NG PUI SHEUNG v. YEUNG CHICK CHEONG and Another

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

1986, No.A298 & 1990, No.A5652

(Consolidated)

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R U L I N G

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1. On the fifth day of this trial the Plaintiff is applying to re-amend her Statement of Claim to allege that by virtue of a written I.O.U. dated 20th November 1985 the Defendant agreed to convey his interest in Flat B, 1st Floor and Flat Roof B, Che Chung Building, 135-143 Po Kong Village Road, No.2 Po Tin Lane, Kowloon, if he failed to repay the sum of $400,000 by 31st December 1985. Amongst the relief that would be sought is an order that the Defendant transfer his interest in that property to the Plaintiff.

2. That such an amendment should be sought today is, to say the least, surprising. The proceedings were commenced over 10 years ago, on 16th January 1986. The I.O.U. dated 20th November 1985 has been a central feature of the Plaintiff's case from the start, but no allegation has been made until now that the document had the effect it is now alleged. No attempt has been made until now to seek the relief now sought in the suggested re-amended Statement of Claim. On the contrary, in a statement to the police on 8th April 1986, the Plaintiff claimed that the effect of the I.O.U. was that if the Defendant did not return the $400,000 to her, he would have his flat mortgaged in order to compensate her. That construction of the document seems to have been shared by the Defendant who, in his witness statement of 24th February 1995, said that his understanding of the terms of the I.O.U. were that his flat would be pledged as security for the repayment of the $400,000.

3. Bearing in mind the rise in property values over the years, one would have thought that the Plaintiff and her legal advisers would have pursued the claim they now seek to pursue if they had taken the view that that was what had been agreed.

4. In my view it would not be appropriate or in the interests to justice to allow the amendment sought at this late stage.

5. It is not disputed by Mr Lim that the amendment sought amounts to a new claim involving the addition of a new cause of action. It is not disputed that if fresh proceedings were initiated, based upon this cause of action, that cause of action would be statute-barred.

6. After many years, the issues in these proceedings have crystallised. The manner in which the trials of the two actions are to be tried have been settled and the trial of the issues is proceeding. The amendment sought would raise a number of new issues which would have the effect of halting the trial while these issues were considered. The correctness of the translation of the relevant paragraph of the I.O.U., which was not previously essential to the issues before the court, would have to be analysed. It appears from what I have been told by counsel that opposing views can be expressed. Issues such as whether the terms of the agreement constituted an unlawful penalty would have to be considered and evidence sought. The procedure settled for the trial of these two actions would have to be altered. The court could not make the order which would be sought in the first action if there had been a valid deed of gift of the property or the Defendant was holding his interest as trustee. These are issues which will be decided in the second action.

7. Furthermore, I consider that there is a possibility that injustice might be caused to the Defendant's case if the amendments were allowed. He has recently died and therefore would be deprived of the opportunity to make any comment on the new allegations. Since we cannot know exactly what his comments might have been on these allegations, we cannot rule out the possibility that if he had had the opportunity he might have been able to say something relevant to the issue. He may, as Mr Yuen has pointed out, be, for instance, denied the possibility of seeking a counterclaim for rectification of the document of 20th November 1985. Accordingly, I am not prepared to exercise my discretion to allow the amendment sought.

(P.K.M. Longley)

Deputy Judge of the High Court