CHAN KING LEUNG WILLY (substituted by Order of Master Sara Tong dated 9 December 2020) v. WO MING ENGINEERING LTD

HCA 437/2018

[2021] HKCFI 951

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 437 OF 2018

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JUDGMENT

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INTRODUCTION

1.  This is an appeal by the defendant (“D”) against the decision of Deputy Master Sara Tong (“Master”) on 9 December 2020.

2.  On 4 August 2020, D issued a summons to strike out the statement of claim (“Striking Out Summons”) essentially on the ground that the plaintiff had no locus standi to sue.  On 26 November 2020, Chan King Leung Willy (“Chan”) issued a summons to substitute Wong Kwong On (“Wong”) trading as Wong & Lawyers (“W&L”) as the plaintiff (“Substitution Summons”).  By her decision, the Master made no order in relation to the Striking Out Summons and grant the orders sought in the Substitution Summons with consequential orders.

BACKGROUND

3.  In August 2009, D instructed a firm of solicitors Messrs Wong & Fok (“W&F”) to act as D’s solicitors in an arbitration case (“Arbitration Case”), which was subsequently settled in November 2011.  The handling solicitor at W&F was a Mr Andrew Cheuk Huen Ngo (“Ngo”), who was a consultant solicitor at W&F up to 1800 on 31 December 2012.

4.  It was not disputed that D had signed 3 engagement letters to W&F for their services in connection with the Arbitration Case.

5.  As set out in the statement of claim filed 19 March 2018 (“SoC”), pursuant to the 3 engagement letters, W&F had issued to D 8 bills between 30 January 2012 and 2 April 2012 and respectively referred to as Bill Nos 9-16, totalling HKD 2,313,850, which were payable by D within 14 days of issuance, but had remained unpaid (“Outstanding Bills”).

6.  On 1 January 2013, Ngo joined a firm of solicitors Messrs Chan & Associates (“C&A”), of which Chan was the sole proprietor from 21 April 2011 to 14 June 2013.  By an assignment dated 4 January 2013 (“Assignment”)[1], W&F assigned the total amount of the Outstanding Bills to C&A.  Then Wong joined C&A as a partner with Chan on 14 June 2013.  4 days later, on 18 June 2013, Chan withdrew from the partnership of C&A and C&A then changed its name to W&L.

7.  On 22 February 2018, Wong trading as W&L issued the writ herein to claim from D the total amount of the Outstanding Bills. 

8.  As seen in the defence filed on 21 May 2018 (“Defence”), D’s case is based on, amongst other things, the following:

(1)     There was an alleged oral agreement between D and Ngo (“Oral Agreement”) that W&F’s fees for the Arbitration Case would be capped at maximum of HKD 800,000 exclusive of disbursements and pursuant to the Oral Agreement, terms of service of W&F were agreed (“Agreed Terms”);

(2)     It was pursuant to the Oral Agreement and in reliance of the Agreed Terms that D signed the 1^st engagement letter;

(3)     Further, D subsequently signed the 2^nd and the 3^rd engagement letters pursuant to a representation that the Agreed Terms would remain unchanged (“Representation”);

(4)     D only admitted to the Outstanding Bills Nos 9, 10 and 11 having been delivered to D by W&F and alleged that those Nos 12-16 were never received by D;

(5)     D made no admission as to the Assignment and further averred that the Assignment only operated, if at all, to assign the total amount of the Outstanding Bills to the sole proprietor or partners of C&A and Wong was not a sole proprietor/partner of C&A as at 4 January 2013, and no notice of the Assignment had been given to D.

9.  In its reply filed on 27 July 2018 (“Reply”), the plaintiff admitted that Wong was not the sole proprietor/partner of C&A as at 4 January 2013, ie the date of the Assignment, but pleaded that the rights and obligations were attached to C&A as a law firm which became W&L and is now Wong’s.

10.  Eventually, D issued the Striking Out Summons under Order 18 rule 19(1)(a) and Order 3 rule 5 of the Rules of the High Court (RHC). By the summons, D seeks an order that the SoC be struck out as it discloses no reasonable cause of action and that the action be wholly dismissed.

11.  In response to the above, Chan issued the Substitution Summons for him to be substituted as the plaintiff. 

12.  D’s case is that by the time when the Substitution Summons was taken out, it was far too late as the relevant limitation period in respect of the cause of action being relied on had already expired.

13.  On the other hand, Chan’s case is that substitution of the plaintiff should be permitted because of sections 35(6)(b) and 35(7)(a) of the Limitation Ordinance, Cap 347 (“LO”) and further Order 20 rule 5(3) of the Rules of the High Court (“RHC”) is satisfied.

14.  The Striking Out Summons and the Substitution Summons were then heard by the Master on 9 December 2020 who made the orders mentioned earlier.  

15.  On 22 December 2020, D issued the Notice of Appeal.

16.  At the hearing before this Court, Mr Jose Maurellet SC and Mr Josiah Chan appeared for D and Ms Queeny Lau and Ms Natalie So appeared for Chan.

THE LEGAL PRINCIPLES

17.  As a start, section 35 of the LO state as follows:

“35. New claims in pending actions: rules of court

(1) For the purposes of this Ordinance, any new claim made in the course of any action shall be deemed to be a separate action and to have been commenced—

(a) in the case of a new claim made in or by way of third party proceedings, on the date on which those proceedings were commenced; and

(b) in the case of any other new claim, on the same date as the original action.

(2) In this section a new claim means any claim by way of set-off or counterclaim, and any claim involving either—

(a) the addition or substitution of a new cause of action; or

(b) the addition or substitution of a new party,

(Amended L.N. 446 of 1994)

and …

(3) Except as provided by section 30 or by rules of court, the court shall not allow a new claim within subsection (1)(b), other than an original set-off or counterclaim, to be made in the course of any action after the expiry of any time limit under this Ordinance which would affect a new action to enforce that claim.

(4) …

(5) Rules of court may provide for allowing a new claim to which subsection (3) applies to be made as there mentioned, but only if the conditions specified in subsection (6) are satisfied, and subject to any further restrictions the rules may impose.

(6) The conditions referred to in subsection (5) are—

(a) in the case of a claim involving a new cause of action, if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment; and

(b) in the case of a claim involving a new party, if the addition or substitution of the new party is necessary for the determination of the original action.

(7) The addition or substitution of a new party shall not be regarded for the purposes of subsection (6)(b) as necessary for the determination of the original action unless either—

(Amended L.N. 446 of 1994)

(a) the new party is substituted for a party whose name was given in any claim made in the original action in mistake for the new party’s name; or

(b)  any claim already made in the original action cannot be maintained by or against an existing party unless the new party is joined or substituted as plaintiff or defendant in that action.”

18.  It has been held in Beijing Tong Gang Da Sheng Trade Co Ltd v Allen & Overy (a firm) (2016) 19 HKCFAR 705[2]:

“(1) An application to add or substitute a party would result in a new claim as defined in s 35(2) and that if the application was made after the expiration of the limitation period current at the time of the commencement of the action, in order for the addition or substitution not to fall foul of limitation, it must come within rules of court as envisaged under s 35(3) and (5). Order 15 rr.6(4)-(6) were designed to cover s. 35(6). Order 20 r.5 must be read with the Limitation Ordinance and as implicitly giving effect to s.35(6)(a)…”

19.  The above was followed by Linda Chan J in Winland Mortgage Limited and Ors v Star Rainbow Investments Limited [2020] HKCFI 3163, HCA 1509/2015, in which she had held, amongst other things, that there was no ‘right’ to join a new party unless the restrictions under the relevant RHC and the conditions stipulated in s 35(6)-(7) of the LO are satisfied.

20.  There was no dispute to the above general legal principles.

DISCUSSION

Section 35 of the LO

21.  It was submitted on behalf of D essentially that[3]:

(1)     Sections 35 (6)(b) and 7(a) of LO have not been satisfied;

(2)     Even if the above subsections are satisfied, this does not automatically entitle Chan’s application for substitution to succeed, for reasons that:

(a)     The substitution was not “necessary” for the purposes of Order 15 rule 6(5)(a);

(b)     Insofar as Order 20 rule 5 is relevant, none of the exceptions in rule 5 (3), (4) or (5) are applicable.

22.  Ms Lau on behalf of Chan had approached the matter from sections 35(2)(b) and (3) of the LO.  It was accepted by Ms Lau that the substitution of Chan is a “new claim” within the meaning of section 35(2)(b) of the LO and the “rules of court” relied on by Ms Lau under sections 35(3) and 35(5) are essentially Order 20 rule 5(2) and (3).

23.  The crux of the dispute between the parties is really whether there was a mistake in the name only of the plaintiff under section 35(7)(a) of the LO.  

Order 20 rule 5 of RHC

24.  Although section 35(7)(a) of the LO refers to simply a mistake in name, it was not disputed that the question to be considered was whether the mistake was misleading or raised any doubt as to the identity of the party intending to sue, as provided under Order 20 rule 5(3) of the RHC.

25.  Order 20 rule 5 states as follows:

“(1) Subject to Order 15, rules 6, 7 and 8 and the following provisions of this rule, the Court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleadings, on such terms as to costs or otherwise as may be just and in such manner (if any) as it my direct.

(2)  Where an application to the Court for leave to make the amendment mentioned in paragraph (3), (4) or (5) is made after any relevant period of limitation current at the date of issue of the writ has expired, the Court may nevertheless grant such leave in the circumstances mentioned in that paragraph if it thinks it just to do so.

(3)  An amendment to correct the name of a party may be allowed under paragraph (2) notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party if the Court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identity of the person intending to sue or, as the case may be, intended to be sued.

(4)  An amendment to alter the capacity in which a party sues may be allowed under paragraph (2) if the new capacity is one which that party had at the date of the commencement of the proceedings or has since acquired.

(5)  An amendment may be allowed under paragraph (2) notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment.” 

(emphasis added)

26.  Ms Lau had referred this Court to the case of The “Sardinia Sulcis” [1991] 1 Lloyd’s Law Reports 201 and the 4 conditions for the former RSC Order 20 rule 5(3) to be satisfied[4]. It was stated by Lloyd LJ in his judgment that:

“The first point to notice is that there is power to amend under the rule even though limitation period has expired: RSC O.20 r.5(2). The second point is that there is power to amend, even though it is alleged that the effect of the amendment is to add a new party after the expiration of the limitation period. But the Court must be satisfied (1) that there was genuine mistake, (2) the mistake was not misleading, (3) that the mistake was not such as to cause reasonable doubt as to the identity of the person intending to sue, and (4) that it would be just to allow the amendment.”[5]

27.  Ms Lau had also referred this Court to paragraph 23.053 of Limitation Periods, McGee, 8^th Ed on the explanation of the former RSC Order 20 rule 5(3).  I will set out the following from paragraphs 23.052 and 23.053 (without the footnotes), which I find helpful:

“23.052     In ABB Asea Brown Boven Ltd v Hiscox Dedicated Corporate Member Ltd;…..Christopher Clarke J gave guidance on the correct approach to be adopted when it is sought, outside the limitation period, to amend a statement of case by substituting one party for another which is said to have been named by mistake within the meaning of CPR r.19.5(3)(a), a rule made pursuant to s. 35(6)(a) of the 1980 Act.  It is also necessary to consider CPR r. 17.4(3), which talks about amending a statement of case after the expiry of the limitation period and which lays down a slightly different test, namely that: “the mistake was genuine and not one which would cause reasonable doubt as to the identity of the party in question.”

23.053     As the judge points out, the courts have had some difficulty with the question ---- when is a mistake a mistake as to the name of a party and not one that would cause reasonable doubt as to the identity of the party intended to sue or be sued?  In “The Sardinia Sulcis”, the Court of Appeal considered the meaning of the former RSC Ord.20 r.5(3).  The rule was said to be that where it was possible to identity the intended claimant or defendant by a description which was more or less specific to the particular case and the party seeking to amend had got that description right, there was unlikely to be any doubt about the intended claimant or defendant. On the other side of the line are cases where the promoter of the action intends to pursue a claim on behalf of or against a legal person whom he describes and names correctly, but who is not the right person to sue or be sued.  In such cases the mistake is said to be one of identity……….However, the “identity of the person intending to sue” is not an easy concept to grasp.  In one sense a claimant always intends that the correct claimant should sue and intends to sue the person who is liable for the wrong that he has suffered; although the test cannot be as wide as that……….In practice, the answer to many of these interesting conceptual points may be that CPR r. 17.4 only applies “where the mistake was genuine and not one which would cause reasonable doubt as to the identity of the party in question”.   If that identity is beyond reasonable doubt, there is likely to be little room for a dispute as to whether the mistake is one of identity or name.  It is also to be noted that CPR r. 19.5 applies a more lenient test because it requires only that the mistake be “genuine””

(emphasis added)

28.  Section 35 (6)(a) of the 1980 Act, is similar to section 35(7)(a) of the LO, and CPR r 19.5(3)(a) is similarly worded, whereas CPR r 17.4(3) seems to be similar to our Order 20 rule 6(3).

29.  Mr Maurellet had argued that Chan did not make any mistake in the name that he simply did nothing in the first place, and there was no suggestion in his affirmation that when the proceedings were commenced, Chan had intended to make a claim against D, but mistakenly thought that he should sue in Wong’s name.  By way of contrast, Mr Maurellet pointed out that in the Sardinia Sulcis case, the solicitor handling the case had filed an affidavit to explain that it was his mistake in that he was relatively inexperienced at the time and that he knew that the original company which owned the ship “Sardinia Sulcis” had been incorporated into another company but it had never occurred to him that the original company had ceased to exist.  However, in the present case, nowhere in his affirmation did Chan say there was a mistake, nor did he own up that it was his mistake, nor did he say it was Wong’s mistake.

30.  Mr Maurellet also submitted that the mistake in the present case was not a mistake in the name only but a mistake in the identity of the party to sue, and that it was a misunderstanding of the law.  He had relied on paragraphs 43-48, and also paragraph 69 of the judgment of Tang PJ in the Beijing Tong Gang Da Sheng case.  

31.  In the Beijing Tong Gang Da Sheng case, the original plaintiff was a company GBRE when the writ was first issued and thereafter, by a deed of assignment GBRE’s causes of action against the defendants were assigned to the plaintiff Beijing Tong Gang Da Sheng Trade Co Ltd then became the plaintiff in place of GBRE.  The defendants applied to strike out the plaintiff’s claim on the ground that the assignment was champertous and void, and before the hearing, the plaintiff applied for leave to add GBRE back as a plaintiff (the joinder application) which was made under Order 15 rr 6 and 7, Order 20 r 5 and under inherent jurisdiction of the court and on the basis that that the relevant limitation periods had expired.

32.  The joinder application was dismissed and the plaintiff’s claim was struck out by the judge.  The Court of Appeal affirmed the judge’s decision to strike out but allowed the joinder application as it was held that since the joinder application did not involve a new cause of action, no issue of limitation arose.  The defendant then appealed further to the Court of Final Appeal, contending that the addition of GBRE or substitution of the plaintiff by GBRE was within the definition of a “new claim” in s 35(2) of the LO and the joinder fell outside Order 20 r 5(3).

33.  As set out earlier, it was held that the application to add or substitute a party would result in a new claim under section 35(2) of the LO.  It was further held, amongst other things, that there was no mistake in the relevant sense, as the plaintiff wished to sue as the assignee, sued as such and was correctly named.  The mistake was the belief that the assignment was valid and effective[6].  Tang PJ had also quoted a passage from Oliver LJ, as he then was, in Central Insurance Co Ltd v Seacalf Shipping Corp (The “Aiolos”) [1983] 2 Lloyd’s Rep 25[7].  What Oliver LJ had said in his judgment was that the plaintiff in that case thought, as the insurer, he had certain legal rights which he did not in fact have, and that there was no error either as to the name or as to the identity of the party which fell to be corrected, but simply an error of law as to the rights possessed by the correctly identified party, and that Order 20 r. 5(3) did not extend to that sort of error.

34.  Mr Maurellet thus submitted that the situation in the present case is similar, in that Wong trading as W&L had wished to sue as the assignee, sued as such and was correctly named and if there was any mistake, even taken at its highest, the mistake was only one in the partnership law.

35.  I accept that in Chan’s affirmation, he did not expressly state whether it was a mistake on his part or Wong’s part.  What he had stated was that the action was commenced by “Wong trading as W&L” as plaintiff to recover the monies owed by D under the Outstanding Bills which had been assigned to C&A (which later then became W&L), and that Chan was informed by W&L that D had argued, amongst other things, that the Assignment only assigned the monies under the Outstanding Bills to Chan, and not to Wong.  Chan thus sought leave to be substituted in the action as the plaintiff so that he could sue to recover the monies owed by D pursuant to the Assignment as the assignee[8].  Although Chan did not expressly admit to any “mistake” on his part or on Wong’s part, it is clear in my view that, by issuing the Substitution Summons, Chan had accepted what was averred by D in the Defence, that Chan himself, as the sole proprietor of C&A at the date of the Assignment, was the assignee of the Assignment and that it was a mistake for “Wong trading as W&L” to be named as the plaintiff.  

36.  In the Beijing Tong Gang Da Sheng case, the assignment was held to be void and champertous.  In the present case, other than the Assignment did not in fact pass to or vest in Wong any purported right of claim or cause of action in the Outstanding Bills, there was no finding in the present case at this stage that the Assignment was in itself a void or ineffective assignment. 

37.  Further, in my view, the facts in the Central Insurance case are different from the present case.  The plaintiff insurers commenced the claim in that case in their own name but no title to sue appeared on the face of the pleadings although the plaintiffs specifically pleaded their subrogation rights.  The defendants denied that the plaintiffs had title to sue and applied to strike out the writ and statement of claim.  Their application was granted by the Admiralty Registry.  The plaintiffs appealed and notified their intention of seeking leave to amend the writ and statement of claim to add the 28 buyers who were the insured as plaintiffs.  The plaintiff’s application to amend and their appeal were dismissed by the judge.  On appeal to the Court of Appeal, it was held amongst other things, that the statement of claim only contained a reference to subrogation and that the reference to subrogation did not of itself show that the right to bring the action was not vested in the plaintiff, and that it merely failed to demonstrate that it was so vested[9].  Further, it was held on the facts of that case that if it were essential to have the buyers before the Court they could quite properly be joined as defendants.

38.  It was held by the Court of Appeal, amongst other things, that the learned judge was right to refuse leave to the plaintiffs to amend under Order 20 rule 5(2) and (3) as there was no error either as to the name or as to the identity of the party but simply an error of law as to the rights possessed by the correctly identified party and that Order 20 rule 5(3) did not extend to that sort of error.  However, the appeal was allowed subject to the plaintiffs bringing in revised amendments to the writ and statement of claim to amend the pleadings [to plead the assignment vesting the right to claim] and to join the buyers as defendants.  The claim was not struck out.

39.  Thus, on my reading of the judgment of Oliver LJ, it would appear that the plaintiff insurer was the correctly identified party to sue and the mistake was on the rights possessed by the plaintiff insurer, which mistake would obviously not fall within Order 20 rule 5(3). 

40.  Anyway, having considered the facts of the present case, I have come to the view that the mistake in the claim made in the name of Wong trading as W&L was a genuine mistake on the part of Chan and/or Wong in that they were under the belief that pursuant to the Assignment, the right to claim for the Outstanding Bills had passed to Wong.  The date of the Assignment was quite clearly pleaded in the SoC and further it was also clearly pleaded that it was only on about 14 June 2013 that Wong joined as a partner of C&A and that on 18 June 2013, Chan withdrew from the partnership of C&A and left the firm and that on the same day C&A changed their name to W&L[10].  The mistake was not misleading and that it was not such as to cause reasonable doubt as to the identity of the person intending to sue, namely the assignee of the Assignment. 

41.  In Chan’s affirmation, he had given reasons for stating that the relevant period of limitation was current at the date of the issue of the writ and although this was not accepted by D, there were no submissions to the contrary.

42.  Mr Maurellet had submitted during the hearing that in the present case, the writ was issued some 10 years after the services were first rendered to D in the Arbitration Case and some 6 years after the Assignment, and that it was a stale case which should never have been brought by Wong in the first place, and that the Court should not exercise its discretion to allow the Substitution Summons.

43.  The writ was issued on 22 February 2018.  From the numbering of the Outstanding Bills, it would appear that there had been earlier bills, which I understand that some of those had been settled by D. The Outstanding Bills were dated between 30 January 2012 and 1 March 2012.  As said by Chan, under section 66 of the Legal Practitioners Ordinance, Cap 159, the cause of action on solicitors’ bills accrues only one month after they have been delivered in accordance with the requirements of that section.  Thus, the cause of action on the two “earliest” Outstanding Bills, namely Bill no 9 dated 30 January 2012 accrued on 29 February 2012 and Bill no 10 dated 1 February 2012 accrued on 1 March 2012.

44.  Although the claim could have been issued earlier, it was not issued or served the day before the expiration of the limitation period, as in Davies v Elsby Brothers Ltd [1961] 1 WLR 170 (CA). Mr Maurellet had also referred the Court to Davies v Elsby Brothers Ltd [1961] 1 WLR 170 (CA).  It was held by the Court of Appeal in that case that the original description of the defendants on the writ were not a mere misnomer and that the court had no power to allow by amendment the substitution of a new party as defendants as the claim against the new party was statute barred.  Pearce LJ had said he arrived at the conclusion reluctantly because it was based on a technicality but so far as merits were concerned, the plaintiff had brought the matter on himself as he waited until almost the expiration of the limitation period to issue the writ which was not served until the day before the period would expire.  

45.  Mr Maurellet had also referred to paragraph 116 of the judgment of Linda Chan J in the Winland case.  It was said by Linda Chan J that the defendant’s position in that case would be prejudiced by the joinder application as the effect of the joinder would be to deprive the defendant of a limitation defence as the claim would be treated as if it were commenced on the same date as the action under section 35 (1)(b) of the LO, and that the interest of justice did not justify the late joinder[11]. 

46.  In the above case, the joinder was in fact only made on the 1^st day of the trial, ie in October 2020, when the sum claimed by the plaintiffs was paid to the defendant in December 2009, some 11 years ago and the plaintiffs only demanded for return of the same in March 2012 and yet the application for the joinder was made by the plaintiffs only on the 1^st day of the trial.  It was in those circumstances that Linda Chan J had said it was a late application.  In any event, the plaintiffs in that case were not in fact relying on Order 20 but Order 15 rules 6(5) and 6(6)[12].

47.  In the present case, although the Substitution Summons was only taken out after the Striking Out Summons, there was no sufficient evidence that D had suffered any real prejudice by the substitution other than being deprived of a limitation defence.  Invariably in a case which falls within section 35(3) of the LO, the new claim will be after the expiry of any time limit under the LO and it is because of this, section 35 (1) provides that the new claim shall be deemed to be a separate action and to have been commenced on the same date as the original action, and this is also why the court has to be satisfied that the addition or substitution of the new party is necessary under section 35(6)(b) and that the conditions in section 35(7) have to be met.  As said, in the present case, the mistake was not misleading or to have caused any reasonable doubt as to the identity of the person intending to sue.

48.  I have found that there is no sufficient evidence of any real prejudice to D.  Although there had been delay, I do not think this is a stale claim, and having considered the circumstances, in my view it is just to grant leave under Order 20 rule 5(2) for Chan to make the amendment mentioned in Order 20 rule 5(3). 

Order 15 rule 6 of RHC

49.  Mr Maurellet had also argued that on the literal reading of Order 20 rule 5(1), the provisions in that rule are “subject to Order 15 rules 6, 7 and 8”, thus in an application under Order 20, not only Order 20 but also Order 15 have to be satisfied.  He accepted that this was a “more ambitious point” and had had only found an authority from DHCJ Longley from about some 18 years ago, namely Li Ming Cheong and Li Wai Ki and Others, HCA 10334/2000, (unrep) 01.03.2002. 

50.  As pointed out by Ms Lau, if this had been the case, this would have been set out in the Sardinia Sulcis case, when the plaintiffs were seeking to rely on Order 20 rule 5(3) and nothing else, in that they did not seek to rely on Order 2 rule 1, or Order 15 (mistakenly typed as Order 16) rule 6.[13]

51.  I do not find there are sufficient authorities to support D’s submissions in this respect.  In any event, as seen later, I am of the view that Order 15 rule 6(6)(a) is also satisfied.

52.  Order 15 rule 6 states as follows:

“(1) No cause or matter shall be defeated by reason of the misjoinder or nonjoinder of any party; and the Court may in any cause or matter determine the issues or questions in dispute so far as they affect the rights and interests of the persons who are parties to the cause or matter.

...

(5) No person shall be added or substituted as a party after the expiry of any relevant period of limitation unless either—

(a) the relevant period was current at the date when proceedings were commenced and it is necessary for the determination of the action that the new party should be added, or substituted, or

…

(6) The addition or substitution of a new party shall be treated as necessary for the purposes of paragraph (5)(a) if, and only if, the Court is satisfied that –

(a) the new party is a necessary party to the action in that property is vested in him at law or in equity and the plaintiff’s claim in respect of an equitable interest in that property is liable to be defeated unless the new party is joined, or

(b) the relevant cause of action is vested in the new party and the plaintiff jointly but not severally, or

(c) the new party is the Secretary for Justice and the proceedings should have been brought by relator proceedings in his name, or

(d) the new party is a company in which the plaintiff is a shareholder and on whose behalf the plaintiff is suing to enforce a right vested in the company, or

(e) the new party is sued jointly with the defendant and is not also liable severally with him and failure to join the new party might render the claim unenforceable.” 

(emphasis added)

53.  Mr Maurellet had submitted on behalf of D that firstly, the words “if and only if ” suggest that rule 6(6) has exhaustively defined all the situations where joinder or substitution of parties shall be treated as necessary for the purposes of rule 6(5)(a) and secondly the words “join(ed)”/“jointly” distinguish and keep separate the addition of a new party [paras (6)(a), (b) and (e)] from the substitution of a new party [paras (c) and (d)].

54.  It was further submitted on behalf of D that since section 35(1)(b) of the LO determines that any new claim (including a claim involving the substitution of a new party) is deemed to commence on the date of the original claim, the effect of permitting such a new claim (by substituting the plaintiff) could be to deprive the defendant of the limitation defence, and the defendant would be seriously and substantially prejudiced in that an existing right would be taken away, rule 6(6) must thus be narrowly interpreted in a restricted manner so as not to cause undue injustice.

55.  With respect, I do not agree.  As submitted by Ms Lau, which I accept, rule 6(6)(c) and (d) do not concern with situations of substitution only and that, such as under rule 6(6)(d), a company can seek to be added as an additional party, with the shareholder remaining as a plaintiff, in order to ensure that both of them would be bound by the Court’s findings.  I also agree with Ms Lau that the use of the word “joined ” in rule 6(6)(a) may simply mean the joinder of a new party, whether by addition or substitution, and this is also evident from the fact that Order 15 rule 6 is titled “Misjoinder and non joinder of parties”.  Sub-paragraphs (6)(a) to (e) thereunder should be construed purposively and in my view the provisions relate to both addition and substitution of parties. 

56.  Mr Maurellet had also argued that in the present case as the original plaintiff, ie Wong trading as W&L did not “have” an equitable interest in the property (being the cause of action in relation to the Outstanding Bills), as referred to in Order 15 rule 6(a), in that “he had nothing”, and thus Chan cannot rely on rule 6(a).

57.  However, as I read it, the wording of Order 15 rule 6(a) does not require that the original plaintiff has to “have” or has to show an equitable interest in the property, all it states is that “plaintiff’s claim in respect of an equitable interest in that property”.

58.  In any event, I am of the view that the substitution of Chan as the new party is necessary as I am satisfied that Chan is a necessary party to the action in that the cause of action in relation to the Outstanding Bills, being the property, is vested in Chan at law or in equity and the claim of Wong trading as W&L in respect of an equitable interest in that property is liable to be defeated unless Chan is joined. In short, I am of the view that Order 15 rule 6(6)(a) is satisfied. 

Order 15 rule 7 of RHC 

59.  As stated in Beijing Tong Gang Da Sheng case by Tang PJ, citing a judgment of Mance J:

“... O 15 r 7 deals with a situation where the proceedings as originally constituted were in perfect order and subsequent changes require to be catered for: it is self-evident that limitation must be irrelevant. The other rules focus on situations where the proceedings as originally constituted were in some way defective or inadequate, and therefore it might be said that their correction or amendment worked an injustice in exposing a defendant to some new claim which could and should have been put forward properly within the limitation period.”[14]

60.  It is not disputed that Order 15 rule 7 is not applicable in the present case.

THE STRIKING OUT SUMMONS 

61.  It is only in plain and obvious cases that this Court should exercise its summary powers to strike out any pleading.

62.  As said by DHCJ To in Koo Ming Kown and Mok Kong Ting and Others, [2018] HKCFI 967, HCA 2337/2016, 04.05.18:

“It is trite that joinder and amendment are together designed to save rather than to destroy and to cure which is capable of cure in relation to the pleadings: see Hong Kong Civil Procedure 2017. In relation to the defendants’ striking-out application, it is necessary for the court to consider all the proposed re-amendments of the plaintiff, inclusive of the the joinder of […. ] as new parties”.[15]

63.  The main ground for the Striking Out Summons was that no cause of action had vested in the plaintiff Wong trading as W&L who had no locus standi to sue.  In light of the fact that I am prepared to allow the Substitution Summons and having regard to the circumstances of this case, I decline to strike out the claim as sought in the Striking Out Summon.

CONCLUSION 

64.  An appeal from the master to the judge in chambers is dealt with by way of an actual rehearing of the application which led to the order under appeal.  Having heard the submissions on the two summonses, I have come to the same conclusion as the Master.   

65.  In light of all said, D’s appeal is dismissed with costs. Costs of the appeal are to be summarily assessed, with certificate for two counsel, and be paid by D within 14 days of summary assessment.  Chan is to lodge his statement of costs within 7 days of this order, and D is to lodge his lists of objections within 7 days thereafter.

66.  Lastly, I wish to thank all Counsel for their assistance to this Court.