Afh Hong Kong Stores, Ltd v. Fulton Corporation Ltd

HCA 2103/2017

[2022] HKCFI 134

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2103 OF 2017

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Before: Hon K Yeung J in Chambers

Dates of Hearing: 14 December 2021

Date of Decision: 14 January 2022

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DECISION

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1.This is Fulton’s application by summons of 23 September 2021 (the “Summons”) for leave to amend its Re-Amended Defence and Counterclaim dated 27 August 2019.

2.Parties have previously come before me.  This Court on 31 March 2021 handed down its Decision on an application taken out pursuant to Order 14A (the “Decision”)[1]. I refer to that Decision for the background of the case, and adopt the same terms as they were used there.

3.Having heard parties on the Order 14A Summons, and for reasons set out in the Decision, I entered judgment for A&F Group, and dismissed Fulton’s Counterclaim.  Fulton has lodged an appeal against that Decision.  The Appeal is pending, and no date has been fixed.

4.The amendments sought to be made are confined to 3 paragraphs of Fulton’s Counterclaim, namely:

(a)  §27.6 thereof, wherein Fulton seeks to amend one aspect of AFH’s alleged breach from failure to reinstate the central chilled water air conditioning system to failure to remove the Variable Refrigerant Volume (“VRV”) air-conditioning system;

(b)  §27.11 thereof, which adds Fulton’s reservation of right in providing further particulars of AFH’s alleged breach; and

(c)  §28 thereof, which updates the fees paid by Fulton to the contractor and consultants for the Reinstatement Works, which exact figures were not available when the Counterclaim was last amended.

5.The main issue involved in the present application is whether the proposed amendments should be permitted to be made after judgment to A&F Group and after dismissal of Fulton’s Counterclaim.

6.It is common ground that the 3 questions of construction posed by the Order 14A Summons are questions of law.  The proposed amendments can have no impact on either of the parties’ case on, or the Court’s determination of, those questions.

7.According to the submissions of Ms Cheng, counsel for Fulton, it is proper for the present application to be made at this stage as the Notice of Appeal refers at §(c)(ii) to the removal of inter alia the “VRV air-conditioning system”[2] and highlights at footnote 2 the need to amend §27.6 of the Counterclaim.  She further submits that it would only be proper for Fulton to correct its pleading so that it accurately supports the Notice of Appeal.  In relation to the proposed amendments to §28 of the Counterclaim, Ms Cheng submits that since the actual figures of the fees for the Reinstatement Works have become available, it would only be fair for Fulton to plead them so as to inform the Court and AFH of Fulton’s precise case.

8.Mr Lam for the A&F Group objects.  The first basis of his objection is that this Court is now functus officio.  He submits that in any event, the application should be dismissed on merits.

9.On the issue of functus officio:

(a)  Mr Lam relies on Andayani v Chan Oi Ling [2000] 4 HKC 233, where Keith JA observed at 237C-E:

“ There must, of course, come a time in any proceedings when the court must be regarded as having completed its task. When that time is reached, the court is said to be functus officio. Once that stage has arrived, the court has no further jurisdiction over the case. But when does that stage arrive? The answer given by the common law is when the judge’s order has been drawn up, entered or otherwise perfected.”

(b)  That case however concerned whether the Judge had power to allow an application for leave to appeal against the decision of the Labour Tribunal to be re-listed and re-argued prior to the earlier order dismissing the original application had been drawn up.  That case was not concerned with the Court’s powers to allow amendment of pleadings after judgement;

(c)  Mr Lam refers to Chan Chi Wai v Chan Sau Wah [2019] 3 HKLRD 330, where an application to amend after judgment (but pending appeal) was entertained (though dismissed).  He points out however that that application was made to the Court of Appeal;    

(d)  In Chan Chi Wai, whilst Kwan V-P observed at §3 that the Court of Appeal did have the power to allow a pleading to be amended even after judgment, the learned Vice President did not say that the trial judge did not have similar power;

(e)  In Total Lubricants HK Ltd v De Chanterac (No.2) [2013] 2 HKLRD 838, the Judge, having struck out all claims against the 5^th and 6^th defendants, ruled that the action against them should be dismissed.  Afterwards, the Judge allowed the pleadings to be amended, such that the 5^th and 6^th defendants were brought back into the picture.  The 5^th and 6^th defendant’s appeal was dismissed.  On the ground based on the allegation that the Judge had become functus officio, Kwan JA (as the Vice President then was) observed at §§35 and 36 that:

“35. One should first ascertain the question that was adjudicated upon in the earlier proceedings to see if it was the same as the subject of the subsequent litigation. As stated in Badar Bee v Habib Merican Noordin[3] at 623: ‘It is not competent for the Court, in the case of the same question arising between the same parties, to review a previous decision not open to appeal. If the decision was wrong, it ought to have been appealed from in due time.’

36. For the reasons given earlier, I am satisfied that the 2012 Judgment did not determine the same question in the earlier judgments. The 2012 Judgment did not undermine in any way the question determined in the earlier judgments. The arguments on functus officio must fail.”[4]

(f)  My Decision concerns the 3 questions of construction posed by the Order 14A Summons.  It has nothing to do with Fulton’s Counterclaim, which the proposed amendments are solely related to.  The subject matters, the issues involved, and the considerations to be given, of the 2 applications are all different; 

(g)  On the authorities before me, and on the strength in particular of Total Lubricants HK Ltd v De Chanterac, I hold that this Court is not functus officio in so far as the present application is concerned.

10.On the merits of the application:

(a)  Mr Lam relies heavily on Chan Chi Wai.  As observed by Kwan V-P also at §3 of Chan Chi Wai, the power to allow amendment in such circumstances is discretionary, and that:

“ The court would of course require an exceptional case before acceding to an application of this nature, as there is public interest in the finality of litigation … Order 20 r.8(1A) should also be noted. This provides that the court shall not under r.8(1) 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.”

(b)  The nature of the proposed amendments in Chan Chi Wai should be noted.  As summarized by the learned Vice President at §1:

“ … The effect of the proposed amendments is to raise a new case of contractual licence, and would entail the withdrawal of a concession made by the defendants’ former trial counsel that the defendants have been occupying the suit premises pursuant to bare licences which had been validly revoked.”

In the light of the nature of the proposed amendments, the learned Vice President observed further at §26 that:

“… the application to amend the defence is made after judgment has been given in favour of the plaintiffs and this must be subject to a stringent scrutiny than is the usual case of amending a pleading before judgment…”

The rationale for that, as explained in Charlesworth v Relay Roads Ltd [2000] 1 WLR 230 at pp.237H–238A which the learned Vice President cited, is that:

“ When a litigant has obtained a judgment … he is by law entitled not to be deprived of that judgment without very solid grounds: Brown v Dean [1910] AC 373 at 374.

It is a duty of every litigant ‘to bring forward his whole case at once and not to bring it forward piecemeal as he found out the objections in his way’: In re New York Exchange Ltd (1888) 39 Ch D 415 at 420.”

(c)  However, in the present case, the proposed amendments do not have any effect of depriving AFH of its judgment.  Whether the Decision will be reversed will be dependent upon the views of the Court of Appeal on the correctness of this Court’s Decision on the 3 questions of law posed by the Order 14A Summons.  The proposed amendments will have no bearing on that;

(d)  According to §(c) of the Notice of Appeal, Fulton invites the Court of Appeal to, should its appeal be allowed, make an order that both AFH and Abercrombie do pay to Fulton damages for the costs incurred by Fulton on the Reinstatement Works to be assessed, or alternatively for removal of inter alia the VRV air-conditioning system.  The proposed amendments will only be engaged in that context, and it is in that context that Fulton submits it is appropriate and fair for the Court, AFH and Abercrombie to be informed for the exact particulars of its Counterclaim;

(e)  During the hearing of the Order 14A Summons before me, the exact particulars of Fulton’s Counterclaim were not engaged.  As to whether, should the Court of Appeal allow the appeal, the Court of Appeal will make the order sought under (c) of the Notice of Appeal, it will be a matter for the Court of Appeal to consider and decide.  But for the matter to be considered, I agree that it will be necessary and appropriate for any error in the Counterclaim to be amended, and the update particulars to be provided;

(f)  For the above reasons, I am of the view that an exceptional case for the making of the proposed amendments has been made out, and it is necessary for the proposed amendments to be made.

11.For the above reason, I make an order in terms of §§1 and 2 of the Summons.

12.On costs, I make an order that Fulton shall bear the costs of and occasioned by the Summons save the costs of the hearing of 14 December 2021 before this Court, which costs shall be borne by the A&F Group, with certificate for counsel, to be summarily assessed.

13.I have considered the Statements of Costs and Objections filed after the hearing (on 17 and 23 December 2021).  I summarily assess the costs of and occasioned at this stage by the Summons (which Fulton should bear) to be HK$25,000, and the costs of the hearing of 14 December 2021 (which the A&F Group should bear) to be HK$80,000.

Mr Justin Lam, instructed by Dentons Hong Kong LLP, for the Plaintiff (by original action) and the 1^st and 2^nd Defendants (by counterclaim)

Ms Bonnie YK Cheng, instructed by Deacons, for the Defendant (by original action) and the Plaintiff (by counterclaim)