TANG YING LOI v. TANG YING IP ALIAS TANG YING YIP AND OTHERS

HCA 2487/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2487 OF 2009

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1.  I have before me an application by the plaintiff for leave (i) to amend the Statement of Claim, (ii) to re-amend the Reply, and (iii) to file a short witness statement in support of the proposed amendments.

2.  I have also before me an application by the defendants for leave to re-amend the Defence.  Mr Chain for the plaintiff has indicated that his client has no objection to the amendments sought by the defendants.

3.  In relation to the proposed amendments of the Statement of Claim and re-amendments of the Reply, Ms Ho has raised objections to various of those proposed amendments and I shall deal with them briefly, in view of the fact that the trial of this action has been fixed to commence on 3 November 2014, and if I shall allow the proposed amendments or some of them further steps have to be taken by the parties prior to the commencement of the trial.

4.  I shall deal with the objections in groups in the same order as they appear in Ms Ho’s submissions.  I bear in mind Ms Ho’s general complaints about the lateness of the proposed amendments and the unfairness to the defendants of having to deal with new allegations at this late stage.  I shall consider these complaints at the end of this ruling.

5.  In respect of paragraph 15(aa) of the draft Amended Statement of Claim, it raises the point that the 10% deposit of HK$2.73 million was less than the amount of the Shortfall in the sum of HK$3,650,694.  Ms Ho says that this plea is not a proper one because there is no proper allegation raised, and that the proposed amendment is in any event unnecessary.  The fact alleged here is indisputable.  The only issue is the relevance of the plea.  As I understand it, by raising this plea, the plaintiff will invite the court to draw an inference that the Shortfall, or part of it, was used to pay for the 10% deposit.  Whether this inference can properly be drawn is not a matter to be determined today.  The purpose of the plea is, it seems to me, clear, and in any event has been made clear by Mr Chain.  I do not see that the proposed amendment is objectionable in principle.

6.  In respect of paragraphs 15A to 15D of the draft Amended Statement of Claim, they relate to the Mortgage of the Property executed on 8 March 2006, and how the money raised from the Mortgage was used.  Ms Ho’s objection is also that the proposed amendments do not raise any proper allegation. Again, as I understand it, the plaintiff will invite the court to draw the inference that the money raised from the Mortgage was used to fund the purchase of No 140, and the plaintiff relies (amongst other things) on the proximity in time between the date of the Mortgage and the date of the purchase of No 140.  As in relation to paragraph 15(aa), I consider the amendments to be unobjectionable in principle.

7.  In respect of paragraphs 15E to 15R of the draft Amended Statement of Claim, they relate to the fund flow in respect of the so called “Unauthorized Withdrawal” of HK$11.48 million.  The proposed amendments are introduced by the plaintiff to show that there was no genuine loan from the Estate to the 1^st defendant and the defendants allowed the 1^st defendant to treat the moneys belonging to the Estate as his own and to use it as he wishes.  Ms Ho’s objection is mainly about the lateness of the proposed amendments and the unfairness to the defendants of having to deal with new allegations at this late stage.

8.  In respect of the extent of the plaintiff’s claim in relation to the Property, originally the plaintiff claims that it is entitled to 11,480,000/27,300,000^th parts or shares of or in the Property.  In various paragraphs of the draft Amended Statement of Claim, the plaintiff now claims, by way of alternative, to be entitled to “such other percentage(s) as this Honourable Court shall determine”.  The precise extent of the plaintiff’s claim is a matter for argument or submission, depending on the court’s finding of the primary facts.  It is not necessary for the plaintiff to set out the precise arguments in the pleadings in support of the claimed extent, provided that all the materials facts are set out.  I consider the proposed amendments to be unobjectionable in principle.

9.  In respect of paragraphs 4(d) and (e) of the draft Re-Amended Reply, they are raised to counter the defendants’ allegation that the alleged Loan had received the retrospective consent of some of the beneficiaries.  Apart from the lateness of the proposed amendments, there does not seem to me to be any valid objection in principle to the proposed amendments.

10.  In respect of paragraphs 7A to 7J of the draft Re-Amended Reply, the crux of Ms Ho’s objection is that they refer to various new transactions completely unrelated to the two heads of complaints in the Statement of Claim, namely, the Shortfall and the Unauthorized Withdrawal.  Mr Chain says that those transactions are relevant to the issues of whether the defendants were acting in good faith or in the best interests of the Estate, and whether there was any good reason for the defendants to hold any surplus or idle funds in the Estate.  I consider that these other transactions are not directly relevant to the claims, or at best their relevance are so remote, that it would not be justifiable for them to be raised, particularly at this late stage when allowing them would pose a serious risk of the defendants not being given adequate time to respond to them thereby jeopardizing the trial dates.

11.  On the other hand, in respect of the rest of the proposed amendments, they are directly connected with the principal heads of complaints in the Statement of Claim which the defendants will have to answer in any event at the trial.  I consider that the defendants will still have sufficient time to deal with them prior to the commencement of the trial.  Ms Ho has indicated to the court that the defendants will need six weeks to deal with them, including the filing of amended pleadings and new or supplemental statements.  That would still allow the trial to commence on 3 November 2014, albeit that the time frame is undoubtedly tight.

12.  I also have to bear in mind that, under Order 1A, rule 2(2) of the Rules of the High Court, in giving effect to the underlying objectives of the rules, the court shall always recognize that the primary aim in exercising the powers of the court is to secure the just resolution of disputes in accordance with the substantive rights of the parties.

13.  In all the circumstances, I shall grant leave to the plaintiff to amend the Statement of Claim as per the draft attached to the summons, save that paragraphs 15B, 15J and 15O shall be further amended as indicated by Mr Chain in his submissions.  I shall also grant leave to the plaintiff to re-amend the Reply as per the draft in the pre-trial review bundle, save and except paragraphs 7E to 7J, the reference to HK$4,667,535.60 on the second line of paragraph 7K and in sub‑paragraph (g) of that paragraph, and sub‑paragraphs (h) and (i) of paragraph 7K.

14.  I also grant leave to the plaintiff to file his 2^nd supplemental witness statement, and the defendants to re-amend the Defence.

15.  I shall hear the parties on the question of costs and the precise form of the order to be made.