KWAN KWOK KI v. TANG SHING BOR AND ANOTHER

HCA 1465/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1465 OF 2012

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HCA 85/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 85 OF 2013

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D E C I S I O N

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1. I have before me a summons taken out by Kwan Kwok Ki (“Kwan”) seeking an order that the amendments contained in paragraphs 28(c)(ii)-(iv), 28(ca), 28(cb) and 42(ca)(ii) of the Re-Amended Consolidated Defence and Counterclaim (“Re-Amended Defence”) filed on 5 October 2016 be disallowed on the grounds that:-

(1)  the amendments are not consequential upon the amendments made by Kwan in his Amended Consolidated Statement of Claim (“Amended Statement of Claim”) filed on 28 September 2016 pursuant to paragraph 2 of the consent order dated 26 September 2016; and

(2)  Kwan has been deprived of an opportunity to sufficiently address the above amendments by way of pleadings or evidence before the commencement of the trial, thereby suffering serious prejudice.

2. The amendments being objected to came about in the following circumstances.  On 26 September 2016, a consent order was made by the court under which Kwan was given leave to file and serve his Amended Statement of Claim as per a draft attached to a consent summons, and leave was given to Tang Shing Bor (“Tang”) and Kaiser 2000 Limited (“Kaiser”) to file and serve a re-amended consolidated defence and counterclaim consequential upon the amendments made by Kwan within 7 days thereafter.

3. Kwan’s Amended Statement of Claim was filed on 28 September 2016.  Two points are of note here.  First, Kwan did not make any amendments to paragraphs 24, 25 and 42 of his existing Consolidated Statement of Claim.  Second, at the time when Tang and Kaiser signed the consent summons, they were aware of the nature of the amendments that Kwan intended to make.  They only asked for leave to make consequential amendments, but not other amendments which they might have thought would be justified or appropriate having regard to the recent discovery given by Kwan in August 2016.

4. I shall first deal with paragraph 42(ca)(ii) of the Re-Amended Defence.  Paragraph 42 of the Re-Amended Defence contains Tang and Kaiser’s answer to the plea raised in paragraph 39 of the Amended Statement of Claim, which pleads that, in reliance on an alleged proceeds-sharing arrangement (as part of the terms of the JV Agreement), Kwan had and has acted to his detriment (with certain particulars given).  By paragraph 42(ca)(ii) of the Re-Amended Defence, Tang and Kaiser seek to raise the point that they are unable to give further particulars of the profits and/or benefits that Kwan had or has already obtained (a matter already pleaded in paragraph 42(ca)(i)) by reason of Kwan’s failure to comply with a discovery order made by the court on 19 July 2016.  While that point may or may not be correct and it is possible that Ms Audrey Eu SC may be entitled to pursue it in her cross examination of Kwan, I am unable to see how paragraph 42(ca)(ii) of the Re-Amended Defence can be said to be consequential upon any amendments in the Amended Statement of Claim, in particular paragraph 39 thereof which, as earlier mentioned, was in fact not amended.

5. In so far as paragraph 28 of the Re-Amended Defence is concerned, it contains Tang and Kaiser’s answer to the pleas raised in paragraphs 24 and 25 of the Amended Statement of Claim to the effect that, pursuant to the JV Agreement, Kwan devoted time and effort for the joint venture, spending approximately 70-80% of his time and effort and consequently spending much less time than before on his other businesses.  In the paragraphs objected to, Tang and Kaiser raise, effectively, the point that Kwan and his companies have in fact received substantial management fees from the joint venture companies, and furthermore have received substantial sums (or loans) from the joint venture companies.

6. In view of the fact that paragraphs 24 and 25 of the Amended Statement of Claim have not in fact been amended, Ms Eu seeks to argue that the amendments objected to are nevertheless “consequential” because Kwan has raised, in other parts of the Amended Statement of Claim, a new allegation that Gaineer Limited is one of the joint venture companies (in addition to Wealthy Vantage Limited and Golden Field Holdings Limited).  It is, however, apparent from the contents of the amendments objected to that apart from alleged payments or loans made by Gaineer Limited, the bulk of the alleged payments or loans in fact came from Wealthy Vantage Limited and Golden Field Holdings Limited.  In my view, Mr Paul Shieh SC is correct in his submission that there is a distinction between amendments consequential upon the amendments in Kwan’s Amended Statement of Claim and those consequential upon Kwan’s discovery which is said to be late. Again, I consider that Ms Eu may be entitled to pursue the matters raised in the various paragraphs objected to in her cross examination of Kwan (subject of course to any objection which may be raised by Mr Shieh), but I do not consider that those paragraphs can properly be regarded as consequential upon the amendments in the Amended Statement of Claim.

7. In all, I would disallow the amendments in the Re-Amended Defence referred to in paragraph 1 of Kwan’s summons.