THYSSEN HUNNEBECK GmbH v. E MAN-SANFIELD JV CONSTRUCTION CO. LTD.

HCCT40/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS
NO.40 OF 2002

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D E C I S I O N

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1. There are two summons before the court. Firstly a summons for directions upon which the defendant seeks an adjournment. Mr Terence Wong for the plaintiff does not consent to the adjournment but concedes it is not ready to proceed. I therefore adjourn it with costs in the cause.

2. The second summons is an application by the plaintiff to amend the Statement of Claim. Some of the proposed amendments are not challenged. One, however, is contested, namely the plaintiff's application to add a 2nd plaintiff and the consequential amendments which flow from that addition.

3. The issue has arisen because in its defence the defendant has denied that it made a contract with the original plaintiff but admits that it made a contract with the proposed 2nd plaintiff. The plaintiff has therefore take out this summons and by affirmation evidence in support states :

"It is the Plaintiff's case that the acts of the proposed 2nd Plaintiff [ie Thyssen Singapore] were undertaken as an agent of the Plaintiff. Alternatively, the proposed 2nd Plaintiff was acting as principal."

4. The defendant's opposition is based on the submission that there is only one cause of action in this case and these two plaintiffs cannot be allowed to share it. Mr Hoy for the defendant argues that, at least, one of the plaintiffs must lose. They cannot both win. The plaintiff must be put to its election as to which plaintiff is going to pursue the single cause of action. The proposed amendment which flows from the above affirmation evidence, which Mr Hoy contends is "a hopeless muddle", is in the following terms :

"The 1st and 2nd Plaintiffs duly completed the Works on 18 November 2000. The 2nd Plaintiff undertook and completed the Works as an agent on behalf of the Plaintiff. Alternatively, the 2nd Plaintiff was acting as principal."

Further, the proposed amendment to the Reply and Defence to Counterclaim states :

"......

(c) The Plaintiff admits that the Works involved Thyssen Singapore but avers that it was undertaken by Thyssen Singapore either as agent for and on behalf of the Plaintiff, or alternatively by Thyssen Singapore on Thyssen Singapore's own behalf.

(d) The Plaintiff admits that Thyssen Singapore made demands for payments but avers that such demands were made by Thyssen Singapore either as agent for and on behalf of the Plaintiff, or alternatively by Thyssen Singapore on Thyssen Singapor's own behalf.

(e) The Plaintiff admits that the Defendant has made payments for the Works to Thyssen Singapore but avers that such payments were received by Thyssen Singapore either as agent for and on behalf of the Plaintiff, or alternatively by Thyssen Singapore's on Thyssen Singapore's own behalf."

5. Mr Hoy has advanced his argument by reference to authorities on strike-out applications. His point is that if these two plaintiffs were in fact on the pleadings an application to strike out one of them would succeed. Therefore the plaintiff should be compelled to make an election now. He acknowledges that if the plaintiffs are forced to elect and, at trial, they lose because the wrong plaintiff has sued, all that will happen is that the other plaintiff will commence a fresh action.

6. Mr Wong, on the other hand, points out that this is not an application to strike out, it is an application to join a party. Even if it were hypothetically assumed to be a strike out situation, the defendant does not say which plaintiff should be struck out. He emphasizes that the proposed amendment merely enables the plaintiffs to argue alternative claims. No authority has been cited which suggests that a plaintiff must be compelled to elect. Rather he points to a passage in Long v. Crossley (1879) 13 CLD where Fry J at p.391 said :

"Is the presence of Mr. Long and his sister necessary in order to enable the Court effectually and completely to adjudicate upon and settle this question? It appears to me that it is. It is said by Mr. North that, if they are added as co-Plaintiffs, the action must still fail. I think that at present I have nothing to do with that. The object of the provisions of the rules was, not that a party's case should be so framed as to succeed, but that it should be so framed that it can be adjudicated upon by the Court, whether in his favour or against him."

7. This was said 123 years ago but the principle remains good when considering an application for joinder such as this. I agree with Mr Wong that it would be premature to decide the issue of agency and principal on this application. The proposed 2nd plaintiff is either an agent or he is not. The material necessary to decide the issue is not presently before the court. It is agreed that the proposed 2nd plaintiff signed the contract. However, the defendant says he dealt with the 1st plaintiff as a disclosed principal. The position is by no means clear.

8. In short, I think that the above issues are not those which should determine this application at this time. Rather, I think the principles on amendments by joinder should not be sidelined. They are uncomplicated. I have decided that I should not be deflected from applying them. They are on the Rules of the High Court in the following terms :

1. Order 15 rule 6 :

"(i) '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.'

(ii) 'Subject to the provisions of this rule, at any stage of the proceedings in any cause or matter the Court may on such terms as it thinks just and either of its own motion or on application ...... order any of the following persons to be added as a party, namely :

(1) any person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon, or

(2) any person between whom and any party to the cause or matter there may exist a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter which in the opinion of the Court it would be just and convenient to determine as between him and that party as well as between the parties to the cause or matter.' "

2. Hong Kong White Book 2002 15/6/2 :

"The question whether the new plaintiff has a cause of action or not will not be considered on the application to add him, the object of the rule being, not that the party's case should be so framed as to succeed, but that it should be so framed that it can be adjudicated on whether in his favour or not."

3. Hong Kong White Book 2002 18/7/12 :

"A party may in a proper case include in his pleadings two or more inconsistent sets of material facts and claim relief thereunder in the alternative."

There are exceptions to this rule but they do not apply in this case.

9. I am therefore persuaded that the amendments should be allowed. What effect this will have on the future conduct of this case is impossible to predict. The defendant may apply to strike out, the plaintiffs may reconsider the matter and choose to substitute the 2nd plaintiff as the sole plaintiff. These are matters for future consideration by the parties, not for present determination by the court.

10. The costs consequential on the making of the amendments themselves will be to the defendant. The costs of the hearing will be to the plaintiff.