LO KA CHUN v. LO TO AND ANOTHER

1980, No. A2015

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

------------------

------------------------

J U D G M E N T

------------------------

1. On 22nd September 1989 I allowed an application for leave to amend the statement of claim in this action. (For further details, reference may be made to the judgment which I delivered on that occasion.) As a result of the leave given to amend the statement of claim, the defendants have of course been given an opportunity to make consequential amendments to their defences. The problem now before me concerns an application by the 2nd Defendant to amend his defence in a manner to which, in some respects, the Plaintiff objects.

2. The substantive amendment to the statement of claim is an amendment which enables the Plaintiff to plead and particularise that knowledge of a trust, and the breach of it, which is necessary to fix the 2nd Defendant with liability as a constructive trustee. Some such allegations had already been made in earlier versions of the statement of claim. But by the time the case was called on for trial, the statement of claim in the form in which it then was had dropped the allegations of knowledge which were essential for the purpose. It maintained only an allegation that the 2nd Defendant had wrongfully intermeddled with the trust property.

3. At an early stage too, the 2nd Defendant had sought to make a number of allegations in his defence which, if substantiated, might have given rise to an estoppel which would have precluded the Plaintiff from relying on his case of intermeddling. That, too, had been dropped.

4. I will briefly say something about that at this stage. From correspondence which has been shown to me, it is, at any rate, to my mind apparent that the Plaintiff had been placed in considerable embarrassment by some of the allegations at that stage being made by the 2nd Defendant. The 2nd Defendant, in support of his plea of estoppel, sought to rely on the conduct of leading and junior counsel then instructed by the 2nd Defendant in proceedings in an earlier action between the 1st Defendant and the 2nd Defendant, at the trial of which the Plaintiff's leading and junior counsel had attended with a view to intervening in those proceedings.

5. The embarrassment was caused in this way: if anything said or done by counsel was to be relied on as creating an estoppel, and if any dispute arose as to what actually had happened, the evidence of counsel would have been material and indeed probably necessary. That, however, would not have been consonant with those counsel continuing to represent the Plaintiff; because counsel cannot both act as counsel at a trial and at the same time give evidence in the course of that trial as to material events which the judge has to consider.

6. It is now sought to resuscitate the allegations, including those referring to the conduct of counsel, which may give rise to an estoppel if the 2nd Defendant is right. The 2nd Defendant says, I think with some justice, that his resuscitation of this plea of estoppel is hardly in a different class from the Plaintiff's resuscitation of the plea of knowledge essential to his success on the case of constructive trust.

7. The embarrassment to which I have referred can no longer occur; because counsel now presenting the case for the Plaintiff are different counsel from whose conduct might come into question in establishing the plea of estoppel. If those counsel are called to give evidence, it will cause no more embarrasement to the Plaintiff than that inevitably caused to counsel who has to examine a fellow member of the Bar in the witness-box. But that sort of embarrassment has nothing to do with the problem I have now to consider.

8. I have to consider, I think, simply whether this amendment can be made now without injustice or prejudice to the Plaintiff. No case was presented to me on behalf of the Plaintiff to suggest that any prejudice would be suffered by the Plaintiff if this plea were allowed to be reinstated now.

9. The Plaintiff urged on me a number of different considerations, which I must mention, in support of the Plaintiff's objection to the amendment to resuscitate the plea of estoppel. The Plaintiff pointed out that no real explanation as to why the plea of estoppel had been dropped initially had been given by the 2nd Defendant. It does not seem to me sensible at this stage to hold an inquiry as to exactly what went through the minds of those concerned, first when they dropped the original allegation of estoppel, and second, when they came to reconsider putting it back again. To some extent, it seems to me that there must have been at least some connection between the Plaintiff's dropping of the allegation of knowledge on the one hand and the 2nd Defendant's dropping of the point on estoppel on the other hand.

10. The exact extent of this seems to me to be quite immaterial. The facts is that the allegation of knowledge has now been raised again; leave has been given to the Plaintiff to raise it. The allegation of estoppel has now been raised again; and I propose to give leave to the 2nd Defendant to raise it. It seems to me that the balance of justice and convenience comes down in favour of allowing the 2nd Defendant to raise this issue by amendment at this stage.

11. I appreciate that an estoppel is an allegation in effect of unconscionable conduct on the part of the person against whom the estoppel is sought to be raised. I do not however think that that means that there is anything unconscionable in the defendant in seeking to raise the plea of estoppel itself in the circumstances which I have just related.

12. For the reasons which I have endeavoured to state, I think the right course is to allow the amendment as it has been framed in its entirety; and I propose to give leave to amend accordingly. The form of the amended defence is before me. It includes a number of minor amendments and some major ones. The major ones, other than those relating to the estoppel, are concerned with an analaysis of the nature of the respective interests of the alleged partners in the family business, that is to say, whether they became beneficially interested as joint tenants or as tenants in common in the partnership assets. No objection is raised as to the amendments to raise those matters; and as to the objections to the amendments intended to raise a plea of estoppel, I have held they are not well founded. So, as I say, for those reasons, I propose to allow the amendments sought by the 2nd Defendant to be made in their entirety.