XCHRX SEVERIN ASIA LTD. v. GREAT UNIVERSE (HONG KONG) LTD.

HCA 2322/99
& 5063/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NOS. A2322 of 1999 and A5063 of 1999

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J U D G M E N T

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1. The Plaintiff has brought two Actions against the Defendant, in each case bringing claims on dishonoured cheques and, in the alternative, for goods sold and delivered. In the first Action, the Plaintiff also alleges breach of an oral contract for the return by the Defendant of certain coffee makers.

2. The Defence and Counterclaim filed in each Action is the same. It alleges breach of certain express and implied terms of a sole agency contract for marketing the Plaintiff's goods on the mainland, as well as breach of implied terms as to quality in the sale contracts entered into by the parties.

3. The Plaintiff has filed a Reply and Defence to Counterclaim in each Action, denying that the Defendant was appointed sole agent and raising allegations concerning an "Importer Agreement" between the parties which it alleges has been broken by the Defendant.

4. In response, the Defendant sought leave to file a Rejoinder and Reply to the Defence to Counterclaim. However, on 27 July 1999, Master Poon refused leave and the Defendant now appeals that decision. The draft Rejoinder and Reply to the Defence to Counterclaim before me differs in content from that which was relied upon before the Learned Master.

5. In the notes to Order 18 rule 4 in the White Book, the learned editors state:

"Leave to serve a rejoinder or subsequent pleading will not be granted unless it is really required, so as to raise matters which must be specifically pleaded."

By Order 18 rule 8, a party must specifically plead any matter which he alleges makes a claim or defence of the opposite party not maintainable or, which, if not specifically pleaded, might take the opposite party by surprise or which raises issues of fact not arising out of the preceding pleading.

6. The present draft Rejoinder and Reply to the Defence to Counterclaim contains some matters but in my view, may strictly be unnecessary and may amount to no more than an elaboration upon matters upon which issue has already been joined. If that were all that the proposed pleading contained then refusal of leave to file it would obviously be correct. As was held in Norris v Beazely [1877] L.T. 845, a case cited by Ms. Munro, who appears for the Defendant, leave is generally refused where the pleading merely seeks to amplify what has already been pleaded or where the subject matter of the Rejoinder ought properly to be raised by amending the Defence. It is the submission for Mr. Burney who appears for the Plaintiff that the matter in the draft can be dealt with by amending the Defence.

7. However, the draft also contains pleas in relation to alleged terms of the "Importer Agreement" which was raised by the Plaintiff for the first time, at least in such terms, in the Reply and Defence to Counterclaim. The draft seeks to deny some of these terms, admit others and also to identify terms that are said to have been varied by subsequent agreement. In my view, these are not matters that could have been anticipated in the Defence, nor are they logically to be pleaded by amending the Defence since in sequence they arise in response to allegations first made in the Reply and Defence to Counterclaim.

8. Accordingly, while I have sympathy for Mr. Burney's concern that the pleadings should not be allowed to get out of hand, it is my view that a sufficient basis has been made out in the present case for leave to be granted.

9. Accordingly, I will order that the Learned Master's order be set aside and that the Defendant have leave to file a Rejoinder and Reply to Defence and Counterclaim in the terms of the document before the court. I will hear the parties as to costs.