CHIU YI TUNG v. LO YUE FUNG FRANKY AND ANOTHER

DCCJ 3591/2019

[2023] HKDC 729

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3591 OF 2019

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REASONS FOR DECISION

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1.  The defendants’ summons filed on 15 March 2023 for leave to amend the defence came before me on the first day of trial. After hearing the parties’ submissions on the summons and their respective opening submissions for the trial, I dismissed the summons. These are my reasons for doing so.

Background

2.  The proceedings relate to a water seepage claim by the plaintiff against the defendants, whose flat is situated immediately above the plaintiff’s. According to the plaintiff’s case, she first discovered water seepage in the ceiling and walls of her flat in around early 2015, upon which she complained to the management office of her housing estate in April 2015.  In May 2017, she issued a complaint to the Joint Office for Investigation of Water Seepage Cases set up by the Buildings Department and the Food and Environmental Hygiene Department (“Joint Office”)  in respect of the water seepage problem in her flat.

3.  The Joint Office commissioned an expert report by Pioneer Management Limited (“Pioneer”)  dated 28 May 2018 in which Pioneer opined that the water seepage in the plaintiff’s flat was caused by floor slab infiltration from the bathtub of the master bathroom of the defendants’ flat.  By a letter dated 4 June 2018, the Joint Office informed the defendants that the waterproofing layer of the floor slab beneath the bathtub of their master bedroom was found to be unsatisfactory.  On 20 November 2018, the Joint Office issued a nuisance notice to the defendants pursuant to section 127(1)  of the Public Health and Municipal Services Ordinance (Cap 132)  (“Nuisance Notice”), requiring them to “repair satisfactorily the floor slab including enclosing walls of the bathtub of the master bathroom” of their flat.

4.  According to the plaintiff’s case, notwithstanding that some remedial works were done at the defendants’ flat, those works were insufficient to abate the water seepage problem in her flat.  In these proceedings, she seeks injunctive relief, as well as general and special damages, against the defendants.

5.  On the other hand, the defendants contend that the replacement of the drainage pipe of the bathtub in the master bathroom of their flat in July 2018 (viz. before the Nuisance Notice was issued)  was sufficient to address the water seepage problem referred to in the Nuisance Notice, and thus they did not consider that any further works would be necessary after receiving the Nuisance Notice.  Other aspects of the defence would be further addressed below.

Procedural history

6.  The plaintiff commenced these proceedings by a specially endorsed writ dated 12 July 2019.

7.  On 29 August 2019, the defendants, who were and are represented by the same firm of solicitors throughout these proceedings, filed their defence.

8.  On 17 February 2021, the defendants’ solicitors filed a listing questionnaire, in which they confirmed that the defendants’ pleadings are in order and require no amendment.

9.  On 4 March 2021, Master Maurice Lam granted leave for the case to be set down for trial, and fixed the trial to take place on 14 March 2022, with four days reserved.

10.  On 12 January 2022, HH Judge MK Liu made an order in terms of the parties’ agreed directions for the pre-trial review.  Pursuant to the court directions, the parties lodged and served their respective opening submissions on 28 February 2022 and 7 March 2022 respectively.

11.  As a result of the General Adjournment Period (arising from the COVID-19 pandemic)  from 7 March 2022 to 11 April 2022, the trial scheduled to commence on 14 March 2022 was adjourned to 20 September 2022.

12.  On the first day of the adjourned trial, Deputy District Judge Jason Wong, who then presided the trial, ordered the trial to be further adjourned on the ground that the plaintiff’s trial counsel was then subject to a quarantine order and therefore could not attend trial.  According to Mr Chau, who appeared for the defendants on 20 September 2022 and at the present trial, the learned Judge briefly mentioned, without hearing any argument or coming to any view, that the defendants may or may not have made admissions in their defence.

13.  Thereafter, the trial was fixed to commence on 22 May 2023 in this court, with four days reserved.

Outline of the defence and the defendants’ proposed amendments thereof

14.  The salient points in the defence may be summarised as follows:

(1)  The defendants admit that they were and are under a common law duty to properly repair the pipes and drains in their flat within a reasonable time where it reasonably appeared to them that water leakage through the ceiling of the plaintiff’s flat was attributable to some defects in the defendants’ flat. Save as aforesaid, no admission is made to the common law duties allegedly owed by the defendants: see §3.

(2)  The defendants deny that they were and are in breach of the covenants of the deed of mutual covenant, or that they caused, permitted or allowed water seepage from their flat to the plaintiff’s flat: see §7.

(3)  The defendants do not admit that the water seepage problem in the plaintiff’s flat was caused by their negligence, and they make reference to the “robust approach” taken by them after the commencement of these proceedings, including the commissioning of plumbing replacement and waterproofing works to be conducted at the master bathroom and maid’s bathroom of their flat: see §8.

(4)  The defendants deny that they were in breach of any statutory duty under the Building Management Ordinance (Cap 344): see §9.

15.  Relevantly, §10 of the defence[1] reads:

“The Defendants’ stance is that for the purpose of saving time and costs, they admit liability to compensate the Plaintiff for damages attributable to water seepage from the Defendants’ Premises to the Plaintiffs’ Premises, subject to their right to dispute the quantum of the Plaintiff’s claim and the Plaintiff’s duty to mitigate. The Defendants also aver that the Plaintiff’s claim for fee of the Surveyor’s Report prepared for the purpose of establishing the Defendants’ liability ought to be part of the Plaintiff’s costs of this action, not a head of special damages.”

16.  The defendants now propose to amend §10 of the defence as follows:

“For the avoidance of doubt, the The Defendants’ stance is that for the purpose of saving time and costs, they admit liability to compensate the Plaintiff for damages that the Plaintiff will be able to prove are caused by a relevant breach of the Defendants’ duty and to be attributable to water seepage from the Defendants’ Premises to the Plaintiffs’ Premises, subject to their right to dispute the quantum of the Plaintiff’s claim and the Plaintiff’s duty to mitigate. In other words, the Defendants make no admission to any particular water seepage or the source thereof being from the Defendants’ Premises, and maintains the non-admissions and/or denials set out at paragraphs 3, 7, 8 and 9 above. The Defendants also aver that the Plaintiff’s claim for fee of the Surveyor’s Report prepared for the purpose of establishing the Defendants’ liability ought to be part of the Plaintiff’s costs of this action, not a head of special damages.”

17.  Mr Chau, counsel for the defendants, submitted that the proposed amendments are purely for the sake of clarification, do not affect the substance of the case, and do not cause any prejudice to the plaintiff.

18.  Mr Yan, counsel for the plaintiff, objected to the defendants’ proposed amendments and invited the court to dismiss the summons on the ground of delay alone.  He also submitted that the proposed amendments amount to a withdrawal of admission, and if accepted, would cause prejudice to the plaintiff in that the plaintiff would have conducted the case differently by calling additional witnesses and requesting for further discovery from the defendants.

Discussion

19.  First, there can be no dispute that the defendants’ amendment application was only issued at the eleventh hour, and significantly, less than 10 weeks before the present trial is due to commence.  Nonetheless, it was not accompanied by any explanation for such grossly inordinate delay by way of affidavit evidence.

20.  In the light of the inter partes correspondence as summarised below, it appears to me that there is no justifiable reason for the defendants’ inordinate delay:

(1)  Shortly after the defence was filed, the plaintiff’s solicitors stated in their open letter dated 16 September 2019 that the defence, in particular, §10 thereof, constituted an admission to the plaintiff’s claim.  On such basis, the plaintiff’s solicitors invited the defendants to admit liability with an injunction to be granted in favour of the plaintiff.  A draft consent order was attached for the defendants’ consideration.

(2)  The defendants’ solicitors replied in their open letter dated 24 September 2019 that the plaintiff’s claim for a mandatory injunction was clearly devoid of merits, but they nonetheless provided their own draft consent order, containing a term that “Interlocutory Judgment be entered for the Plaintiff against the 1^st and 2^nd Defendants for damages to be assessed” for the plaintiff’s consideration.  It is noteworthy that the defendants’ solicitors did not make any response to the plaintiff’s claim that §10 of the defence constituted an admission to the plaintiff’s claim.

(3)  Thereafter, the issue of whether the defendants made any admission in their defence was again floated between the parties in October 2022.  The exchange of inter partes correspondence culminated in the defendants’ solicitors’ letter dated 2 February 2023, in which they stated that absent any supplemental opening submissions from the plaintiff, “the need to amend our clients’ Defence remains academic”.

(4)  No supplemental opening submissions have ever been filed by the plaintiff.  Nonetheless, on 2 March 2023, the defendants for the first time invited the plaintiff to consent to their proposed amendments to the defence by providing a draft amended defence to the plaintiff.  Absent any agreement from the plaintiff, on 15 March 2023, the defendants issued the present summons for leave to amend their defence.

21.  It is therefore right to point out that, despite a clear indication by the plaintiff’s solicitors back in September 2019 that they considered §10 of the defence to constitute an admission of liability, the defendants had chosen not to apply to amend their defence until 15 March 2023, viz. less than 10 weeks before the commencement of the third set of trial dates.

22.  The practice of issuing last minute pre-trial application for amendment of pleadings has to be discouraged.  As Practice Direction 5.2 states at §34, late interlocutory applications may be dismissed on the basis of delay alone. Further, as Lam JA (as Lam PJ then was)  stated in Li Xiao Yun and Anor v China Gas Holdings Limited, CACV 38 of 2013 (11 March 2013), §18, last minute pre-trial applications disrupt the preparation for the trial on the part of a trial judge in terms of reading into the case.  Instead of getting himself or herself familiar with the issues that have to be tackled at the trial, the judge would have to divert attention and spend time and efforts on such applications.  Thus, such practice has to be discouraged.

23.  Having said that, for the present purposes, I am not inclined to reject the defendants’ amendment application on the ground of delay alone.  The court’s primary aim is to secure the just resolution of disputes in accordance with the substantive rights of the parties, and its case management power must only be exercised after considering all the circumstances of the case in the light of all the relevant underlying objectives set out in Order 1A, rule 1 of the Rules of the District Court (Cap 336H).  As stated by Cheung CJHC (as the Chief Justice then was)  in 厦門新景地集團有限公司v Eton Properties Ltd and Others, HCMP 13, 15, 18 and 21 of 2012 (14 February 2012), §§29-30:

“29. However, I do agree with the defendants that the late amendments, or more specifically, the new paragraph 35(5), took them by surprise and left them with inadequate time for the proper preparation of their defences in relation to it. Furthermore, such a late application for amendment also went contrary to the letter and spirit of the civil justice reform and made a mockery of the requirement for filing information checklist before a case management conference.

30. All this does not necessarily mean, however, that the court must refuse the amendments, bearing in particular in mind that the “primary aim” in exercising the case management (or other)  powers of the court is to secure the “just resolution of disputes in accordance with the substantive rights of the parties” O 1A, r 2(2), the Rules of the High Court (Cap 4A). Driving a party away from the judgment seat without proper adjudication is always a serious matter. Such a power of exclusion, like all other powers given under the rules, must only be exercised after considering all the relevant underlying objectives set out in O 1A, r 1.”

24.  I shall therefore consider the substantive arguments raised by the parties on the amendment application.

25.  According to Mr Chau’s submission, the proposed amendments are “purely for the sake of clarification” and “do not affect the substance of the case”.  This appears to me to be an implicit acknowledgement that, on the defendants’ own case, the proposed amendments are not necessary.  In my view, this must be a factor which strongly militates against granting the application, especially when it was only taken out shortly before trial.

26.  Mr Chau also submitted that the present case is a “close parallel” to Wingames Investments Ltd v Mascot Land Ltd [2013] 1 HKLRD 26, in which the Court of Appeal allowed the defendants’ appeal against a final judgment entered on the basis of an alleged admission by the defendants in the amended defence and counterclaim, and granted leave to the defendants to further amend their pleadings.

27.  In Wingames (supra), the Court of Appeal’s reasoning for allowing the defendants’ application to further amend their defence and counterclaim was set out in the judgment of Barma J (as he then was)  (at §26), and may be summarised as follows:

(1)  It was not the intention of the defendants to admit the plaintiffs’ claim in that case.

(2)  Absent real prejudice to the plaintiffs, fairness required that the defendants be permitted to advance their true case.

(3)  Any withdrawal of admission by the defendants would not prejudice the plaintiffs in any way, given that the proceedings therein were at a very early stage and pleadings had not yet closed.

(4)  On the contrary, for the defendants to be held to the admission would clearly be prejudicial to them, and it would not be right to punish them for a slip or error on their part, or that of their legal advisors, when this could be corrected without prejudicing the plaintiffs.

(5)  The application to amend was made very shortly after the application for judgment on admissions was taken out by the plaintiffs, at a very early stage in the proceedings.  This is very far from a case where leave to withdraw an admission is made at a late stage, very close to the actual trial of the action.

28.  To my mind, the absence of any real prejudice to the other side, even if it would have involved the withdrawal of an admission, lies at the heart of the Court of Appeal’s decision in Wingames (supra)  in allowing the amendments to be made.  On the contrary, the circumstances of the present case appear to me to be materially different from those in Wingames (supra)  for the following reasons.

29.  First, in the present case, it appears to be reasonably arguable (and I put no higher than that)  that §10 of the defence may amount to an admission that the defendants will admit liability so long as the plaintiff can prove that the water seepage in her flat originated from the defendants’ flat. Whilst the defendants have also made non-admissions and denials in the earlier parts of the defence, the averment in §10 of the defence is expressly made “for the purpose of saving time and costs”.  On such basis, any admission contained in §10 of the defence cannot be said to be a slip or error on the defendants’ part, or that of their legal advisors, as in the case of Wingames (supra), but rather, represents a conscious decision on the part of the defendants to narrow down the issues to be tried in these proceedings for the stated purpose of saving time and costs.

30.  Secondly, notwithstanding Mr Chau’s submission that the proposed amendments do not affect the substance of the case, it appears to be reasonably arguable that §10 of the defence, if amended, may amount to a withdrawal of admission.  As explained above, §10 of the defence may be construed as an admission of liability by the defendants in the event that the water seepage is found to have originated from the defendants’ flat.  In other words, by virtue of §10 of the defence, the plaintiff would only have to prove the cause of water seepage, without more, to establish liability against the defendants.

31.  However, if §10 of the defence were allowed to be amended, the plaintiff would have to prove not only the cause of water seepage but also fault on the defendants’ part, viz. whether the defendants breached any statutory, contractual and/or common law duties for failing to take reasonable remedial action after having knowledge of the plaintiff’s water seepage problem.  Therefore, it would be pertinent for the present purposes to consider whether the plaintiff would suffer any prejudice if the amendments were to be allowed at this stage.

32.  In my view, this is a case where the plaintiff would indeed suffer real prejudice if the defendants were allowed to amend §10 of the defence.  Such prejudice is threefold:

(1)  The fact that late applications disrupt the innocent party’s trial preparation by diverting away attention and requiring expenditure of time and costs on the applications and the new matters arising therefrom is in itself a form of prejudice: Li Xiao Yun v China Gas Holdings Ltd, CACV 38 of 2013 (11 March 2013), §18, per Lam JA (as Lam PJ then was); Tao Soh Ngun v HSBC International Trustee Ltd [2018] HKCFI 2543, §5(4), per Wilson Chan J.

(2)  I agree with Mr Yan’s submission that, but for §10 of the defence, the plaintiff could have prepared her case differently by, among other things, calling the handling officers of the management company and the investigation officers of the Joint Office and Pioneer to give oral evidence on the water seepage problem since 2015, the defendants’ knowledge of such problem and the remedial works purportedly undertaken by the defendants, which would be relevant to the issue of fault.

(3)  If the proposed amendments were allowed, the plaintiff should be given the time and opportunity to file further witness statements from new witnesses.  However, such course of action would inevitably derail the present trial, which is highly undesirable given that the trial dates have already been adjourned twice on other grounds.

33.  All in all, in the light of the defendants’ own case that the proposed amendments are not necessary, the inordinate yet unexplained delay by the defendants in taking out the present application, and the real prejudice that the proposed amendments would cause to the plaintiff’s preparation for trial, I declined to accede to the defendants’ amendment application.

34.  As I indicated at the end of the hearing, the ramifications of §10 of the defence would have to be further canvassed at the trial.  As the parties agreed, I would hear evidence and submissions in relation to the defendants’ knowledge of the water seepage problem in question and the remedial works purportedly undertaken by the defendants de bene esse at the trial.

Conclusion

35.  For the foregoing reasons, I dismissed the defendants’ summons.

36.  Upon hearing parties’ submissions on costs, I made an order that the costs of the summons shall be paid by the defendants to the plaintiff, to be taxed if not agreed with certificate for counsel.