YANG YANI v. FANG MINGYUN AND ANOTHER

HCA 1439/2019

[2023] HKCFI 3357

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1439 OF 2019

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BETWEEN

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REASONS FOR DECISION

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INTRODUCTION

1.  The Plaintiff alleged that D1, in her own capacity and acting on behalf of D2, had acted in breach of duties as estate agent of the Plaintiff. Allegedly, D1 made false representation to the Plaintiff and acted on her behalf without her authorization in releasing earnest monies and tender documents for the purchase of a property. The Plaintiff’s tender was subsequently accepted by the vendor and the Plaintiff was required to pay the remaining initial deposit. To ensure that legal proceedings would not be taken against the Plaintiff, the Plaintiff paid the remaining initial deposit. She claims for her loss, being the earnest money and remaining initial deposit.

2.  The Defendants denied that they were engaged by the Plaintiff as estate agents. Rather, it was Centaline Property Agency Limited (“Centaline”) who was. Centaline’s agents arranged the Plaintiff to sign the Tender Documents. The Plaintiff made enquires of her own and understood that the tender was irrevocable. D1 denied owing any duties or making misrepresentation to the Plaintiff. D1 said that it was one Mr Ng, agent of Centaline, who explained to the Plaintiff about the procedure of submitting the tender. The Defendants also denied that the Plaintiff relied on the pleaded false representation to sign the Tender Documents.

3.  The trial is due to commence on 20 February 2024, with an estimated length of 4 days.

4.  This was the 2^nd pre-trial review to deal with the Defendants’ Summons dated 22 November 2023 (“New Evidence Summons”), taken out the day before the 1^st pre-trial review. By the New Evidence Summons, the Defendants sought leave to file D1’s supplemental witness statement and witness statements from 2 new witnesses (“New Evidence”), including that of Mr Ng. After hearing the parties, I gave leave to the Defendants to file the New Evidence with costs on indemnity basis to be borne by them. Here are my reasons.

LEGAL PRINCIPLES

5.  It is well-established that whether to give leave to adduce late witness statements is a balancing exercise. The discretion is to be exercised after the Court has considered all the circumstances, including, amongst others, the prejudice caused to the opponent and any conscious flouting of rules of court, practice directions and/or case management timetables, or any over-reaching or deliberate manoeuvring on the part of the applicant: see for eg Civic Limited v余綺妙 & Ors (unrep., HCA 225/2011, 12 July 2013) at § 20 per DHCJ M Ng (as she then was).

6.  The Court may exercise discretion to allow late interlocutory application where there are exceptional circumstances to explain and justify the delay: China Shanshui Cement Group Ltd v Zhang Caikui, at §11, 29, Coleman J.

7.  There are numerous authorities that held that delay alone could be a ground for refusal of leave to adduce new evidence, since delay, derailing or prolonging of a trial is prejudicial to a respondent, who has every right to expect that a trial fixed months ahead with due notice to the parties could proceed without disruption and time and costs being wasted. If a party were to make last minute fundamental changes to his case, it would be unfair to his opponent to have to divert his energy and attention away from the actual preparation for trial. On the other hand, the mere fact that an applicant would face considerable difficulties in establishing his case is no reason to allow the new evidence if this would lead to the trial being adjourned part- heard. See Hongkong Changyi Real Estate Development Ltd v Neo China (Group) Infrastructure Investment Ltd, HCA 1576/2011, 25 May 2014 §1, M Chan J; Credit One Finance Ltd v Leong Wun Heng [2019] 4 HLRD 591, §§12-13, G Lam J (as he then was).

8.  Although a proposed new witness statement might be short, this does not mean that the cross-examination would be correspondingly brief: Credit One Finance, §12.

9.  A change of legal representation normally would not amount to a valid justification for the Court to grant leave to adduce new evidence at a late stage: see Hongkong Changyi Real Estate Development Ltd, §1.

10.  That said, the Court must recognize that, under Order 1A, rule 2 of Rules of High Court (Cap. 4A), the primary aim in exercising the powers of the Court is to secure the just resolution of disputes in accordance with the substantive rights of the parties. The Court shall give effect to the underlying objectives when it exercises any of its powers.

ANALYSES

11.  It could not be disputed that the New Evidence was relevant. In particular, the witness statements of Mr Ng and one Mr Wong went to the heart of the defence, to prove that (i) it was Centaline’s staff who explained the Tender Documents to the Plaintiff; (ii) D1 did not make the alleged false representations; and (iii) the Plaintiff could not have signed the Tender Documents in reliance on the alleged false representations.

12.  In opposition to the New Evidence Summons, Mr. Justin Ho, counsel for the Plaintiff, put forward 5 main arguments on behalf of the Plaintiff, which may be summarized as follows:-

(1) There was extreme and unacceptable delay.

(2) The New Evidence Summons was an ambush and the Court should mark its disapproval and dismiss such.

(3) The Defendants’ late change of legal team did not provide an explanation for the delay.

(4) Allowing the application would affect the Plaintiff’s preparation and might derail the trial dates or prolong the trial.

(5) The New Evidence raised numerous new factual allegations and allowing the New Evidence Summons would occasion prejudice to the Plaintiff.

Delay, ambush and change of legal team

13.  There were 2 relevant periods of delay (i) the 1 ½ year from 31 May 2022 to early November 2023; and (ii) the 3 weeks from early November to 22 November 2023 when the New Evidence Summons was issued.

14.  With regard to the first period of delay, 31 May 2022 was the date the last witness statement was filed. The Defendants have repeatedly confirmed in the timetabling questionnaire and the listing questionnaire that they have no further witness statements to file. The Plaintiff had good cause for complaint about the delay.

15.  However, in this period, Lim & Lok (“L&L”) was handling the case for the Defendants. Whilst accepting, with hindsight, that D1 could have been more active in making enquiry with L&L, she claimed not to have been informed of the progress of the present case by L&L since early November 2022. They only discovered the trial dates and pre-trial review date in early November 2023.

16.  D1 claimed to have got the impression from L&L that her witness statement was only supplemental to the defence. In fact, she had instructed L&L to file a further statement for her and the Centaline agents, but she only discovered afterwards that her instructions were not carried out.

17.  Mr. Lok Tze Bong (handling solicitor) of L&L was suspended from practice on 12 September 2023 but the Defendants were only made aware of it in early November 2023.

18.  Whilst a change of legal team was not usually a good reason to justify delay, on the facts of this case, the change of legal team was not due to a tactical move. The exceptional circumstances that occurred was of L&L not handling the case with proper care, failure to inform the Defendants of the progress of the case, the Law Society’s intervention of Mr Lok’s practice and the Defendants’ late acquisition of knowledge of that intervention. The Defendants could not be entirely faulted for the unenviable situation they found themselves in.

19.  The second period of delay was regrettable. For 3 weeks since discovery of L&L’s suspension from practice and change of legal team, the Defendants had not given any indication that they would issue the New Evidence Summons until 5:00 pm on the day before the 1^st pre-trial review. It was even more regrettable that no draft witness statements were attached to the New Evidence Summons. In the end, it took an overall 3 weeks from issue of the Summons to this hearing, with the draft witness statements prepared expeditiously upon the Court’s directions.

20.  In future, in applications like this, the Court would have expected an applicant’s new team of lawyers to have acted with the speed of seeking an urgent ex parte injunction. That said, the second period of delay was not so gross that the Court should refuse the application upon balancing the need to secure a just resolution of the disputes in accordance with the substantive rights of the parties.

Derailing the trial dates

21.  The proposed witness statements were short. That of course, would not necessarily mean that cross-examination would be equally short. However, no new documents were attached to the witness statements. The relevant events covered by the New Evidence occurred within the month of April 2019. The witness statements were corroborative of D1’s case and disclosed no new issues.

22.  Although trial time might be prolonged, given proper preparation by counsel, one could expect the trial to still finish within the dates assigned.

Prejudice to the Plaintiff

23.  The Plaintiff pointed out that the New Evidence referred to new personnel and “Guidelines” in place on the sale of the Property which would warrant new factual inquiries.

24.  However, the Defendants have explained that the guidelines were internal and the Defendants were ready to provide contact details of people who were mentioned in the New Evidence. The Plaintiff has not expressed any difficulty in finding witnesses or need for substantial discovery.

Conclusion

25.  Having regard to the analyses above, whilst procedural discipline was important, despite the delay and with the exceptional circumstances in this case, the scale tipped in favour of granting leave to adduce the New Evidence to secure a just resolution of the dispute.

Costs

26.  Given that indulgence was granted by the Court and the additional work on the Plaintiff to answer the New Evidence at such a late stage, it was only fair for the Defendants to bear the Plaintiff’s costs on indemnity basis. I reserved the question of summary assessment to after trial.

27.  I thank counsel for their assistance.