TANG SHUN HAY v. JETLINE CO. LTD. AND OTHERS

CACV 188/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 188 OF 1999

(ON APPEAL FROM HCPI 948 OF 1996)

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J U D G M E N T

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Rogers, J.A. :

1. This is an appeal from a decision of Seagroatt, J. given on 10th June this year when he was hearing a pre-trial review in a personal injury action.

2. The accident arose out of the unfortunate death of Mr. Lau Ka Ming, which occurred on 11th September 1993. He was working on the electrical wiring in a building which was nearly completed. Some floors had been completed but apparently the floor where he was working had not been completed.

3. In circumstances which apparently are not entirely certain, it appears that, possibly he received an electric shock. Whether he did, or not, at any rate, he fell off his ladder. It appears from the pathology report that he hit his head and, as a result of his injuries, he died.

4. The writ in this action was issued by Madam Tang, nearly 3 years later on 9th September 1996. From the papers, it appears that the reason for the late issue of the writ, almost 3 years from the date of the accident, was not because things were left to the last moment, but because the first firm of solicitors, who were acting on her behalf, found themselves to have a conflict of interest with a potential defendant. They had to take counsel's advice as to whether that party should be sued as a defendant and eventually they were advised it should and the papers had to be passed on.

5. When the writ was originally issued, there were 5 Defendants. The defence of the 5th Defendant revealed that the security guards, who were on duty, were employed by the 6th Defendant. The allegation was that they were in control of the electrical switching rooms, one of which may be relevant as regards this case.

6. Up until that stage, for one reason or another, some of the papers which would have revealed the fact that the security guards were employed by the 6th Defendant and not by the 5th Defendant had not been retrieved. These have subsequently been obtained on behalf of the Plaintiff because the papers relevant to the inquest have now been obtained.

7. As a result of that, on 27th June 1998, an application was made to join the 6th Defendant as a Defendant to the action. That is of course beyond the 3-year period provided in the Limitation Ordinance.

8. On 3rd July 1998, Master Betts granted an order joining the 6th Defendant. The 6th Defendant then sought to have itself taken out of the action on the basis that the action was barred because of the Limitation Ordinance. It took out an application which was heard before Master Kwan on 24th November 1998. The order that Master Kwan made was, first, that the joinder of the 6th Defendant in the action be allowed to stand and secondly, that the action by the Plaintiff against the 6th Defendant be treated as having been commenced on 27th June 1998 rather than the date of the writ of summons herein.

9. The purpose of that order was clearly to leave open, if the 6th Defendant so desired, the possibility of reliance upon the Limitation Ordinance.

10. On the 8th December, the 6th Defendant filed its Defence. The Defence goes into some detail. It cannot be described as a holding Defence. It raises, in particular, acts of contributory negligence and/or breach of statutory duty on the part of the deceased and it gives particulars of how it says the deceased caused his own accident.

11. But the Defence is silent as to any matter of limitation and the limitation point which had been argued before Master Kwan on 24th November and had been the subject of those interlocutory proceedings was entirely absent from that Defence.

12. When the matter came before Seagroatt, J. on the 8th June, it was, as I say, for a pre-trial review. A pre-trial review is not a summons for directions, but it is a time when the Court considers the whole of the Plaintiff's case and the Defendant's case and it confirms to itself that the action is ready for trial and it fixes the trial date.

13. On that pre-trial review, the 6th Defendant made an application to amend its defence to plead the limitation point. The matter was discussed in the Court and the Judge raised with the solicitor acting for the 6th Defendant the fact that there was no affidavit. That was confirmed. Then the Judge said :-

"Well, you had better tell me why I should give leave at this stage?"

14. Then, there was a discussion between the Court and the counsel. But there was no explanation as to why the original defence by the 6th Defendant did not plead the limitation point after the point had been argued, as I say, on 24th November and the defence was filed within 14 days thereafter.

15. There was only a short discussion between the solicitor for the 6th Defendant and the Court but it is quite clear from the transcript which we have that the 6th Defendant put everything before the Judge that he wished to and he used the time hallowed phrase, "I leave the matter for your Honour to decide."

16. The Judge said in his short decision :-

"Mr TSE, on behalf of the 6th defendants, does not seek to advance any argument in support of his summons other than by reference to an advice that he has received from counsel and says that he leaves the matter for the court to decide.

In those circumstances, I think it would be wholly wrong for me to allow the 6th Defendants to raise that defence at this very late stage and accordingly, I dismiss the 6th Defendants' application. The costs of that application provide for them to be to the plaintiff in any event, and I confirm that order."

17. What I understand the Judge to be saying when he used the words "to raise that defence at this very late stage" is that if the 6th Defendant were allowed to amend its Defence, it would cause a severe disruption to the proceedings. I have no doubt myself, although Mr. Lin who has said everything that he could on behalf of the 6th Defendant has argued the point strongly that if the 6th Defendant had been permitted to amend its defence to rely on the limitation point, the Judge could not have made the order which he then proceeded to do on the pre-trial review. In particular, he could not have ordered that the trial should come on for hearing on 15th November this year. The Plaintiff would have to have been given an opportunity to file further pleadings, in particular, a Reply to rely on matters which she says she could rely on in order to overcome the limitation point, in particular the matters in section 30 of the Limitation Ordinance.

18. It seems to me it is no answer to say that the Plaintiff has already argued points on the application to dismiss the 6th Defendant from the action in November 1998, the matter still have to be gone into again. They still have to be considered by counsel who will conduct the trial and most importantly, the matters have to be pleaded and discovery in respect of the issues which will arise in relation to the limitation point would have to be gone into.

19. In those circumstances, if nothing else, it seems to me, that the Judge was perfectly correct in referring to it as "this very late stage" because, it seems to me, it would have inevitably meant the trial of the action would have to be put off. The accident had happened in 1993. For one reason or another, the proceedings had extended up until now. It is now more than 6 years from the date of the accident. To put this trial off even further would, it seems to me, to be most undesirable.

20. The matter is further complicated by the fact that there are so many Defendants involved. The allegations in negligence against the different Defendants are of course by their nature very different. I do not propose to go through it here but the nature of the responsibility which the various Defendants are alleged to bear, is quite different. It seems to me that it would not be possible and in the circumstances to have a trial on liability first. If it were to be split at all, it would have had to be on the basis that the limitation point in respect of the 6th Defendant would have to be tried first.

21. Mr. Lin on behalf of the Plaintiff urges us strongly that the Judge should only consider the question of prejudice to the parties in relation to whether an amendment should be allowed and he relies on a number of well-known cases, starting with the case of Cropper v. Smith (1883) 26 Ch.D. p.700 to the effect that it matters not how negligent or in dereliction of duty that the party seeking the amendment has been, what the Court must consider is whether the opposing party will be prejudiced by the amendment and the prejudice, on the contrary, against the Plaintiff and the balancing prejudices.

22. In my view, this matter resolves itself in this way. In the first place, I do consider that the Plaintiff would be prejudiced if the 6th Defendant were allowed to amend its Defence now. But I also consider that it behoves a party seeking to amend in circumstances such as the present case at least to provide some sort of explanation as to why the original Defence did not contain a plea. This is not simply a question of a defence coming up, this is a question where a point has been argued, it has been the subject of interlocutory proceedings, a Defence has been filed immediately consequent thereon and the point was not raised. It seems to me that the Plaintiff is entitled to proceed and deal with this Defendant and all Defendants on the basis that the point will not be raised. The Court is of course unaware of any questions of payments into Court or the like. That matter cannot be gone into at this stage but there is a possibility that in the intervening period, the Plaintiff might even be prejudiced in that respect.

23. In these circumstances, it is quite a live possibility that the failure to plead the limitation point is not simply a matter of negligence or dereliction of duty but was even a deliberate decision. The 6th Defendant was given an opportunity even in the absence of an affidavit of explaining this to the Court below and did not.

24. For my part, I would not disturb the Judge's discretion which he has exercised and I would therefore dismiss this appeal.

Godfrey, J.A. :

25. The application made by the 6th defendant in this action to amend its defence so as to plead a limitation defence was made in unusual circumstances. The limitation point had been the subject, some months before the date of the application for leave to amend, of an application made by the 6th defendant to strike it out of the action on the ground that the claim against it was time-barred. The master had rejected that application. In the defence, subsequently filed by the 6th defendant, the limitation point was not taken.

26. In these circumstances, during the course of the hearing before the judge below, the judge asked the solicitor appearing in support of the 6th defendant's application for leave to amend, the following question :-

"I'm interested in knowing your arguments as to why I should give you leave to amend your defence today, seven months, roughly, after Master KWAN's decision, six months after the original defence in which the limitation point was not pleaded?"

27. The judge received no satisfactory answer to that question, and in his conclusion, he said this :-

"In those circumstances, I think it would be wholly wrong for me to allow the 6th defendants to raise that defence at this very late stage and accordingly, I dismiss the 6th defendants' application."

28. From that observation by the judge, it is possible to infer that he was resting his conclusion, not on the matter of delay alone, but delay in all the circumstances of the case. Indeed that would seem to be the better explanation of the judge's reason for dismissing the application. If, however, what the judge said is taken literally, so that his only reason for dismissing the application was that it had been made very late, then, for my part, I would have regarded that as an exercise of discretion which would be open to challenge in this court.

29. In relation to delay in applying for leave to amend, Sir Balliol Brett, M.R. in Clarapede v. Commercial Union Association (1883) 32 WR 262, at p. 263 said this :-

"However negligent or careless may have been the first omission, and however late the proposed amendment, the amendment should be 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." (emphasis added.)

30. More recently, in British Gas Plc. v. Green Elms Ltd., 5 February 1988 (unreported, but cited in Easton v. Ford Motor Co. Ltd. [1993] 1 WLR 1511 at p.1520) Staughton, L.J. said this :-

"It is said that there was delay on the part of the plaintiffs and they should have advanced their case earlier."

A few lines later, he continued :-

"But, even if there was reprehensible delay, I remind myself that courts do not exist for the sake of discipline or to punish mistakes but to decide the rights of the parties." (emphasis added.)

31. Those observations were cited, obviously with approval, by Dillon, L.J. in Easton's case.

32. Nevertheless, in a statement made by the Editors of the Supreme Court Practice 1999 in their editorial introduction to Order 20 of the English Rules of the Supreme Court (which is concerned with amendment) they say this :-

"... as a general rule either party is allowed to make any amendment in his own pleadings or other proceedings which is reasonably necessary for the due presentation of his case on payment of the costs of and occasioned by the amendment, provided there has been no undue delay on his part, and provided also the amendment will not injure or prejudicially affect any vested rights of his opponent. But if the application is made mala fide, or if the proposed amendment is sought to be made after undue delay, or will in any other way unfairly prejudice or cause detriment to the other party, or is irrelevant or useless or would raise merely a technical point, leave to amend will be refused." (emphasis added.)

33. So it is not altogether easy to know whether and to what extent "undue delay" is, of its own, sufficient to disentitle an applicant who seeks to amend his pleading to a grant of that relief. But, for present purposes, I am prepared to assume that undue delay on its own is not sufficient to justify a refusal of grant of leave to amend. There must also be prejudice to the opponent of the party seeking leave to amend. If the judge's observations in the instant case are treated as showing that the judge relied exclusively on undue delay, then I would be of the view he did err in principle; so this court would be entitled and bound to review his exercise of discretion and to substitute its own view of the matter for that of the judge.

34. But I do not think that in fact assists the 6th defendant here. For the reasons which had been fully explained by Rogers, J.A., I too am of the opinion that this is a case in which prejudice would be suffered by the plaintiff if leave to amend were to be granted. It follows that whether we uphold the judge's exercise of discretion here, or substitute our own exercise of discretion for that of the judge, it will make no difference. The result will be the same. Accordingly, for these reasons, I too would dismiss this appeal.