BEST VIEW MEDICAL CO LTD v. RICHERMEN INTERNATIONAL INVESTMENTS LTD

DCCJ 1080/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.1080 OF 2015

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REASONS FOR DECISION

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1.  On the pre-trial review of the captioned action, I heard plaintiff’s summons filed 12 Dec 2016 (“the summons”) applying, inter alia, to amend its Reply & Defence to Counterclaim and I allowed it to such limited extent indicated below.

2.  Below are my reasons for my decision.

The pleadings

3.  The plaintiff tenant rented an entire floor (“the premises”) of a building in Central (“the building”) owned by the defendant landlord in order to operate a medical clinic and a tenancy agreement for a term of 2 years as from 1 Jan 2015 was executed (“the agreement”).

4.  At para 8 of the Statement of Claim (“SOC”), the plaintiff complained that it had been prevented from operating its clinic at the premises 3 months into the term as a result of defendant’s breaches of express and implied terms of the agreement.

5.  The defendant, it was said, had unreasonably refused to give consent to proposed decoration/renovation to the premises whose plans had been submitted by plaintiff (“the proposed decoration”). It had also demanded additional reinstatement deposit and charges which are unreasonable and grossly excessive.

6.  At para 8(g) of SOC, it was pleaded that on 3 occasions, including the 1^st occasion on 28 Feb 2015, plaintiff’s contractor was unreasonably interfered and prevented by the manager of the building (“the manager”), which was affiliated with defendant, to proceed with the proposed decoration.

7.  In its Amended Defence (“the Defence”), the defendant pleaded various clauses of the agreement to suggest that the proposed decoration was prohibited unless prior written consent was given by it to their plans and that it was entitled to request from plaintiff reinstatement deposits prior to giving written consent for the same (“the various clauses”).

8.  By para 11(k) to (o) of the Defence, it was further pleaded that the plaintiff had not paid the reinstatement charge and deposit in respect of the proposed decoration, and that there was no consent granted by defendant in respect of it. Nonetheless, on or about 28 Feb 2015, plaintiff proceeded with the proposed decoration in breach of the various clauses, causing defendant, inter alia, to report to police.

9.  In reply, at para 8(d) of its Reply & Defence to Counterclaim, it was pleaded by plaintiff that: -

“... before 28 Feb 2015, the defendant had appointed its own contractors and carried out the works in items 1 and 4 (which concerned the common area on that floor of the building outside of the premises) listed on its debit note dated 24 Nov 2014 after being informed by the plaintiff the gist of its renovation/decoration plans. The works carried out by the plaintiff on or after 28 Feb 2015 was merely the continuation of the said works done by the plaintiff’s contractors. As such, consent or approval, whether express or implied, to proceed with the alleged works has been duly given by the defendant. Alternatively, the defendant has the obligation to give its consent or approval to the continuation of the alleged works by the plaintiff (italics supplied)”

The summons

10.  By para 1of the summons, plaintiff seeks leave to amend aforesaid para 8(d) by:

(1) correcting 2 typographical errors by changing its 2^nd sentence to “The works carried out by the plaintiff on or after 28 Feb 2015 were merely the continuation of the said works done by the defendants’ contractors (errors in italics)”;

(2) re-numbering its 3^rd and 4^th sentences as sub-para (iii) & (iv);

(3) adding after the words “As such,” a new sub-para (i) which reads “as [the proposed decoration] and the renovation/decoration works actually carried out by the plaintiff are concerned:- (i) the defendant by conduct represented to the plaintiff that it would forbear to enforce and/or rely on [the various clauses] to be performed or observed by the plaintiff, where the plaintiff so acted in reliance on such conduct of the defendant and believing in such representation of the defendant; (italics supplied)”

(4) adding new sub-para (ii) which reads “ the defendant had waived, or is estopped from enforcing and/or relying on [the various clauses] (italics supplied);”.

11.  By para 2 of the summons, plaintiff seeks leave for the parties to exchange further witness statement(s) in respect of the matters stated in the said para 8(d) only, on or before 4 Jan 2017.

12.  Para 3 to 5 of the summons relate to time abridgment and costs of the summons.

Evidence

13.  A 2^nd affirmation of Chan Siu Pan (“Chan”), the handling solicitor of the plaintiff, was filed on 13 Dec 2016 in support of the summons.

14.  Chan confirmed that the summons was taken out “as a result of advice of trial counsel instructed to take up the case last week”. The trial counsel had, Chan said, previously been involved in defendant’s application for security for costs, but was no longer involved subsequently. He said that it so happened “trial counsel holds different views on the same subject matter”.

Analysis

15.  I have carefully considered all materials, authorities and submissions from both parties before me.

Applicable law & principles

16.  The summons was made, inter alia, under O.20 r.5 of the Rules of District Court, Cap.336H (“RDC”), whose r.5(1) is subject to O.20 r.8. RDC. Under O.20 r.8(1A), RDC, this court shall not order a pleading to be amended unless it is of the opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs.

17.  The general principles governing grant of leave to amend are trite and they are set out at para 20/8/6 - 20/8/10, 20/8/24 & 20/8/28 at p.495-499, 505 & 506 of Vol.1 of Hong Kong Civil Procedure 2017.

18.  Of course, I have also to exercise my discretion to give effect to the underlying objectives set out in O.1A, r.1 of RDC.

New allegations

19.  While the proposed amendments involve correction of typographical mistakes (to which Mr Ho appearing for defendant (“Mr Ho”) did not object), I think they advance new allegations of waiver of, and estoppel from enforcing or relying on, the various clauses for defendant to meet for the 1^st time.

20.  Looking at original para 8(d) of the Reply, the former allegations are only consent or approval duly given expressly or impliedly, or that the defendant had the obligation to give consent or approval to continuation of the alleged works. The proposed amendments are, I think, more than an exercise to “tidy up”, as Mr Chai appearing for plaintiff (“Mr Chai”) put in his skeleton. He had no choice to concede that when pressed by this court.

Unknown new factual materials

21.  Though limited to para 8(d) alone of the Reply, as envisaged by para 2 of the summons, new factual materials could further be introduced by both parties.

22.  As was complained by Mr Ho, no draft further witness statement(s) are annexed to the summons to give some clue to the extent of further factual materials to be input by plaintiff.

23.  On enquiry of this court, Mr Chai said both existing witnesses of plaintiff are to provide supplemental witness statements limited to matters of amended para 8(d) if leave to amend is given. Instructions were being sought from them and no draft was ready. One cannot tell how much new factual materials are to be introduced by plaintiff. I must say I find this unsatisfactory.

Late application

24.  As Mr Chai frankly admitted, this summons was taken out late in the day.

25.  The trial is scheduled to commence on 6 Feb 2017 with a total of 4 days reserved. In other words, the trial is about 7 weeks ahead and there is not much time for maneuver in between.

26.  By order of Master D. Ho as early as on 11 Apr 2016, it was already ordered that both parties shall obtain counsel’s opinion and take out all outstanding interlocutory applications on or before 27 Jun 2016.

27.  In plaintiff’s Listing Questionnaire filed for case management conference (“CMC”), Chan on behalf of plaintiff confirmed that plaintiff’s pleadings are in order and require no amendment.

28.  At CMC held on 15 Aug 2016, leave was given to set the case down (with PTR to be held on 14 Dec 2016).

29.  And the action was set down in the fixture list as early as on 12 Sep 2016.

No good explanation for lateness

30.  Again, Mr Chai agreed that no good explanation was offered by Chan in his affirmation for this late application.

31.  It goes, I think, without saying that counsel’s opinion should be sought earlier and that confirmation in Listing Questionnaire is nowadays taken seriously after introduction of Civil Justice Reform. The parties’ legal advisers are also there to assist the court to advance the underlying objectives by being disciplined and diligent.

Real risk of impact on trial

32.  While there was no suggestion before me that the milestone dates for the trial need to be rescheduled, such addition of unknown new factual materials at this late stage caused me to have concern their possible adverse impact on the trial.

33.  This court has asked Mr Ho what new factual materials, if any, and how much time, if any, were required on the part of the defendant to deal with such new allegations of para 8(d) of the Reply if leave is given for the same. He said he cannot assess or give an answer without sight of draft further witness statements to be introduced by plaintiff and I cannot but agree this is the prudent answer.

34.  Putting aside possible original length of trial taken up by the new allegations to be introduced, absent reliable or reasonable information about the extent of new factual materials to be introduced by both sides and the time taken for the same, be it by exchange or in sequence of time, I took the view that there is a real risk that these additional matters and preparation would make an adverse impact on the otherwise orderly preparation for the trial on the current pleadings.

35.  In the ordinary course of events, the parties (and their legal teams) should, I think, not be distracted in the 7 weeks ahead and should now focus on trial preparation.

Amendments unparticularized and useless

36.  Had the proposed amendments been useful in determining the real question in controversy between the parties, the arguments of Mr Chai that my balancing exercise tilted in plaintiff’s favour might be stronger. But I agree with Mr Ho that the proposed amendments are useless to plaintiff and are doomed to fail.

37.  To start with, I must say that, save with Mr Chai’s explanation in his skeleton and from the bar table, one can hardly tell that the particulars for the new plea of waiver of, and estoppel from enforcing or relying on, the various clauses are found in the 1^st and 2^nd sentences of the said para 8(d).

38.  As Mr Chai explained, as defendant’s contractor had carried out certain works[1] concerning the common area of the floor of the premises after informed by plaintiff the gist of its renovation/decoration plans, plaintiff was misled by such conduct into believing that it could do or continue the same and the various clauses are not to be enforced or relied upon (or that they were waived).

39.  With respect, such new plea is, I think, fundamentally flawed and cannot succeed. Defendant was the owner of the building and the premises. Plaintiff was a mere tenant of the premises and bound by the various clauses allegedly applicable to it. One begs to ask how plaintiff could reasonably think that it could continue or follow the same works done by its landlord defendant. Equally, one begs to ask how plaintiff could reasonably interpret the works of defendant’s contractor as defendant not enforcing or relying on the various clauses against it. The legal position of the two parties is fundamentally different.

40.  This is not to mention that Mr Ho had drawn my attention to email and letter written on behalf of the manager prior to 28 Feb 2015[2] making it clear to plaintiff’s side that the proposed decoration cannot proceed without first obtaining written consent or approval of its plan by paying up additional reinstatement deposit and charges requested. Plaintiff could in no way, I think, be misled after receipt of such blunt reminders from the opposite side.

41.  Accordingly, the new plea at para 8(d) cannot, I think, assist the plaintiff at all.

Discretion

42.  All things considered and balanced, save for the correction of typographical errors which Mr Ho agreed, I do not see fit to allow the rest of the proposed amendments to para 8(d) of the Reply & Defence to Counterclaim.

43.  Such remaining late amendments to para 8(d) introducing new allegations serve, I think, no purpose in determining the real question in controversy between the parties. They are unnecessary for disposing fairly this action. They only add to the costs of the action and distract the parties from their task of trial preparation, if not otherwise having an adverse impact on the trial or its dates.

Disposition

44.  On para 1 of the summons, I give leave to plaintiff to amend para 8(d) of its Reply & Defence to Counterclaim by changing its 2^nd sentence to “The works carried out by the plaintiff on or after 28 Feb 2015 were merely the continuation of the said works done by the defendants’ contractors” and plaintiff is to file and serve its Amended Reply & Defence to Counterclaim within 7 days of today.

45.  And I made no order on para 2 of the summons.

Costs

46.  I made orders in terms of para 3 to 5 of the summons, with certificate for counsel (as there was no objection from Mr Chai).

47.  Finally, I thank Mr Ho and Mr Chai for their assistance.