HCA 2493/2018
[2023] HKCFI 1272
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO 2493 OF 2018
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BETWEEN |
| | XUE BORAN | 1st Plaintiff |
| | YANG LIXUAN | 2nd Plaintiff |
| | and | |
| | HUI CHI SUM | 1st Defendant |
| | YUEN SZE MAN | 2nd Defendant |
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| Before: | Deputy High Court Judge Winnie Tsui in Chambers (Open to the Public) |
| Date of Hearing: | 31 March 2023 |
| Date of Decision: | 31 March 2023 |
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D E C I S I O N
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1. Before me this morning is the summons filed by the defendants on 23 March 2023, which is last Thursday. It is supported by an affidavit sworn by their solicitor. The affidavit was filed on 28 March 2023, which is just this past Tuesday. There is no explanation why this supporting affidavit was filed five days later after the filing of the summons.
2. Having heard submissions from counsel, I refuse to grant leave sought by the defendants to amend the amended defence and counterclaim. In arriving at that conclusion, I have taken into account the following factors.
3. First, the application to amend is an extremely late application.
4. Master granted leave to the plaintiffs to set down the action for trial in May 2021. The pre-trial review hearing took place in January this year, more than two months ago. The trial is scheduled to commence on 17 April this year, after the Ching Ming and Easter holidays.
5. The defendants’ amendment summons was taken out less than four weeks before the commencement of the trial. Because of the obvious lateness of the application, it was clearly incumbent on them to explain why the application was taken out so late. But the supporting affidavit in relation to the present application only came four days ago.
6. Secondly, the defendants have not been able to put forward any proper explanation for the lateness.
7. Their position is that the present form of their defence is not factually consistent with what is stated in their witness statements. Mr Michael Lee, counsel for the defendants, submits that the proposed changes are “technical in nature” and the purpose of the proposed amendments is simply to bring in line the pleading with the witness statements.
8. In the supporting affidavit, the following explanation was put forward for the delay and I quote below paragraph 13:
“As to the reason for delay, it was at first believed that paragraph 9 of the Amended Defence and Counterclaim has already spelled out sufficiently the defence case with respect to the issue of duress. For this reason, no application has been made to seek amendment.”
9. Paragraph 14 read:
“However, upon clarification by the Defendants in the meeting in March 2023, Mr Lee [trial counsel for the defendants] was of the view that the proposed amendment is necessary in order to properly reflect what was stated in the Witness Statements.”
10. For reasons which I will go into later, there is nothing technical about the proposed change. In fact, the proposed change, if allowed, would alter the scope of the potential evidence that can be adduced by the plaintiffs to meet the newly pleaded case.
11. On the face of the explanation now put forward by the defendants’ solicitor, the defendants were aware of the content of paragraph 9 of the amended defence. Accordingly, they can be taken to have been conscious of the content but have decided that the paragraph could stay that way.
12. In fact, that must be the case as Ms Jennifer Fan, counsel for the plaintiffs, has highlighted to the court the chronology of these proceedings. The defendants served their witness statements on 15 May 2020, almost three years ago. At the same time when they served their witness statements, they also filed their answers to the plaintiffs’ request for further and better particulars to their amended defence and counterclaim. The meeting at The Arch, which took place on 23 November 2014, forms the subject-matter of paragraph 9 of the amended defence. It is plain that at that time the defendants must have reviewed both their own pleadings and also their witness statements and came to a conscious decision that it was unnecessary to amend their amended defence then.
13. By order of Master Lai dated 20 July 2020, the time for the parties to take out further interlocutory application lapsed on 31 July 2020. Importantly, when Master set down the case for trial in May 2021, it was upon the confirmation by the legal representatives for the parties that counsel advice had been obtained and that the case was ready for trial. In fact, by a letter dated 17 May 2021 sent by the defendants’ solicitors to the court, it was confirmed that the defendants had sought advice from counsel. I should note here that the counsel was not Mr Lee on that occasion.
14. In any event, change of counsel is not a proper explanation for a late application.
15. Thirdly, there will be serious prejudice caused to the plaintiffs if the proposed amendments are now allowed. The prejudice is twofold.
16. First, the proposed amendments, if allowed, would cause disruption to the preparation of the trial. The proposed change relates to the main episode of the present dispute. It relates to the meeting in the plaintiffs’ flat in The Arch on 23 November 2014.
17. According to the present form of the defence, the 1st plaintiff made threats to the defendants, suggesting that harm might follow to the defendants and their three children if they did not sign the loan agreement produced to them.
18. Materially for today’s purposes, according to the present form of the defence, two staff from the firm of solicitors acting for the plaintiffs were present in the flat in some parts of that meeting. Those two staff were Mr Lau and Mr Leung. According to the present form of the defence, Mr Lau and Mr Leung were not present when those alleged threats were made. According to the proposed changes, they were present in the flat when those alleged threats were made. Mr Lau is now on the list of witnesses to be called by the plaintiffs at the trial. Mr Leung is not.
19. It is true, first, that this version of events has been set out in the defendants’ witness statements. It is also true that the plaintiffs’ position is that no such threats had ever been made by them on that occasion. But, here, if the proposed amendments are allowed, the plaintiffs would be required to meet a formal case that Mr Lau and Mr Leung were present in the flat when the alleged threats were made. It is the pleadings which define the issue in dispute between the parties, not the witness statements.
20. It is clear that if the changes are allowed, the plaintiffs’ lawyers would have to spend time now to take instructions from the plaintiffs, from Mr Lau and possibly from Mr Leung in relation to, for instance, the exact sequence of events which took place on that occasion. This would cause serious disruption to the preparation of the trial which is upcoming and amidst the intervening public holidays.
21. Second, if the proposed changes are allowed, the plaintiffs might be deprived of the opportunity to call Mr Leung to testify on their behalf and that would cause substantial prejudice to them. According to the proposed changes, Mr Leung was or could have been an eyewitness to the threats made by the 1st plaintiff to the defendants.
22. A plain reading of the proposed changed pleading would suggest that both Mr Lau and Mr Leung could have been said to be aiding and abetting the plaintiffs’ intimidation and threats, or at the very least they had done nothing to stop the plaintiffs from doing so. It is perfectly legitimate for the plaintiffs to now consider calling Mr Leung to testify in the trial to rebut this serious allegation.
23. In the short space of time after the defendants took out the summons, the plaintiffs managed to make inquiries with Mr Leung who is now working in another law firm. The indication has been that Mr Leung may not be able to attend the trial as a witness. In any event, to call Mr Leung to testify on such short notice in order to meet such serious allegation is a material prejudice.
24. If the trial has to be adjourned for that reason, that is clearly prejudice. If the trial is not adjourned, the plaintiffs would be deprived of the chance to call Mr Leung who has now become a material witness in light of the new pleaded case.
25. For all these reasons, there is nothing “technical” about the changes proposed by the defendants. These changes would result in substantive and substantial unfairness to the plaintiffs, thus causing prejudice which should not be allowed. I would just add that the matter might be viewed differently if Mr Leung had all along been a witness of the plaintiffs. But that is not the case here.
26. Fourthly, I must bear in mind, however, that the task of the court is to resolve the issues in dispute between the parties in accordance with their substantive rights and obligations as required by Order 1A, rule 2(2) of the Rules of the High Court. The defendants are now making a serious allegation of duress against the plaintiffs. If I do not allow their proposed amendments, they are bound by a defence which is not entirely accurate and which is factually inconsistent with the witness statements which they have filed.
27. Subject to oral evidence which will come up at the trial and also further submissions of counsel, the defendants will not be able to run the case that Mr Lau and Mr Leung were present in the flat when those threats were allegedly made by the 1st plaintiff to the defendants.
28. Nonetheless, in both versions of the defence, there is no change as regards the content of the alleged threats and the acts which the defendants now say amount to duress. On this primary factual dispute, the 1st and 2nd plaintiffs, who are the alleged makers of the threats, and the 1st and 2nd defendants, who are the alleged recipients of the threats, would be the key individuals. They will be giving oral evidence at the trial and the court will be able to resolve the primary factual dispute after hearing evidence from these four individuals as well as from Mr Lau who would also give evidence in the trial.
29. In the circumstances, I am satisfied that even if the proposed changes are not allowed, the court will still be in a position to adjudicate on the substantive rights and obligations of the parties at the upcoming trial. Any difficulties faced by the defendants in having factually inconsistent pleadings and witness statements is a problem of their own making and they will have to resolve it as they see fit at the trial.
30. Overall speaking, in light of the extreme lateness of the amendment application, the lack of proper justification for the lateness and the substantial prejudice that will be caused to the plaintiffs if the amendments are allowed, the balance comes down against the defendants.
31. The outcome of my decision is that the defendants would be bound by a factual case which is, according to them, not entirely accurate on the facts. But as I have said just now, this is a problem of their own making and they will have to live with the consequence and deal with the problem if they can. So that is my decision.
(Submissions re costs)
32. I order that the defendants should pay the plaintiffs’ costs incurred on the amendment application on an indemnity basis, summarily assessed at $45,000, payable on or before 14 April 2023.
33. As I have ruled above, the application, if allowed, would have caused substantial prejudice to the plaintiffs. This has been highlighted by Ms Fan in her written submissions. Yet Mr Lee insists today that the amendments are only “technical” changes. This is wrong. This reflects a casual attitude on the part of the defendants in how they prepare the case for trial. The situation warrants an indemnity costs order. This is to mark the court’s disapproval of the defendants’ handling of the case. That is also in line with the remarks made by the Court of Appeal in Li Xiao Yun and Xu Ying, CACV 38/2013, 11 March 2013 at paragraph 18.
34. Lastly, I repeat my direction which was given in the course of this morning’s hearing that no further interlocutory application be taken out unless with the prior leave of the trial judge.
| | (Winnie Tsui)
Deputy High Court Judge |
Ms Jennifer Fan, instructed by Robinsons, Lawyers, for the 1st and 2nd plaintiffs
Mr Michael Lee, instructed by Chan & Chan, for the 1st and 2nd defendants