Crane World Asia Pte Ltd v. Hontrade Engineering Ltd

HCA 109/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 109 OF 2014

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R E A S O N S   F O R   D E C I S I O N

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1.This is an application by the Plaintiff to amend its Amended Statement of Claim on the second day of the trial.  At the conclusion of the parties’ submissions, I dismissed the application and indicated that I would give my reasons in writing.  I now give my reasons for my decision.

2.This application arose under the following circumstances:

(1) On the first day of the trial, Mr Jose-Antonio Maurellet SC made a short oral opening on behalf of the Plaintiff.  At the end of Mr Maurellet’s opening address, Mr Richard Khaw SC, on behalf of the Defendant, rose and sought a number of clarifications in relation to the Plaintiff’s case.

(2) One of the points raised by Mr Khaw related to the precise amount of damages sought by the Plaintiff.  It was pointed out that the Plaintiff’s claim for the alleged breaches of 32 rental agreements (“the Rental Agreements”) in its Amended Statement of Claim is for HK$10,295,035, whereas the Plaintiff alleges in its Re-Amended Reply that the Defendant owes a sum of HK$25,064,211.76 to the Plaintiff.

(3) Mr Maurellet informed the Court that the Plaintiff intends to seek damages against the Defendant for a sum of HK$21 million odd for breaches of the Rental Agreements.  However, that ball-park figure does not appear in either the Plaintiff’s Amended Statement of Claim or its Re-Amended Reply. 

(4) After a short adjournment in the morning, Mr Maurellet indicated to the Court that the Plaintiff would apply for leave to re-amend its Statement of Claim.  Further time was sought by the Plaintiff to formulate the proposed amendments and Mr Maurellet applied for an adjournment until 10am on the following day to make submissions to support his client’s application. 

3.In the proposed Re-Amended Statement of Claim, the Plaintiff sought to amend paragraph 9 and prayer (2) as follows:

“9. The Plaintiff’s claim is for the sums of HK$10,295,035 HK$21,029,004.13 and Euro 62,825.58 as at 5 March 2015 or HK$24,678,308.53 and Euro 44,525.58 as at 9 March 2016 due under the Rental Agreements, full particulars whereof are set out in the Plaintiff’s invoices rendered to the Defendant and as set out in a letter from the Plaintiff’s solicitors to the Defendant’s solicitors dated 15 January 2014 a Statement of Account dated 5 March 2015 and in a schedule of invoices dated 9 March 2016.”

“AND the Plaintiff claims:

(2) the sums of HK$10,295,035 HK$21,029,004.13 and Euro 62,825.58 as at 5 March 2015 or HK$24,678,308.53 and Euro 44,525.58 as at 9 March 2016 due under the Rental Agreements as at 14 January 2014 and any further sums due under the Rental Agreement [sic] and unpaid by the Defendant thereafter;”

4.By the proposed amendments, the Plaintiff effectively sought to increase its breach of contract claim against the Defendant from HK$10,295,035 to HK$21,029,004.13, or alternatively HK$24,678,308.53.

5.In support of his application, Mr Maurellet submitted:

(1) the Defendant has always been aware of the fact that as at 5 March 2015, the amount claimed by the Plaintiff was HK$21,029,004.13 and a small sum in Euro;

(2) one of the Plaintiff’s witnesses has dealt with the claim for HK$24,678,308.53 as at 9 March 2016 in his witness statement;

(3) the Defendant would not be taken by surprise by the proposed amendments.

6.Mr Khaw opposed the application and submitted:

(1) the Plaintiff has given no explanation for the delay in making this application;

(2) the proposed amendments were unclear and devoid of particulars in that the 2 documents purporting to support the sums of HK$21,029,004.13 and HK$24,678,308.53 (namely the Statement of Account dated 5 March 2015 and the schedule of invoices dated 9 March 2016) referred to invoices relating to cranes beyond the scope of these proceedings.

7.There were 3 matters which caused me to refuse leave to the Plaintiff to amend its Amended Statement of Claim as per the proposed amendments.

8.First, this was an extremely late application and the Plaintiff did not give any satisfactory reason for its delay in making the application.

(1) In March 2015, the Plaintiff applied for summary judgment and interim payments against the Defendant.

(2) At a hearing before B Chu J on 25 August 2015, it was ordered by consent, amongst other things, that there be a speedy trial and that leave be granted for this action to be heard together with HCA 256/2014 and HCA 462/2014 and be set down for trial with 7 days reserved.

(3) At the time when these proceedings were set down for trial in August 2015, there were already references to the sum of HK$21,029,004.13 in the Plaintiff’s affidavit evidence in the summary judgment/interim payments applications but the Plaintiff did not see fit to apply to amend its Statement of Claim to plead such a sum.

(4) In the course of his submission, Mr Maurellet drew the Court’s attention to the words in the prayer (“any further sums due under the Rental Agreement [sic] and unpaid by the Defendant thereafter”) to suggest that the Plaintiff was not required to amend its pleading to pursue the alternative claims for HK$21,029,004.13 and HK$24,678,308.53.  I was unable to accept this submission. 

(a) Paragraph 9 of the Amended Statement of Claim sets out the Plaintiff’s claims of damages for breach of the Rental Agreements and does not refer to any claims beyond 14 January 2014.  On the contrary, the purported particulars provided by the Plaintiff to support the sums of HK$10,295,035 and Euro 62,825.58 are said to be set out in a letter from the Plaintiff’s solicitors to the Defendant’s solicitors dated 15 January 2014.  That letter made no reference to any claims against the Defendant other than the claims for the sums of HK$10,295,035 and Euro 62,825.58.

(b) The words in the prayer relied upon by the Plaintiff are imprecise; they provide no clue as to what further sums the Plaintiff alleges to be due under the Rental Agreements or unpaid by the Defendant.  The Defendant is said to be in breach of 32 rental agreements and it seems to me to be only fair for the Plaintiff to specify in its Statement of Claim what sum is said to be due and unpaid by the Defendant under each of the 32 agreements. 

(5) In its Listing Questionnaire dated 7 April 2016, the Plaintiff indicated that it intended to seek leave to amend the Statement of Claim.  Leave to amend was granted by B Chu J on 14 April 2016 to amend paragraph 3 of the Statement of Claim (which was unconnected with the quantum of the Plaintiff’s claims).  This amendment only took place two months ago and the Plaintiff did not take that opportunity to seek leave to amend its Statement of Claim to include the present proposed amendments. 

(6) On 14 April 2016, B Chu J also ordered the parties to take out any further interlocutory applications 7 days before the Pre-Trial Review hearing fixed on 11 May 2016.

(7) At the Pre-Trial Review hearing on 11 May 2016, both parties through their counsel indicated to me that the case was ready for trial.

(8) In its written Opening Submissions filed on 3 June 2016, no reference was made by the Plaintiff to any claim against the Defendant for HK$21,029,004.13 or HK$24,678,308.53. 

(9) A party making an application to amend his pleading after the commencement of trial is seeking an enormous indulgence from the Court.  It is an enormous indulgence because such an application diverts the trial judge’s attention from the issues at the trial and disrupts the orderly conduct and progress of the trial: Li Xiao Yun v China Gas Holdings Ltd (unreported, CACV 38/2013, 11 March 2013) §18 (Lam JA).  It would be a rare case that such an indulgence is given without a satisfactory explanation: Chan Wing Cheung Allan v Ho Shu Yee Susana (unreported, CACV 393/2004, 10 January 2005) §9(4) (Ma CJHC).

(10) Mr Maurellet accepted that this was a late application.  However, no explanation was proffered on behalf of the Plaintiff (whether by way of affidavit evidence or counsel’s skeleton filed to support the application) as to the delay in making this application. 

9.Second, the purported particulars given by the Plaintiff to support the alternative claims for HK$21,029,004.13 and HK$24,678,308.53 were highly unsatisfactory.

(1) As mentioned earlier, the Plaintiff relied on 2 documents (namely the Statement of Account dated 5 March 2015 and the schedule of invoices dated 9 March 2016) to support its claims for HK$21,029,004.13 and HK$24,678,308.53.

(2) However, as submitted by Mr Khaw, the 2 documents refer to numerous invoices which include those relating to cranes other than the relevant 32 cranes in these proceedings.  Indeed, by way of example, Mr Khaw referred the Court to one invoice listed in the Statement of Account dated 5 March 2015 which relates to a crane not being one of the 32 cranes we are concerned with in these proceedings.

(3) Given the very late stage in the proceedings, it would be entirely wrong to allow the Plaintiff to make significant amendments to its Statement of Claim which were supported by inaccurate particulars.

10.Third, the consequences of allowing the proposed amendments would inevitably lead to an adjournment of the trial.

(1) If the proposed amendments were allowed, the Defendant would need to amend its Amended Defence and the Plaintiff would need thereafter amend its Re-Amended Reply.  Further, Mr Khaw informed me that additional evidence would need to be prepared to deal with the proposed amendments.

(2) Although Mr Maurellet suggested that the Defendant would only make minimal consequential amendments to its Amended Defence, I was not able to say with any certainty that that would necessarily be the case. 

(3) Therefore, if the proposed amendments were allowed to be made by the Plaintiff, further consequential steps would need to be taken by both parties and there was every possibility that the trial would not finish within the allotted time and go part-heard, which would be highly unsatisfactory.

11.I did not lose sight of the fact that my refusal of the Plaintiff’s proposed amendment would mean that the Plaintiff could not pursue a much higher monetary claim against the Defendant.  Nonetheless, having balanced all the relevant factors, I exercised my general and case management discretion and dismissed the application.

12.As far as the costs of and occasioned by the application were concerned, I ordered them to be paid by the Plaintiff to the Defendant on an indemnity basis with a certificate for two counsel to be taxed if not agreed.  I considered the Plaintiff’s application to be entirely without justification, disruptive and inconsistent with the underlying objectives in RHC Order 1A rule 1, and accordingly made a costs order on a higher basis.

Mr Jose-Antonio Maurellet SC & Mr Michael Lok, instructed by Tsui & Co, for the Plaintiff

Mr Richard Khaw SC & Mr Adrian Leung, instructed by K C Ho & Fong, for the Defendant