Metrowell Holdings Ltd. v. Periwin Development Ltd. and Another

HCA010417/1998

HCA10417/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.10417 OF 1998

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Coram: Hon Chu J in Chambers

Date of Hearing: 13 June 2001

Date of Decision: 31 August 2001

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D E C I S I O N

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1.This is the 2nd defendant's application to strike out the plaintiff's Statement of Claim pursuant to Order 18, rule 19 of the Rules of the High Court. The application is made on the ground that the Statement of Claim discloses no reasonable cause of action. Accordingly, no evidence has been filed. For the purpose of the application, it is assumed that all the facts pleaded can be proved. There is at the same time an application by the plaintiff to amend the Statement of Claim.

BACKGROUND

2.The 1st defendant is the developer of a construction project for the erection of four luxurious houses ("the Buildings") at No.8 Tai Tam Road, Hong Kong ("the Project"). The main contractor of the Project is W. Ho Civil Engineering & Construction Co. Ltd ("W. Ho"). The 2nd defendant is the architect of the Project. Both W. Ho and the 2nd defendant are retained by the 1st defendant.

3.By an agreement dated 17 April 1997 ("the Sale Agreement"), the plaintiff agreed to purchase and the 1st defendant agreed to sell the Buildings. Clause 4.01(c) of the Sale Agreement provides that the Buildings shall be completed on or before 28 February 1998, subject to any time extension granted by the architect under clause 4.02. Clause 4.02 sets out the circumstances in which the architect may grant extension of time, namely,

(a) strike or lock-out of workmen;

(b) riots or civil commotion;

(c) force majeure or act of god; and

(d) fire or other accident beyond the vendor's control.

4.Clause 4.03 entitles the plaintiff to rescind the Sale Agreement in the event of the 1st defendant's failure to complete the Buildings by 28 February 1998 or by the extended deadline. Under clause 11, time is made the essence of the Sale Agreement.

5.The plaintiff had paid a total of $87.3 million to the 1st defendant as deposits under the Sale Agreement. The Buildings were not completed on 28 February 1998. Two extensions of 66 days and 43 days were granted by the 2nd defendant on 19 January and 17 April 1998 respectively, which brought the completion deadline to 17 June 1998.

6.On 25 May 1998, the 1st defendant requested the plaintiff to complete the sale by 25 June 1998. On 17 and 18 June 1998, the plaintiff gave written notices to the 1st defendant to rescind the Sale Agreement. On 24 June 1998, the plaintiff further gave notice to the 1st defendant to accept the latter's repudiation of the Sale Agreement. The 1st defendant, on the other hand, wrote on 25 June 1998 to the plaintiff, accepting its repudiation and forfeited the deposits paid.

THE PLAINTIFF'S CLAIM

7.The plaintiff commenced these proceedings on 25 June 1998. The plaintiff's main case is that the two extensions of time were not validly granted in that they do not fall within any of the circumstances prescribed by clause 4.02 of the Sale Agreement. The plaintiff says that, as against the 1st defendant, it is entitled to rescind the Sale Agreement and to have the deposits returned. As against the 2nd defendant, the plaintiff's case is that the 2nd defendant had acted negligently and in breach of its duty of care to the plaintiff as well as acted wrongfully in extending the time for completion under the Sale Agreement.

8.The Statement of Claim was filed on 16 July 1998. The Defence and Counterclaim of the defendants was filed on 5 October 1998. On 27 February 2001, the 2nd defendant took out the present striking out application. By summons filed on 29 May 2001, the plaintiff applied to amend the Statement of Claim. The reasons for the amendment were set out in an affirmation made by the plaintiff's solicitors. Principally, it is said that the amendments were as a result of material and information emerging from discovery and provided by potential witnesses. The amendment application is heard at the same time as the striking out application.

9.As against the 2nd defendant, initially the Statement of Claim raises two causes of action, negligence and inducement or procurement of breach of contract. The proposed amendment seeks to change the second cause of action to causing a breach of or interfering with the plaintiff's rights under the Sale Agreement. It also adds a third cause of action in conspiracy. I shall deal with these three proposed causes of action in turns.

NEGLIGENCE OR BREACH OF DUTY

10.The 2nd defendant moves to strike out this cause of action on three grounds. Firstly, it is said that no duty of care has been established either on the pleading or as a matter of law and/or facts of the case. Secondly, it is argued that the Statement of Claim discloses no reasonable grounds for defining the scope of the duty owed by the 2nd defendant as pleaded. The third objection is that no causation has been made out on the Statement of Claim.

(1) Duty of Care

11.It is common ground that the plaintiff's claim is for pure economic loss. As such, there is no general liability in tort for the loss. To succeed in its claim, the plaintiff may rely on a voluntary assumption of responsibility on the 2nd defendant's part, as coming within the principle of Hedley Byrne & Co. Ltd v. Heller & Partners Ltd [1964] AC 465. Alternatively, it is possible for such a duty of care to be imposed by law if the plaintiff can satisfy the three requirements of foreseeability of harm, of proximity and of it being just and reasonable to impose the duty : Pacific Associates Inc. v. Baxter [1990] 1 QB 993, Smith v. Bush [1990] 1 AC 831, 865.

12.In White v. Jones [1995] 2 AC 207, 273G-274B, Lord Browne-Wilkinson explained that assumption of responsibility should be understood as a conscious assumption of responsibility for the task, rather than a conscious assumption of legal liability to the plaintiff for the careful performance of the task. By assuming the responsibility for the task, the defendant creates a special relationship between himself and the plaintiff in relation to which the law attaches a duty to carry out the task carefully.

13.In the present case, the 2nd defendant is the architect of the Project. It is also admitted that the plaintiff and the 1st defendant had agreed that the 2nd defendant would also act as the architect under the Sale Agreement. The 2nd defendant has different roles to play in granting time extensions under, on the one hand, the building contract between the 1st defendant and W. Ho and, on the other hand, the Sale Agreement that involves the 1st defendant and the plaintiff.

14.In Global Time Investments Ltd v. Super Keen Investments Ltd [2000] 4 HKC 419, 423C-424B, Lord Hoffmann described an architect's role in granting time extension under a building contract as a quasi-arbitral one in that he is fixing the date from which the contractor will be late and will have to start paying liquidated damages. Hence, he is, at least provisionally, adjudicating between the claims of the developer and the contractor. In the case of the sale agreement, the extension granted by an architect will fix the date for completion of the contract of which time is of the essence and will therefore affect the purchaser's right to rescind and also determine the rights of the developer and the purchaser.

15.The extensions granted by the 2nd defendant on 19 January and 17 April 1998 were pursuant to two letters dated 12 January and 14 April 1998 respectively from the 1st defendant. The contents of these letters are not before the court. Prima facie, the 1st defendant would not be applying for extensions under or for the purpose of the building contract. Further, the defendants have pleaded in paragraph 10 of the Defence and Counterclaim that the two extensions were granted pursuant to clause 4.02 of the Sale Agreement. It is therefore clear that the time extensions were granted under the Sale Agreement. It is also, at least, arguable that the 2nd defendant was aware or should have been aware that the extensions were pursuant to or for the purpose of the Sale Agreement and that they would affect or determine the rights of the parties under the Sale Agreement. Accordingly, notwithstanding that the 2nd defendant is the architect of the Project and that it is not a party to the Sale Agreement, it can be said that the 2nd defendant had assumed responsibility for the task envisaged by clause 4.02 of the Sale Agreement in agreeing to grant and in fact granting the two extensions of time. The task is separate and different from the 2nd defendant's obligations under the building contract, and one which the 2nd defendant can decline to accept. I am of the view that a case of duty of care based on assumption of responsibility has been made out on the pleadings.

16.Alternatively, a duty of care can also arise by the imposition of the law. The requirements of foreseeability of harm and proximity are met by the preceding analysis on the role of an architect in granting time extensions under a sale agreement. In this case, it is open to inference that, in acting as the architect for the purpose of clause 4.02 of the Sale Agreement, the 2nd defendant was made aware of or should have known of the terms of the Sale Agreement. Plainly, in the context of time extensions, the interests of the 1st defendant and the plaintiff are adverse to each other. In the circumstances, the 2nd defendant must know or should have known that its decisions to grant extensions under clause 4.02 would affect the parties' rights under the Sale Agreement. In particular, they would affect the plaintiff's ability to invoke clause 4.03 and to rescind the Sale Agreement. The possibility that the plaintiff may wish to rescind was not a remote one when one considers the condition of the property market in early 1998. It is thus reasonably foreseeable by the 2nd defendant that the plaintiff might suffer pecuniary loss as a consequence of any want of care on its part in granting time extensions under clause 4.02 or for the purpose of the Sale Agreement.

17.At the same time, given that the interests of the plaintiff and the 1st defendant are adverse to each other, it is, to say the least, arguable that the 2nd defendant is under a duty to act fairly and partially and to see to it that the plaintiff's rights as purchasers are properly protected, when considering to grant extensions of time under the Sale Agreement. Further, it will be within the 2nd defendant's expectation that the plaintiff relied on its professional skill and judgment and that the plaintiff would be directly affected by its decisions to grant extensions under the Sale Agreement. This is because the plaintiff had no involvement at all in the process of granting time extensions. The Sale Agreement also did not provide any means of challenging the decisions of the 2nd defendant. There is therefore arguably a sufficiently direct and close relation between the plaintiff and the 2nd defendant as to satisfy the requirement of proximity.

18.As to the third requirement that it should be just and reasonable to impose liability, the imposition of a duty of care in the present case does not necessarily cut across and becomes inconsistent with the structure of relationships created by the building contract and the Sale Agreement. As pointed out, the 2nd defendant assumes different roles and, on the facts of this case, is required to adopt different criteria in considering applications for time extensions under the two contracts. There is also no mechanism under the Sale Agreement for challenging or settling the disputes arising from the decisions of the 2nd defendant. In the circumstances, it is not a case where it will clearly be unjust and unreasonable to impose on the 2nd defendant's liability over and above that it already owes under the building contract and as the architect of the Project. It is also not too onerous and wide a duty to impose on the 2nd defendant. The fact that the Sale Agreement was created some 21/2 years after the 2nd defendant was first retained for the Project means that the 2nd defendant can decline to accept the task envisaged by clause 4.02 of the Sale Agreement, if it did not feel able to discharge the two tasks separately and with no conflict. The class of objects of its duty would also be limited to the parties to the Sale Agreement, of whose existence the 2nd defendant would be aware when accepting the task of considering and granting time extensions under the Sale Agreement. It will not be, as counsel for the 2nd defendant submits, extending an architect's duty of care beyond the contractual relationships of a construction project to include an indeterminate class of objects.

19.The 2nd defendant has placed great reliance on the English Court of Appeal's decision in Pacific Associates Inc. v. Baxter. In that case, a contractor under a dredging works contract claimed against the engineer retained by the employer to supervise the works in damages for economic loss. The contractor's case is that the engineer had acted negligently and, alternatively, in breach of the duty to act fairly and impartially in failing to certify payments and in rejecting applications for payments. The claim was struck out on the basis that the engineer owed no duty of care to the contractor. The Court of Appeal dismissed the appeal, holding that the engineer was not obliged under the contract to exercise due care to the contractor, that it had not voluntarily accepted any responsibility towards the contractor in the performance of their obligations under the contract and that it could not by implication be assumed to owe a duty of care not to cause economic cause to the contractor.

20.Despite the apparent similarities between Pacific Associates Inc. v. Baxter and the present case, there are a number of salient differences between the two. In the contract between the contractor in Pacific Associates Inc. v. Baxter and its employer, General Condition 67 ("GC 67") provided that disputes between the employer or the engineer and the contractor were to be referred to arbitration. The arbitrator was given full power to review the engineer's decision, certificate or valuation. Further, Condition P.C. 86 ("PC 87") contained a general disclaimer by the engineer of liability to the contractor. The English Court of Appeal in arriving at the conclusion that the engineer owed no duty of care to the contractor was significantly influenced by the contractual structure of the contract entered into by the contractor. In Purchas LJ's judgment, the contractual framework, of which GC 67 and PC 87 formed an important and integral part, made it impossible to say that the engineer had held himself out as accepting a duty of care with consequential liability for pecuniary loss outside the provisions afforded to the contractor under the contract, or that the contractor had relied on such assumption of responsibility to bolster or extend its rights : at 1022A-B and 1023A-1024C.

21.This approach was applied in the Hong Kong case of Leon Engineering & Construction Co. Ltd v. Ka Duk Investment Co. Ltd [1989] 2 HKLR 537. In that case, a contractor sued the employer on a building contract and sought to join the architects appointed by the employer. The contractor's proposed claim against the architects was in negligence over the issue of architect certificates. Bokhary J (as he then was) held that the architects did not owe the contractor a duty of care and dismissed the application for joinder. He observed that all members of the English Court of Appeal in Pacific Associates Inc. v. Baxter had attached importance to GC 76 and that the material circumstances of the case before him were akin to those in Pacific Associates Inc. v. Baxter in that the architect's certificates were also subject to full review on arbitration : at 540C-541F. In his judgment, the important considerations are whether there is adequate machinery under the contract to enforce the contractor's rights thereunder and whether there is any good reason to suppose, at the tender stage, that such rights and machinery would not together provide the contractor with an adequate remedy.

22.In the present case, there is no avenue opened to the plaintiff under the Sale Agreement to dispute or challenge the extension granted by the 2nd defendant. It may also be that, as between it and the 1st defendant, the plaintiff is in law bound by the decisions of the 2nd defendant to grant extensions pursuant to clause 4.02 of the Sale Agreement. In Global Time Investments Ltd v. Super Keen Investments Ltd at 425F-426C, Lord Hoffmann, in the context of a contractual provision stipulating for the completion date of a building to be subject to the usual architect's extension, observed that this meant that the parties had to accept as final the architect's answers to the question of whether the circumstances fell within those stipulated in the provision. On this basis, it may be argued that, as against the 1st defendant, the plaintiff is bound by the extensions granted by the 2nd defendant, if they were found to be granted pursuant to clause 4.02 of the Sale Agreement.

23.The present case is also different from Pacific Associates Inc. v. Baxter and Leon Engineering & Construction Co. Ltd v. Ka Duk Investment Co. Ltd in that it is not suggested that the plaintiff would know at once after the granting of the extensions whether it agreed with the 2nd defendant's decision and that the plaintiff had access to information on which it could judge the propriety of the 2nd defendant's decision. The ability of the contractor has relevant information and to judge the correctness of the decision of the engineer is also an important part of the contractual structure in Pacific Associates Inc. v. Baxter : see Ralph Gibson LJ's judgment at 1031C-H. Unlike the contractor in Pacific Associates Inc. v. Baxter, the 2nd defendant cannot suppose that the plaintiff would have discovered any error on its part and would take appropriate action to correct it. Therefore, it cannot be said that the 2nd defendant will not expect the plaintiff to be in the end directly affected by any want of care on its part in granting the extensions.

24.I am thus unable to agree that the present case is on all fours with Pacific Associates Inc. v. Baxter or Leon Engineering & Construction Co. Ltd v. Ka Duk Investment Co. Ltd, and that the court is bound to apply these cases and conclude that no duty of care can arise.

(2) Scope of the duty

25.Paragraph 6 of the Statement of Claim pleads that there are implied in the Sale Agreement terms that govern the manner in which the 2nd defendant would carry out its duties and functions under the Sale Agreement. Paragraph 13 pleads that the 2nd defendant had acted in breach of the implied terms in granting the extensions. Paragraph 14 of the Amended Statement of Claim sets out the particulars of the breaches.

26.The scope of the 2nd defendant's duty is therefore prescribed by paragraph 6 of the Statement of Claim. I accept that the basis for paragraphs 6(2) and (3), namely, giving prior notice to and affording the plaintiff an opportunity to make submissions before deciding to grant time extension, is not apparent from the pleadings. However, as to paragraphs 6(1), (4) and (5), it is not impossible for these to be implied into the Sale Agreement. It is also not unarguable that the 2nd defendant, in granting time extensions under the Sale Agreement, should act fairly, exercise reasonable and skill and also assess the reasons given for the extension and their impact on the Project in a methodical and logical manner.

(3) Causation

27.The plaintiff's loss and damage is pleaded in paragraph 27 of the proposed Amended Statement of Claim (formerly paragraph 21 of the Statement of Claim). It includes the deposits paid, stamp duty, legal costs and wasted marketing costs on sale of the Buildings. Paragraph 30 of the proposed Amended Statement of Claim pleads that but for the extensions granted, the plaintiff would have been entitled to and would have rescinded the Sale Agreement on or shortly after the initial completion date. It is then pleaded that the 1st defendant has since become impecunious and that a second mortgage on the Buildings had since been created in September 1997. It is further pleaded that the defendants have acted to delay and may have jeopardized the plaintiff's interest in the Buildings resulting in the loss and damage pleaded.

28.I agree that the casual link between the 2nd defendant's alleged breaches and the plaintiff's loss and damage as claimed is not apparent from the pleadings, even taking into account the proposed amendment. Without the proposed new paragraphs 14, 16 and 30, it is difficult to see how the alleged negligent or wrongful extensions granted by the 2nd defendant would have led to the loss of deposits and the expenses incurred by the plaintiff.

29.Paragraphs 14 and 16 of the proposed Amended Statement of Claim set out the circumstances in which the extensions came to be granted and the basis for contending that the extensions were wrongfully granted. These two paragraphs together with paragraph 30 of the Amended Statement of Claim serve to provide part of the missing casual link. They serve to show that the 2nd defendant should have decided the applications for extension differently and that the plaintiff's right to rescind has been affected by the 2nd defendant's decisions. Despite that, it remains to be shown how the loss of the right to rescind would have led to the loss and damage pleaded. The two matters pleaded in paragraph 30, namely, the 1st defendant's subsequent impecuniosity and the creation of the 2nd mortgage, do not by themselves fill the gap. In particular, the creation of the 2nd mortgage is irrelevant in that if the plaintiff succeeds in claiming a lien over the Buildings, the lien will relate back to the date of the creation of the Sale Agreement, irrespective of when it was rescinded.

30.The plaintiff's case on causation is, however, developed further by Mr Barma in his submissions. It is argued that if the court were to find that the 2nd defendant did intend to grant extensions of time pursuant to clause 4.02 of the Sale Agreement and/or that it had concluded that the reasons for the extensions fell within the ambit of clause 4.02, then on the basis of Global Time Investments Ltd v. Super Keen Investments Ltd, the court may hold that the extensions, though wrongfully granted, remain valid for the purpose of the Sale Agreement. In such eventuality, the plaintiff would have no right to rescind and would also not be able to recover from the 1st defendant the deposits paid and other loss, and would thereby suffer the loss and damage pleaded. It is also submitted that in any event the plaintiff has been put to costs and expenses to litigate with the 1st defendant.

31.I accept that the case on causation as formulated by Mr Barma in his submissions is an arguable one. But as Mr Lin rightly points out, this is not pleaded. But for counsel's formulation, this part of the plaintiff's claim will have no case and will be liable to be struck out. In the circumstances, the proper course is to grant leave to the plaintiff to amend the pleading so as to properly plead its case on causation.

INTERFERENCE WITH CONTRACTUAL RIGHTS

32.This cause of action is introduced by the proposed amendment and to replace the previous cause of action in procuring a breach of contract. The former cause of action is clearly inadequate and the plaintiff recognizes that, too. It is therefore not necessary to dwell into that.

33.As to the new cause of action, the 2nd defendant says that the proposed amendment fails to show an intention to interfere with the contract and also fails to identify the unlawful acts of the 2nd defendant. The 2nd defendant also challenges the plea on the basis that the necessary causation is missing.

34.Knowing interference by a third party with the contractual rights of a party to a contract without sufficient justification resulting in damages to that party is an actionable tort : Quinn v. Leathem [1901] AC 495 at 510. The tort covers violations of both primary and secondary contractual obligations : Law Debenture Trust Corporation v. Ural Caspian Oil Corporation [1995] Ch 152, 164-5 and 171. I have already dealt with the question of causation in the context of the cause of action in negligence, I do not repeat them here. The points are essentially the same. The tort may take the form of a direct intervention by an act wrongful in itself so as to prevent performance of the contract : D C Thomson & Co. Ltd v. Deakin [1952] Ch 646, at 678 and 695, Torquay Hotel Ltd v. Cousins [1969] 2 Ch 106 at 137. It is on this footing that the plaintiff's claim is put.

35.The plaintiff's case is that the 2nd defendant was aware of the terms of the Sale Agreement and that by reason of the matters pleaded in paragraphs 14 and 16 of the proposed Amended Statement of Claim, the 2nd defendant knew that there was no justification for the extensions granted. The granting of the extensions was therefore unlawful, being a deliberate wrongful decision . It was further made with the intention of depriving the plaintiff of or preventing it from exercising its right of rescission.

36.In my view, this is an arguable claim : see the observation of the English Court of Appeal in Lubenham Fedelities & Investment Co. v. South Pembrokeshire District Council and Anor (1986) 6 Con LR 85 at 113-114. As to the element of intention to interfere with the contractual rights, it is very much a question of fact. Whether the 2nd defendant granted the extensions with a view to frustrating the plaintiff's right to rescind or that the 2nd defendant was doing no more than to further the performance of the Sale Agreement, as in Lubenham Fedelities & Investment Co. v. South Pembrokeshire District Council and Anor, hinges upon the factual findings on the circumstances surrounding the granting of the extensions. The plaintiff's claim in interference with contractual rights is not plainly unarguable as to merit a striking out.

CONSPIRACY

37.The plaintiff alleges both a conspiracy to injure and also a conspiracy to use unlawful means. Paragraph 26 of the proposed Amended Statement of Claim pleads that the irresistible inference to be drawn from the circumstances leading to the grant of the extensions (as pleaded in paragraph 16) is that the defendants had acted in combination or agreement. The 2nd defendant's challenge to this added cause of action is that there is a failure to plead any overt act, quite apart from the point on causation, which had already been dealt with.

38.In Aktieselskabet Dansk Skibsfinansiering v. Wheelock Marden [1994] 2 HKC 264, it was held that a plaintiff in a claim of conspiracy has to plead at least one overt act which was the act of all the alleged conspirators or, alternatively, a number of overt acts which include at least one overt act on the part of each conspirator.

39.In paragraph 16 of the proposed Amended Statement of Claim, it is pleaded that the 1st defendant initiated and did effect an amendment to the building contract to include inclement weather as events entitling W. Ho to extensions of time thereunder. It is also pleaded that the 1st defendant had suggested and told W. Ho to make the two extensions for time. The paragraph continues to plead that the 2nd defendant granted the two extensions knowing that the grounds put forward did not justify the extensions. Paragraph 16 has therefore pleaded three overt acts, two in respect of the 1st defendant and the third in respect of the 2nd defendant. Whether these overt acts were in furtherance of a combination or conspiratorial agreement involving the defendants and, possibly, also W. Ho is a matter of inference to be drawn from the facts pleaded in paragraphs 14 and 16 of the proposed Amended Statement of Claim. It is not an inference that is impossible to be drawn. The claim in conspiracy is arguable on the facts pleaded.

40.By reason of the matters aforesaid, the 2nd defendant has not made out a plain and obvious case that, as against it, the plaintiff has no reasonable cause of action, such that the Statement of Claim should be struck out and the action dismissed or stayed. It is true that the Statement of Claim is in some aspects inadequate, and ought to be amended. The plaintiff's application to amend is therefore granted. The plaintiff is also given leave to amend the plea on causation along the line developed by Mr Barma in the course of his submissions.

COSTS

41.Although the 2nd defendant fails in the striking out application, the application is not totally unjustified or without merits. The plaintiff's application to amend is a good reflection of this fact. Indeed, had not been for the proposed amendment, the 2nd defendant would have succeeded in striking out part of the Statement of Claim. The 2nd defendant should therefore be awarded the costs of the application.

42.On the plaintiff's application to amend, there is no reason for departing from the usual costs order so that the defendants should be awarded the costs of the application and the costs of and occasioned by the amendment.

43.The costs of the hearing of the two summons on 13 June 2001 however requires further consideration. The arguments on the two applications are intertwined. In pursuing the striking out application, the 2nd defendant is in effect opposing the application to amend. Apart from the causation point, the 2nd defendant has failed in its arguments. The hearing and the arguments would have been considerably shortened had the 2nd defendant confined its objection to the causation point. Therefore while the 2nd defendant would be entitled to the costs of the part of the hearing on causation, it would have been liable to the plaintiff for the costs of the other part of the hearing. A fair result will thus be for there to be no order as to the costs of the hearing.

44.I will make an order nisi on costs along the lines indicated above.

CONCLUSION

45.The orders I make are as follows :

(1) The 2nd defendant's summons filed on 27 February 2001 be dismissed.

(2) The plaintiff be granted leave to amend its Statement of Claim in substantially the same form as the copy annexed to the plaintiff's summons filed on 29 May 2001 and to include amendment on the plea of causation.

(3) The Amended Statement of Claim be filed and served within 14 days from the date of this order.

(4) The defendants to file and serve Amended or Re-Amended (as the case may be) Defence and Counterclaim within 28 days thereafter.

(5) There be an order nisi as to costs as follows :

(a) The costs of the 2nd defendant's said summons be to the 2nd defendant against the plaintiff in any event,

(b) The costs of the plaintiff's said summons and the costs of and occasioned by the amendments to the Statement of Claim be to the 1st and 2nd defendants in any event, and

(c) There be no order as to the costs of the hearing on 13 June 2001.

Representation:

Mr Aarif Barma, instructed by Messrs Baker & McKenzie, for the Plaintiff

Mr David Harrington of Messrs Richards Butler, for the 1st Defendant

Mr Kenny Lin, instructed by Messrs B.C. Chow & Co., for the 2nd Defendant