CHEUNG KING FONG v. CHEE TAK SECURITIES LTD

HCA 75/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 75 OF 2002

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D E C I S I O N

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Application

1. This is an application by the Plaintiff to amend her Writ of Summons and Statement of Claim by adding:

(a) 2 new claims, and

(b) an Intended 2nd Defendant to the present proceedings.

Background

2. Mr. Chiu Koon Yu Kevin (“Kevin”) and Mr. Chiu Koon Chi Harry (“Harry”) were born in 1970 and 1971 respectively out of the marriage between Mr. Chiu Ho Chuen (“Mr. Chiu”) and Madam Lam Ching Kam (“Madam Lam”).

3. Madam Lam passed away in July 1973.  In December 1973, Mr. Chiu married the Plaintiff.

4. In 1992, the Defendant Chee Tak Securities Ltd (“Chee Tak”) was incorporated.  The Plaintiff held 4,000 shares (“the 4000 shares”) out of a total of 59,997 in Chee Tak.

5. Around that time, the family migrated to Australia.  In about 1995, Mr. Chiu separated with the Plaintiff.  While the Plaintiff continued to live in the Plaintiff’s house in Australia, Mr. Chiu returned to Hong Kong.

6. On 8 January 2002, the Plaintiff, as the registered and beneficial owner of the said 4,000 shares, sued Chee Tak for unpaid 1996 and 1997 dividends (“the 1996 and 1997 dividends”) in the total sum of $760,000.

7. Chee Tak filed its Defence on 8 February 2002.  In short, it was said that the Plaintiff only held the shares on trust for Mr. Chiu.  Alternatively, the dividends were paid to the Plaintiff in the following manners.

(a) $60,000 was paid by Mr. Chiu to the Plaintiff,

(b) $500,000 was paid to the Plaintiff’s margin account with Chee Tak to set off the debit balance, and

(c) $200,000 was paid to the Plaintiff’s joint account with Mr. Chiu in Asia Commercial Bank Limited (“the Joint Account”).

8. Thereafter, from 2002 to 2005, it appeared that both parties did not prosecute the proceedings diligently.

9. On 7 January 2006, the Plaintiff took out the present summons.  The Plaintiff’s solicitor filed a short affidavit to support the application.  It was said that the Plaintiff had discovered a new cause of action, namely, an additional claim for $640,000 dividends (“the 2000 dividends”) and Mr. Chiu was to be made the 2nd Defendant herein.  Further, Kevin and Harry, as the executors of Mr. Chiu’s Will, should be appointed by this Court to represent Mr. Chiu for the proceedings.

10. The call-over hearing of the application was heard on 12 January 2006.  The matter was simply adjourned for argument with 2 hours reserved.  No direction or leave was obtained for filing and serving of further evidence.

11. The summons was then fixed to be argued before Master Yu on 13 March 2006.  Upon receiving skeleton argument from Chee Tak’s Counsel on 10 March 2006, the Plaintiff filed her affirmation on 11 March 2006 denying any delay.  She deposed that she had been residing in Australia since around 1993 and only came to Hong Kong occasionally for very short stay.  In early 2002, she came across some bank statements for the Joint Account.  The matter was then followed up and subsequently, she discovered in May 2004 of the 2000 dividends.  She sought Ms. Sit’s assistance in September 2005 and was advised to take out the present application.

12. Upon hearing from both Counsel, Master Yu adjourned the summons to be re-fixed for 3 hours.  He granted leave for Plaintiff to rely on her said affirmation.  He further allowed Chee Tak to file and serve an affidavit in opposition within 21 days.  Thereafter, the Plaintiff might file and serve affidavit in reply, if necessary.  Costs on 13 March 2006, with Counsel’s Certificate (limited to a refresher) was granted in favour of Chee Tak.  Further, the question as to whether the Intended 2nd Defendant should or should not be informed of the application was raised.  Although it was not absolutely necessary to do so, the Plaintiff decided to serve the summons upon Kevin and Harry.

Hearing on 4 June 2006

13. The matter then came before me on 5 June 2006.  I had the benefit of the same Counsel as Master Yu.  Ms. E. Sit of Counsel acted for Plaintiff while Defendant was represented by Ms. G. Lan.  Ms. Lan, by her late skeleton, raised a preliminary issue, namely, this Court should adjourn the matter due to the absence of the Intended 2nd Defendant.  Upon hearing from the Counsel, I ruled in favour of Ms. Sit.  I indicated that reasons were to be given later.  Here are them.

(a) There was indisputable evidence before me that the 2nd Defendant (at the very least, the first named 2nd Defendant Kevin) had knowledge and notice of the joinder application since December 2005.

(b) There appeared to be a dispute as to whether the Intended 2nd Defendant was properly served with Plaintiff’s application by way of ordinary post on 26 April 2006.  Before me, for the Plaintiff, I had 2 affidavits of Lung Man On sworn on 1 and 5 June 2006 respectively.  However, the Intended 2nd Defendant only copied 2 letters, dated 2 and 3 June 2006, to the Court saying that they had not been served with the summons and were therefore not in a position to attend.  They intended to respond and oppose the application by way of affidavit to be filed.

(c) Regrettably, I was not informed of even the brief grounds of opposition.  Further, the Intended 2nd Defendant failed to attend before me by themselves or their legal representatives.  It was only Ms. Lan, Counsel for Chee Tak, raising the issue before this Court.

(d) With respect to Ms. Lan, I did not agree that further adjournment of the summons would save costs and time as a matter of case management.  Quite to the contrary, the question of pleadings ought to be resolved as soon as possible in order to identify clearly the issues of dispute before this Court.

(e) As far as the estate of Mr. Chiu was concerned, the intended cause of action by the Plaintiff against it had not been expired.  As such, there was no way to stop the Plaintiff from commencing proceedings against the estate at all.  I had not heard any submission why the Plaintiff should be prevented from suing the estate of Deceased.

14. Due to the taking of about 2.5 hours for the argument of the above preliminary issue, the Plaintiff’s application could only be left part-heard with costs reserved.  Upon consultation with the Counsel’s diaries, the matter was adjourned to be heard on 20 June 2006.  I also took the opportunity to ask the solicitors acting for the parties to try to make use of the 2 weeks’ time to agree sensibly and reasonably on any procedural matter that might arise so as to avoid any unnecessary disruption to the Court to resolve the substantial issues between or among the parties.  To complete the evidence before this Court, leave were granted for the late filing and serving of the Affidavit of Lai Chi Chiu Alfie sworn on 18 May 2006 and the Affidavit of Lung Man On sworn on 1 June 2006.

Hearing on 20 June 2006

Application of adjournment by the Intended 2nd Defendant

15. On 20 June 2006, Ms. Sit and Ms. Lan came back before me.  The Intended 2nd Defendant also instructed Mr. G. Hui of Counsel appeared for them.  By 2 affirmations of Kevin and Harry both filed on 19 June 2006, they applied for either a re-hearing or an adjournment.  Upon hearing from the parties, I refused the same with reasons to be given.  They were:

(a) Time and costs were spent because the application had been adjourned for a couple of times for different reasons. By that time, the matter was a part-heard case before me.

(b) Parties agreed that it was essentially a case management question.  3 options were open to the Court:

(i) To refuse the Intended 2nd Defendant’s application for adjournment and continue with the hearing.  Depending on my decisions to be given, the parties might take up the matter to appeal to a Judge in chambers by way of re-hearing.

(ii) To adjourn the matter, give directions for filing of further evidence and have the matter re-heard or continued to be heard before me.

(iii) To give directions for filing of further evidence and refer the matter to a Judge in chambers for a fresh hearing of the Plaintiff’s summons.

(c) After hearing the parties’ submission, I believed that option (b)(ii) was not appropriate.  Such course could even further complicate the matter because Ms. Lan suggested that there might be recusal application to be taken.

(d) There was dispute of evidence on service of the Plaintiff’s summons on 26 April 2006.  On this occasion, both Kevin and Harry had filed their affirmations.  However, there could not be any dispute that they had notice of the adjourned hearing on 20 June 2006.  Nonetheless, they decided to apply for further adjournment only instead of dealing with the application substantially.

(e) At one moment, I thought that a referral to a Judge might help the parties to get back to the right track.  Nonetheless, upon further thoughts, judging from the development of the matter as aforesaid, with respect, I had reservation if it could put a full-stop on the procedural arguments.  Further, the matter was part-heard before me and I had not decided on merits of the Plaintiff’s application.  After all, all the parties were present before me on this day.

16. Upon my refusal of Mr. Hui’s application, the matter was stood down for him to take instructions.  Regrettably, Mr. Hui then informed me that he was only instructed to apply for an adjournment.  After the costs of the Intended 2nd Defendant’s application, including Counsel’s Certificate and a hearing of 1.5 hours before me on 20 June 2006, on a party-and-party basis, to be taxed if not agreed, was granted in favour of the Plaintiff, Mr. Hui had to be excused.  As to the costs between Chee Tak and the Intended 2nd Defendant, there was no order as to costs.

Application by Chee Tak for adjournment

17. After Mr. Hui had left us, Ms. Lan raised another application for adjournment for Chee Tak on the ground that it had filed a notice of appeal against my decision to refuse her application for adjournment on 5 June 2006.  Ms. Sit strongly opposed to it.

18. Having heard from both Counsel, I declined the application.  Other than reiterating the aforesaid reasons for the adjournment applications, the following paragraphs cited by Ms. Sit was agreeable to me as a matter of principle equally applicable to our case.

“It is highly undesirable that there should be appeals to the Court of Appeal in the course of trials of actions.  It is altogether better that matters of an interlocutory nature should work themselves out in the course of the trial without interlocutory recourse to the Court of Appeal before the facts have been completely determined and the trial has been concluded.  The Court of Appeal may hear appeals in the course of the trial but only in exceptional circumstances.  The reason is not just that it interrupts the trial, although that is usually a sufficient reason, but that if it became the practice to give leave to appeal in the course of a trial, the Court of Appeal will soon be overwhelmed with appeals, many of which might prove academic (Mcgarry (E.) Electrical v. Burroughts Machines, unreported, April 14, 1986, CA, Transcript No. 346).”

(page 363 HKCP 2006)

“An intended appeal against an interlocutory ruling made in the course of a trial should not generally be a ground for adjourning the trial awaiting the outcome of the appeal (Chan Kwan Yin & Another v. Wu Wing & Others [2004] H.K.E.C. 1020).”

(page 592 HKCP 2006)

19. Thereafter, Ms. Lan appeared to try an adjournment again by way of “stay pending appeal” application.  Upon discussion among her, Ms. Sit and me, Ms. Lan withdrew the same.

Further evidence to be referred to?

20. Before the substantial application of the Plaintiff could be heard, the parties had a further argument as to whether 3 late affirmations could be referred to:

(a) Affirmation of Kevin filed on 19 June 2006,

(b) Affirmation of Harry filed on 19 June 2006, and

(c) Affirmation of Ngan Yiu Kau (a director of Chee Tak) filed on 19 June 2006.

I allowed the use of them on a de bene esse basis at that time.  Upon thoughts, now, I consider that the Plaintiff suffers no substantial prejudice by them.  Further, in case that any of the parties would like to take up the matter to a Judge in chambers, generally speaking, I think that there is no reason why these 3 affirmations cannot be relied upon.

Ruling

21. Eventually, both Counsel continued to argue the matter in substance.  Having heard from them, I reserved my decision to be handed down.  Upon consideration of all evidence authorities and submissions from the parties, I have come to the conclusion that:

(a) The Plaintiff’s application for amendment of her Writ of Summons and Statement of Claim is to be allowed, but

(b) only Harry (and not Kevin) will be appointed to represent the estate of Mr. Chiu to defend for the proceedings.

My reasons appear as follows.

Reasons

22. The general principles for grant of leave to amend are succinctly contained in paragraph 20/8/6 at page 357 HKCP 2006:

“…It is a guiding principle of cardinal importance on the question of amendment that, generally speaking, all such amendments ought to be made ‘for the purpose of determining the real question in controversy between the parties to any proceedings or of correcting any defect or error in any proceedings’ (see, per Jenkins L.J. in G. L. Baker Ltd v. Medway Building & Supplies Ltd [1958] 1 W.L.R. 1216 at 1231; [1958] 3 All E.R. 540 at 546).

‘It is a well established principle that the object of the Court is to decide the rights of the parties, not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights … I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party.  Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or grace … It seems to me that as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected if it can be done without injustice, as anything else is a matter of right’ (per Bowen L.J. in Cropper v. Smith (1883) 26 Ch.D. 700 at 710-711, with which observations A. L. Smith L.J., expressed ‘emphatic agreement’ in Shoe Machinery Co. v. Cultam [1896] 1 Ch. 108 at 112).

In Tildesley v. Harper (1878) 10 Ch.D. 393 at 396 and 397, Bramwell L.J. said: ‘My practice has always been to give leave to amend unless I have been satisfied that the party applying was acting mala fide, or that, by his blunder, he had done some injury to his opponent which could not be compensated for by costs or otherwise.’  ‘However negligent or careless may have been allowed if it can be made without injustice to the other side.  There is no injustice if the other side can be compensated by costs’ (per Brett M.R., Clarapede v. Commercial Union Association (1883) 32 W.R. 262 at 263; Weldon v. Neal (1887) 19 Q.B.D. 394 at 396; Australian Steam Navigation Co. v. Smith (1889) 14 App.Cas. 318 at 320; Hunt v. Rice & Son (1937) 53 T.L.R. 931, CA; and see the remarks of Lindley L.J. Indigo Co. v. Ogilvy [1891] 2 Ch. 39; and of Pollock B. Steward v. North Metropolitan Tramways Co. (1885) 16 Q.B.D. 178 at 180, and per Esher M.R. at 558, CA).  An amendment ought to be allowed if thereby ‘the real substantial question can be raised between the parties’, and multiplicity of legal proceedings avoided (Kurtz v. Spence (1888) 36 Ch.D. 774; The Alert (1895) 72 L.T. 124).

……”

23. Ms. Lan specifically asked me to read a case of the Hon. Madam Justice Chu in Hesson Development Limited v Tang Kin Fan Tso, HCA No. 5584 of 1998, unreported.  I have done so but do not see any conflict with the above principles set out in HKCP 2006.  In short, this Court should consider all the circumstances of the case including the followings:

(1) Is the application for amendment late?

(2) If so, why?

(3) What are the proposed amendments?

(4) Will the other party suffer injustice by the amendments that cannot be compensated by costs?

(5) In the end, the Court will exercise his discretion to determine if the amendments should or should not be allowed as a matter of proper administration of justice and as a matter of good and effective case management.

24. Ms. Sit further submitted the following legal propositions in her skeleton:

“10. It is submitted that in determing whether leave should be granted to amend, disputed facts should be taken in favour of P for the following reasons:

(1) Refusing leave to amend in the present case is tantamount to barring P’s causes of action, for P will not be able to bring a fresh action on the same notwithstanding the non-expiry of the limitation period.  It is thus analogous to an application to strike out a pleading and the same test should apply.

(2) In any event, the Court is not in a position to resolve disputed facts on affidavit and should not be asked to do so.  Unless D is able to adduce cogent evidence to rebut the assertions of P, such assertions should be taken as true and correct for the purpose of this application.”

To these, I heard no argument from Ms. Lan.  I agree with Ms. Sit.

25. Bearing the above principles in mind, I now turn to the disputed areas of the parties.

Delay?

26. Was the Plaintiff late in making the application?  Ms. Sit and Ms. Lan disputed vigorously on the question.  In my opinion, the answer can be “yes” and “no” depending how one views it.  It is not late because parties are still at the initial stage of the proceedings.  No list of documents witnesses’ statements and so forth have been filed or exchanged.  So, it is not the common ‘late’ application to put right the pleadings shortly before the trial proper will commence or has commenced.  On the other hand, the Plaintiff must be late in the sense that, even on her own case, it has taken 15 months for her to wait for Counsel to advise her after the 2000 dividends came to light in May 2004.  Further, she (including the Defendant) did not prosecute the case for almost 3 years from 2002.

27. Ms. Lan tried to argue that the Plaintiff knew and should have known the 2000 dividends much earlier in about 2001 when she started her inquiries.  Without the benefit of oral evidence, it is not easy to resolve such dispute.  However, on balance, given the fact that Plaintiff resides in Australia most of the time, the separation between her and Mr. Chui, and the inactive role played by her in Chee Tak, it is not difficult for me to accept she only knew the 2000 dividends as she suggested.

28. Ms. Lan further argued that the delay was inordinate with no explanation offered.  I believe that some explanations have been offered by the Plaintiff and her solicitor.  However, as to whether it is acceptable by the Court is another matter.  To cut short the argument, it suffices for me to conclude that waiting Counsel for 15 months must be inordinate, i.e. materially longer than the time usually regarded by the profession and Courts as an acceptable period.

29. In conclusion, I find an inordinate delay on the part of the Plaintiff in bringing up the application for about 1 year (3 months should be allowed for her to take advice).

Prejudice?

30. Probably, the question “whether Chee Tak will suffer prejudice that cannot be compensated by costs” is the main battlefield between the parties.  Before I move to this area, it is necessary to try to identify the issue to be resolved at trial in order to determine prejudice, if any.  In this respect, I have the following observations:

(a) Ms. Lan suggested that the present proceedings were indeed a family dispute.  I cannot agree more.

(b) Based on the existing pleadings (including the proposed amendments in the Statement of Claim), the main questions to be ventilated at trial include:

(i) Was/Is the Plaintiff a mere trustee of the 4,000 shares?  If the answer is “yes”, the Plaintiff’s case will collapse completely.

(ii) If the answer is “no”, the Court will move to determine how Chee Tak paid the dividends to the Plaintiff.  I do not presume that there will be much dispute as all payments were well-documented.

(iii) Next, a “tracing” exercise of the subject dividends should be done to determine if they were paid to the Plaintiff (by Mr. Chiu or through the Joint Account) or were used to set off debts of the Plaintiff.  If it was proved, the Plaintiff cannot maintain any claim for dividends under this head.

(iv) Further, for dividends going only to Mr. Chiu (including through the Joint Account), question will arise if he was so entitled to or he was hiding them from the Plaintiff and routed them into his own pocket without the knowledge and consent of the Plaintiff?

(v) Finally, assuming that Mr. Chiu had “stolen” the dividends, was it made in conspiracy with Chee Tak (probably when he was controlling the company)?

31. Bearing in mind these issues, I do not consider that Chee Tak will suffer prejudice that cannot be compensated by costs.

(a) Ms. Lan said in her skeleton that:

“(2)  Prejudice to Chee Tak

17. ……

18. ……

19. It is the Plaintiff’s case that Chiu was the controlling mind and will of Chee Tak who had signed cheques on its behalf for the purpose of distributing dividends for 1997 and 2000 to the Plaintiff ……

20. Had the Plaintiff amended her claim in the first instance, i.e. soon after February 2002, Chee Tak would be in the position to obtain relevant information from Chiu and to prepare witness statement for him or even to apply for an order that his evidence be given by disposition pursuant to Order 39.  Nothing was done because the Defendant was being notified of her intention to claim against Chiu personally after his death.

21. If Chee Tak were to defend the new claims regarding the 2000 Dividends and the conspiracy claim, the availability of Chiu’s evidence was vital.  With Chiu’s death, Chee Tak would be handicapped in rebutting the evidence of the Plaintiff.  Chee Tak would be seriously prejudiced which could not be compensated by costs.”

(b) I disagree with Ms. Lan.

(c) As pointed out by Ms. Sit,

“18.      ……

(1) The question of whether (a) Chiu was the controlling mind and will of D; (b) dividends were declared in 1996, 1997 and 2000, and (c) cheques were signed by Chiu on behalf of D allegedly for payment of the dividends to P are matters which are either based on documentary evidence or to be inferred from undisputed facts.

(2) ……” (skeleton of Ms. Sit)

Chee Tak is a corporation.  The declarations of dividends were documented.  There had to be something in written form authorizing the issue of the cheques.  The director record can be located from the Companies Registry. Other than Mr. Chui, I believe that other evidence must be available. 

(d) Prejudice is only a matter of degree.  Due to lapse of time, memory of witnesses is almost bound to diminish as time goes on.  Death, disappearance and/or unavailability are not uncommon at all.  However, the importance and effects really depends on the circumstances, the issues and other evidence that can be given.

(e) It is indisputable that the burden of proving prejudice lies on Chee Tak who alleges the same.  Bare assertion is insufficient.  However, other than the simple complaint that no evidence could be taken after the death of Mr. Chiu, I have not been provided with any particulars of prejudice.  Kevin, directors/officers of Chee Tak, and the books/records of the company should and could offer assistance in the circumstances.

(f) Finally, “prejudice” certainly is to be caused by the delay in order to hold the Plaintiff liable for it.  Further to my analysis of issues to be tried as aforesaid, with respect, instructions were and/or could have been taken from Mr. Chiu much earlier.  It is noted that Chee Tak has also allowed the proceedings herein to keep in abeyance for a few years from 2002.

(g) Chee Tak has attempted to suggest prejudice caused to its financial position.  However, it fails to adduce any corroborative evidence.  Further, the fact that the parties’ financial position being affected is really something bound to happen once litigation has been commenced in every case.

Merits of the additional claims?

32. Ms. Lan raised that the 2000 dividends claim was bound to fail as cheques were issued to the Joint Account.  Further, the conspiracy claim against Chee Tak was also bad in law because “one person alone cannot conspire” (ASD v Wheelock Marden & Co. [1994] 2 HKC 264).  Ms. Sit argued otherwise.  I do not propose to rule on the legal arguments put forward by both Counsel.  It suffices for me to conclude that, as a matter of law, I cannot come to a definite view that they are bound to fail.  Depending on how the evidence will come up, the payment of cheques to the Joint Account may or may not be a defence for Chee Tak.  On the other hand, Lee v Lee’s Air Farming Ltd [1961] AC 12 and Clerk & Lindsell on Torts, 19th Edition (2006) 25-119 does support the legal proposition that a “one-man” company, as a separate legal entity, may “conspire” with its sole controller.

Plaintiff not acting in good faith?

33. Ms. Lan said that the amendment had to be honest, not intended to overreach the opposite party, or made for ulterior motive.  She alleged that the Plaintiff was not acting in good faith by deliberately choosing to add the new claims after the death of Mr. Chiu who was the only witness to defend for Chee Tak.  The burden of proving dishonesty, bad faith and/or ulterior motive are not light.  Given my ruling on the fact that Chee Tak suffered no prejudice that cannot be compensated by costs, together with the confirmation from Ms. Sit that she was the one who advised the Plaintiff to pursue the claim of conspiracy and drafted the proposed amendments to the Statement of Claim, I do not consider that Chee Tak has discharged the necessary burden.

Joinder of the Deceased’s Estate

34. The relevant principles of adding new cause of action can be located at paragraph 20/8/16:

“…The Court has power to grant or allow an amendment after the expiry of any relevant period of limitation notwithstanding that the effect of the amendment will be to add or substitute a new cause of action provided that the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment.”

35. For the Intended 2nd Defendant, Ms. Lan said in her skeleton that:

“ 36. If the Court accepts that the conspiracy claim should go because it is bad in law, the only claim that the Plaintiff has against Chiu was over the money paid out from the joint account.

  37. It is submitted that the case over the joint account is entirely different from the original claim based on the failure to paid dividends to the Plaintiff by Chee Tak.  The following matters, which would not be relevant to the original claim and the Plaintiff’s claim against Chee Tak, would become relevant and need to be adjourned at trial:

(i) the setup and subsequent operation of the joint account by the Plaintiff and Chiu, who were still husband and wife at the material time;

(ii) beneficial interest of the joint account: any agreement between them, resulting trust or constructive trust

(iii) any agreement or absence of agreement over the disposal of the proceeds in the joint account upon their separation in 1995

(iv) where did the money go after the said dividends were paid into the joint account

38. It is beyond doubt that if Chiu were to be joined in this proceedings, the case would be prolonged and much delayed due to the various issues that the personal representatives of Chiu need to investigate so as to properly answer the claim.  The trial would inevitably be lengthened to a great extent over matters which Chee Tak has no interest in whatsoever.  It is submitted that the causes of action simply cannot conveniently be tried together.”

36. On the other hand, Ms. Sit argued that:

“ 21. Chiu’s role in relation to the 2000 Dividends and the subsequent withdrawal of sums by Chiu from the Joint Account only became apparent in May 2004.  The claims against Chiu (breach of trust and conspiracy) arise out of the same factual background as the claims (original and proposed) against D, and the issues to be determined between P and Chiu are the subject matter of the new claims as between P and D.  Insofar as P has satisfied the Court that the new claims against D can be introduced by amendment, there is no reason why the Court should not allow Chiu’s estate be joined as a party to the proceedings, given he is a proper and necessary party to the new claims, so that all the issues between the parties can be resolved in a single set of proceedings.  If a separate writ had been taken out against Chiu, no doubt the 2 actions could, and indeed should, have been consolidated.”

37. I agree with Ms. Sit.  This is a family dispute arising from the same or substantially the same facts (the subject dividends) in respect of which the Plaintiff has commenced the present proceedings seeking redresses.  To disallow the joinder application will only lead to multiplicity of proceedings which would incur further time and costs.

Appointment of Kevin and/or Harry to represent the estate?

38. From the evidence of Kevin, I can understand that he does not want to represent the estate of Mr. Chiu because he has been giving instructions for Chee Tak to defend for the proceedings.  There is a (possible) conflict of interest.  I agree it is a valid point and as such will only appoint Harry to represent the estate of Mr. Chiu to defend for the proceedings. There is no way to stop the Plaintiff from commencing action against the estate and, in the proper administration of justice and good case management, someone has to take up the job. Before me, Harry is the only and suitable choice.  

Orders to be made

39. In the circumstances, I would allow the Plaintiff’s application and order that:-

(1) Subject to (5) below, the Plaintiff do have leave to amend file and serve within 3 days her Statement of Claim, including corresponding amendments to the Writ of Summons, as marked in red as per the draft attached to the summons of 7 January 2006 (together with further proposed amendments submitted by her Counsel at the hearing on 5 June 2006).

(2) The 2nd Defendant do have leave to file his acknowledgement of the service 14 days thereafter.

(3) Both Defendants do have leave to file and serve their (Amended) Defence and Counterclaim (if any) within 28 days from the service of the Amended Writ of Summons and Statement of Claims.

(4) The Plaintiff do have leave to file and serve a Reply and Defence to Counterclaim (if applicable) within 14 days thereafter.

(5) Chiu Koon Chi Harry be appointed to represent the estate of Chiu Ho Chuen, deceased for the purpose of this action which will be carried on accordingly until further order of this Court.

Costs

40. I do not have the benefit from the parties on the question of costs.  There appears to be no reason why costs should not follow the event.  Hence, I will make the following costs order nisi:

(6) (a)  Costs of and occasioned by the Plaintiff’s application and the amendment be to Chee Tak, including Certificate of Counsel for hearing on 5 June 2006 (0.5 hour) and 20 June 2006 (2.25 hours) as well as costs reserved on 12 January 2006, be borne by the Plaintiff, to be taxed if not agreed, on party-and-party scale.

(b) Costs of Chee Tak’s application on 5 June 2006, including a hearing of 2.5 hours and Certificate for Counsel, be to the Plaintiff and borne by Chee Tak, to be taxed if not agreed, on party-and-party scale.