’s claims relate to 2 sums of HK$5,000,000 each he paid to D on 6 May 2011 and 14 July 2011.  His primary case is that they were loans, advanced to D for use in renovating, refurbishing and selling certain houses at Shek O (the “Shek O Project”).  D promised to repay those loans any time on demand after 6 months from around June 2011 (ie any time after the promised completion date of the Shek O Project).

6.  The pleaded causes of action are non‑repayment of loans, resulting trust / unjust enrichment, and fraudulent misrepresentation in so far as the 2^nd sum is concerned.

7.  On 19 October 2018, D filed his defence.  It was settled by counsel.  D avers that the agreements between the parties were not loan agreements, but were investment agreements under which D had no obligation to repay.  He denies the existence of the relevant representations.  Illegality has also been raised. 

8.  No limitation defence has been pleaded.

9.  A draft amended defence is attached to the Summons.  §34A is the paragraph which D seeks leave to add.  It reads:

“ Further, P’s claims are time‑barred under the Limitation Ordinance (Cap. 347) on the ground that the P’s alleged causes of action had already accrued more than 6 years prior to the issue of the writ herein.”

10.  In that proposed new paragraph, D does not deal with P’s different pleaded causes of action individually.  No particulars have been provided as to when he says each of the pleaded causes of action accrued.

11.  Mr Brian Fan for P objects to the application. 

12.  I have considered the cases on amending pleadings cited to me, which include Tao Soh Ngun v HSBC International Trustee Limited [2018] HKCFI 2543, per Wilson Chan J at §5, and Shenzhen Futailhong Precision Industry Co Ltd v BYD Co Ltd, HCA 2114/2007, per Peter Ng J at §15.

13.  For the following reasons, I refuse the application:

 (a)  Limitation defences have to be specifically pleaded — Order 18 rule 8(1);

 (b)  No limitation defence has so far been raised.  P is entitled to proceed on the basis that no limitation defence is in issue;

 (c)  The trial is only 3 months away.  The application is made late;

 (d)  No explanation has been offered as to why no limitation defence has hitherto been pleaded, or the reason for the lateness in which the application is made. I note that in the Questionnaire filed on 26 June 2020, D raised as an issue to be tried “Time bar of the cause of action of P”.  Yet that was not followed up by any application for amendment.  And in the latest Questionnaire filed, that issue has disappeared;

 (e)  The proposed amendment is vague.  It fails to deal with the pleaded causes of action separately and individually.  It fails to inform P when D says those causes of action first accrued, and when the relevant limitation periods expired.  It should be noted in this regard that the causes of action pleaded by P are of divers nature, covering contractual, trust, and tortious.  The rules of limitation applicable to them are all different;

 (f)  P is entitled to those particulars, so that he knows what case to meet, what replies he may file, and what evidence to be complied to make good those replies.  This is particularly so given the lateness in which the application is made;

 (g)  Factual issues which are so far not raised would become relevant if the amendment were allowed — for examples, and as have been highlighted by Mr Fan in his written submissions, the question of concealment and the associated facts (see section 26 of the Limitation Ordinance) and estoppel (Ho Yuk Lun Alan v Chan Yui Hang [2015] 2 HKLRD 87, per Harris J at §§16-17);

 (h)  The amendment, if allowed, would necessitate the amendment of P’s Reply, another round of discovery, and further witness statements;

 (i)  The trial / milestone dates would be affected;

 (j)  If the trial is not refixed, the time and effort that P would need to incur to deal with the newly pleaded limitation defence would be diversions which would prejudice P’s preparation of the trial;

 (k)  In so far as D may say that he may be prejudiced if the application is refused, he has only himself to be blamed.

14.  For the above reasons, I dismiss the application.

15.  Having heard parties, I order that D shall bear costs occasioned by the Summons, which I summarily assessed at HK$35,000.