Lai Chik Kun Michael and Others v. The Baptist Convention of Hong Kong and Another

HCA 2741/2018

[2026] HKCFI 3918

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2741 OF 2018

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REASONS FOR DECISION AND
SUMMARY ASSESSMENT OF COSTS

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A.  INTRODUCTION

1.This is the pre-trial review. The Plaintiff makes a late application for amendment of the current version of the statement of claim (“SOC”). It will be the 6^th version (“Blue Version”). The Plaintiff claims that, upon advice of the new legal team, they wish to put their house in order by moving what is in the pleaded reply, disclosed in witness statements and documents into the SOC.

2.The 1^st Defendant (“BCHK”) opposes the application on the grounds that (i) the proposed amendments are substantial; (ii) they do not appear to arise from any newly discovered pieces of evidence or recent disclosure of documents; (iii) the recent change of legal representative is not a justification; (iv) the amendments are late and would cause serious prejudice that could not be compensated for by costs.

3.The 2^nd Defendant (“SJ”) does not oppose the application.

4.After hearing, I dismissed the application with indemnity costs to the Defendants. Here are my reasons.

B.  BACKGROUND

5.The Plaintiffs are alumni of the Pui Ching Primary School (i.e. the “School”) and the Pui Ching Middle School (the “Middle School”) (collectively, the “Pui Ching Schools”):

6.BCHK is a charitable institution under s.88 of the Inland Revenue Ordinance (Cap. 112), and the sponsoring body that exercises overarching management over the School.

7.The School was first established in Hong Kong in 1933. It was not a legal entity and was not capable of holding assets. Since the 1950s, BCHK has been entrusted with the administration of the School and its assets. BCHK and the School maintain separate bank accounts in their respective names.

8.BCHK is also the operator of a tertiary education institute known as the Pui Ching Academy (“the Academy”) (formerly known as the Pui Ching Education Centre (the “PCEC”), unrelated to the Pui Ching Schools. The School, the Middle School, and the PCEC/Academy are separate institutions with different school registration numbers.

9.In or around 2006, the School undertook a large-scale project (“Redevelopment Project”) to re-develop its then school hall into a multi-storey building (“New Education Building”). To fund the Redevelopment Project, BCHK conducted a fundraising campaign to solicit donations.

10.The Plaintiffs claim that they had made donations in reliance on fundraising materials in which BCHK had falsely represented (i) the purpose of the donations and the intended use of the New Education Building; and (ii) that without further donations, the School would experience financial difficulty in carrying out the Redevelopment Project.

11.The Plaintiffs also allege that since the 1950s, BCHK has been holding the funds in the School’s account on a charitable trust (“the Trust”) and the school name of “Pui Ching” on trust for the Pui Ching Schools. As such, BCHK is under the obligation to apply the funds in the School’s account exclusively for the School’s purposes.

12.In gist, the Plaintiffs’ claims against BCHK are for: (a) return of donations due to misrepresentation (“Return of Gift Claim”); and (b) equitable compensation for misapplying the Trust assets in breach of the charitable trust (“Charitable Trust Claim”).

13.BCHK’s case is that it had made clear in the fundraising materials that (i) only the lower portion of the New Education Building would be used by the School, whereas (ii) the upper portion of the New Education Building would be used by the PCEC/Academy.

14.BCHK also claims that it owns the School and its funds “legally and beneficially” and that no trust exists. Even if a trust exists, the object is “for the advancement of Christian education and/or religion in the Baptist Christian tradition” rather than for the School exclusively. BCHK also denies breach and disputes the Plaintiffs’ locus standi.

15.The proposed amendments fell into 4 categories. The first 2 related to the Charitable Trust Claim. The third related to the Return of Gift Claim. The fourth was allegedly a “minor factual particular”. The Plaintiffs submitted that the amendments did not introduce new claims but properly characterized matters already in controversy or in the Re-Re-Re Amended Reply to the Re-Re-Re Amended Defence of BCHK (“the Reply”), and were based on facts in witness statements and documentary evidence.

C.  LEGAL PRINCIPLES FOR GRANTING AMENDMENT

16.The relevant principles have been set out in the case of Tse Man Yiu v Tse Man Wai [2025] HKCFI 967, §9:

(1)  Amendments ought to be made for the purpose of determining the real question in controversy between the parties.

(2)  Leave is readily granted before trial unless the proposed amendments are bound to fail. The court should only have regard to the merits where they are so apparent as not to require prolonged investigation.

(3)  If the proposed amendments are bound to fail, no leave should be granted. In this regard, the court will take the applicant’s proposed pleaded case at its highest.

(4)  Absent any real prejudice, an application for amendment, albeit late, must be decided upon the general principle that the court seeks to adjudicate on the real issues and disputes between the parties; technical and procedural rules shall not stand in the way of allowing the parties to raise their real claims or defenses for adjudication.

(5)  Where prejudice is alleged, the burden is on the party opposing the amendment to show prejudice. There is no injustice to the opposing party if he can be compensated by appropriate orders as to costs.

(6)  The primary aim in exercising the powers of the court is to secure the just resolution of disputes in accordance with the substantive rights of the parties under O.1A, r.2(2), RHC.

17.Where the opposing party cannot genuinely be taken by surprise by the proposed amendments, the Court may be more willing to grant leave even at a late stage: Ng Kwok Piu Philip v To Pui Kui, HCA 51/2007, 29 December 2014, Mimmie Chan J, §13.

18.There is no place for the application of a mechanical rule that the court will invariably refuse an application simply because a party is guilty of serious delay without any good explanation. The court must conduct an overall balancing exercise: Chen Cheung Ming Jacky v Siu Sin Man [2014] 5 HKLRD 89, §27, Lam VP (as he then was).

19.However, it is not a mechanical rule to refuse an amendment application on the ground of lateness alone when the trial is imminent, due to the prejudice it may cause. Last minute applications to introduce amendments to the pleadings and/or evidence on the eve of trial inevitably cause disruptions in the preparation for trial. There are needs for the innocent party to squeeze its consideration of the new pleading and/or evidence, to respond thereto, and to locate witnesses in the few weeks/months before trial. There is the last minute distraction from the proper focus and priority of the due preparation for trial. This is actual prejudice. See Converge Design and Construction Co Ltd v Mount Kelly International Ltd [2020] HKCFI 2433, §2, Mimmie Chan J; Competition Commission v W Hing Construction Co Ltd [2018] 5 HKLRD 437, §§25-26, G Lam J (as he then was).

20.Accordingly, the applicant for leave must establish, by affidavit evidence, exceptional circumstances to explain and justify the delay. PD 5.2 makes it clear that change of the legal team will not be treated as exceptional circumstances. See Hong Kong Changyi Real Estate Development Limited v Neo-China (Group Infrastructure investment Limited and others, unreported, HCA 1576/2011, 25 February 2014, Mimmie Chan J, §1.

(1)  Whilst the ultimate concern of the Court is to achieve a just resolution of the case, it does not mean that a party should be permitted to raise any arguable case at any point in the proceedings, simply on payment of costs. If a party has been afforded a reasonable opportunity to advance its case, the just resolution of the case does not require that he should be allowed a further opportunity in spite of his own inordinate and inexcusable delay. See Securities and Future Commission v Andrew Liu [2022] HKCFI 697 at §§22-23, Coleman J.

(2)  There is no longer room for the notion that delay, even though inordinate and unexplained, will be forgiven as long as there is no prejudice and costs are paid. Delay of a trial (even if paid for by the applicant for amendment) is in itself a prejudice to a party. See Wise Union Industries Ltd v Hong Kong Science and Technology Parks Corp (unreported, HCAL 12/2009, 21 September 2009) at §9, A Cheung J (as the Chief Justice then was).

D.  LACK OF EXPLANATION FOR THE LATE APPLICATION

21.There was no explanation for the lateness in the 10^th affirmation of Mr Koo Ming Kown (“Koo-10^th”) filed in support of the amendment application except that there was a change of lawyers. Mr Liu, counsel for the Plaintiffs, accepted that this was not a good explanation.

E.  DELAY IN APPLICATION

22.The unacceptable lateness in the application was apparent from the procedural history. This action was started 8 years ago. Deacons is the 3^rd firm of solicitors on record. Mr Liu is the 5^th team of counsel. The previous counsel included 3 senior counsel, another 2 counsel who subsequently took silk and 3 junior counsel. With every change in counsel, there was an amendment to the SOC, almost on an annual basis, in 2018, 2019, 2020, 2022 and 2023.

23.The current (2023) version of the SOC is of 26 pages. The Reply is of 40 pages, longer than the SOC. It was difficult to imagine that the previous teams of counsel overlooked the importance of pleading facts in the right pleading and that it suddenly dawned on the Plaintiffs’ current legal team to now put the Plaintiffs’ house in order by purporting to move what is in the Reply into the SOC.

24.The proposed amendments, if allowed, would add 12 pages to the 2023 SOC. This proportion of amendments in itself showed that the amendments were substantial. It could not be said that they came as no surprise to the Defendants.

25.To the extent that the proposed amendments allegedly arose out of witness statements filed, the last witness statement (from the Plaintiffs) was in October 2023, just under 3 years ago.

26.To the extent that the amendments allegedly arose out of documents disclosed, there was nothing in Koo-10^th or Mr Liu’s submission to show that there had been new or late discovery on the part of BCHK.

27.The Plaintiffs had been given more than reasonable opportunities to advance and amend their case over 5 years until 2023. The just resolution of the case did not require that they be given yet another opportunity to amend for no good explanation.

28.The delay was sufficient in itself to dismiss the application.

29.I now turn to each category of proposed amendments.

F.  PROPOSED AMENDMENTS

Category 1 – historical particulars of the Trust (paragraph 7D of the Blue Version)

30.Mr Liu accepted that he had an uphill fight on Category 1. The new paragraph 7D purported to provide “detailed factual particulars supporting the existence of the Trust” in 10 pages.

31.That was in stark contrast to the original averment in paragraph 7B wherein the Plaintiffs pleaded that the Trust could be inferred from only 2 factual bases: (i) that the School’s assets, operation and administration have been entrusted to BCHK for management since the 1950s; and (ii) that BCHK and the School maintained separate accounts in their respective names without intermingling.

32.The proposed amendments pleaded documents and events dating as far back as 1934, thus expanding the factual bases of the Plaintiffs’ case. The Plaintiffs also made a new averment that the School Committee of Pui Ching was an unincorporated association and the property was held by it on charitable trust for the objectives pleaded. This new characterization of the School Committee did not appear to have factual basis.

Category 2 – abusive inconsistency in BCHK’s plea (paragraph 7E of the Blue Version)

33.This paragraph pleaded that BCHK has abused the process and was debarred from denying the existence of the Trust by reason of the diametrically opposite position it took and benefitted from HCA 946/2003 and the appeal therefrom in CACV 2/2007. Those judgments in those 2 cases were given long ago in 2010 and 2006. The new plea identified 4 specific witness statements / affirmations filed by BCHK’s own witnesses in those proceedings.

34.Only BCHK was a party to HCA 946/2003 but not the Plaintiffs here. One could reasonably expect these new pleas to require BCHK to give further instructions, make new witness statements and/or disclose further documents. There was uncertainty as to whether contemporaneous documents of events that took place 20 years ago could be retrieved.

Category 3 – strengthened rescission and restitution plea (paragraphs 14, 16, 20A, 20B of the Blue Version and prayers 1 and 4)

35.The Plaintiffs submitted that the proposed amendments did not alter the factual bases of the Return of Gift Claim but supplemented the legal formulation for rescission of a gift, ie the Pitt v Holt [2013] 2 AC 108 test. Specifically they (i) introduced the concept of “mistaken beliefs”, making explicit what the Plaintiffs subjectively believed when making the donations; (ii) expressly pleaded causation by reference to each Representation and each Mistaken Belief; (iii) that the mistake was of sufficient gravity to make it unconscionable or unjust on the part of the recipient to retain the donations; and (iv) added an account of profits and expanded relief to the prayers for the Charitable Trust Claim. The underlying facts have already been pleaded in the SOC and responded to by BCHK in its Defence.

36.Despite the Plaintiffs’ submission, Category 3 introduced a new cause in mistake and expanded the reliefs claimed, which BCHK had to answer.

Category 4 – to add a footnote to paragraph 18 of the Blue Version about 5^th and 6^th floors

37.Mr Liu submitted that it was a “minor factual particular” on height restriction. It added to the existing plea in paragraph 18 of the SOC that 5/F and 6/F of Block A and the new Block AX also exceeded the 24m height restriction, although special approval was granted by the Secretary for Education subject to conditions. This was based on the same 8 April 2008 letter already pleaded in the Reply.

38.With respect to Mr Liu, the reference to 5/F and 6/F was not minor. The Plaintiffs’ case all along has been that the height restriction applied to floors above 7/F. The reference to 5/F and 6/F thus expanded the scope of the Plaintiffs’ case and was plainly in need of new evidence from BCHK in rebuttal.

G.  PREJUDICE TO BCHK

39.There was no suggestion that the amendments were bound to fail. Mr Liu submitted that the amendments were matters that BCHK had been on notice for years. No new witnesses, discovery or third party inquiries were needed. If the amendments were allowed, BCHK would have an opportunity to plead its response to the documents which it previously did not do following the filing of the Reply.

40.I was unable to accept the submission. It could be seen that the amendments of over 12 pages could not be regarded as minor or just putting the Plaintiffs’ house in order. The Plaintiffs themselves anticipated the need for BCHK to respond to the amendments. One could expect the Reply to be further amended, since some pleas would be moved to the Blue Version. The Plaintiffs themselves filed a new list of documents even at this late stage, although they said they would not rely on those documents at the trial.

41.The new legal team for the Plaintiffs came on board in February 2026. It took them 4 months to file the amendment application. With only 3 months left before trial was to commence on 5 October 2026, it was plainly unfair to squeeze BCHK to prepare amendments to its Defence and Counterclaim, wait for a further Reply and Defence to Counterclaim, and then file new witness statements and make further discovery.

42.The trial would be derailed if the amendments were allowed. It was a prejudice to BCHK that could not be compensated for by costs.

H.  CONCLUSION AND COSTS

43.For the reasons given, the application for amendment was dismissed.

44.There being no explanation for the egregious delay, I therefore ordered costs against the Plaintiffs on indemnity basis. On a nisi basis, the costs (excluding costs of the pre-trial review) are summarily assessed in the sum of $180,000 for BCHK and $6,719 for SJ.

Mr Charlie Liu, instructed by Deacons, for 1^st to 6^th Plaintiffs

Mr Richard Yip, instructed by Or & Partners, for 1^st Defendant

Attendance of 2^nd Defendant was excused