AU YEUNG SHUN MEI & POON KIT FONG the manageresses of ‘MAN WAH TONG, a Religious Tong v. JAN FUNG AND OTHERS

HCA 595/2019

[2022] HKCFI 2253

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 595 OF 2019

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BETWEEN

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REASONS

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Introduction

1.  This is the hearing of a summons issued on behalf of the 1^st and 2^nd defendants (respectively “D1” and “D2” and collectively “Ds”) to amend their respective defence and counterclaim (“Amendment Summons”).

2.  On 18 June 2021, this Court made an order for this action to be tried at the same time as HCMP 496/2017, and further, among other things, ordered that all interlocutory applications should be made on or before 31 December 2021.

3.  On the last day, 31 December 2021, a total of 3 summonses were filed on behalf of Ds, one of which was the Amendment Summons. The 3 summonses were initially fixed for a direction hearing on 25 February 2022. Subsequent thereto, agreement was reached on 2 of the summonses, leaving only the Amendment Summons being disputed, and at the suggestion of the parties, this Court directed that the hearing on 25 February 2022 be vacated for them to lodge agreed draft order for directions. The parties agreed for the Amendment Summons to be dealt with on paper and directions were duly given on 25 February 2022 for the filing of affirmations.

4.  However, thereafter, no written submissions and/or paginated bundles were lodged for the paper disposal of the Amendment Summons. Eventually, on 17 May 2022, in light of the GAP period having ended, the Court directed that the Amendment Summons be re-fixed for an oral hearing, which took place on 15 July 2022. Counsel Mr Clark Wang appeared for Ds and Mr KM Chong and Ms Vivian Li appeared for P.

5.  At the hearing, upon query by the Court, Mr Wang confirmed and clarified that pursuant to the Amendment Summons, Ds were seeking leave to file a proposed consolidated amended defence and counterclaim (“AD&C”), in place of their current respective defence and counterclaim (“D&C”). Further, in light of the delay of the hearing of the Amendment Summons, and this Court’s concern that the 14 day trial (commencing 31 August 2022) could be derailed if the proposed 4^th to 8^th new defendants were added in the proposed amendments to the counterclaim, Ds were willing to delete their proposed counterclaim against the 4^th to 8^th defendants.

6.  On the above basis, and upon hearing submissions from respective counsel, this Court allowed the proposed amendments in the AD&C as follows:

(1) the proposed amendments in the AD&C which were not objected to by P;

(2) For the rest of the proposed amendments, this Court allowed those in the following paragraphs of the AD&C:

(i) Paragraph 13(4)

(ii) Paragraphs 14, 15

(iii) Paragraph 19

(iv) Paragraph 24, save the last sentence

7.  Leave was given for Ds to file the AD&C within 3 days, and leave to P to file an amended Reply and Defence to Counterclaim within 10 days upon receipt of the filed copy of the AD&C. Ds were ordered to pay P’s costs of and occasioned by the Amendment Summons, to be taxed, if not agreed, on party and party basis.

8.  Reasons for my decision are set out herein.

The legal principles

9.  As submitted by Mr Wang:

(1) The ultimate and primary aim is to make sure that the real question in controversy between the parties to any proceedings may be decided by the Court. Therefore, as a matter of general principle, amendments to clarify the real dispute between the parties are usually allowed unless injustice that cannot be compensated by costs may arise[1].

(2) Pure delay is usually not a bar to amendment unless there is unexplained undue delay which, considered in all the circumstances, makes it necessary to reject the amendment to dispose fairly of the cause or matter or for saving costs[2].

Any undue delay

10.  The writ herein was issued by P on 4 April 2019. The chronology of relevant events is as follows:

Date	Event
04.04.19	Writ issued by P
23.07.19	Defence and counterclaim filed by Ds respectively in person
15.12.20	Ds’ current solicitors filed notice to act for Ds
18.06.21	Trial dates fixed for 14 days from 31 August 2022
31.12.21	Amendment Summons filed
31.08.22	Commencement of trial

11.  In Ds’ affirmation in support of the Amendment Summons, D1 explained that she and D2 were retired persons and had limited means and that was why they decided to act in person to save legal costs and they filed their respective defence and counterclaim in person in July 2019. Thereafter, on 22 May 2020, P issued a summons to strike out part of their respective defence and counterclaim, and on 1 December 2020, P succeeded in part of its summons. It was under those circumstances that they sought legal advice and lodged an appeal. This led to Au-Yeung J’s judgment of 20 May 2021, allowing a substantial part of Ds’ appeal. According to Ds, they then proceeded to seek counsel’s opinion and their counsel advised on the amendment of their pleadings. However, there was a further delay due to P issuing another summons on 27 July 2021 for an injunction against Ds, which was fixed for hearing on 13 December 2021. As Ds had limited funds, they were only able to prepare for the Amendment Summons around mid December 2021 and were only able to just meet the deadline of 31 December 2021 for the filing of interlocutory applications.

12.  A joint affirmation was filed on behalf of P in opposition by Au Yeung Shun Mei, Poon Kit Fong, the proposed 4^th defendant and 5^th defendant (“Joint Affirmation”). In the Joint Affirmation, the deponents stated that the proposed 6^th to 8^th defendants had never been formally appointed as P’s members. Although it was pointed out that Ds only sought to amend their respective D&C 5 months (sic)[3] before the trial, P’s main objection in the Joint Affirmation was in relation to the proposed amendment of the counterclaim to add the proposed 6^th to 8^th defendants. There was no evidence of any prejudice to the deponents set out in the Joint Affirmation, save that they would need leave to amend their pleadings and to file supplemental witness statements if the Amendment Summons was granted and that the trial dates might be affected.

13.  Having considered the evidence, I find there was no sufficient evidence of any undue delay on the part of Ds in taking out the Amendment Summons.

The merits

14.  As summarised by this Court, there were mainly 5 areas of amendments which P objected to as set out hereinunder.

15.  In relation to the proposed amendments in paragraph 13, P’s objection was that Ds were introducing a new cause of action of proprietary estoppel and that in particular, for paragraph 13(4) of the AD&C, Ds’ allegation that D2 and his brother had spent their own money to pay for the various works was not supported by particulars and that this was not pleaded previously. First of all what was set out in paragraphs 13 (1) to (9), were matters already set out previously, including paragraph 13(4) which had been set out in Annex 3 of D1’s D&C. As pointed out by Mr Wang, the proposed amendments were not really new matters nor would they raise a new cause of action of irrevocable licence and/or proprietary as such matters had already been pleaded and/or disclosed as seen in the decision of Au-Yeung J of 20 May 2021 in this action[4] , and that the proposed amendments were only to tidy up the previous D&C drafted without legal advice. Having considered the proposed amendments, I find the amendments would be necessary to dispose fairly of the real issues between the parties and did not raise any new matters and/or causes of actions.

16.  In relation to the proposed amendments in paragraphs 14 and 15 of the AD&C, P’s objection was that these amendments, if allowed, would be to introduce a new defence under section 4 of the Limitation Ordinance, Cap 347, and that to respond to this, P would need to introduce evidence to say when they became aware of Ds’ improper conduct and to plead “concealed fraud” and that the trial could be derailed.

17.  First of all, in paragraphs 14 to 16 of P’s statement of claim (“SOC”), it was P’s own pleaded case that Ds’ wrongful interference and/or breach of duties went back since about 1996. Secondly, P had been aware of the proposed amendments in the AD&C since end of December 2021 when the Amendment Summons was issued. There was no evidence in the Joint Affirmation of any allegation of fraud. At the hearing, P complained of being sent 4 boxes of documents on 11 July 2022, 4 days prior to the hearing, including P’s accounting documents and that P had been pressing for these documents since 2017. I do not find P’s complaint of Ds’ late delivery of 4 boxes of documents to be relevant to the issue as to whether Ds should be allowed to amend to plead properly their limitation defence. If the amendments were allowed, P would be given leave to amend their pleadings and there would be time for P to provide details as to when Ds’ alleged improper conduct was discovered and as to when time should start to run. In any event, as pointed out by Mr Wang, such discovery must have been prior to P’s issue of the writ. Having considered the evidence and submissions, I allowed the proposed amendments.

18.  As for the proposed amendments in paragraph 19, Ds set out that on 15 December 2021 they had delivered all the documents demanded by P in the SOC. This amendment was mainly for Ds to update the Court of the position as of December 2021. Mr Chong complained of the lack of particulars in paragraph 19 and further again complained of the late delivery of 4 boxes of documents. As pointed out by Mr Wang, in paragraph 19, Ds were responding to paragraphs 17-19 of the SOC, and in those paragraphs, P had set out the particulars of all the documents alleged by P to have been in wrongful possession of Ds. Further, the late delivery on 11 July 2022 of 4 boxes of documents was not the issue before this Court. I accept Mr Wang’s submissions and allowed this amendment.

19.  As for the proposed amendment in paragraph 24, this Court did not allow the last sentence of the amendment in relation to Au Yeung Shun Mei and Poon Kit Fong having no locus to issue the present action. I accept that this may be a consequence of the Ds’ case, if proved, that there had been a failure to comply with the relevant articles of the Abridged Regulations of Man Wah Tong on the qualification of those who became members. However, I do not find this part of the amendment was necessary to clarify or to dispose of the real dispute between the parties or to save costs.

20.  In relation to the proposed amendments to paragraphs 10, 13, 15A, 16, 17, 21, 23A, 24A, 24B, 24C and 28A (mistakenly typed as 24A) of Annexure 2, P’s objection was based on there being no particulars of Ds’ allegation of P’s members misappropriating funds and further the conduct of P’s members being in breach of Buddhist teachings/principles, and that if the amendments were allowed, P might have to call expert evidence on Buddhism in relation to the Buddhist teachings/principles. Mr Wang submitted that the proposed amendments were not new allegations/matters, and further in response to Mr Chong’s submission of calling expert evidence, Mr Wang indicated that if this was a concern of the Court, Ds would be prepared to withdraw those allegations in relation to breach of Buddhist teachings/principles. I do not find those proposed amendments necessary to clarify or to resolve the real dispute between the parties, or for saving costs. I disallowed those amendments objected by P in Annex 2.

Conclusion

21.  The above were the reasons for this Court’s decision in granting the order on 15 July 2022.