BOWARDLEY ENTERPRISES LTD v. MILLENNIUM GROUP LTD

DCCJ3039/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3039 OF 2004

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D E C I S I O N

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I.  Introduction

1.  The Plaintiff is “Bowardley Enterprises Limited (“BEL”) suing on behalf of itself and all other members of the Hong Kong Badminton Association (“HKBA”)” (“P”) pursuant to Order 15 rule 12 of the Rules of District Court (“RDC”).

2. Subject to the defences raised by the Defendant (“D”), there is no dispute that :

(a) HKBA is an unincorporated association having the right to hold an annual badminton event, ie “The Hong Kong Open” (“Event”). Mr Tong Yun Kai (“Tong”) was/is HKBA’s president.

(b) By a sponsorship agreement dated 9^th August 1997 (“Contract Date”) which appears on its face to be made between Tong on HKBA’s behalf and D (“1^st Agreement”), D agreed to become a non-exclusive title sponsor. Pursuant to Clause 3 of 1^st Agreement, D undertook to pay HKBA for each Event to be held in 1997 and 1998 (“1^st and 2^nd Events”) respectively as follows : (i) US$170,000.00 in prize money (at the time of the signing of 1^st Agreement and on/before 1^st April 1998) and (ii) HK$180,000.00 in organisation fees (on/before 6^th October 1997 and on/before 6^th October 1998). The sums payable for 1^st and 2^nd Events are called “1997 and 1998 Sums” below.

(c) HKBA duly held 1^st Event. D paid 1997 Sums to HKBA.

(d) By a letter dated 7^th September 1998, HKBA demanded D to pay 1998 Sums. By a letter dated 10^th September 1998 (“10/9/98 Letter”), D informed BEL its cash flow was tight due to the 1997 financial crisis. D did not pay 1998 Sums to HKBA.

(e) HKBA entered into a sponsorship agreement dated 28^th September 1998 with D’s subsidiary, Worldwide Golden Leaf Ltd (“WGLL”) (“2^nd Agreement”). Pursuant to Clause 3 of 2^nd Agreement, WGLL undertook to pay HKBA 1998 Sums with the prize money and organisation fees payable at the signing of 2^nd Agreement and on/before 1^st November 1998 respectively.

(f) HKBA duly held 2^nd Event.

(g) By a letter dated 27^th March 2002 to BEL, D claimed that due to serious loss incurred WGLL had closed its business and had been liquidated.

II. P’s pleaded claim

3. P claims that D was in repudiatory breach of 1^st Agreement, which P was entitled to accept. In mitigation of loss and on D’s introduction, P entered into 2^nd Agreement with WGLL for sponsorship of 2^nd Event. When P was unable to recover 1998 Sums from WGLL, it continued to press D for payment. It was eventually agreed that D would pay P US$300,000.00 (or HK$2,325,000.00) (“Reduced Sum”) by instalments (“3^rd Agreement”). D received a total sum of HK$1,575,000.00 in respect of 1998 Sums. P claims for damages for breach of contract being the outstanding balance of HK$750,000.00 (“Balance”).

III. D’s pleaded claim

4. D does not admit P’s capacity to sue on behalf of itself and all other members of HKBA (“Members”) and denies HKBA’s capacity as an unincorporated association to enter into 1^st Agreement or any agreement. Subject to the aforesaid, 2^nd Agreement was a novation agreement amongstP, D and WGLL, so that D ceased to be and WGLL became solely responsible for 1998 Sums. Further, the consideration for 1998 Sums has totally failed since WGLL (and not D) received the benefit under 1^st Agreement for 2^nd Event. D is therefore not liable for 1998 Sums/Balance.

IV. Present applications

5. There are two summonses before me : (a) P’s summons for leave to amend its Writ of Summons and Statement of Claim under Order 20 rule 5 and Order 15 rule 6 of RDC (“Amendment Summons”), and (b) D’s summons for specific discovery under Order 24 rule 7 of RDC (“Discovery Summons”).

V. Amendment Summons

(a) Draft amendments

6. On the first day of the hearing on 23^rd February 2005 (“Hearing Date”), Mr Yip, counsel for P, applied twice to amend the draft Amended Statement of Claim annexed to Amendment Summons. Without objection from Mr Pao, counsel for D, I granted P leave to do so. The proposed amendments to P’s pleadings (“Amendments”) include inter alia the following :

(a) P is to be renamed “[BEL] suing on behalf of itself and all other members of [HKBA] as on 9^th August 1997 (“9/8/97 Members”)” (“Members Amendment”).

(b) Tong is to be added as a 2^nd plaintiff in these proceedings (“Tong Amendment”).

(c) Tong signed 1^st, 2^nd and 3^rd Agreements (collectively, “Agreements”) on behalf of 9/8/97 Members, so that Agreements were made between 9/8/97 Members and D or, alternatively, between Tong personally and D (“Contract Amendment”). 3^rd Agreement was made on/about 20^th November 1998 (“3^rd Agreement Date”).

(d) There were other consequential amendments to change references from P to HKBA or to 9/8/97 Members as appropriate.

(b) P’s case

7. Members Amendment  Members Amendment is to make clear that P sues on behalf of 9/8/97 Members who were the party to 1^st Agreement. As at Contract Date, HKBA had 44 full and 53 affiliated members, so it is desirable for P to sue on behalf of 9/8/97 Members. 

8. Tong Amendment and 1^st Agreement  Tong has been HKBA’s president since 1970-1971. It has been customary for HKBA’s president to sign sponsorship agreements on behalf of Members.

9. HKBA’s Executive Committee (“ExCo”) managed HKBA’s affairs. Rule 4A of the rules of HKBA (July 1997 revised edition) applicable as atContract Date (“Rules”) provides that (a) HKBA’s affairs should be handled by the executive members of ExCo comprising, amongst others, HKBA’s president and (b) ExCo has authority to do any legal act to achieve HKBA’s aims (which are to promote interest in badminton activity and to organise badminton competitions in Hong Kong).

10. The minutes of Exco’s meeting held on 18^th August 1997 (“18/8/97 Minutes”) confirm that Tong as HKBA’s president was authorised to negotiate and sign sponsorship agreements for 1^st and 2^nd Events. 1^st Agreement on its face shows that Tong signed on HKBA’s behalf as its duly authorised representative, so to all intents and purposes he contracted on behalf of 9/8/97 Members. As Tong had authority from all/some Members, such Members can enforce 1^st Agreement under the ordinary principles of agency. But if it is found that Tong signed 1^st Agreement without authority, as a matter of law he may be held to have signed it personally, so Tong Amendment is necessary. Tong has consented to be added as a 2^nd plaintiff.

11. 2^nd Agreement  Before Tong signed 2^nd Agreement on behalf of 9/8/97 Members to mitigate loss, D’s director/chairman, Mr Kwong Chi Shing (“Kwong”), told him inter alia that D would continue to pay as usual. Pursuant to 2^nd Agreement, WGLL paid HK$775,000.00 (or US$100,000.00) by cheque dated 16^th November 1998 drawn on World Seal Limited (“WSL”) for which HKBA issued a receipt (“Receipt”). At Kwong’s request, Tong agreed to change the title of 2^nd Event to “Hong Ta Cup”.

12. 3^rd Agreement  When WGLL defaulted under 2^nd Agreement, Tong chased Kwong for 1998 Sums following his promise to pay as usual. At a lunch meeting with Tong (most probably on 3^rd Agreement Date and with D’s director, Dr Hung Tak Lung (“Hung”)), Kwong on D’s behalf agreed to pay (and HKBA agreed to accept) Reduced Sum by instalments of HK$100,000.00 each payable every two months (ie 3^rd Agreement).

13. By 18^th December 1998, only the aforesaid US$100,000.00 hadbeen paid,so Exco’s minutes on that date recorded that Tong reported the outstanding balance of 1998 Sums was reduced to US$200,000.00. On/about 22^nd March 1999, Hung requested HKBA to amend Receipt to address it to WGLL. Consequently, HKBA cancelled Receipt and issued a replacement receipt to WGLL.

14. Pursuant to 3^rd Agreement, D paid HK$200,000.00 by cheque dated 19^th March 1999 for the first two instalments due on 20^th January and 20^th March 1999 and HKBA issued a receipt to D. D madevarious cheque payments totalling HK$800,000.00 (“Payments”) for which HKBA issued corresponding receipts to D (“Payment Receipts”).

15. HKBA issued various invoices to D from 11^th December 1999 to 2^nd November 2001 for the outstanding balance of Reduced Sum (“Invoices”). The detailed description on each Invoice sets out the agreed sponsor fee for 2^nd Event (ie Reduced Sum) and the amount of sponsor fee received (listing out each Payment and the corresponding date of payment) to arrive at the then outstanding amount (“Invoice Format”). Each Invoice was signed for and on behalf of HKBA. The printed words “Please make cheque payable to [HKBA]” (“Invoice Demand”) are found at the bottom of each Invoice.

16. There is no documentary evidence to suggest that D acted as WGLL’s payment agent in making Payments. WGLL (BVI company) could have opened a Hong Kong bank account or could have paid by other means, eg cashier order or WSL’s cheque. Further, Hung/D did not request for invoices/receipts to be issued to WGLL or to “correct” Invoices/Payment Receipts.

17. Since WGLL’s default, Tong never discussed the outstanding payment with Hung. On/about 29^th September 2000, Kwong requested reduction of the outstanding balance of Reduced Sum to around HK$300,000.00 but Tong rejected the request.

(c) D’s case

18. D argues that Amendment Summons should be dismissed :

(a) Tong and Contract Amendments are vexatious and an abuse of process since(i) Tong claims he has all along acted on HKBA’s behalf and (ii) P still refuses to disclose the list of Members to verify whether there has been any change in HKBA’s membership between Contract Date and the date of issuance of the Writ of Summons (“Writ Date”); and

(b) if Amendments are allowed, D will be prejudiced by the circumvention of the Limitation Ordinance Cap.347 (“Ordinance”).

19. 2^nd Agreement  Around the time when D sent 10/9/98 Letter to Tong as HKBA’s president, Tong agreed for Kwong to find another sponsor to replace D for 2^nd Event. Kwong later introduced Hung, WGLL’s director/representative, to Tong. At a meeting amongst Tong, Hung and Kwong representing HKBA, WGLL and D respectively, it was agreed that in consideration of D procuring WGLL to sign 2^nd Agreement, D shall be released from any and all liabilities arising from 1^st Agreement.

20. Tong purportedly on HKBA’s behalf and Hung on WGLL’s behalf signed 2^nd Agreement whereby WGLL replaced D as sponsor for 2^nd Event. Consequently, the title of 2^nd Event was changed from “Millennium Cup”(name for 1^st Event) to “Hong Ta Cup”, Hong Ta being the brand name of the cigarettes distributed by WGLL. Kwong denied that he told Tong D would continue to pay as usual. 

21. Kwong understood that WGLL’s first payment of HK$775,000.00 was made via the bank account of Hung’s private company (WSL) because WGLL was a BVI company with no bank account in Hong Kong. So Hung asked for Receipt to be made out to WGLL even though it was paid by WSL’s cheque. HKBA complied with such request.

22. 3^rd Agreement  Kwong denied3^rd Agreement or that he had lunch with Tong as alleged. Since WGLL did not have any Hong Kong bank account, Kwong arranged to makevarious Payments totalling HK$800,000.00 as and when instructed by WGLL. D only acted as WGLL’s payment agent. Payment Receipts should have been made out to WGLL as instructed by Hung, but Kwong did not check each receipt himself to see if Hung’s instructions were followed.

(d) Analysis of Members Amendment

(1) Unincorporated association

23. The following matters are not in dispute :

(a) HKBA as an unincorporated association does not have a separate legal existence from Members and cannot sue in its own name (Halsbury’s Laws of England 4^th ed, Vol.6, para.172 at p.97 and Carlton & Football Social Club v Joseph [1970] VR 487, 488).

(b) Members of an unincorporated association may be liable on contracts entered into by an agent, either because the contracts are within the scope of authority given by the rules, or the members who are sought to be made liable can be shown to have sanctioned or subsequently ratified the particular transactions or to have held out the persons entering into them as being authorised to do so (Halsbury’s Laws of England 4^th ed, Vol.6, para.164 at p.93).

(c) Whenever the circumstances are such that the members of an unincorporated association are bound by a contract, they also have, generally speaking, a right to enforce it (Halsbury’s Laws of England 4^th ed, Vol.6, para.165 at p.94).

(d) The rights and liabilities of members of an unincorporated association in contracts made on their behalf are prima facie joint only and all the members should be joined as claimants in any claim on such a contract although representative proceedings may be brought in suitable cases, eg where there are numerous members who have the same interest in the proceedings (Halsbury’s Laws of England 4^th ed, Vol.6, paras.166 and 172 at pp.94 and 97).

24. It is plain from P’s description and paragraph 1 of the Statement of Claim in these proceedings that P has chosen to sue by representative proceedings.

(2) Identity of P as currently pleaded

25. Both counsel agree that the group/class of persons sought to be represented in representative proceedings must be clearly defined in the writ. This may be done by reference to the date on which the cause of action arose in respect of which the claim is brought (Hong Kong Civil Procedure 2004, Vol.1, para.15/12/5 at p.235).

26. P’s case  Mr Yip submits that Members Amendment merely adds Contract Date to P’s description to ensure sufficient precision and to clarify P’s identity. He refers to Campbell v Thomas & anor [1953] 1 QB 455 where the claimant suffered a fall at club premises and sued two members on their own behalf and on behalf of all other members. The claimant applied for a representation order directing that the two members be appointed to represent all persons who were members of the club on the date of the fall and for leave to amend the pleadings to add such date in the defendant’s description. Pilcher J held that the only members who could properly be sued were those at the time of the claimant’s fall (p.451) and accordingly granted the application (p.454).

27. The present claim rests on 3^rd Agreement which is a compromise of 1^st and 2^nd Agreements in respect of 1998 Sums. Mr Yip submits that since 9/8/97 Members are the contracting party to 1^st Agreement and there is no assignment of their rights and obligations under 1^st Agreement, they are necessarily also the contracting party to 3^rd Agreement which compromised the subject matter of 1^st and 2^nd Agreements. D plainly knew this all along and has not been prejudiced, mistaken or misled by Members Amendment. This is illustrated by D’s application for disclosure of a list of all 9/8/97 Members (“Item A”). Members Amendment therefore does not introduce any new cause of action or substitute any new party.

28. D’s case  Mr Pao submits that as a matter of law “all members of an association” in a writ of summons refers to all members as at the date of issuance of the writ of summons and not when the contract was signed.

29. In Carlton’s case, the plaintiff entered into a purported agreement with a football club through the club’s officers. The breach specified in the claim was repudiation or termination of the purported agreement by the members of the club. Gowans J at p.492 said that “[as] drawn, that could only be a reference to all the present members of that club. Thus the potential contract-breakers are there identified as all the present members of the club, whether they were members at the time of the agreement or not.”

30. In Jarrot v Ackerley (1915) 85 LJ Ch 135, three individuals purported to sue as trustees on behalf of an unregistered society. Eve J at pp.135-136 said “I assume that they are members of the society, and are suing on behalf of themselves and the other members of the society.  That means on behalf of members who were members at the date when the writ was issued. That is a very important point …… It is now argued that it was an under-lease to the members at the time when it was granted, but the action is not brought on behalf of such members.”

31. P’s description in the Writ of Summons herein does not specify the time of HKBA’s membership. Mr Pao submits that as a matter of law it must be taken to refer to HKBA’s members as at the date of issuance of the Writ of Summons (“Writ Date Members”). P appears to have implicitly conceded this by seeking Members Amendment and by accepting the need to define the persons represented by P by reference to the date on which the cause of action arose. Consequently, by Members Amendment P is in fact fundamentally and substantially altering its case by substituting a new party, ie 9/8/97 Members, for Writ Date Members as the party on whose behalf these proceedings are purportedly brought. There is presently no evidence that HKBA’s membership remained constant between Contract and Writ Dates. If there is any fluctuation during this period (which is likely to be the case given the lapse of time), P will have no entitlement to sue and the present proceedings will be improperly constituted.

32. Analysis  In my view, Members Amendment amounts to a substitution of a new party since P’s description refers (as a matter of law) to BEL representing Writ Date Members but P’s proposed amended description refers to BEL representing 9/8/97 Members.

33. Carlton’s case and Jarrot’s case make it quite plain that Members Amendment is not simply a matter of clarification. These cases are analogous in that they draw a distinction between the members of the club/society at the time of the purported agreement and the party described in the claim (ie the members of the club/society without qualifying such membership by reference to a particular date). As a matter of law, the latter description refers to members as at the date of issuance of the writ of summons.

34. I am not persuaded by Mr Yip’s submission that D well knew that P’s present description refers to BEL representing 9/8/97 Members and that D has not been mistaken or misled as to P’s identity. I find that D requested specific discovery of Item A and a list of all Writ Date Members (“Item B”) not because it implicitly knows that P’s present description refers to BEL representing 9/8/97 Members but, on the contrary, because it believes that P’s present description refers to BEL representing Writ Date Members and it wishes to explore the status of HKBA’s membership as at Contract and Writ Dates to see whether P’s claim is improperly constituted and liable to be struck out.

35. I do not think Campbell’s case disturbs the conclusions in Carlton’s case and Jarrot’s case. In Campbell’s case, no application had been made by the plaintiff under the then rules of court to allow the named defendants to be sued in their representative capacity. The plaintiff with the full support of the defendants invited the court to make a representation order, and conceded that if a representation order was to be made, the named defendants would have to be restricted to represent the proper party, ie the members of the club as at the date of the fall. Campbell’s case is therefore concerned with the propriety of making a representation order and the proper naming of the defendants pursuant thereto and not with the meaning of the description of a party to the proceedings.

(3) Limitation issue

36. Mr Pao submits that no person should be added or substituted as a plaintiff after the expiry of the time limit. Since the relevant limitation period for Members Amendment has expired, such amendment falls foul of Ordinance (also see discussion on Order 15 rule 6 and Order 20 rule 5 of RDC below). Mr Yip, on the other hand, submits that Members Amendment has been made within the relevant limitation period.

37. Relevant date for considering limitation period  P’s claim is for damages for breach of 3^rd Agreement. The basic limitation period applicable to claims based on breach of contract is six years. What then is the appropriate time for considering whether the relevant limitation period has expired (“Relevant Date”)?

38. P’s case  It is P’s case that 3^rd Agreement was made on/about 20^th November 1998 (ie 3^rd Agreement Date). Mr Yip is prepared to assume for the sake of argument on this issue that P’s cause of action accrued on 3^rd Agreement Date (“Assumption”), so the basic/primary period of limitation would have expired on 20^th November 2004, ie before Hearing Date but after the filing of Amendment Summons on 3^rd November 2004 (“Summons Date”). Following Lim Ban Thoon v Chintung Securities Limited [1991] 2 HKC 204, Summons Date (and not Hearing Date or the date of this decision) is Relevant Date, so Members Amendment is not yet statute-barred.

39. In Lim Ban Thoon’s case, the plaintiff applied to amend its pleadings to add three additional defendants. A question arose as to whether Relevant Date was the date when the application to amend was (a) filed or (b) heard by the master. The plaintiff was statute-barred by (b) but not by (a).

40. Fuad VP in delivering the judgment of the Court of Appeal said at pp.209-210 as follows :

“…… In neither of the cases cited in the Supreme Court Practice in para 15/6/3 (Leicester Wholesale Fruit Market Ltd v Grundy [1990] 1 WLR 107 and Grimsby Cold Stores Ltd v Jenkins & Potter (1985) Const LJ 362) did this very question arise for consideration. While both cases make it clear that the date of the issue of the original writ is not the determinative date, they do not discuss or decide what should be the position when the relevant limitation period has not expired when the summons applying for leave to add a party has been taken out, but has expired by the time the application comes on for hearing or the court announces its decision.

There is, perhaps, some measure of support for the submission that proposition (a) is sounder in law than proposition (b) in a decision of this court: Wo Fung Paper Making Factory Ltd v Sappi Kraft (Pty) Ltd [1988] 2 HKLR 346. However we take the view, in the absence of clear legislative provision or of binding authority, that the appropriate date for a consideration of limitation questions in circumstances such as the present must be the date the application is made (in the sense that it is filed in court) for reasons which seem to us too obvious to elaborate. We would mention only the anomalies which could arise if proposition (b) were the true position in law. As Miss Yuen fairly asks, what if the application is part-heard within the limitation period, but concluded after the period has expired? And could the right of a plaintiff seeking to add a defendant be dependent upon whether the judge gives an extempore judgment within the limitation period, or reserves judgment to a date outside that period? Of course, if an application is made before the limitation period has expired, and the applicant himself drags his heels in moving the court or in taking any necessary steps, then the court will consider whether the exercise of its discretion should be affected by the resultant delay.”

41. D’s case  Mr Pao submits that subsequent to our Court of Appeal’s decision in Lim Ban Thoon’s case, a line of English authorities came to a contrary conclusion. These authorities, Mr Pao suggests, illustrate that :

(a) section 35 of the Limitation Act of 1980 (“Act”), which is equivalent to section 35 of Ordinance, imposes a general prohibition on new claims (including the addition of new parties) “to be made” after the expiry of the relevant limitation period (see section 35(3) of Ordinance);

(b) Relevant Date is the date at which the amendment is actually “made”  (ie the date at which leave is granted for making the amendment);

(c) a new claim (including the addition of new parties), if allowed, will take effect or relate back as if it has been included in the original writ of summons as at the date the writ was issued and may extinguish potential limitation defence (see section 35(1) of Ordinance);

(d) leave to amend by adding a new claim (including the addition of new parties) should not be given unless the plaintiff can show that the defendant does not have a reasonably arguable case on limitation which will be prejudiced by the new claim or unless the plaintiff can bring himself within Order 15 rule 6 and/or Order 20 rule 5 (see discussion below);

(e) on Assumption, the basic limitation period for Members Amendment has expired by Hearing Date, let alone the date of this decision;

(f) if Members Amendment is allowed, it will relate back to Writ Date and D will be prejudiced by being deprived of a reasonably arguable limitation defence that it will otherwise be entitled to raise at the trial.

42. Such argument flows from section 35 of Ordinance which provides inter alia as follows :

“(1) For the purposes of this Ordinance, any new claim made in the course of any action shall be deemed to be a separate action and to have been commenced-

……

(b) in the case of any other new claim, on the same date as the original action.

(2) In this section a new claim means any claim by way of set-off or counterclaim, and any claim involving either-

(a) the addition or substitution of a new cause of action; or

(b) the addition or substitution of a new party,

…...

(3) Except as provided by section 30 or by rules of court, the court shall not allow a new claim within subsection (1)(b), other than an original set-off or counterclaim, to be made in the course of any action after the expiry of any time limit under this Ordinance which would affect a new action to enforce that claim.

          ……”

43. The first English authority Mr Pao relies on is Welsh Development Agency v Redpath Dorman Long [1994] 1 WLR 1409. The plaintiffs in that case brought an action against the defendants in July 1990 for damages for negligence, and in July 1992 sought leave to amend the statement of claim to add a further claim on inter alia negligent misstatement. The earliest limitation period for such further claim expired on 18^th September 1992. The summons for amendment was issued in July 1992 but was not heard until May 1993. 

44. It appears that the English Court of Appeal had considered and rejected the reasoning in Lim Ban Thoon’s case for concluding that Relevant Date was the date when the application to amend was filed. Glidewell LJ in Welsh Development Agency’s case said at pp.1420-1421 as follows :

“…… Mr. Keating argues that the relevant date for this period is the date at which the application to leave is made.  If, at that date, the limitation period has not expired, section 35(5) of the Act of 1980 does not apply.

In support of this argument, Mr. Keating relies upon the wording of Ord. 20, r.5(2) :

“Where application to the court for leave to make the amendment … is made after any relevant period of limitation current at the date of issue of the writ has expired, the court may nevertheless granted such leave …”

This, submits Mr. Keating, interprets section 35(3) so as to make it clear that it is the date of application which is the relevant date. If this were not so, the plaintiffs’ right to amend would depend on purely arbitrary factors, such as when the court could hear the application for leave or how long it took the court to deliver judgment after hearing the application.

In our judgment the judge’s decision on this issue was entirely correct.  The wording of section 35(3) of the Act of 1980 “ neither the High Court nor any county court shall allow a new claim … to be made in the course of any action after the expiry of any time limit under this Act …” is so clear as to admit of only one interpretation.  That is that the relevant date is the date at which the amendment is actually made, which by definition must be no earlier than the date at which leave is granted to make the amendment.  We are glad to see that this decision agrees with that reached by Hirst J. in Bank of America National Trust and Savings Association v. Chrismas [1994] 1 All E.R. 401, 415-416.”

45. The English Court of Appeal in Welsh Development Agency’s case held that the further negligent misstatement claim involved a “new claim” within the meaning of section 35 of Act. If the court allowed such new claim by amendment, it shall relate back or be regarded as having commenced when the writ was originally issued, and a reasonably arguable case on limitation might thereby be defeated. Hence, leave for adding such new claim was refused.

46. Glidewell LJ considered Leicester Wholesale Fruit Market Ltd’s case and Grimsby Cold Stores Ltd’s case, which cases Fuad VP also referred to in Lim Ban Thoon’s case. In coming to the aforesaid conclusions, Glidewell LJ at p.1425 said it was unnecessary for the decision in Leicester Wholesale Fruit Market Ltd’s case to disagree with what Purchas LJ said in Grimsby Cold Stores Ltd’s case at p.370 as follows :

“Leave to add new party should not be given unless it can be shown that the defendant did not have a reasonably arguable case on limitation which would be prejudiced by the additional new claim.  …… the appellants have at least a strong arguable case that the damage was suffered more than six years before the date of the application to amend and that, therefore, this application should not be granted.  Any prejudice to the applicant plaintiff can to a large extent be mitigated, if it exists, by having recourse to the ordinary process of issuing a fresh writ.”

Mr Pao submits that Lim Ban Thoon’s case did not disturb such principles as seen from Fuad VP’s comment at p.209 that the relevant question in Lim Ban Thoon’s case did not arise for consideration in these two cases.

47. Following Welsh Development Agency’s case, Relevant Date for Members Amendment should be the date when such amendment is made/allowed by the court (which must necessarily be after 20^th November 2004). If Members Amendment is allowed, it will relate back to Writ Date and D will be deprived of a reasonably arguable limitation defence. Mr Pao therefore submits that Members Amendment must be refused.

48. In answer to Mr Yip’s submission that Welsh Development Agency’s case was concerned with the addition of a new cause of action and not a new party, Mr Pao submits that the relevant principles are applicable by analogy since section 35 of Ordinance draws no distinction between the two situations. In either situation, the defendant is faced with an entirely new claim against which it may be deprived of a complete defence.

49. Welsh Development Agency’s case was followed in Oates v Harte Reade (a firm) [1999] 1 FLR 1221, 1231 per Singer J. Further, in Paragon Finance plc v D B Thakerar &Co (a firm) [1999] 1 All ER 400, 404, Millett LJ referred to Welsh Development Agency’s case and said as follows :

“The court observed that a new claim is not made by amendment until the pleading is amended.  It follows that the relevant date for the purpose of calculating the limitation period is the date at which the amendment is actually made, which by definition must be no earlier than the date at which leave to make the application is granted.  The court also held that leave to amend by adding a new cause of action should not be given unless the plaintiff can show that the defendant does not have a reasonably arguable case on limitation which will be prejudiced by the new claim or that the new cause of action arises out of the same or substantially the same facts as the cause of action in respect of which he has already claimed relief.  By this means the injustice to the defendant of depriving him of an arguable limitation defence is avoided without denying the plaintiff the right to bring a fresh action to which, if he is correct, there is no limitation defence.”

50. In Furini v Bajwa & ors [2004] 1 WLR 1971, the judge refused to approve the specific amendments sought at the hearing but accepted in principle that the statement of claim could be amended. The revised amendments were left for agreement or determination at a later date by which time the limitation period had expired. Accordingly, the English Court of Appeal held that the judge was prohibited by section 35(3) of Act from allowing the revised amendments.

51. Stare decisis  The question here is whether I am bound by Lim Ban Thoon’s case. If I am so bound, then plainly the basic limitation period for Members Amendment has not expired.

52. Mr Pao submits that I should adopt the Welsh line of authorities and not follow Lim Ban Thoon’s case. He argues that Lim Ban Thoon’s case was decided per incuriam due to our Court of Appeal’s failure to consider section 35(3) of Ordinance. This raises two issues : (a) whether Lim Ban Thoon’s case was decided per incuriam and (b) even if it were, whether as a lower court judge I am still bound by such decision.

53. When is a decision per incuriam? Mr Pao refers to Peter Wesley-Smith, The Sources of Hong Kong Law at p.62 where the learned author said “[it] can be said, in summary, that as a general rule a decision can properly be labelled as per incuriam only when these conditions are satisfied : (1) there was a binding rule of law (contained in a statute, subordinate legislation or judicial decision) which, if taken into account, would have affected the result of the case; ……” (Young v Bristol Aeroplane Co, Ltd [1944] KB 718 and Morelle Ld v Wakeling & anor [1955] 2 QB 379).

54. In Morelle’s case, Lord Evershed MR said at p.406 as follows :

“…… As a general rule the only cases in which decisions should be held to have been given per incuriam are those of decisions given in ignorance or forgetfulness of some inconsistent statutory provision or of some authority binding on the court concerned : so that in such cases some part of the decision or some step in the reasoning on which it is based is found, on that account, to be demonstrably wrong. This definition is not necessarily exhaustive, but cases not strictly within it which can properly be held to have been decided per incuriam must, in our judgment, consistently with the stare decisis rule which is an essential feature of our law, be, in the language of Lord Greene M.R., of the rarest occurrence. ……”

55. In my view, the Welsh line of authorities does not render Lim Ban Thoon’s case per incuriam.  Not only were they decided after Lim Ban Thoon’s case, they are not authorities binding on our Court of Appeal. I have referred the parties to LCHY v CWF & ors HCMP5231/2001, Deputy High Court Judge Lam  (as he then was) (unreported, 10^th December 2001) where the learned judge said : “the omission of any reference by the Court of Appeal to the relevant authorities overseas …… does not render the decision per incuriam”.

56. Mr Pao next argues that although Fuad VP did expressly refer to sections 35(1) and (2) of Ordinance and section 35(5) of Act (in the same form as section 35(6) of Ordinance), his statement at p.209 (ie “the absence of clear legislative provision or of binding authority”) shows that the Court of Appeal in Lim Ban Thoon’s case did not consider the express wording of section 35(3) of Ordinance and such case is therefore not an authority on the meaning or interpretation of that section. In such circumstances, there is no binding authority on such subject and this court is free to consider for itself the meaning of section 35(3) of Ordinance with the assistance of the Welsh line of authorities.

57. I do not agree with Mr Pao’s submission. When one considers whether a court is bound to follow a case or bound by a decision, it means that the judge is under an obligation to apply a particular ratio decidendi to the facts before him in the absence of a reasonable legal distinction between the facts in the case before him and the facts to which the ratio was applied in the previous case. I cannot see how the decision on Relevant Date in Lim Ban Thoon’s case can be distinguishable or how I am free from the authority of that case. The doctrine of binding precedent is not concerned with interpretation of legislative provision but with rationes decidendi of superior courts which apply to all within their scope.

58. Mr Pao alternatively argues that our Court of Appeal has failed to consider the binding provision in section 35(3) of Ordinance and Lim Ban Thoon’s case is therefore per incuriam. He submits that this court is then free to consider the meaning of section 35(3) of Ordinance and follow the Welsh line of authorities. The plain and literal meaning of section 35(3) in not allowing “a new claim …… to be made” after the expiry of the time limit is that the court must consider the question of amendment at the time when it is allowed by the court for it is not until then that a new claim is in fact made.

59. Mr Yip, on the other hand, argues that the references in Fuad VP’s judgment to Leicester Wholesale Fruit Market Ltd’s case and Grimsby Cold Stores Ltd’s case and to section 35 of Ordinance/Act necessarily suggest that our Court of Appeal must have considered the issue of relation back of amendments to the date of the issuance of the writ of summons. Indeed, Fuad VP at p.207 said “[counsel for the defendant] confirmed that the Master had heard full argument on the issue of limitation before he rejected the defendant’s submission that the action against the proposed additional defendants was barred by limitation”. Fuad VP further noted on the same page that the judge below observed there was a passage in the 1991 Supreme Court Practice “on O 15 r 6 which set out the procedure to be adopted when the action against the proposed added party was plainly time-barred and did not come within the condition described in s 35(5) of the Limitation Act ……” (ie equivalent to section 35(6) of Ordinance).

60. Mr Yip submits that sections 35(1), (3), (5) and (6) of Ordinance are interrelated. Since section 35(6) of Ordinance (equivalent to section 35(5) of Act which was considered by the Court of Appeal) flows from section 35(5) which in turns flows from section 35(3) (the effect of which is related to section 35(1), which provision was also considered by the Court of Appeal), the Court of Appeal must have considered the import of section 35(3) of Ordinance in Lim Ban Thoon’s case. Hence, the decision was not per incuriam.

61. I do not agree that Lim Ban Thoon’s case was decided per incuriam.  The Court of Appeal in that case was not in ignorance of the problem; it was aware of the impact of its determination of Relevant Date on any limitation defence. It did not fail to face the issue and its decision to favour the date when the amendment application was filed over the hearing date of such application cannot be regarded as having been given per incuriam.

62. Since the issue in the present case on its face cannot be distinguished from that in Lim Ban Thoon’s case, why should it not be followed? Mr Pao’s submission is that if the Court of Appeal had been referred to section 35(3) of Ordinance and had considered such section it would have appreciated that Relevant Date is the date when the court granted the amendment. What then is the significance of section 35(3)? It is said that it provides that the time-bar is to be determined by the date when a new claim is “to be made”, which necessarily means the date when the amendment was granted. However, in Lim Ban Thoon’s case, although section 35(3) of Ordinance was not expressly mentioned in the judgment of Fuad VP, it is plain that the Court of Appeal had section 35(3)very much in mind. I refer to Fuad VP’s judgment at p.209 where he said that “the appropriate date for a consideration of limitation questions in circumstances such as the present must be the date the application is made (in the sense that it is filed in court) ……” There is no statutory provision on what the phrase “to be made” means and Mr Pao has not referred me to any binding authority which the Court of Appeal has failed to consider when it interpreted the date when the application to amend was “made” as the date when it was filed. In the circumstances, there is nothing to suggest that Fuad VP was incorrect in saying that there was an absence of clear legislative provision or of binding authority.

63. Given the aforesaid analysis, particularly in light of the Court of Appeal’s consideration of section 35 of Ordinance generally and the fact that the Court of Appeal was plainly alive to the import of section 35(1) of Ordinance (ie the provision for relation back of amendments to the date of the original writ) which was expressly referred to in the judgment, I am not persuaded that Lim Ban Thoon’s case was decided per incuriam.

64. It is not sufficient to say that a particular legislative provision has not been expressly referred to in the judgment to render a decision per incuriam. I have referred the parties to Miliangos v George Frank (Textiles) Ltd [1976] AC 443 and China Overseas Grand Gain Property Development Limited v Mok Yuen Fun and Persons Unknown HCMP968/1999, Suffiad J (unreported, 15^th April 2005). In Miliangos’ case, Lord Simon said at p.477 as follows :

“A previous decision of the same appellate court is not binding if it is given per incuriam: Young v. Bristol Aeroplane Co. Ltd. [1944] K.B. 718. But this exception to the rule of stare decisis is one which must be most modestly invoked. It is not applicable merely because the authority in question does not mention some relevant rule (judge-made or statutory or regulatory); still less because that authority appears to be open to practical or policy objections which have not apparently been envisaged or sufficiently weighed; and least of all, of course, because the judge otherwise bound merely considers the otherwise binding judgment to be wrong. A court should only hold a judgment to have been given per incuriam if it is satisfied, first, that such judgment was given in inadvertence to some authority (judge-made, statutory or regulatory) apparently binding on the court giving such judgment and, secondly, that, if the court giving such judgment had been advertent to such authority, it would have decided otherwise than it did – would, in fact, have applied the authority.” (my emphasis)

65. In China Overseas Grand Gain Property Development Limited’s case, Suffiad J found that particular points taken by the defendant in that case had been decided in an earlier Court of Appeal decision which he was bound to follow. In the context of that case, the learned judge rejected the suggestion that a failure to refer to a particular legislative provision in the earlier Court of Appeal decision made such decision per incuriam. The learned judge pointed out that the Court of Appeal was fully aware of the conflicting earlier cases which were decided on the wording of the relevant legislation.

66. Mr Pao submits that the learned judge in LCHY’s case said if it could be shown plainly that the Court of Appeal had wrongly interpreted the Hague Convention, it was his duty (even though he was a lower court judge) to apply the plain meaning of the Convention instead of following the Court of Appeal. In support of this proposition, he cited Farrell v Alexander [1976] 1 QB 345, 359 where Lord Denning MR said “[no] court is entitled to throw over the plain words of a statute by referring to a previous judicial decision. Where there is a conflict between a plain statute and a previous decision, the statute must prevail.”

67. However, in a subsequent decision, Hartmann J noted in F v F [2003] 1 HKLRD 836, 861-862 that Lord Denning MR was in the minority in Farrell’s case and Scarman and Lawton LJJ (the majority) disagreed with him. The majority held that the earlier Court of Appeal decision under discussion did not come within the per incuriam doctrine. Lord Scarman has the following to say in respect of Lord Denning’s approach at p.371 :

“I decline to accept his lead only because I think it damaging to the law in the long term – though it would undoubtedly do justice in the present case. To some it will appear that justice is being denied by a timid, conservative adherence to judicial precedent. They would be wrong. Consistency is necessary to certainty – one of the great objectives of the law – is responsible for its stability, its consistency, and its predictability ……”

68. I have referred the parties to the appeal decision in Farrell’s case ([1976] 2 All ER 721). The House of Lords delivered an even stronger rebuke of Lord Denning’s view that the Court of Appeal was entitled to depart from an earlier House of Lords decision on the basis that it was wrongly decided and that the result of an appeal to the House of Lords was “a foregone conclusion” (see per Lord Simon at pp.741-742 and Lord Russell at p.753). I am not persuaded that Lord Denning’s view forms a sufficient basis for extending the exceptions to the per incuriam rule or for upsetting the precedent doctrine.

69. However, in deference to counsel’s arguments and in case I am wrong, for completeness I now proceed to discuss the next question, namely, whether I am bound by Lim Ban Thoon’s case even if it were decided per incuriam.

70. Mr Pao refers to The Sources of Hong Kong Law at pp.32-33 which confirms that (a) every court is bound by decisions of courts which are superior to itself in the same hierarchy and (b) a previous decision is incapable of binding effect if it has been declared per incuriam. He submits that the broad principles in Young’s case and Morelle’s case encompass the proposition that the lower courts are not bound to follow Court of Appeal decisions that are decided per incuriam.

71. Mr Yip submits that Young’s case and Morelle’s case only deal with the issue whether the Court of Appeal can depart from its own decisions and there is no suggestion in those cases that the per incuriam exception applies to the lower courts. He therefore argues that I am not entitled to declare Lin Ban Thoon’s case per incuriam.

72. Apart from the above authorities, I have subsequent to the hearing invited further written submissions from the parties on inter alia Broome v Cassell & Co Ltd & anor [1972] AC 1027 and Hughes v Kingston upon Hull City Council [1999] 2 All ER 49.

73. The English Court of Appeal in Broome’s case held that an earlier House of Lords decision was wrong on the circumstances in which exemplary damages could be awarded. On appeal, Lord Hailsham rebuked Lord Denning MR and his colleagues at p.1054 : “…… even if [the Court of Appeal did not agree with the House of Lords’ earlier decision], it is not open to the Court of Appeal to give gratuitous advice to judges of first instance to ignore decisions of the House of Lords in this way …… The fact is, and I hope it will never be necessary to say so again, that, in the hierarchical system of courts which exists in this country, it is necessary for each lower tier, including the Court of Appeal, to accept loyally the decisions of the higher tiers” (also per Lord Diplock at p.1131).

74. The English Court of Appeal in Miliangos’ case again declined to follow a clear House of Lords decision that was contrary to its views. On appeal the House of Lords agreed with the Court of Appeal’s conclusion but held that it adopted a wrong approach. Lord Wilberforce said at p.459 that “[it] has to be re-affirmed that the only judicial means by which decisions of this House can be reconsidered is by this House itself under the declaration of 1996” (also per Lord Simon at p.479).

75. The learned judge in LCHY’s case also confirmed that “I cannot choose to prefer overseas authorities over our Court of Appeal decision even in the setting of the Hague Convention. It is not for me to say whether the Court of Appeal was right in adopting a different approach. According to Chan CJHC (as he then was), the only remedy lies with the Court of Final Appeal.”

76. Suffiad J in China Overseas Grand Gain Property Development Limited’s case said he was bound to follow the earlier decision of the Court of Appeal. “It follows therefrom that it is not for me to question the correctness of that decision, but that I must follow it rightly or wrongly.”

77. In light of the aforesaid principles which has been undisturbed for many years in England and which has been scrupulously followed in Hong Kong, I find it is my duty to follow Lim Ban Thoon’s case. Loyal application of the rule that lower courts must follow the decisions of the courts above them in the hierarchy produces certainty and is necessary for the smooth operation of the judicial system.

78. However, it is only fair to point out that more recently in England there appears to have been attempts by the first instance courts to test the aforesaid precedent doctrine. In Hughes v Kingston on Hull City Council [1999] 2 All ER 49, the Divisional Court declined to follow the Court of Appeal’s decision in Thai Trading Co (a firm) v Taylor [1998] 3 All ER 65 on the ground that the Court of Appeal had not been asked to consider the House of Lords decision in Swain v Law Society [1982] 2 All ER 827. There was no discussion of the precedent doctrine in the judgment of the Divisional Court. Moreover, the Divisional Court applied Swain’s case, a decision of a higher court in the judicial hierarchy.

79. Hughes’ case was applied by another Divisional Court in Leeds City Council v Carr The Times, 12^th November 1999 where Kennedy LJ said that since Swain’s case was not drawn to the attention of the Court of Appeal when it decided Thai Trading Co’s case, it must be accepted that the contrary assertion in that case was made per incuriam. But again the precedent doctrine was not discussed at all.

80. The issue eventually reached the Court of Appeal in Awwad v Geraghty & Co (a firm) [2001] QB 570. The Court of Appeal found the criticisms made of Thai Trading Co’s case justified and decided not to follow its own decision in Thai Trading Co’s case. Still, Schiemann LJ said at p.587 that : “…… In that state of the recent authorities in my judgment while this court is bound by the Swain case we are not bound to follow either the Thai Trading case or the Mohamed case. ……” (my emphasis).

81. The English Court of Appeal in Awward’s case affirmed the precedent doctrine, namely, that as a lower court it was bound by a decision of the House of Lords. In the circumstances, I do not consider it appropriate for me to depart from Lim Ban Thoon’s case.

82. Applying Lim Ban Thoon’s case, the primary limitation period for Members Amendment has not expired as at Summons Date, so Members Amendment does not fall foul of section 35(3) of Ordinance. Order 20 rule 5(1) of RDC permits the court to grantsuch amendment without any particular requirement being satisfied. However, the court retains a discretion, the exercise of which will be discussed below.

83. In case I am wrong, for completeness I now proceed to consider counsel’s arguments on the actual accrual of P’s cause of action and any postponement thereof.

84. Accrual and postponement of the cause of action  Mr Yip submits that without Assumption, P’s cause of action vis-à-vis 3^rd Agreement actually would not have accrued on 3^rd Agreement Date. P’s affirmation evidence says that by 3^rd Agreement D agreed to pay by instalments of HK$100,000.00 each every two months, so the contractual date for payment of the last instalment would have been some time in September 2002. Mr Yip says there is no contractual provision for acceleration of payment of the whole outstanding balance of Reduced Sum upon default of any instalment on its due date (“Acceleration”). None has been pleaded or referred to in the affirmation evidence, so P’s cause of action for the full amount of Balance only accrued some time in 2002.

85. On the other hand, Mr Pao argues that even if Payments were payments made under 3^rd Agreement (which D disagrees – see below), Acceleration is an implied term of 3^rd Agreement such that upon D’s default in payment of the first instalment on its due date of 20^th January 1999, the then outstanding balance of Reduced Sum would become immediately due and payable. In such circumstances, the basic six-year limitation period would have expired by 20^th January 2005, ie after Summons Date but before Hearing Date. However, to succeed on this argument, D still has to pray in aid the Welsh line of authorities, which argument I have rejected. In case I am wrong, I will consider D’s arguments for completeness.

86. I note there is no dispute between the parties that Payments were made and Invoices were issued/received. Each Invoice not only states the then outstanding amount of Reduced Sum by Invoice Format but also makes Invoice Demand on its face. Thus each Invoice as addressed to D on its face plainly demands payment of the whole outstanding amount of Reduced Sum and not just the accrued instalments. P’s affirmation evidence also states that “pursuant to [3^rd Agreement], HKBA issued [Invoices] to [D]” and “[despite] repeated demands through [Invoices], [D] defaulted in making payment.”

87. Mr Yip submits that Invoice Format merely states the then total outstanding amount of each Invoice for reference. Such submission is not supported by P’s affirmation evidence and appears to fly against the plain wording of Invoices. In light of the objective evidence referred to above and even on P’s case as presented before me (ie demands for the outstanding balance of Reduced Sum by Invoices long before September 2002), I find it probable that Acceleration is implicit for 3^rd Agreement.

88. On such basis, I agree with the following general proposition drawn from Halsbury’s Law of Hong Kong Vol.17(2) 2004 Reissue para.245.042 at p.405 cited by Mr Pao :

“ If in an agreement for the repayment of an existing debt by instalments it is provided that on default of payment of any instalment the whole debt is to be recoverable, time runs as to the whole debt from the time of the first default in payment of an instalment. ……”

Therefore, under normal circumstances, Acceleration would have caused P’s cause of action to accrue on 20^th January 1999. The question is whether such accrual has been postponed by Payments subsequent to such date.

89. Section 23(3) of Ordinance provides inter alia that where any right of action has accrued to recover any debt or other liquidated pecuniary claim and the person liable therefore makes any payment in respect thereof, the right shall be deemed to have accrued on and not before the date of the last payment.

90. Mr Yip argues that by reason of D’s late payment of various instalmentsmade under or in respect of 3^rd Agreement (eg the first instalment of HK$100,000.00 due on 20^th January 1999 was paid on 22^nd March 1999) which were accepted by HKBA (ie by its acceptance of Payments), the accrual of P’s cause of action was postponed to 1^st November 2001 (ie the date of D’s last Payment).

91. Mr Pao submits there are several aspects to this issue : (a) the nature of Payments, ie whether they are payments under 3^rd Agreement, (b) their relevance to the accrual of the cause of action under 3^rd Agreement and (c) whether section 23(3) of Ordinance is applicable to P’s claim.

92. In respect of (a), the court will look at the act and intention of the debtor to see whether the payment was made “in respect of a particular debt”. The court is concerned with the actual position as understood by the parties at the time of payment rather than the legal analysis placed on that payment. Halsbury’s Laws of England 4^th ed, Vol.28, para.1104 at p.564 states as follows :

“The payment must be ‘in respect of’ the debt or claim. The debtor’s express declarations at the time of the payment are conclusive, but assertions made by him subsequent to the payment are not.

   The nature of a payment may be inferred from the nature of similar payments made at other times; and, although the plaintiff must in all cases give some evidence that the payment relied on was made in respect of some debt, the circumstances attending the payment, even without any direct evidence, may be such as to render it improbable that the payment could be made for any other purpose. When it is once established that the payment was made in respect of some debt and no other debt than the one sued for then existed, the inference may be drawn that the payment was in respect of the debt sued for ……”

93. Mr Pao submits there is evidence that Payments were made on WGLL’s behalf, so Payments are not made in respect of 3^rd Agreement. However, I note that Payments were made by D’s cheques and Payment Receipts were issued to D and not WGLL. Further, HKBA by Invoice Format treated Payments as payments in reduction of the outstanding balance of Reduced Sum. There is no suggestion on the evidence before me that D objected to Invoices (addressed to D) and D in fact continued to issue cheques for Payments. Although D claimed it was merely WGLL’s payment agent and Payment Receipts should have been issued to WGLL, there is no evidence that D/Kwong objected to Payment Receipts made out to D. In my view, on the evidence before me at this stage, given the objective facts outlined above, it is probable that Payments were in respect of 3^rd Agreement/Reduced Sum and, subject to satisfying the other requirements of section 23(3) of Ordinance, such part Payments are sufficient to start time running afresh (Halsbury’s Laws of England 4^th ed, Vol.28, para.1083 at p.553).

94. In respect of (b), Mr Pao suggests that since Payments were made by D on WGLL’s behalf, they do not have the effect of postponing the accrual of P’s cause of action. However, in light of my conclusion on (a), I am not with Mr Pao on this argument.

95. In respect of (c), Mr Pao submits that P’s claim is for damages for breach of contract and not for payment of a debt (see distinction in Chitty on Contracts 29^th ed. (2004), Vol.1, para.26-009 at pp.1428-1429). I note that part payment does not postpone the limitation period in relation to unliquidated claims (section 25(6) of Ordinance and McGee, Limitation Periods 4^th ed. (2002) para.18.005 at p.317). McGee, Limitation Periods, para.18.006 at p.318 goes on to say as follows :

“[The meaning of “liquidated claim”] is a matter which has received very little judicial attention. In Amantilla v. Telefusion the claim was for a quantum meruit, and it became necessary to decide whether this was a liquidated claim. It was held that it was, the claim having a sufficiently certain contractual description for the amount to be ascertainable by the court. This should not be regarded as a decision that all quantum meruit claims are liquidated claims for this purpose. Rather, it is a question of fact in each case whether the particular claim is sufficiently certain. In Byatt v. Nash it was held that a solicitor’s claim for unpaid fees is a liquidated claim in this context.”

96. In the present case, P’s claim is obviously pecuniary in nature. But is P’s claim liquidated? In both Amantilla’s case and Byatt’s case referred to above, the claimants claimed for monies due under the contracts. Here P’s claim is for damages for breach of contract. Since the amount of damages has to be assessed by the court, I am of the view that P’s claim is not a liquidated claim even though the amount of damages is quantifiable. I refer to Alco International Limited v Akai Electronic Co, Ltd [2000] 3 HKC 724 where the court was concerned with inter alia a claim for damages for breach of contract, namely, loss of profits. Suffiad J said at p.730 that “[as] for the defendant’s claim for loss of profits in the amount of US$20,922 …… and US$4,680 ……, the amount of loss of profit in these two transactions, although quantified by the defendant, are not liquidated claims but must be assessed by the court ……”

97. In the circumstances, P’s claim is not a liquidated pecuniary claim within the meaning of section 25(6) of Ordinance. Hence, the accrual of P’s cause of action has not been postponed and if I am wrong in relying on Lim Ban Thoon’s case, the actual basic limitation period for P’s claim would have expired on 20^th January 2005 before Hearing Date or the date of this decision.

(4) Order 20 rule 5 of RDC

98. Assuming that the relevant period of limitation for Members Amendment has expired (which I disagree), I will next consider the effect of Order 20 rule 5 of RDC for completeness. Order 20 rule 5 of RDC provides inter alia that :

“(1) Subject to Order 15, rules 6, 7 and 8 and this rule, the Court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleadings, on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct.

(2) Where an application to the Court for leave to make the amendment mentioned in paragraph (3), (4) or (5) is made after any relevant period of limitation current at the date of issue of the writ has expired, the Court may nevertheless grant such leave in the circumstances mentioned in those paragraphs if it thinks it just to do so.

(3) An amendment to correct the name of a party may be allowed under paragraph (2) notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party if the Court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identity of the person intending to sue or, as the case may be, intended to be sued. ……”

99. Mr Yip suggests that even if the effect of Members Amendment is to substitute a new party and the relevant limitation period has expired, Members Amendment is still permissible under Order 20 rule 5(2) and (3) of RDC (see also section 35(5), (6) and (7) of Ordinance). He refers to Hong Kong Civil Procedure 2004 Vol.1, para.20/8/19 at p.355 which states as follows :

“The word “mistake” in r.5(3) should not be narrowly construed to mean error without fault (per Russell L.J. in Mitchell v. Harris Engineering Co. Ltd. [1967] 2 Q.B. 703, C.A.).

The power to amend after the expiry of the limitation period to correct the name of a party is not limited to making mere variations in the names of parties to an action but allows the substitution of a different party if it is plain that the new party is the party that the person making the mistake intended to sue ……”

100. Mr Pao submits that in order to pray in aid Order 20 rule 5(3) of RDC, P has to show that (a) the mistake is a genuine one and (b) it is not misleading or such as to cause reasonable doubt as to P’s identity. He submits that other than a bare assertion in P’s affirmation evidence, there is no primary evidence for the court to infer that the “mistake” is genuine. Further, the “mistake” is misleading. As a matter of law (see above) and it is D’s belief (as evidenced by the solicitors’ correspondence and Discovery Summons) that P’s present description refers to BEL acting on behalf of Writ Date Members. Indeed, D sought specific discovery of Items A and B with a view to bring a striking out application if such documents reveal there is fluctuation in HKBA’s membership during that period.

101. Neither counsel cites any case authority on the interpretation of Order 20 rule 5(3) of RDC. However, I note that the Court of Appeal in Kutex International Ltd v Shui Hing Investment Co Ltd & anor [1989] 1 HKC 192 reminded that in applying Order 20 rule 5(3), it was important to bear in mind the distinction between suing A in the mistaken belief that A was the party who was responsible for the matters complained of and seeking to sue B, but mistakenly describing and naming him as A and thereby ending up suing A instead of B. The rule was designed to correct the latter and not the former category of mistake. Which category was involved in any particular case depended upon the intentions of the persons making the mistake and they had to be determined on the evidence in light of all the circumstances.

102. In my view, as noted by Mr Pao, there is sparse primary evidence for me to consider whether BEL has all along intended to act for 9/8/97 Members but mistakenly described and named “Members” in the Writ of Summons or whether, as asserted in the affirmation of P’s director Mr Kam Kwok Fong, Members Amendment was to “make clear” BEL is suing on behalf of 9/8/97 Members and “to put this matter beyond doubt”. However, Members Amendment was only made after D’s solicitors sought specific discovery of HKBA’s membership lists via correspondence. Plainly, Members Amendment is a reaction to the request for specific discovery. I am doubtful whether there is any genuine mistake.

103. Further, even if the “mistake” is a genuine one, based on my analysis in paragraphs 25-35 above, I rather think the “mistake” is misleading in that P’s present description has been understood by D to refer to BEL acting on behalf of Writ Date Members (as supported by the law elicited from Carlton’s case and Jarrot’s case). In the circumstances, I doubt whether the “mistake” is of the permissible category envisaged in Kutex’s case. I do not think Order 20 rule 5 of RDC is of assistance to P.

(5) Order 15 rule 6 of RDC

104. However, Order 20 rule 5(1) of RDC provides that it is subject to Order 15 rule 6, which provides inter alia that :

“(5) No person shall be added or substituted as a party after the expiry of any relevant period of limitation unless either-

(a)           the relevant period was current at the date when proceedings were commenced and it is necessary for the determination of the action that the new party should be added, or substituted; or ……

In this paragraph, "any relevant period of limitation" (任何有關的時效期) means a time limit under the Limitation Ordinance (Cap 347).

(6) The addition or substitution of a new party shall be treated as necessary for the purposes of paragraph (5)(a) if, and only if, the Court is satisfied that-

(a)           the new party is a necessary party to the action in that property is vested in him at law or in equity and the plaintiff's claim in respect of an equitable interest in that property is liable to be defeated unless the new party is joined; or ……”

105. Order 15 rule 6 of RDC sets out the exceptions to the prohibition in section 35(3) of Ordinance against allowing any new claim (including the addition or substitution of a new party) in a pending action after the expiry of the current period of limitation (see also section 35(6) and (7) of Ordinance). Both counsel cite Hong Kong Civil Procedure 2004 Vol.1, para.15/6/3 at p.208 as follows :

“ There are however, three exceptions to the general rule stated above.

First, where the relevant period was current at the date when the new proceedings were commenced and it is necessary for the determination of the action that the new party should be added or substituted (see para. 5(a), and s.35(6) and (7) of the Ordinance). For this purpose, the addition or substitution of a new party will be treated as “necessary” if the court is satisfied that one of the following conditions is fulfilled:

(a) the new party is a necessary party to the action, in that property is vested in him at law or in equity and the plaintiffs’ claim in respect of an equitable interest in that property is liable to be defeated unless the new party is joined (para. 6(a) above) and see Asia Wide Properties Ltd. & Another v. Tsang Yuk Kui & Another, unreported, HCA No. 9500 of 1994, May 26, 2000, [2001] H.K.E.C. 594; ……”

106. There is no dispute that when the Writ of Summons herein was issued, the relevant limitation period was current. It is also D’s case that Members Amendment involves a substitution of a new party. The question is whether there is any “property” vested in 9/8/97 Members such that the joinder of 9/8/97 Members is necessary for the determination of the action.

107. Mr Yip submits that the contractual rights under 3^rd Agreement being the subject matter of the present proceedings are intangible property rights vested in P falling within Order 15 rule 6(6)(a) of RDC. He argues that an unduly restrictive interpretation will rob the relevant rules of their usefulness.

108. Mr Pao submits that Order 15 rule 6(5) and (6) of RDC deal with the situation when the plaintiff’s claim is not completely constituted. Here, P’s case is completely constituted unto its own and there is no suggestion that P’s claim is liable to be defeated in respect of any equitable interest in property vested in 9/8/97 Members. This does not sit well with D’s professed intention of possibly bringing an application to strike out P’s claim. Next, Mr Pao says “property” cannot be interpreted to mean choses in action such as contractual rights and cites Asia Wide Properties Ltd’s case in support where Yam J said :

“Since there is no property vested in the proposed 2^nd and 3^rd Defendants in law or in equity, the joinder cannot be said to be necessary for the determination of the action. It cannot be said that the action would be defeated unless the proposed 2^nd and 3^rd Defendants are joined.”

I am not persuaded that this case is of assistance because on the facts the intended defendants to be joined were only nominee directors for the 1^st defendant and there is no evidence that any property was vested in them.

109. In my view, to answer the aforesaid question, the court has to determine whether (a) there is “property” vested in law or equity in 9/8/97 Members and (b) P’s claim in respect of an equitable interest in that property is liable to be defeated unless 9/8/97 Members are joined.

110. I am not with Mr Pao when he suggests that “property” does not include choses in action or contractual rights. He has not cited any authority or legislative provision for his proposition. I note that “property” is defined in section 3 of the Interpretation and General Clauses Ordinance Cap.1 as follows (applicable pursuant to section 2(1) of such ordinance) :

““property” includes –

(a) money, goods, choses in action and land; and

(b) obligations, easements and every description of estate, interest and profit, present or future, vested or contingent, arising out of or incident to property as defined in paragraph (a) of this definition; ……”

111. There is no dispute that members of an unincorporated association may become bound on contracts entered into on their behalf by an agent and they also have a right to enforce it (see paragraph 23 above). In such circumstances, on P’s case, the contractual rights under 3^rd Agreement (which agreement amounts to a compromise of 1^st and 2^nd Agreements) are vested in 9/8/97 Members and P’s claim is liable to be defeated unless 9/8/97 Members are named and joined as a party. This is apparent from Carlton’s case and Jarrot’s case cited by Mr Pao. Therefore, even if the relevant limitation period has expired (which I disagree), Members Amendment still falls within Order 15 rule 6(5) and (6) of RDC to enable the court to exercise its discretion to allow such amendment.

(6) Timing of Members Amendment

112. Mr Pao submits that Members Amendment insofar as it relates to the claim for damages based on breach of 3^rd Agreement (ie Contract Amendment) has been unclear until clarification by further amendment of the draft Amended Statement of Claim at Hearing Date. Mr Pao queries whether Members Amendment was in fact applied for at Summons Date or at Hearing Date.

113. In my view, Amendments should be read realistically in its context. I find it is quite plain even from the original draft Amended Statement of Claim annexed to Amendment Summons that the proposed Members Amendment refers inter alia to an amendment of P’s description to read as BEL acting for and on behalf of 9/8/97 Members in place of Writ Date Members in the context of P’s claim for damages for breach of 3^rd Agreement. I do not see any confusion or uncertainty as to the purport of Members Amendment irrespective of Contract Amendment sought at Hearing Date. In any event, Contract Amendment is not a new claim that attracts limitation considerations.

(e) Analysis of Tong Amendment

114. Both counsel repeat their arguments in relation to Members Amendment.

(1) Timing of Tong Amendment

115. Mr Pao suggests that Tong Amendment is only perfected at Hearing Date as a result of Contract Amendment. He therefore argues that by such time the relevant limitation period has expired. I repeat paragraphs 112-113 above, which are also applicable mutatis mutandis to Tong Amendment, and reject such argument. It is plain from the original draft Amended Statement of Claim annexed to Amendment Summons that the purport of Tong Amendment was for an alternative plea as a matter of law in case the court finds that Tong did not contract on behalf of 9/8/97 Members.

(2) Conflict with Tong’s primary position

116. Mr Pao submits that Tong Amendment should not be allowed because Tong has affirmed that he contracted on HKBA’s behalf. He suggests that there is no evidence to demonstrate that Tong contracted in his personal capacity. I do not agree with such submission. It has always been P’s primary stance that Tong contracted on behalf of HKBA or 9/8/97 Members. Tong Amendment is to cater for the situation if the court finds against P’s primary stance, in which case Tong having signed Agreements may be held as a matter of law to have contracted personally (Chitty on Contracts 29^th ed (2004) Vol.1, para.9-068 at p.653). I do not see any conflict as suggested by Mr Pao.

(3) Failure of consideration

117. Mr Pao informs me that he will not pursue the argument that there is no demonstrable consideration for Tong to enter into Agreements for the purpose of Amendment Summons.

(4) Limitation issue

118. On P’s case, Tong’s cause of action against D turns on the court’s eventual finding on his legal capacity (ie whether as agent or principal) in entering into Agreements. If he did so without authority, he may be held to have contracted personally. If he had the authority, express or implied, of all or some 9/8/97 Members to contract on their behalf, such Members as co-principals may enforce 3^rd Agreement by the ordinary rules of agency.

119. Hence the accrual of Tong’s cause of action and any limitation issue arising therefrom turn on the same analysis as those for Members Amendment. However, since Tong is not mentioned in the original Statement of Claim, there can be no dispute that Tong Amendment is an application for addition of a new party to the present action.

120. Mr Pao fairly accepts that if I am not with him on his arguments on the limitation issues, D will likely fail in its opposition against Tong Amendment. As seen from the above analysis, I am indeed not with Mr Pao on his contentions. But if I am wrong, I will for completeness consider the question whether Order 15 rule 6 and Order 20 rule 5 of RDC are applicable.

(5) Order 15 rule 6 of RDC

121. I have no hesitation in concluding that Order 15 rule 6(5)(a) and 6(a) of RDC (see also section 35(6) and (7) of Ordinance) are not applicable. Although the relevant limitation period was current as at Writ Date, the addition of Tong as a party is not necessary for the determination of the action. P’s claim (with Members Amendment) is fully constituted by itself and does not require the addition of Tong to perfect it. In short, P’s claim is not liable to be defeated if Tong is not joined as a co-plaintiff.

(6) Order 20 rule 5(5) of RDC

122. Mr Yip suggests that Tong Amendment can be allowed under Order 20 rule 5(5) of RDC (see also section 35(6) of Ordinance) since it arose out of the same or substantially the same facts as the cause already pleaded. Indeed, both counsel accept that the factual basis that underlies the cause of action under Tong Amendment is no different from that of P’s claim.

123. Hong Kong Civil Procedure 2004 Vol.1, para.20/8/8 at pp.348-349 summarises the effect of section 35(5) of Ordinance and Order 20 rule 5(5) of RDC as follows :

“[S.35 of Ordinance] seems to emphasise that the principle underlying the provisions in s.35 and of the rules made thereunder is restrictive.

In relation to a claim involving a new cause of action the conditions which the rules of court must satisfy are specified in s.35(6)(a), which provides as follows:

“(a) in the case of a claim involving a new cause of action, if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment.”

These words are substantially the same as the words in r.5(5). Accordingly, the power to allow the addition or substitution of a new cause of action after the expiry of the relevant period of limitation is now to be derived from r.5(5), as if it were made under the powers to make rules of court specified in s.35(5), and the cases decided under this rule before the Ordinance are to be regarded as binding and in full force.”

124. Mr Yip further refers to Leung Kin Fook & ors v Eastern Worldwide Co Ltd (No. 2) [1997] 1 HKC 524. In that case, the plaintiff intended to add inter alia further claims for breach of contract and tort to the original claim based on breach of bailment. The contractual duties arose out of the same contractual arrangements as already pleaded and the duty of care also arose from the relationship of owner and charterer as pleaded. Liu JA held that there is a significant overlap of the factual matrix and the words in Order 20 rule 5(5) should be given a broad and liberal interpretation to attain the objective of the rules. He also applied Welsh Development Agency’s case to say that whether there was overlapping of facts was “substantially a matter of impression”.

125. In my view, Tong Amendment plainly arises from the same facts or substantially the same facts as P’s cause of action. It is only a matter of interpretation of Tong’s legal capacity at the time of the execution of 3^rd Agreement that will determine whether 9/8/97 Members or Tong was the proper party to and/or has the right to sue on such agreement. However, satisfying the requirements under Order 20 rule 5(5) of RDC is not sufficient because Order 20 rule 5(1) of RDC specifically provides that it is subject to inter alia Order 15 rule 6. Order 15 rule 6(5) of RDC specifically provides that no person shall be added as a party after the expiry of the relevant time limit unless the requirements therein are satisfied. Since Tong Amendment does not satisfy such requirements, Tong cannot be added as a 2^nd plaintiff if the relevant limitation period has expired.

(f) Conclusion on Amendment Summons

126. Both counsel accept the following broad principles :

(a) generally amendments in pleadings ought to be made for the purpose of determining the real question in controversy or for correcting any defect/error in any proceedings;

(b) there is no kind of error or mistake which, if not fraudulent or intended to overreach, the court ought not to correct, if it can be done without injustice to the other party;

(c) Order 15 rule 6 of RDC should be construed so as to bring all parties to disputes relating to one subject matter before the court at the same time so that the disputes may be determined without delay, inconvenience and expense of separate actions and trials;

(d) amendments are allowed to add a plaintiff whose presence is necessary to enable the question at issue to be properly determined.

In light of such principles and my aforesaid analysis, I consider it appropriate to exercise my discretion to allow Amendments sought by P.

VI. Discovery Summons

127. By Discovery Summons, D sought specific discovery of the following documents against P : (a) Item A, (b) Item B, (c) the bylaws and/or rules and regulations of HKBA applicable on Contract Date (“Item C”) and (d) all documents, letters or memorandum pertaining to the due authorisation of BEL to act on behalf of itself and all other Members in this action.

128. At Hearing Date, I granted leave to P to amend the request in sub-paragraph (d) of the above paragraph to read as “all documents, letters or memoranda pertaining to any objection or disapproval indicated by any member of HKBA (as at [Contract or Writ Date]) in relation to BEL acting as a representative plaintiff in this action” (“Item D”). P’s solicitors confirmed by letter dated 1^st March 2005 to D’s solicitors that P did not have Item D in its possession, custody or power. Mr Pao confirms that D will not pursue Item D.

129. After the issuance of Discovery Summons, P filed a supplemental list of documents to disclose copy Rules and later confirmed that Rules have not been amended as at Contract Date. Mr Pao again confirms that D will not pursue Item C save as to costs.

130. Mr Pao also concedes that D will not pursue Item B if I allow Amendments. Since I have allowed Amendments, Item B becomes irrelevant.

131. That leaves Item A. P disclosed the following documents in its supplemental list of documents filed on 1^st September 2004 : (a) copy 18/8/97 Minutes, (b) copy Rules, (c) copies of invoices and receipts issued by HKBA in respect of membership fee (from 1995 to 2002/03) evidencing that BEL was as at Contract Date and still is a Member of HKBA and (d) copy of BEL’s annual return dated 1^st May 2004 showing that it was a company owned and controlled by Tong.

132. P explained that Hong Kong Badminton Association Limited (“HKBAL”) was incorporated on 23^rd April 2001. Members who paid annual membership fee to HKBAL were no longer required to pay membership fee to HKBA. BEL continued to pay membership fee to HKBAL for 2003/04 as evidenced by a receipt dated 15^th May 2004 issued by HKBAL in BEL’s favour.

133. Mr Pao submits that no issue has been taken as to whether Item A was within P’s possession, custody or power. Since BEL took out representative proceedings, it must have access to information and documents relevant to the present claim against D. As an unincorporated association, HKBA must keep proper records of its membership at all material times for the purpose of its operations. HKBA should therefore have Item A in its possession.

134. Mr Pao submits that Item A is relevant to the following issues : (a) P’s capacity to contract and to sue, (b) whether Members were numerous and (c) whether BEL was/is Member at the relevant time.

135. I am not persuaded that issue (a) is still relevant. D by its Defence challenged (i) whether P as described in the original pleadings is a proper party having capacity to sue for and on behalf of Members, and (ii) whether 1^st Agreement was entered into on Contract Date with the authority of all Members such that it constituted a binding contract existing between Members and D. D’s original purpose in seeking Items A and B is to ascertain whether there is any change in HKBA’s membership between Contract and Writ Dates, and if there is, given that P’s description in the original pleadings refers to BEL acting for and on behalf of Writ Date Members and not 9/8/97 Members (ie the contracting party), P’s claim is wrongly constituted and liable to be struck out. However, as I have allowed Members Amendment and D has consequently abandoned Item B, the purpose of the proposed exercise is now spent.

136. Mr Yip further submits that in any event, Item A is irrelevant as regards P’s capacity to sue. He refers to Hong Kong Civil Procedure 2004 Vol.1, para.15/12/7 at pp.235-236 which states that “[a] person or persons claiming to represent numerous other persons having the same interest may begin an action as the representative plaintiff or plaintiffs …… Representative plaintiffs may be self-elected: the consent of those represented is not necessary in choosing representatives (Sung Sheung-hong v Leung Wong Soo-ching [1965] H.K.L.R. 602).” The learned editors also say in para.6/5/9 at p.61 that “[where] a person sues on behalf of himself and others in a representative action under O.15, r.12, he is the sole plaintiff, and the others are not plaintiffs, and the names and addresses cannot be obtained (see Leathley v McAndrew [1875] W.N. 275).” In Markt & Co, Ltd v Knight Steamship Co, Ltd [1910] 2 KB 1021, 1039, Fletcher Moulton LJ said “[in] representative actions it is wholly different.  The plaintiff is the self-elected representative of the others.  He has not to obtain their consent.  ……” Mr Yip submits that BEL being a Member as at Contract Date and as at all material times was/is bound by Agreements and shares a common interest with each and every 9/8/97 Member. As D is not entitled to the names of 9/8/97 Members and BEL can be self-elected, D cannot seek Item A.

137. As regards P’s capacity to contract, Mr Yip submits that the documents as disclosed in P’s supplemental lists of document and affirmation evidence clearly establish that Exco is authorised under Rules to act on behalf of Members. Exco in turn authorised Tong to enter into 1^st Agreement.  P’s affirmation evidence also confirms that it is customary for Tong as HKBA’s president to negotiate the terms of and to sign sponsorship agreements on Members’ behalf.  Therefore, Tong was duly authorised to sign 1^st and 2^nd Agreements and to enter into 3^rd Agreement on behalf of 9/8/97 Members. Item A is irrelevant on this issue since it has never been P’s case that Tong had authority from each and every 9/8/97 Member to contract. P does not even contend that all 9/8/97 Members or that 9/8/97 Members in meeting formally ratified the authorisation given to Tong by Exco.

138. I accept Mr Yip’s submissions. On the above analysis, I am not prepared to grant discovery of Item A for issue (a).

139. As regards issue (b), Mr Pao submits that it is an essential requirement for representative proceedings under Order 15 rule 12 of RDC for the representative plaintiff to act for “numerous persons”.

140. Mr Yip reminds that Tong has already affirmed that as at Contract Date there were 44 full and 53 affiliated Members, so it is quite plain that 9/8/97 Members were numerous. Further, even if D is entitled to seek discovery of Item A for this issue, Mr Yip says the names of 9/8/97 Members are irrelevant and should be expurgated from the register/list to be disclosed.

141. Mr Pao argues that in respect of issue (c), it is necessary to ascertain whether BEL was a Member of HKBA as at Contract Date otherwise it does not have the right to sue on behalf of 9/8/97 Members. Mr Pao argues that the disclosure of receipts of annual subscription fees issued by HKBA to BEL does not sufficiently address D’s request for Item A. The proper method of proof is by HKBA’s register of members, which is a relevant document that ought to be discovered.

142. Mr Yip on the other hand argues that the invoices and receipts in relation to BEL’s payment of membership fees to HKBA and HKBAL sufficiently show BEL’s status as HKBA’s Member.

143. The principles in this area of the law are well-established and helpfully summarised in Hong Kong Civil Procedure 2004 Vol.1, para.24/7/1 at pp.435-436 as follows :

(a) There is no jurisdiction to make an order under Order 24 rule 7 for production of documents unless (i) there is sufficient evidence that the documents exist which the other party has not disclosed, (ii) the document(s) relate to matters in issue in the action, and (iii) there is sufficient evidence that the documents are in the possession, custody and power of the other party.

(b) When it is established that those three prerequisites for jurisdiction do exist, the court has a discretion whether or not to order disclosure.

(c) The order must identify with precision the document(s) or category(ies) which are required to be disclosed, for otherwise the person making the list may find himself in serious trouble for swearing to a false affidavit, even though doing his best to give an honest disclosure.

144. Under Order 24 rule 8 of RDC, the court if satisfied that discovery is not necessary or not necessary at that stage of the cause or matter may dismiss or adjourn the application and not make the specific discovery order if and so far as it is of the opinion that discovery is not necessary either for disposing fairly of the cause or matter or for saving costs. The burden of establishing that a document is not necessary falls on the respondent opposing discovery (The Secretary for Justice v Wembley International (HK) Limited & anor HCA8518/1998 Deputy High Court Judge Gill (unreported, 15^th January 2002)).

145. In my view and on the authorities cited by Mr Yip, I am not persuaded that D is entitled to the names and addresses of all 9/8/97 Members. Such information is irrelevant to the contested issues between the parties. Next, is Item A necessary for issues (b) and (c)? As regards issue (b), Tong has gone on affirmation to confirm the number of full and affiliated Members as at Contract Date. Little purpose is served is allowing discovery of Item A just to confirm the number of 9/8/97 Members with their names and addresses expurgated. Order 24 rule 8 of RDC reminds that even if the documents requested are relevant, the discovery must be refused if it is not necessary either for disposing fairly of the cause or matter or for saving costs. So where the issue will become sufficiently clear from evidence or documents placed or to be placed before the court, additional discovery requested should not be ordered.

146. As regards issue (c), I am prepared to allow specific discovery of the extract page of HKBA’s register or list of Members as at Contract Date that shows BEL as Member but with the names and addresses of other Members expurgated. This will satisfy the discovery requirement over the issue as to whether BEL was a Member as at Contract Date.

VII. Conclusion

147. In respect of Amendment Summons, I make the following orders :

(a) P be at liberty to amend its Writ of Summons as shown in red on the copy attached to Amendment Summons and to amend its Statement of Claim as shown in red on the copy attached to Amendment Summons and as further amended pursuant to my orders made at Hearing Date;

(b) service of the Amended Writ of Summons be dispensed with;

(c) leave to P to file and serve the Amended Statement of Claim within 7 days from the date hereof;

(d) leave to D to file and serve its Amended Defence within 14 days thereafter.

148. In respect of costs of Amendment Summons, I grant a costs order nisi that costs of and occasioned by the application for amendment be paid by P to D, including the costs of P’s two oral applications on Hearing Date for further amendment of the draft Amended Statement of Claim annexed to Amendment Summons (apportioned as half an hour of the hearing time to assist the taxing master), but the costs of and occasioned by D’s opposition of Amendment Summons (including costs relating to the affirmations in opposition and reply, the costs of the hearing of such application before me, the costs of the further written submissions and all costs reserved in respect of Amendment Summons (if any)) be paid by D to P. The aforesaid costs are to be taxed if not agreed with certificate for counsel.

149. In respect of Discovery Summons, I order that :

(a) P do within 14 days from the date hereof make and file an affirmation stating whether it has or had at any time in its possession, custody or power any document falling within the description of “extract page of HKBA’s register or list of Members as at Contract Date showing BEL as Member but with the names and addresses other Members expurgated”, and if the said document has been but is not now in its possession, custody or power stating when it parted with the same and what has become of the same;

(b) there be inspection of the said expurgated document within 7 days after the filing and service of the affirmation referred to in (a) above (if applicable).

150. For its requests for specific discovery, D was successful to a limited extent in relation to Item A and unsuccessful vis-à-vis Item B. Item C was resolved by disclosure of Rules in P’s supplemental list of documents. Given P’s voluntary discovery of copy Rules and its reliance on Rules and Exco’s resolutions to support Tong’s authority to enter into 1^st Agreement on behalf of 9/8/97 Members, D is justified in requesting Item C. Item D was resolved at the hearing before me through compromise between the parties by D amending the wording of its request and P responding to the amended request by way of solicitors’ correspondence. In the circumstances, since both parties are successful to some extent in their respective contentions, I consider that the appropriate order for Discovery Summons (including the costs of D’s oral application at the Hearing Date to amend Discovery Summons) is no order as to costs. I grant a costs order nisi to such effect accordingly.

151. For the convenience of the taxing master, I apportion two-thirds of the hearing time before me for Amendment Summons and one-third for Discovery Summons.

VIII. Publication of this decision

152. Pursuant to Practice Direction 25.1, I request the parties to make written representations on the release of this decision for publication within the next 7 days. If there is no objection or response within such time period, I propose to grant permission for this decision to be published.