Discreet Ltd. v. Cubiertas Y. Mzov S.A. and Others

HCCT000112/1997

1997, No. Con 112

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

Coram: The Hon Mr Justice Findlay, in Chambers

Date of hearing: 3 December 1998

Date of handing down of judgment: 9 December 1998

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JUDGMENT

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1. I have three applications by the plaintiff before me -

1. for leave to amend its statement of claim;

2. for an order that the defendants provide answers to a requests for further and better particulars; and

3. for further directions relating to the exchange of expert reports and (by application from the bar) supplementary witness statements.

2. The result of the plaintiff's application for leave to amend will have some bearing on the other two applications so I will deal with this first.

3. The plaintiff's case started life by writ in July 1997 as simple matter. The plaintiff alleged that the defendants had, since late 1993 or early 1994, interfered with the exercise of the plaintiff's right of way to its property, which became, sadly for the plaintiff, situated immediately adjacent to a large government civil engineering project at the Ting Kau Bridge. The particulars alleged that the entrance to the property was blocked by a trench 1 metre in width and 1 metre in depth, with sandbags, across the road, and by placing materials, vehicles and equipment on and along the access road. The plaintiff claimed an injunction and damages.

4. The defendants then began a long, arduous process of seeking to obtain further and better particulars of the plaintiff's claim; some of the requests were justified, some not and some debatable. The plaintiff seemed reluctant to provide many of these particulars. Three applications to court were necessary. From this process, several aspects of the plaintiff's claim came into prominence -

1. that it was of materiality that there was a building on the plaintiff's property; at this stage nothing was alleged in relation to the plaintiff's intentions regarding this building;

2. there were many occasions when the plaintiff's directors, officers, servants and agents were prevented from gaining access to the property, but only three occasions could be specifically identified;

3. the plaintiff was claiming general damages only of which no particulars could or need be given.

5. Regarding the damages, the plaintiff told the defendants several times and the plaintiff's counsel insisted before me that the plaintiff had suffered only general damages; no special damages were alleged or claimed. In an earlier judgment, I said this -

"The plaintiff pleads that it has suffered "loss and damage". The defendants want particulars of this alleged loss and damage. The plaintiff says that it is claiming only general damages. So be it. It will not be permitted to lead evidence of any special damage suffered."

6. That the plaintiff was claiming only general damages was not a surprise to me. I, in the company of the solicitors for the parties, saw the property on a site visit on 10 March 1998. The building was derelict, and has obviously not been occupied or used for a very long time. I would not have expected a claim for specific damages without some additional allegations to support this. The defendants' impression must have been the same.

7. On 1 April 1998, the plaintiff intimated that it was considering amendments to its claim, but no application was filed in this respect until 31 August 1998, and the defendants was not served with the summons until 13 November 1998.

8. On 9 July 1998, I heard an application by the defendants to set down the action. The plaintiff said it was not ready for trial as it was about to amend its claim. I thought the matter was a simple one and granted leave to set the matter down; the trial would not come on until the end of the year. It was set down to commence on 7 December 1998. As I have said, it was not until 13 November 1998 that the plaintiff served on the defendants a summons for leave to amend the claim, although this summons was filed on 31 August 1998. This application was to be heard on 3 December 1998. It could not be heard earlier. The plaintiff also applied to adjourn the trial. I heard this application for adjournment on 23 November 1998. Because it would not be known until 3 December 1998 at the earliest whether the plaintiff would obtain leave to amend its claim, and the amendments were substantial, it seemed to me that it was impossible to commence a trial on 7 December 1998. Accordingly, I adjourned the trial.

9. The amendments sought would make radical changes to the plaintiff's case. Apart from adding a new claim based on trespass, the plaintiff now wishes to allege that, contrary to what I and the defendants had been told earlier, the plaintiff had in fact suffered considerable special damage. This is because the plaintiff is said to be a property developer and had acquired the property for development or renovation for re-sale or rental. The plaintiff also wishes to base its case on the fact that an access road was closed without the proper procedure under the Roads (Works, Use and Compensation) Ordinance (Cap. 370) being followed. For the first time, the plaintiff now wishes to rely upon a blockage of the access by a wire fence, and to say that the temporary access road was "hazardous and unsuitable". It also alleges for the first time that the defendants trespassed on the plaintiff's land. Particulars of the loss and damage the plaintiff now seeks to recover have been changed from what, as general damages, and having regard to the non-use of the building, could have been nothing but modest, to, originally, about $1.9 million for loss of rental income or about $2.8 million for loss of re-sale value, but now about $1.5 million loss of rental income. The plaintiff also wishes to abandon its claim for an injunction.

10. Miss Landon argues that the amendments should not be allowed because to do so would inconsistent with earlier orders. There is no previous order that is directly inconsistent with allowing the amendments, but Miss Landon says that my statement quoted above that the plaintiff "will not be permitted to lead evidence of any special damage suffered" is of that nature. My statement must, of course, be taken in context. It was made on the basis of the pleadings as they then stood. I was stating, on other words, the obvious; that if the plaintiff did not plead special damage, it could not lead evidence to prove it. Nevertheless, the plaintiff has, by neglect or otherwise, misled the defendants and this court into believing that no special damage had been suffered. That is a factor I must take into account.

11. In any event, Miss Landon argues, leave should not be granted as a matter of discretion. In this connection, in her written argument, Miss Landon relied upon Ketteman v Hansel Properties 1987 1 AC 189. But Mr Houghton said that case is really against her. He drew attention to the statement by Lord Keith at page 203. There, Lord Keith said that the exercise of discretion must be exercised in accordance with well-settled principles. He said the "rule is that amendment should be allowed if necessary to enable the true issues in controversy between the parties to be resolved, and if allowance would not result in injustice to the other party not capable of being compensated by an award of costs.". Lord Keith went on to say that the injustice was "something which places the other party in a worse position from the point of view of presentation of his case than he would have been in if his opponent had pleaded the subject-matter of the proposed amendment at the proper time." But Lord Keith's speech was a dissenting one. Lord Griffiths, at page 220, stated what I would regard as the broader modern view that "Whether an amendment should be granted is a matter for the exercise of the discretion of the trial judge and he should be guided in the exercise of the discretion by his assessment of where justice lies. Many and diverse factors will bear upon the exercise of this discretion." Lord Templeman and Lord Goff agreed with Lord Griffiths.

12. Mr Houghton says that the trial has already been adjourned so the defendants can make nothing of the lateness of the application to amend. But the timing of the plaintiff's application is not without relevance. The plaintiff, apparently, had amendments in mind as early as April 1998, but did not serve a summons to move the court for these until 13 November 1998, and then this was not the final version of what the plaintiff wanted. It was not until 1 December 1998, a mere 6 days before the trial, that the plaintiff filed a summons seeking the amendments it now wants. It was upon the basis of these late applications to amend that the defendants were deprived of their trial on 7 December 1998. The fact is that the plaintiff put me in a position that deprived me of any real discretion regarding the application to adjourn. Until I had heard the application to amend, which could not be heard until 3 December 1998, I could not make a decision about it, and the parties could not know upon what case they should prepare and proceed to trial. So, I had no choice but to adjourn the trial. That conduct by the plaintiff is not conduct that should be encouraged.

13. I have not been given any explanation for the plaintiff's delay in making these substantial amendments for so long. The amendments are sought nearly eighteen months after the action commenced. The mind of the plaintiff was concentrated many months ago on the basis and substance of its action by the many requests for further and better particulars by the defendants. It is very hard to understand why it is that the plaintiff insisted that it had suffered no special damage if it is its case that it is a property developer and was prevented from realising the potential of the property. I have been given no explanation for this strange omission from the plaintiff's original case. One would have thought that one of the first questions asked of the plaintiff by its legal advisers would have been a request to explain why it wished to launch an expensive high court action when the property was derelict and obviously unused, and, therefore, it would be difficult to prove actual damage. The answer should have been from the outset - "Well, we are a property developer. These were our plans, but the defendants have stopped us so we have suffered these damages." I cannot understand why it has taken the plaintiff so long to get to this position. And I have also been given no explanation why other factual matters on which the new allegations are based have taken so long to come to light. This, I believe, is another factor that militates against exercising the discretion in favour of the plaintiff.

14. And the defendants have suffered, are suffering and will continue to suffer prejudice, by the plaintiff's delays; that is prejudice in relation to the defendants' ability to present and prove their case. As the plaintiff accepts, the defendants are joint venture partners in a venture that has now been completed. This is not a case against a company with a settled business and a settled staff. The evidence is, as one would expect, that the staff involved on the site on the joint venture project have been "demobilised". As Miss Landon says ". . .the longer the action proceeds, the less likely it is that the defendants will have witnesses and resources to deal with the matters arising out of the action, either because they will have left the employ of the defendants or at least Hong Kong." And, of course, the freshness of memory fades as time goes on. This is not a case to be tried on documents. We are dealing here with a case involving details of many factual incidents said to have happened as long ago as, at one time "late 1993", but now apparently "early 1995". Even the plaintiff, who says he was injured by these happenings, is apparently unable now to give coherent particulars of the incidents about which it complains. As time goes on, it becomes less and less likely that the defendants will be able to produce witnesses with first hand knowledge and a reliable memory of the events concerned. If the amendments are allowed, there will need to be further pleadings, further applications for particulars, further discovery, further proofing of witnesses and the other procedures involved in completely new allegations and new claims, all of which must lead to the eventual trial of this matter being greatly delayed to the prejudice of the defendants.

15. The plaintiff has already disrupted the court's business and prejudiced other litigants. It has wasted money and the court's time. It continues to do so. The plaintiff has caused, and is causing, inconvenience and prejudice to the defendants, the court and other court-users. It may be that all this is not the fault of the plaintiff's present legal advisers, but that is no comfort to me or the defendants. As Lord Griffiths said in Ketteman, at page 220, "We can no longer afford to show the same indulgence towards the negligent conduct of litigation as was perhaps possible in a more leisured age.".

16. The pleadings now, as read with the further and better particulars, are a thoroughgoing mess, difficult to follow and understand. The amendments, if allowed, with the inevitable further and better particulars, will make this that much worse.

17. I have to say that I have not found this decision an easy one to make, but the burden of persuasion is on the plaintiff, and, for the reasons I have mentioned, I am unpersuaded that justice lies in granting the amendments.

18. In the result, the application for leave to amend the claim is refused. I speak of the amendments of substance I have mentioned. There are other amendments are of no moment; they are largely cosmetic and tidying-up. These are amendments to the existing paragraphs 3, 4, 8, the addition of new paragraph 21, the deletion of existing paragraphs 12, 13 and 14, and the deletion of existing prayers 1 and 2. The plaintiff has leave to make these amendments.

19. I do not know what the plaintiff will decide to do in the light of this decision. It may wish to appeal. It may wish to proceed with its case as unamended. It may wish to attempt to start the action afresh. It seems to me that, in this situation, there is little point in dealing with the plaintiff's other applications. They have been argued, and I can decide them at any time once the plaintiff's decides on its future course of action. If the plaintiff decides to proceed with its case as unamended, I suggest that its solicitors write to my clerk, with a copy to the defendants' solicitors, and I will then decide those applications without any further appearance.

20. There remains the question of the costs of the application to amend and of the application to adjourn the trial. These have not been argued, but my present inclination is to order that the plaintiff pay the costs of this application, the costs of the application to adjourn and the costs thrown away as a result of the adjournment. I make an order nisi to this affect. The costs of the plaintiff's other two applications are reserved.

Representation:

Mr Anthony Houghton, instructed by Messrs Richards Butler, for the plaintiff.

Miss Antonina Landon, of Messrs Masons, for the defendants.