CHAN CHUNG WAI AND OTHERS v. CHEUNG WAI PUI AND OTHERS

HCA 8721/1996

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 8721 OF 1996

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REASONS  FOR  DECISION

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1. This is the application of the 1st Defendant to 7th Defendant (also called "the Defendants") for:

(1) the original trial date of this action to be vacated and for the trial date to be refixed;

(2) leave to amend the defence.

At the end of the hearing of this application, the following order was made:

(a) the trial date from 3 to 13 December 2001 be vacated;

(b) the application for refixing the trial date of this action be adjourned to 10 a.m. on 13 March 2002 before the listing Master;

(c) the 1st Defendant to 7th Defendant are to file and serve affidavit regarding the 3rd Defendant's health condition (if any) not later than 4 p.m. on 20 February 2002;

(d) the application for leave to:

(1) delete paragraphs 30, 51 and 52;

(2) add the new paragraphs 18(c) to 18(f) and 24(c), 25(b) and 26(c),

is refused. Subject to the aforesaid, leave is granted to the 1st Defendant to 7th Defendant to amend the other paragraphs of the Defence as per the draft attached to the summons dated 13 November 2001;

(e) the 1st Defendant to 7th Defendant are to file and serve the Amended Defence within 7 days from 19 November 2001;

(f) the Plaintiffs are to file and serve a Reply (if any) within 7 days thereafter;

(g) no order is made on paragraph 4 of the said summons.

 

The following are the reasons for the said order.

Application for Trial Dates to be Vacated and Refixed

2. The Plaintiffs bring this action alleging in essence that the 1st Defendant to 7th Defendant were the majority shareholders and directors in control of the affairs of the 8th Defendant. The Plaintiffs allege therein that the 1st Defendant to 7th Defendant acted in breach of their various duties owed to the 8th Defendant by diverting the 8th Defendant's business elsewhere to the undue advantage of the 1st Defendant to 7th Defendant. The claim is denied by the 1st Defendant to 7th Defendant.

3. The trial of the action was scheduled to last from 3 December to 13 December 2001. The 1st Defendant to 7th Defendant applied for those dates to be vacated on the ground that the 3rd Defendant, being the principal witness for the defence, has recently been diagnosed to be suffering from lymph cancer and was certified by a doctor from the Queen Mary Hospital to be medically unfit to attend court during the period when he will undergo chemotherapy. That period would last from November 2001 to May 2002.

4. The Plaintiffs oppose the application on the ground that:

(1) the application ought to have been made by the defence earlier;

(2) the Plaintiffs have incurred costs and time in coming to Hong Kong from Canada to prepare for the trial originally scheduled to commence in December 2001.

5. It is ultimately a matter of discretion as to whether or not the trial of this action ought to be refixed. The Plaintiffs have not disputed that the 3rd Defendant will be the principal witness, or the said opinion of the Government doctor. In these circumstances, after weighing the relative prejudice likely to be caused to the Defendants as opposed to that likely to be caused to the Plaintiffs, my discretion should be exercised in granting this part of the Defendants' application.

6. Although the Defendants asked for the adjourned date of hearing to be not earlier than 13 May 2002, I adjourned the matter to 13 March 2002 before the listing Master. The adjourned hearing is intended to enable the parties and the court to find out whether by then the action is ready for trial and, if not, what its further conduct should be.

Leave to Amend the Defence

7. The Plaintiffs raised a number of objections to the proposed amendments to the Defence. They will be dealt with in turn in the paragraphs below.

8. The first objection is that the proposed deletion of paragraphs 30, 51 and 52 is in truth an application to withdraw admissions already made in the defence. Solicitor for the 1st Defendant to 7th Defendant agreed that they were admissions and that no explanation had been given by way of affidavit evidence as to why the admissions are withdrawn. I agree with the Plaintiffs' argument, relying on Tse Yuk-tin, administrator of the estate of Tse Yat-hung, deceased v Chee Cheung Hing & Co. Ltd & another [1984] HKLR 391, 395, that the absence of a credible or convincing explanation is a powerful factor in favour of exercising the discretion against the application for leave. The application for leave to delete these averments is accordingly refused.

9. The averments at paragraphs 24(c), 25(b) and 26(c) of the proposed Amended Defence are inconsistent with the existing paragraphs 30, 51 and 52 of the Defence. The proposed amendments (being inconsistent pleas) should not be allowed. Leave to add paragraphs 24(c), 25(b) and 26(c) is therefore also refused.

10. Solicitor for the 1st Defendant to 7th Defendant accepted that paragraphs 18(c) to 18(f) contain averments which should more appropriately be raised in a striking out application. I do not consider it appropriate for such pleas to be raised in a Defence when no application for the striking out of the action as an abuse of process has been, or will be, taken out. The plea (if allowed) is embarrassing to the Plaintiffs because it is uncertain whether at the time of trial, the Plaintiffs should prepare their case relating to the substantive issues or those relating to the possible striking out application. Leave to add these proposed paragraphs of the draft Amended Defence should be refused.

11. The Plaintiffs' objection to leave being given for the other averments in the proposed Amended Defence is based on the ground that it may result in delay because there may be a need for request for further and better particulars to be made or for the filing of further discovery of documents or the filing of further witness statements. Solicitor for the 1st Defendant to 7th Defendant has stated during the hearing that neither he nor counsel who advised on, and drafted, the purposed Amended Defence consider that the defence need to file or serve any further list of documents or further witness statement. He further stated that all the necessary evidence already appeared in the lists of documents and witness statements filed and served by the 1st Defendant to 7 Defendant.

12. Taking into account these statements (made on the Defendants' behalf at the hearing), and the additional time available because of the adjournment granted by reason of the 3rd Defendant's health condition, it is unlikely that the trial of this action would need to be delayed (if at all) beyond the estimated 6-month period. For this reason, leave to amend the other paragraphs of the draft Amended Defence should be granted.