KWONG KIN YIN v. SHUN LEE COPPER & DECORATION LTD AND ANOTHER

HCPI 285/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 285 OF 2008

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R U L I N G

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1.  This is the Personal Injuries Court. This is not the Commercial Court where one examines and construes in detail the terms of commercial documentation and where multiple interlocutory applications involving pleadings are the order of the day. This is the Personal Injuries Court, where the concentration is on witness statements and expert reports, and which will not suffer the plaintiff’s claim for damages for personal injuries to be delayed by the sort of applications and appeals that has been engaged in by the third party.

2.  The matter has already been delayed substantially by the third party’s application, to strike out the third party notice issued by the second defendant, which was dismissed by Master Ng on 5 January 2010, and by Suffiad J on 19 March 2010, when he dismissed the appeal from the decision of Master Ng.  The facts and circumstances of the case are fully set out in the judgment of Suffiad J and I do not repeat the same. 

3.  The second defendant has now issued a summons to amend the third party notice.  The proposed amendment contained in paragraph 8 of the third party notice is not objected to and I say no more about that. 

4.  The second defendant also proposes to insert the following paragraphs into the third party notice.  

“10A. Alternatively, if, which is denied, the Third Party was not the employer of the Plaintiff or the subcontractor of the 2^nd Defendant for the subject project at Kerry Cargo Centre, the 2^nd Defendant says that by a letter of completion signed by the Third Party on about 18^th May 2005, the Third Party gave a collateral warranty to the 2^nd Defendant that the subject project at Kerry Cargo Centre had been completed without any accident, loss and liability involved during the works (referred to as ‘the collateral warranty’).

10B. By reason and/or in consideration of the collateral warranty given by the Third Party, the 2^nd Defendant agreed to make full payment for the subject project to the Third Party and/or Shun Lee Decoration and Engineering Limited.

10C.       By reason of the alleged injuries sustained by the Plaintiff, the Third Party committed a breach of the collateral warranty given to the 2^nd Defendant who has thereby suffered loss and damage.  In the premises, the Third Party is liable to indemnify the 2^nd Defendant against its loss and damage as a result of or occasioned by the Plaintiff’s alleged injuries.”

5.  The letter of completion dated 11 May 2005 reads as follows :

“Re: letter of completion on the project Construction of Signee at Kerry Cargo Centre (H021141)

This letter is to certify that the above captioned project has been totally completed without any accidents, [loss] and liability involved during the work.  Shun Fat has received the full payment from Asiaray completely and there is no further claims in the future. Please sign up with company chop for confirmation.”

6.  It is not suggested that the amendment raises a cause of action that is time-barred under the Limitation Ordinance. 

7.  The amendment raises a cause of action in contract.  Perhaps, if the confusing phrase “collateral warranty” had not been used and the phrase “contractual undertaking” or “contractual promise” had been used instead, the opposition to the amendment by the third party might have been less vehement.  However, whatever label may be used to describe the matter, it is clear that the amendment pleads a contractual promise said to arise from the terms of the letter of completion, and for breach of which the second defendant originally claimed, not damages for breach of contract, but an entitlement to an indemnity from the third party, an entitlement from the third party to be indemnified against the plaintiff’s claims.  Sensibly, Mr Chan for the 2^nd defendant has now included a claim for damages.  If I allow the amendment, then it is a matter for the trial judge to determine whether or not the second defendant can make good its claim that the letter of completion contains an express or an implied undertaking that the works had been completed without any accident, loss or liability, and whether or not the second defendant can make good its claim that, by reason of the breach of the contractual undertaking, it is entitled to damages or to be indemnified by the third party against the plaintiff’s claims. 

8.  The matter before me is whether or not I should allow this amendment.  I would refuse to allow it if it is demonstrated to me that to do so would impact on a milestone date and delay the plaintiff’s claim for damages.  The third party has not demonstrated that to me.  Mr Chan said that his client’s claim was based entirely on the letter of completion and that there was no additional evidence to be adduced on it.  The third party has already given evidence about the letter of completion in his witness statement.  Mr Chan submitted that he may file a supplemental statement on it; however, no additional hardship or prejudice would be caused by the amendment.  Mr Ip for the third party referred me to his affidavit in which he stated that, based on what his client had told him, the scope of the proceedings would be widened and entail discovery of a large number of documents, and that relevant documents and material witnesses may no longer be available.  I am not persuaded by Mr Ip that the amendment would add much to the length of trial.  I accept the submissions of Mr Chan.  The third party can give evidence about the letter of completion at the trial of the action, and his additional evidence on the matter is unlikely to add much more to the length of trial, which the parties have estimated would last 6 days. 

9.  I do not accept the submissions of Mr Ip that the new claim for breach of contract falls outside the scope of third party proceedings.  In my judgment, it is a claim that falls within all 3 sub-paragraphs of Order 16, r.1 : the claim for indemnity falls with sub-paragraph (a); if the second defendant establishes that the proper measure of damages for breach of the undertaking is the plaintiff’s loss and damage, the new claim also falls within sub-paragraph (b); sub-paragraph (c) is also engaged as the same question arises in both proceedings: the occurrence of the accident which constitutes the plaintiff’s claim in tort and the second defendant’s claim for breach of contract. 

10.  Applying the general principles for the grant of leave to amend pleadings, and taking into account the submissions made to me in writing and orally on behalf of the third party, I have come to the firm conclusion that I ought to allow the amendments.  I will give consequential directions to the third party to amend his defence and to file further witness statements and I will hear the parties on costs. 

[Submissions on costs]

11.  I award the costs of and occasioned by the application to amend the third party notice to the third party.  However, as the third party has made, in my view, an unmeritorious opposition to the application to amend, I award the costs incurred after 5 July 2010 in connection with the application to amend, including the costs of today, to the second defendant to be paid forthwith.  I will assess those costs summarily and I direct the second defendant to serve its skeleton bill of costs within 14 days and I direct the third party to serve his response to that bill within 14 days thereafter.