CSI INVESTMENT MANAGEMENT LTD v. KE JUN XIANG

HCA1647/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.1647 OF 2004

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R U L I N G

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1. The new affirmation contains in particular an allegation at paragraph 7 that there was a further sum of $500,000 added, as extra consideration for the compromise which involved the issue of promissory notes for the licence fees to September 2003, i.e. 25 months.  This is to explain why promissory notes to a total of $3,000,000, i.e. to cover licence fees for 30 months, were issued.  This is new.  When the promissory notes were issued in December, 28 months’ licence fees were owed.  There is nothing in the first affirmation of the defendant to suggest a compromise for fees up to September. 

2. The rule is that in the normal case, evidence should be admitted because the appeal is a re-hearing.  The rule may be departed from if a wholly different defence is raised.  Core Resources (Far East) Ltd v. Sky Finders Ltd, [1992] 1 HKLR 193.  In the later case of Wong Hung Yu v. Woing Ming Fat, [2002] 1 HKLRD 555 Ma J (as he then was) said much the same thing; that leave might be refused to admit further evidence where this entails a radical change of case by the party seeking to adduce that evidence. 

3. I do not see that a radically different defence is raised here, so I will allow the admission of the 2^nd affirmation of the defendant.  However, it does raise new matter which needs to be answered; and so the plaintiff will have to be allowed to answer, and there will have to be an adjournment for this purpose. 

4. As to costs, the simple fact is that the defendant is bringing in new matter, by a summons filed yesterday.  The new matter was communicated to the plaintiff five days ago.  It is said that if the plaintiff had indicated its position it might have been possible to vacate this hearing, and avoid wasted costs; also that, since the defendant would have opposed the application on other matters than paragraph 7, the adjournment would have been needed anyway. 

5. The simple fact, in my view, is that all this should have been done before the matter came before the master.  The defendant should at that stage have decided what his case was going to be, and what evidence he was going to put up in support of it.  If he saw the need to put in fresh evidence after the master’s hearing he had ample time to do that.  I do not see that he can expect to put in fresh evidence at this stage, by indulgence, and not pay for all the costs occasioned thereby.

6. I will allow the application in the defendant’s summons dated 12 September 2005, paragraphs 1-4.  That includes of course the amendment of the pleadings which I accept are not radical and not new matter. 

7. The plaintiff will have 14 days from the date of the order to file affidavit evidence in reply to the latest affirmation, and the 2^nd defendant seven days to reply thereafter if so advised.

8. Appeal adjourned to a date to be fixed, three hours reserved.

9. The costs of and occasioned by the amendment of the pleadings will be to the plaintiff in any event. 

10. The costs of the summons will be to the plaintiff in any event, including the costs of the hearing today.