Wong Chit Sen v. Tse Kwong Lam

Case No.

Court

Date—

Judge—

Case Document

100%Judiciary

HCA002102A/1966

IN THE HIGH COURT

	1966 No. 2101

BETWEEN
	WONG CHIT SEN	Plaintiff
	and
	TSE KWONG LAM (By original Action)	Defendant
	and

BETWEEN
	TSE KWONG LAM	Plaintiff
	and
	WONG CHIT SEN	1st Defendant
	CHING WAI SHORK (or SHOOK)	2nd Defendant
	CHIT SEN COMPANY LIMITED (By Counterclaim)	3rd Defendant

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Coram: Zimmern, J.

Date of Judgment: 15th November, 1978.

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DECISION

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1. This case has a long history. The Plaintiff's claim was disposed of years ago and what is left is the Defendant's counterclaim fixed for hearing on the 13th November, 1978. I shall call the Defendant in the action i.e. the party counterclaiming as the Claimant and the opposing parties the Respondents.

2. A few days before the hearing the Claimant applied to the Registrar for leave to amend the counterclaim which was opposed. The Registrar transferred the matter to the trial judge. Before me Mr. Bernacchi for the Claimant referred to the counterclaim as the 1970 pleading which required amendment by reason that no particulars of allegations of collusion, bad faith and fraud specifically pleaded had been given and he now seeks leave to add them by way amendment Mr. Jackson-Lipkin for the Respondent opposed on the ground that the application is far too late and in any event the amendments sought would not comply with order 18 rule 12(1)(b) and the application is a futile exercise.

3. Lateness by itself is rarely fatal to an application for leave to amend. The question in this issue is whether the amendments sought at this late stage are necessary for the correction of errors made in the past so that the real questions in controversy between parties may be determined.

4. One has to look at the counterclaim as it now stands after eight years of smouldering within archives of the Court. Before that it is necessary to say that the 1st Respondent's claim against the Claimant was as mortgagee suing the Claimant as mortgagor on the covenant for the balance between the mortgage debt and the sum realised on the sale of the mortgage security after exercising his power of sale. The account was settled by an arbitrator who awarded a sum to the 1st Respondent which sum was converted into a judgment debt.

5. So far as I can see the Claimant has joined two causes of action in his counterclaim. First he says the Claimant as mortgagee had sold to himself and if not actually to himself then to his wife the 2nd Respondent who put the property in the name of his family company the 3rd Defendant and furthermore the sale was at a gross undervalue. In another paragraph of the counterclaim there is an allegation that the property was worth $2,494,780. Second the Claimant says well prior to the sale he had arranged with an Insurance Company to take a transfer of the mortgage from the 1st Respondent in a sum not exceeding $1.5 million but the 1st Respondent wrongfully maintained that the mortgage debt was over $1.6 million and refused to transfer. The mortgage debt was then in fact and in truth under $1.5 million. The refusal was wrongful and in breach of contract. It had deprived him of his right of redemption which redemption would have prevented the sale. He claims damages. In respect of the first cause of action the relevant part of the pleading reads:

" On 24th June 1966, the 1st Defendant purported to exercise his power of sale under the abovesaid mortgage and further charges and sold a total of 6 shops, 12 offices and 36 flats in the said property, particulars of which are given in paragraph 2 of the Statement of Claim. These units were sold for a total price of $1,200,000.00. At the sale the 2nd Defendant purchased these units but the assignment was taken in the name of the 3rd Defendant on 23rd July, 1966. The Plaintiff will say that this was not a true sale and that the 2nd and 3rd Defendants were acting as the Plaintiff's agent in this sale and that in truth the 1st Defendant was selling to himself. Further or in the alternative the price of $1,200,000 was a gross undervalue and the Plaintiff will say that the 1st, 2nd and 3rd Defendants acted in collusion and in bad faith and in fraud of the Plaintiff in order to deprive him of the true value of the property. The Plaintiff is entitled to have the said sale and assignment set aside alternatively to receive credit for the true value of the property and to payment of the balance found due upon an account taking for that purpose."

6. Under the words collusion, bad faith and fraud the Claimant now seeks to supply particulars by amendment. Mr. Bernacchi conceded that the word "fraud" was not intended to mean deceit or a Derry and Peck fraud but an equitable fraud i.o. conduct which falls below the standards demanded by equity. That is how I read the pleading myself though the word "fraud" ought not to have been used; but then why ask at this very late stage to add particulars when it is said that no actual intention to defraud is to be imputed on the Respondents. I would not at this stage or during the hearing allow any amendment imputing fraudulent intention on the part of the Respondents or any of them without the most cogent particulars now or evidence at the hearing which if proved or accepted would prove such fraudulent intention.

7. In my view and so I hold the particulars are totally unnecessary for the correction of errors made in the past to determine the real questions in controversy between the parties some of them are already on the face of the pleading and others would indeed blurr, befog, befuddle the real issues between the parties though no doubt they may be used for comments.

8. Save for deletion of the words "for fraud and conspiracy" in paragraph 11(3) the application for leave to amend is refused with costs. Certificate for counsel.

Representation:

B. Bernacchi, Q.C. & Patrick Woo (H.H. Lau & Co.) for the Claimant.

Jackson-Lipkin, Q.C. & Ronny Wong (Johnson, Stokes & Master) for the Respondents