FUNG WUN YIN MAGARET v. HOLLYTEX LTD AND ANOTHER

HCA 4841/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 4841 OF 2002

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BETWEEN

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D E C I S I O N

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1.  The plaintiff applies for special leave to file her witness statement notwithstanding that the time for her to do so has expired. She also seeks an extension of time to administer interrogatories and apply for specific discovery of documents.

2.  The plaintiff initially claimed against both the 1st and 2nd defendants.  The 2nd defendant filed a defence and counterclaim on 1 August 2006.  He amended it on 14 February 2007 and re-amended it on 11 November 2008.  The plaintiff purportedly discontinued her claim against him in the end of September 2006.  But that was after he had filed his defence and counterclaim.

3.  Master Ko gave directions on 4 February 2009 for exchange of witness statements within 48 days.  Master de Souza granted leave on 2 March 2009 to the plaintiff to discontinue her action against the 2nd defendant with costs of the action awarded to the 2nd defendant.  The costs were duly taxed and paid.  But the 2nd defendant’s counterclaim remained.

4.  There was no exchange of witness statements as per the directions of Master Ko.  Master Lung on 30 September 2009 directed that unless the parties comply with Master Ko’s directions for exchange of witness statements by 4 p.m. on 18 November 2009, the party in default shall be debarred from adducing evidence without special leave from the trial judge and the other party may be at liberty thereupon to serve the witness statement on the party in default. 

5.  The 2nd defendant then filed the witness statement of one Madam Wong Jen on 12 November and the 1st defendant filed the witness statement of one Chan Ping Che on 18 November.  However, the plaintiff did not file her witness statement within the deadline.  The unless order duly took effect.  The plaintiff did not apply within 14 days thereafter for relief from sanction under O.2 r.4 of the Rules of the High Court.

6.  At the case management conference on 17 January 2010, counsel for the plaintiff produced a copy of the plaintiff’s witness statement.  But Master Ko did not grant leave for it to be filed.  He told the plaintiff to seek special leave from the trial judge to do so as provided in the direction of Master Lung.  A copy of the witness statement was also given to the solicitors for the 1st defendant, but they returned it to the solicitors for the plaintiff as no leave was granted for it to be filed.

7.  Master Ho on 7 January also directed that unless by 4 p.m. on 21 April 2010, the plaintiff do administer or take out an application for interrogatories, the plaintiff be debarred from taking out such application.  There was no such application within the deadline.

8.  Master Levy on 11 March 2010 struck out 2nd defendant’s re-amended defence and counterclaim with costs to the plaintiff.  The 2nd defendant then ceased to take any part in the action.  Madam Wong’s witness statement which was filed by the 2nd defendant also ceased to be relevant in this action.  From then on, no interlocutory application could be made against the 2nd defendant as there was no respondent to such application.  The deadline imposed by Master Ho for interrogatories also ceased to be relevant to the 2nd defendant or the statement of his witness Madam Wong.

9.  On 20 April 2010, the plaintiff issued a summons to re-re-amend her statement of claim.  The solicitors for the 1st defendant filed an affirmation on 25 May to oppose it.  The plaintiff withdrew her application on 8 September 2010. 

10.  There was another CMC before Master Ho on 16 September.  Master Ho directed the parties to obtain counsel’s advice on the whole matter within 14 days and that all interlocutory applications, as may be advised, shall be taken out within 7 days thereafter.

11.  Before 2 November 2010, the solicitors for the 1st defendant made known to the solicitors for the plaintiff that the 1st defendant intended to call Madam Wong as its witness and would like to rely on Madam Wong’s witness statement.

12.  The plaintiff’s solicitors on 2 November wrote to the 1st defendant’s solicitors and requested, without prejudice to their stance that Madam Wong’s witness statement was not admissible for the 1st defendant, specific discovery of some documents relating to the businesses alleged by Madam Wong to be hers in the witness statement.

13.  On 4 November, the plaintiff’s solicitors further served on the solicitors of the 1st defendant some interrogatories on the businesses for Madam Wong to answer.

14.  There was another CMC before Master Ko on 4 November.  Master Ko granted leave for the 1st defendant to rely on Madam Wong’s witness statement that was filed by the 2nd defendant.  Master Ko also granted leave to the plaintiff to set the case down within 14 days for a 2-day trial. The Master’s reasons were that the plaintiff had been debarred from adducing evidence save with special leave from the trial judge and that the 1st defendant had indicated that it may withdraw or discontinue its counterclaim upon dismissal of the plaintiff’s claim by the trial judge.  I do not think the counterclaim would require much time to dispose of as it only prays for consequential relief upon dismissal of the plaintiff’s claim.

15.  Master Ko also directed that there be a 2-hour PTR at 12 weeks before the trial.  He also directed the plaintiff to take out an application to be heard at the PTR for:

(a)   special leave to adduce evidence at the trial notwithstanding her non-compliance with the unless order made by Master Lung on 30 September 2009;

(b)   specific discovery requested by the letter of her solicitors dated 2 November, if so advised;

(c)   in relation to the interrogatories filed on 4 November, if so advised; and

(d)   in relation to the witness statement of Madam Wong, to apply to strike it out or to adduce evidence in response, if so advised.

16.  Despite granting leave for the case to be set down for a 2-day trial, Master Ko further directed the parties to confirm the length of trial at the PTR.  It seems that the Master did contemplate that the result of the applications to be heard at the PTR may render the length of trial to be longer than 2 days.

17.  The PTR took place on 6 January 2011.  A copy of the plaintiff’s application for special leave with a copy of the plaintiff’s witness statement was only given to the 1st defendant’s solicitors a few minutes before the PTR. It should have been served on the plaintiff’s solicitors at least two clear days before 6 January.

18.  At the PTR, the plaintiff applied to have special leave to file her witness statement, to have specific discovery by the 1st defendant and to administer interrogatory on the 1st defendant.  But she did not seek to strike out Madam Wong’s witness statement or to file evidence in response. 

19.  Counsel for the 1st defendant submitted that the 1st defendant was surprised as its solicitors were not informed of this move by the plaintiff.  However, I think if the 1st defendant was desirous of knowing beforehand whether the plaintiff would indeed make the applications mentioned in Master Ko’s order, its solicitors could have enquired with the plaintiff’s solicitors.  In any case, the PTR was adjourned from 10 a.m. to the afternoon for the 1st defendant to consider its position. Owing to the constraint of time, which was insufficient for oral submissions, the matter was further adjourned for written submissions.

20.  Counsel for the 1st defendant in his written submissions referred to the previous orders and directions by the Masters on filing witness statements and administering interrogatories.  However, it was clear since the end of September 2006 that the plaintiff had wanted to discontinue the action as against the 2nd defendant.  She was granted leave to do so by Master de Souza on 2 March 2009.  Master Levy also struck out the 2nd defendant’s re-amended defence and counterclaim on 11 March 2010.  The 2nd defendant ceased to be involved since then and Madam Wong’s witness statement also became irrelevant.  The deadline for interrogatories was 21 April 2010.  By then, there was no point in administering any interrogatories on Madam Wong or seeking specific discovery of documents pursuant to her witness statement.  Master Ho’s directions on 16 September 2010 on the making of interlocutory applications were also not directed to the 2nd defendant or Madam Wong’s statement.

21.  The 1st defendant did not apply for leave to use Madam’s witness statement until shortly before the CMC on 4 November 2010. This move certainly was not made diligently.  It could have been made since 11 March 2010.  The 1st defendant waited for more than 7 months before embarking on it.  Since the 1st defendant only got leave to rely on Madam Wong’s witness statement on 4 November, there is no reason why the plaintiff cannot then administer interrogatories and seek special discovery pertaining to this statement. 

22.  I also take the view that the interrogatories as framed are proper and reasonable and the documents sought to be discovered are relevant.  They were also served on the solicitors for the 1st defendant on 2 and 4 November 2010 respectively.

23.  The 1st defendant at the CMC of 4 November applied for leave to rely on Madam Wong’s statement, but it at the same time resisted the plaintiff’s interrogatory and specific discovery.  This stance was unreasonable.  Though the plaintiff was again late in putting in the applications in the morning of 6 January 2011, that was a delay of two clear days and the prejudice so caused was not significant.

24.  The 1st defendant further says that Madam Wong is separately represented and is having litigation against the 1st defendant and his solicitors.  But if Madam Wong is willing to give evidence for the 1st defendant, as counsel for the 1st defendant has confirmed, there is no reason not to ask her to further cooperate by answering the interrogatories and providing the documents for specific discovery.  Madam Wong’s creditability may also be hampered if she is only willing to give evidence for the 1st defendant to fight against the plaintiff but not to answer interrogatories or to provide the relevant documents for discovery.  If there should indeed be difficulties in making discovery, the same can always be explained on affidavit.

25.  I therefore order that the 1st defendant do procure Madam Wong to answer the interrogatories served on 2 November 2010 by affidavit to be filed and served on the solicitors for the plaintiff within 21 days from today.  I further order that the 1st defendant do make discovery of the documents requested by the plaintiff’s solicitors in their letter of 2 November 2010 within 21 days from today.  Inspection to follow within 7 days thereafter.

26.  Regarding whether special leave should be granted for the plaintiff to file and serve her witness statement, it is useful to look into the nature of the dispute.  The subject matter of the dispute is a flat in Cavendish Heights, Perkins Road.  It is an expensive property.  It was sold by Mr Fung William, now deceased, to the 1st defendant in October 2000.  The 1st defendant was at that time owned and controlled by Madam Wong who was the wife of Fung William.  The plaintiff is their daughter.  The plaintiff is representing the estate of Fung William deceased.

27.  It is the plaintiff’s case that the sale was a sham as the purchase money was provided by Fung William and the purpose of the sale was to reduce the amount of assets under his name.  The plaintiff as the personal representative of Fung William’s estate therefore claims that the property is held by the 1st defendant on trust for Fung William’s estate.  This was disputed by Madam Wong who said in her witness statement that she used to operate several businesses and she financed the purchase of the property by the 1st defendant with her own resources.

28.  Since the 1st defendant has on 4 November obtained leave to call Madam Wong to give her side of the story at the trial, the plaintiff should not be deprived of the opportunity to reveal her side of story.  This may also be regarded as her response to Madam Wong’s witness statement.  If the 1st defendant has not obtained leave on 4 November or had obtained leave much earlier than 4 November, then the plaintiff’s position may be different.  There may then be insufficient reason for granting her special leave to put in her witness statement at this late stage.

29.  Counsel for the 1st defendant also submitted that if the plaintiff’s witness statement should be admitted, there would be the need to prepare the case from afresh.  I do not find this submission forceful. The plaintiff’s witness statement does not constitute any change in her case which has already been set forth in her pleadings.  She has also made discovery.  There may be more preparation work if the plaintiff’s witness statement is admitted, but not preparation from afresh. 

30.  Counsel also submitted that there would be more discovery to be sought from and interrogatory to administer on the plaintiff. But counsel only identify the affirmation by Executrix made by the plaintiff for the estate of Fung William and some documents which have been referred to in the further and better particulars of the re-amended statement of claim filed on 23 June 2009.  If such documents need be discovered and interrogatories administered, the need was already there in June 2009.  The 1st defendant cannot now say that it is too late for it to undertake these tasks when it could have embarked on them more than a year ago.

31.  Counsel also complained that certain request for further and better particulars had not been properly responded to by the plaintiff. Again this was so since 23 June 2009 and is not anything new.  That was before any party had filed any witness statement.

32.  To sum up all the 1st defendant’s arguments are premised on the wrong basis that Madam Wong’s witness statement had all along been filed for the 1st defendant and thus relevant.  The arguments overlooked the fact that this witness statement had become of no relevance in this action on 11 March 2010 upon striking out of the 2nd defendant’s re-amended defence and counterclaim.  All orders and directions that took effect after this date also had no relevance to Madam Wong’s statement.  When the 1st defendant was allowed to rely on this statement on 4 November 2010, the plaintiff was entitled to take the appropriate steps pertaining thereto.  This is the reason for granting the plaintiff special leave to file her statement and to rely on it at the trial.  I therefore grant special leave to the plaintiff and require her to file and serve her witness statement within 7 days from today.

33.  Regarding the time estimates for the trial, counsel for the plaintiff gave 2 days for his conduct of the case.  One hour of which will be for the evidence in chief of the plaintiff.  Counsel for the 1st defendant gave 12.5 hours of which 8 hours are for the cross-examination of the plaintiff.  Hence, even if the plaintiff is not allowed to give evidence, the 2-day fixed will still be insufficient for the trial.

34.  I therefore vacate the 2-day trial and direct the parties to fix a 4-day trial.  There should also be a further PTR 6 weeks before the trial.

35.  On the question of costs, since the 1st defendant has failed in its opposition to the plaintiff’s applications, I make an order nisi that the plaintiff do pay the 1st defendant the costs of the application for special leave save that the 1st defendant do pay the plaintiff the costs of the argument.  I make a further costs order nisi that the 1st defendant do pay the plaintiff the costs of the applications to administer interrogatories and for specific discovery.  I also give a certificate for counsel for the costs orders.

36.  Since the 1st defendant has been unreasonable in seeking to rely on Madam Wong’s statement but refusing to make specific discovery and answer interrogatories in relation thereto, I order that the above costs orders be taxed and paid forthwith.  Unless the parties can agree on the amounts payable, the parties shall fix a 9:30 a.m. hearing before me after 14 days but within 28 days from today for summary assessment.