THE INCORPORATED OWNERS OF SHATIN HEIGHTS GARDEN v. WONG SHING BIU AND ANOTHER

CACV 391/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 391 OF 2007

(On Appeal from LDBM 129 of 2007)

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REASONS FOR JUDGMENT

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Hon. Yuen JA:

1.  This is an appeal by the Applicant from an order of Judge Yung sitting as presiding officer of the Lands Tribunal dismissing the Applicant’s summons for an order that its Amended Grounds and Particulars of Claim may be filed out of time.  At the conclusion of the hearing we dismissed the appeal and ordered that the Applicant pay the Respondents’ costs of the appeal forthwith on an indemnity basis. 

2.  We also directed the Applicant’s solicitors to show cause within 14 days after these reasons are handed down why an order should not be made against them under Order 62 rule 8(1)(b) directing them to repay those costs to their client the Applicant.  As will be made clear in the paragraphs below, this direction was given as a result of certain conduct on the part of the Applicant’s solicitors.  However I should make it clear that the observations on that conduct set out in these Reasons for Judgment have been made before we have heard any representations from the solicitors themselves.    

3.  These are my reasons for those orders. 

Background

4.  In 2007 Lands Tribunal proceedings were commenced by the Applicant against 3 persons who were former members of its Management Committee (proceedings against the 2^nd Respondent were later withdrawn).  The relief sought was for an account, payment of sums due upon taking the account and interest etc.

5.  The Applicant filed Grounds and Particulars (“G&P”) of Claim, the Respondents filed a Notice of Opposition, and the Applicant filed G&P of Reply. 

Hearing on 16 November 2007

6.  On 16 November 2007 the hearing of the proceedings commenced before Judge Michael Y.M. Wong sitting as presiding officer of the Lands Tribunal.  Both parties were represented by counsel. 

7.  Counsel for the Applicant Ms Chih referred in her opening to certain matters.  When it was pointed out that these matters had not been pleaded, she made an application to the judge for leave to amend the G&P of Reply, producing for this purpose a typed “Amended Grounds and Particulars of Reply” containing new paras. 3(a)-(f) (Appeal Bundle pp.20-21).  

8.  When it was then pointed out that the amendment should be made to the G&P of Claim rather than to the G&P of Reply, Ms Chih duly sought leave to amend the G&P of Claim.  No separate draft “Amended Grounds and Particulars of Claim” was produced, save for a handwritten amendment to the Prayer for Relief (Appeal Bundle p.22). 

9.  It was thus clearly intended that only paras. 3(a)-(f) of the draft Amended G&P of Reply would be incorporated into the G&P of Claim by way of amendment.  This was made explicitly clear in the transcript.  Ms Chih asked for 3-5 days to put the amendment “mentioned just now” into the G&P of Claim.  She said:

“MS CHIH：

冇問題，法官閣下容許我哋三、五天時間complete 番頭先所講嘅 amendment係擺番落去grounds of particular of claim嗰度。”(Appeal Bundle p.16E).

Judge Wong questioned the time required and indicated that he   expected the amendment to be done that day.  Ms Chih thereupon replied that there would be no problem with that (Appeal Bundle p.16G-J).  

Judge Wong’s ruling

10.  The judge then gave a brief oral ruling giving leave to the Applicant to amend the G&P of Claim that day and consequential directions.  In his ruling, the judge reiterated that the Applicant should be able to amend the G&P of Claim within that day as its contents had already been formulated.  Ms Chih agreed.

“[官：] 咁變咗係會批准呢個雙方面嘅修改，申請人嗰邊我相信        佢今日之內都可以做到個修改， 因為佢個內容已經寫晒 出嚟架嘞。

          MS CHIH：係。” (Appeal Bundle p.17D-F).

11.  After the ruling, Ms Chih again said that her solicitors would like 3 days to do the amendment as it was Friday.  The judge refused that request on the ground that since the hearing would finish in the morning, the Applicant’s solicitors would have sufficient time to file the Amended G&P of Claim in the afternoon.  Ms Chih did not press the matter.

“MS CHIH：法官閣下，我啱啱instructing solicitor 提我就佢想              攞三日，因為今日禮拜五，佢因為個文件上要返             番公司去做番出嚟，就我嘅instructing solicitor                              希望有三日嘅時間。

          官：  你今日仲有成個晏晝，點會做唔到呀？你遲咗咁即係人哋                嗰啲又遲架咋喎，佢收到你嗰份先至有得修改架嘛。

          MS CHIH：我決定都係今日做咗佢喇，今日應該得。

          官：今日做咗佢喇。

          MS CHIH：係喇。” (Appeal Bundle p.17H-K)

Judge Wong’s order

12.  On 30 November 2007, Judge Wong’s order was sealed.  The material part was in these terms: 

“3.  Leave to the Applicant to amend the Notice of Application, the Applicant do serve and file the Amended Notice of Application today”.

Issue: “general leave to amend”?

13.  The Applicant has argued on appeal that Judge Wong had given “general leave” to amend the G&P of Claim.  However Mr Lawrence Cheung, acting for the Applicant now, accepted that the Transcript showed that Judge Wong had not given general leave to amend at the hearing.  Nor did Mr Cheung argue that Judge Wong had changed his mind between the hearing and the sealing of the order on 30 November 2007.  Nevertheless he submitted that the terms of the order gave the Applicant “general leave to amend”.

Discussion

14.  Of course it would have been desirable for the judge’s order to make it clear that leave was given only to incorporate paras. 3(a)-(f).  Nevertheless the Applicant’s submission is clearly untenable. 

15.  First, it is a well-established rule of practice that leave to amend should only be given when and to the extent that the amendment has been precisely formulated (Hong Kong Civil Procedure 2008, vol. 1, para. 20/8/4). 

16.  Secondly, Ms Chih explicitly asked for leave to amend to state only those matters that she had “mentioned just now” (Appeal Bundle p.16E). 

17.  Thirdly, the judge refused to give any further time to do the amendment – explicitly on the ground that it had already been formulated, to which Ms Chih expressly agreed (Appeal Bundle p.17D-F). 

18.  Fourthly, it would have been remarkable for a judge to give general leave to amend and yet give the party only a few hours to draft and file it when the proceedings had been adjourned to another date to be fixed.

19.  Accordingly, any lawyer present at the hearing on 16 November 2007 must have known that in the circumstances, what was meant by the words “leave to amend” in the order was leave to amend by incorporating paras. 3(a)-(f).  In my view, it was disingenuous of a party to attempt to exploit the brevity of the sealed order for the purpose of arguing that it had general leave to amend when it knew that that was not what the judge ordered.

No Amended G&P of Claim filed on 16 Nov. 2007

20.  Going back to the narrative of events, the Applicant did not file an amendment to the G&P of Claim on the afternoon of Friday 16 November 2007. 

New draft

21.  The next day (Saturday 17 November 2007), the Applicant’s solicitors faxed a draft Amended G&P of Claim (“the new draft”) to the Respondents’ solicitors.  This new draft was substantially different from paras. 3(a)-(f).  The Respondents were asked to consent to filing.  Not surprisingly, they refused.   

Summons to file Amended Claim out of time

22.  On Wednesday 21 November 2007, the Applicant filed a summons for an order that “the Applicant do have leave to file the Amended Notice of Application as per copy enclosed [the new draft] out of time”. 

23.  The inclusion of the words “out of time” make it clear that the Applicant was intending to file the new draft in purported compliance with Judge Wong’s order, albeit late.

Hearing before Judge Yung on 26 November 2007

24.  The summons was heard by Judge Yung on 26 November 2007.  It should be noted that the transcript of the proceedings before Judge Wong on 16 November 2007 was not available to Judge Yung, and Judge Yung was unable to read Judge Wong’s handwriting (Appeal Bundle p.45R).  Judge Yung therefore looked to the lawyers for the parties to inform him of the events before Judge Wong on 16 November 2007.

25.  The Respondents’ solicitor (Mr Hui) asserted that Judge Wong had only given leave to amend by adding “the six paragraphs” i.e. paras. 3(a)-(f).  When Judge Yung looked to the Applicant’s solicitor (Mr Yau) for comment, this was what Mr Yau said (Appeal Bundle p.49J-V):

“COURT:    You have a duty to tell me whether what your friend said is right or wrong.  It is not a question of proving the case.  It’s you are officer of the court.  He said Mr Wong – he said Judge Wong allow you, allowed the applicant to amend the Notice of Application.  But your friend said he only allowed – how many paragraphs, the six paragraphs?  

MR HUI:     The six small paragraphs.

COURT:      I note, either I – it doesn’t matter what happened during argument.  I’m only interested whether, at the end of the day, Judge Wong made such an order.

MR YAU:    The six paragraphs proposed by counsel is that to ...

COURT:      Now, put it very simply.  Apart from the six paragraph that appear in the draft Amended Notice of Application available to the court at the hearing, did the judge, did the learned judge allow other amendment?

MR YAU:    He just gave a general leave, without restricting that.

COURT:      “General leave”?  

MR YAU:    Yes, general leave, without restricting us the draft.  The draft is just to support the need for amendment.

COURT:      Are you quite sure about this?

MR YAU:    Yes. ...” 

(Emphasis added).

26.  Mr Yau was the instructing solicitor present in court on 16 November 2007.  He would have been aware from what Ms Chih and Judge Wong said that the judge had not given general leave.  Furthermore, when he appeared before Judge Yung on 26 November 2007, the draft order had not yet been sealed.  As such it is difficult to see what factual foundation he had for the answers he gave to Judge Yung.

Judge Yung’s order

27.  As I have noted earlier, Judge Yung did not have the Transcript of the hearing of 16 November 2007 before him.  In view of those answers from the Applicant’s solicitor and the fact that the draft order did not specify that leave to appeal was restricted to paras.3(a)-(f), Judge Yung treated the order as one giving general leave to amend. 

28.  Nevertheless Judge Yung dismissed the summons on the ground that the Applicant’s solicitors had deliberately failed to file the Amended G&P of Claim on the afternoon of 16 November 2007 as he did not agree with it (Appeal Bundle p.54T-V, p.55E-J).  

29.  The Applicant subsequently asked Judge Yung to review his order.  On 6 December 2007 he confirmed it.  The Applicant then lodged this appeal on 11 December 2007. 

Hearing before Judge Wong on 17 December 2007

30.  This led to an application for vacating dates of trial for which there was a hearing before Judge Wong on 17 December 2007.  There was no argument except on the issue of costs.  In the end Judge Wong reserved costs.  

31.  The only relevance of this is that Mr Cheung argued that at that hearing Judge Wong himself confirmed that he had given “general leave to amend” on 16 November 2007. 

32.  We were provided with the Transcript of the hearing before Judge Wong on 17 December 2007.  The Applicant through counsel was advancing the argument that general leave was granted (p.4U - 5B):

“MR CHEUNG:    ... And as you can see, the Notice of Appeal, and my understanding – your Honour, I wasn’t the trial counsel – my understanding was that you have granted per general leave to amend the pleadings, not specifically – not based on a draft application placed before your Lordship”.

Subsequently Judge Wong said the following (p.6E-G):

“... The respondent seems to suggest that the applicant was wrong in making such substantial amendments.  But the order I make in allowing the amendment was not specific.  So, there could be something that the applicant can argue on, so I will not say that the appeal is entirely without merit”.   

33.  As the Transcript of the hearing on 16 November 2007 was not yet available, it was unfortunate that Judge Wong did not listen to the recording of the hearing to remind himself of the events before accepting the Applicant’s assertion.  Had he done so, undoubtedly he would not have accepted that “there could be something that the applicant can argue on”.

Receipt of Transcript of 16 November 2007 hearing

34.  In any event, two days later on 19 December 2007, the Applicant’s solicitors received from the Tribunal a transcript of the hearing which had taken place on 16 November 2007.  On reading the Transcript, there could be no possible doubt that Judge Wong had not given general leave to amend.  

Respondent’s Notice

35.  The Respondents also filed a Respondents’ Notice on 24 December 2007 expressly making the point that leave given by Judge Wong was not “general leave for the Applicant to amend at its liberty”.

Appeal

36.  It is clear that there is absolutely no merit in the appeal.  Although a party may amend a document once without leave, it can only do so before the hearing: rule 12(1) Lands Tribunal Rules.  Since the hearing had commenced, the Applicant could not make any amendments without leave of the Tribunal.  The Applicant’s argument that Judge Wong had given “general leave to amend” is clearly wrong for the reasons I have set out above.  As such, the new draft was not in compliance with Judge Wong’s order of 16 November 2007 and it was disingenuous to simply ask for an order to file it “out of time”.         

37.  If, on further reflection in the afternoon of 16 November 2007, the Applicant wished to amend the G&P of Claim in a way different to paras. 3(a)-(f), it could have filed the Amended G&P of Claim that afternoon and then sought leave to re-amend.  In fact Judge Yung had sought to explain that procedure to the Applicant’s solicitor on 26 November 2007. 

38.  Instead the Applicant ignored the terms of leave granted by Judge Wong which must have been clear to all present at the hearing, sought leave to file the new draft under cover of a time summons, sought to exploit the brevity of the sealed order and made representations to Judge Yung which had no factual foundation.  The time summons was completely misconceived and the summons should have been dismissed without the need to consider aspects relevant to time summonses such as prejudice and costs.

Order

39.  For those reasons I dismissed the Applicant’s appeal and ordered that the Applicant pay the Respondents’ costs of the appeal forthwith on an indemnity basis. 

40.  In view of the conduct of the Applicant’s solicitor who would have been aware of how events unfolded before Judge Wong on 16 November 2007, I also ordered the Applicant’s solicitors to show cause within 14 days of the handing down of these Reasons why they should not repay those costs to their client the Applicant.  If they wish to show cause, they should do so in the first instance by sending representations in writing, which they may support by affirmation, to be served also on the Applicant.  If they do so, the Applicant may (if it wishes) reply by written representations which it may support by affirmation within 14 days thereafter.  If it does so, the Applicant’s solicitors may similarly reply to it within 14 days thereafter.

Hon Chung J:

41.  I agree.