PROSPEROUS NURSING CENTRE LTD v. CHEUNG YUK YING AND ANOTHER

HCA3810/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.3810 OF 2002

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D E C I S I O N

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1.  This is an application by the defendants to add two more defendants to their counterclaim. 

2.  The plaintiff agreed to take over the lease of the premises used as an old people’s home operated by the defendants and the agreement also contained that the defendants should hold the licence for the elderly home for six months after the delivery of vacant possession to the plaintiff in order to enable the plaintiff to become the licensee of the old people’s home.  The plaintiff became the tenant but did not proceed with the agreement.

3.  In the counterclaim, the defendants alleged that the 1^st defendant by Counterclaim (Madam Mak) conspired with the plaintiff, a company under her control, to injure the defendants by engineering a situation whereby the defendants were induced to yield possession of the premises, thereby terminating the operation of the old people’s home.

4.  Mr Lee for the defendants now apply to add a new claim of conspiracy between Madam Mak, her son Mr Wong and daughter-in-law Mrs Wong. 

5.  What fuelled this belated application was that notwithstanding the agreement between the plaintiff and the defendants that the tenancy agreement was to be procured to be transferred to Madam Mak, on the signing of the tenancy agreement by the plaintiff with the landlord, there was an additional clause that in the event that the defendants were not to yield possession on or before 15 September 2002, delivery of possession could be postponed until on or before 15 November 2002, and if thereafter, the landlord were unable to obtain vacant possession of the old people’s home from defendants, then the tenancy agreement would be let to lapse.  Mr Lee said he only discovered the parts played by Mr and Mrs Wong from the evidence of Madam Mak yesterday. 

6.  On the other hand, Mr Charles Wong for the plaintiff submitted that the provisional tenancy agreement was disclosed on at the latest 22 November 2004 where a copy of it was sent to the solicitors for the defendants.   And even earlier to that, in November 2003, without disclosing the contents of the provisional tenancy agreement, Mr Wong, who is set down to be a witness for the plaintiff in the case, had disclosed in his witness statement that the provisional tenancy agreement was signed by him.  Mr Charles Wong submitted that at the latest by November last year the defendants’ awareness should have been triggered, whereby enquiries by means of say, interrogatories to be administered on Mr Wong should be had, and if so, the claim should have been added prior to the commencement of the trial on 6 April this year.

7.  Mr Charles Wong referred to two passages in the Hong Kong White Book, under paragraph 15/6/6, in that: (1) an order for adding or substituting party may be refused if a new cause of action were added; and (2) the application should be refused if the adding of the parties does not throw light in the resolution of the disputes.  Mr Charles Wong said that Mr Wong will be a witness in any event and the case against him may be brought separately after this trial has concluded.

8.  There are two ways of looking at the matter.  It may be asked whether Mr Wong may be prejudiced if he is to give evidence first and to be sued later.  Of course that is not a major consideration.  For the major consideration, I still have to look at the merits of the amendment.

9.  The conspiracy, as presently pleaded, is not without difficulties, both forensically as well as to evidence.  Be that as it may, without entering into detailed assessment of the merits of the matter, there seems to be one matter which causes me some concern, that was notwithstanding Madam Mak was the signatory of the agreement of sale and purchase of the old people’s home, she claimed to have absolutely no knowledge of the terms of the provisional tenancy agreement, and as to the formal tenancy agreement which she signed, she tried to explain away the questions under cross-examination on the special clause by saying she did not know English.

10.  This is just a very preliminary view and I do not know what is to become of this special clause.  But having considered the whole matter and also that if there were to be any trial on the conspiracy at all, there should be only one rather than two, I shall allow the amendment and adjournment, but it must be on costs as I have indicated to Mr Lee before he proceeded with the application.  As the trial has to be re-constituted, I have also to declare a trial de novo.

11.  I will allow the adjournment and make an order that all the costs of and occasioned by the amendment and all the costs up to today and all the costs thrown away (if not included in the costs up to today) be paid by the defendants to the plaintiff forthwith.