BECKTON INTERNATIONAL LTD AND ANOTHER v. OOI LEAN CHOO (also known as ALSIE LAU)

HCA 1945/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1945 OF 2014

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HCA 2304/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2304 OF 2014

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D E C I S I O N

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THE APPLICATIONS

1.  There are two applications in respect of the following actions:

(a)   By summons dated 28 March 2017, the defendant in HCA 1945/2014 seeks to make material changes to her defence and add a counterclaim; and

(b)   By summons dated 29 March 2017, the 1^st defendant in HCA 2304/2014 seeks to make material changes to its defence.  The proceedings against D2 and D3 were dismissed by consent on 12 October 2016 by the Order of Master J Wong.

2.  The plaintiffs are the same in HCA 1945/2014 and HCA 2304/2014.  They contest the above applications.  The parties are legally represented.[1]

MISCONCEPTION OF CONSOLIDATED ACTION

3.  Because of the misconception of consolidation of proceedings under Order 4 RHC, the proceedings in these two actions have embarked on wrong tracks, as can be shown below.  As a result, the applications have missed the appropriate pleadings and the hearing today can be said as wasted.  Time and costs for these two actions are wasted too.  I shall set out the procedural history to demonstrate the procedural confusion in these two actions below.

4.  Under O.4 r.9(1), there are a number of options, namely:

(a)   Consolidation of the actions;

(b)   Actions to be tried at the same time;

(c)   Actions to be tried one immediately after another, or

(d)   Any of them to be stayed until after the determination of any other of them.

5.  Directions for each of the options are different.  Special directions have to be tailored for the matter for the purpose of an expeditious and fair trial in accordance with Order 1A RHC.

6.  Inappropriate directions will not save costs and time for the trial.  Quite the contrary, the proceedings will be unduly lengthened and time and costs will be wasted.  It will be helpful to set out the remarks of Chung J. in Wong Yuen Shun Kwong Wah Hong Limited v Siu Siu Kam (unreported, HCA 3205/2000, 30 March 2006) to illustrate this issue:

“ 35. When they came on for trial, the trial bundles contained, among other things, pleadings for each of the two actions. This is because, despite the ‘consolidation’ order, there was no court direction to give effect to the consolidation. The actions were thus effectively only ‘consolidated’ in name; the ‘consolidation’ order actually required discovery of documents to be proceeded with as if the two actions were still separate and independent actions. There was no direction as to, for instance, who was to be the plaintiff and who the defendant in the consolidated action, which set of pleadings in the two actions should be used (or whether new pleadings should be filed) or how the relief originally sought in the two actions is to be treated in the consolidated action.

36. This totally defeated the purpose of the consolidation, which is to save costs and time: Hong Kong Civil Procedure 2006, para. 4/9/2… …”

The procedural history

7.  The plaintiffs of HCA 1945/2014 filed their writ on 3 October 2014.  They also took out another writ against the defendants in HCA 2304/2014 filed on 13 November 2014.  The respective Statements of Claim were filed on 5 December 2014 and 28 November 2014 respectively.

8.  The parties in HCA 2304/2014 made an application before Master S. Lo where by consent, the Master made an order in the following terms:

(a)   This action be heard and tried together with HCA 1945/2014;

(b)   The Plaintiffs do have leave to file and serve the Consolidated Statement of Claim within 7 days from the date hereof;

(c)   The Defendants do have leave to file and serve their Defence to the Statement of Claim and the Counterclaim if so advised within 28 days thereafter;

(d)   The Plaintiffs do have leave to file and serve their Reply and Defence to Counterclaim if any in the action within 28 days thereafter;

(e)   Evidence adduced (including documents disclosed) in one of the above actions should also serve and be treated as evidence in the other action;

(f)   [the costs]

9.  It is apparent that if the two actions are to be tried together before the same judge, they remain to be two separate actions, which tally with direction e. that the evidence of these two actions are mutually admissible.  For two separate actions, the so-called “Consolidated Statement of Claim”, which is for a consolidated action[2], is inconsistent with separate actions.  It is therefore not applicable for the trial.

10.  When the parties appeared before me for the Case Management Summons hearing on 15 August 2016, I raised this issue with the parties.  They agreed that the “Consolidated Statement of Claim” is not applicable and should be dispensed with. An Order was then made, by consent, that the Consolidated Statement of Claim be dispensed with.

11.  As the Consolidated Statement of Claim has been dispensed with, the original Statements of Claim in respect of the two actions remains.  The proceedings for the pleadings under the respective original Statements of Claim should apply.

12.  However, the defendants in the respective actions had prepared their Defence to the Consolidated Statement of Claim.  Their Defences did not specify that they are for the Consolidated Statement of Claim.  They simply refer to the Statement of Claim of the respective actions.  Common sense dictates that once the Consolidated Statement of Claim has been dispensed with, their Defences to the Consolidated Statement of Claim will have no effect.

13.  The original Statement of Claim in respect of each of the actions remains without Defence.

14.  Now the defendants in the two actions apply for leave to amend their Defences, which are in fact responding to the Consolidated Statement of Claim and have become invalid.

Request from court for clarification

15.  In the circumstances, the defendant in HCA 1945/2014 and the defendants in HCA 2304/2014 have not even filed their Defences.  There is simply no basis for them to apply for leave to amend their respective Defences.  The proper procedure will be for them to apply to file and serve their respective Defences out of time.

16.  I have, in my preparation for the hearing today, identified this issue and I asked the solicitors of the parties to explain the above procedural conundrum to me on 29 July 2017 (Friday).

Case management directions

17.  The parties agree that the hearing cannot be proceeded.  Ps have proposed directions for me today. Having considered their submissions on the proposed directions, I shall now make the following directions:

(a)   Ps shall, within 14 days from the date hereof, take out an application for leave to amend the Statement of Claim in HCA 1945 of 2014 and HCA 2304 of 2014, if so advised;

(b)   Time for the defendants of the respective actions to file and serve their defence shall be suspended until the Plaintiffs have applied for leave to amend the Statements of Claim;

(c)   Leave for Ps to set down for trial shall be set aside;

(d)   The parties shall take out a Case Management Summons before the Court after close of the amended pleadings;

(e)   Liberty to apply;

(f)   Time shall run during the Summer Vacation.

18.  As to the costs of these applications, including the hearing today, Ps ask for costs or alternatively costs should be the Ps’ costs in the cause.  Ds ask this Court to make an order of no order as to the costs as this is a mutual misunderstanding of Consolidation under O.4, RHC.  I agree.  It is an obvious misunderstanding by the parties as the previous orders were made by consent of the parties.  Under Order 1A, rule 3 of RHC, the parties have a duty to assist the Court.  I shall now make an order that there shall be no order as to costs for the applications, including the hearing today.  It is unnecessary for me to make a decision for counsel’s certificates for this hearing.