Leung Yin Fun Connie v. Sogo Hong Kong Co Ltd

DCCJ3024/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3024 OF 2004

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BETWEEN

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Before: Her Honour District Judge Marlene Ng in Chambers (Open to Public)

Date of Hearing: 3^rd December, 2005

Date of Handing Down Decision: 5^th December, 2005

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D E C I S I O N

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Introduction

1.These proceedings began life in the Small Claims Tribunal since the Plaintiff’s claim is for HK$48,390.80 (the “Sum”). On 28^th May 2004, the learned adjudicator transferred the claim to the District Court when it transpired that it was based on breach of trust. The trial of this action is due to be heard before a District Court Judge on 19^th and 20^th December 2005.

The present application

2.On 25^th November 2005, the Defendant issued a summons (the “Summons”) inter alia for leave to (a) amend its Defence, (b) file a supplemental list of documents, (c) file the supplemental witness statement of Ms Chan Man Chi (“Ms Chan”) and (d) file and serve the witness statement of Ms May Auw Yang (“Ms Auw Yang”) as well as for consequential directions. The Defendant intends to substitute Ms Auw Yang for its witness, Ms Pang So Sum Rio (“Ms Pang”), and their respective witness statements are substantially similar. The Defendant filed an affirmation of Ms Chan to explain the basis for the present application.

The background

3.It is necessary to have regard to the history of the matter and the background of the present claim and defence.

4.The following matters are essentially not disputed :

(a) The Plaintiff resigned and left the Defendant’s employment on 25^th January 2004. From 1^st March 1989 until her resignation, she was a member of the Defendant’s provident fund scheme (the “Scheme”) initially managed by American International Assurance Company (Trustee) Limited and later by American International Trustee Limited (collectively, “AIA”).

(b) Under the Scheme, every member employee of the Defendant (the “Member”) and the Defendant were respectively required to make monthly contribution amounting to 5% of the Member’s monthly salary. Upon cessation of employment with the Defendant, each Member was entitled to the return of his accumulated contribution plus interest together with a percentage of the Defendant’s contribution for the Member calculated according to the vesting schedule of the Scheme plus interest.

(c) Upon cessation of employment with the Defendant, the Plaintiff was entitled to a total sum of HK$55,542.72 (the “Benefit”) under the Scheme being the aggregate of HK$28,637.68 (employer’s portion) and HK$26,905.04 (employee’s portion).

(d) The Defendant received the Sum on/about 27^th February 1998.

5.The Plaintiff claims she was entitled to the return of the Benefit from the Scheme upon her cessation of employment with the Defendant. The Defendant received the Sum (being part of the Benefit) from AIA for the Plaintiff’s use and for onward transmission to the Plaintiff, so the Defendant was a constructive trustee holding the Sum for her. The Plaintiff claims against the Defendant for breach of trust in failing/refusing to return the Sum on demand or as money had and received for the use of the Plaintiff.

6.The Defendant in its Defence claims it became a contributing employer to the Scheme pursuant to a Deed of Participation made between the Defendant and AIA on 10^th July 1998 (the “Deed”). The Deed expressly provides inter alia that (a) the Defendant consented to AIA making payment of any benefit due to an employee directly to such employee member, his nominee or legal personal representative as provided in the Rules and (b) AIA shall, at the Defendant’s request, out of the benefit payable to a Member or other person, pay or transfer to the Defendant the amount of proven loss the Defendant had suffered due to a dishonest act committed by the Member and the indebtedness acknowledged in writing by the Member to AIA as owing to the Defendant (the “Exception”). Subject inter alia to the above, the benefit payable to a Member shall be transmitted to the order of the Member, termination of whose status as Member renders such benefit payable, if living at the time of payment. The Defendant claims that the above terms were/are binding and effective as between the Defendant and AIA.

7.The Defendant further claims that in 1994 AIA has in compliance with the Deed issued a cheque to the Plaintiff for the difference between the Benefit and the Sum (ie HK$7,151.92, the “Balance”).

8.The Defendant raises the following defence arguments :

(a) The Defendant puts the Plaintiff to strict proof of her entitlement to the Sum.

(b) Since AIA paid the Sum to the Defendant, it must have been pursuant to the Exception that disentitled the Plaintiff from receiving the Sum. But the Plaintiff is unable to provide further particulars other than to say the Defendant operated a staff instalment account for its employees for purchasing goods and/or incurring expenses on credit to be repaid by instalments (the “SIA”).

(c) The Plaintiff’s claim is time-barred since the cause of action arose more than 6 years before the commencement of the action.

(d) The Plaintiff’s claim is barred by laches. There is no need, for present purposes, to describe the detailed material facts relied on by the Defendant for this defence.

9.The Plaintiff in her Reply denies any knowledge of AIA’s cheque for the Balance allegedly issued in 1994. She claims AIA only presented her with a cheque for the Balance on/about June 2003. She also denies she owed the Defendant any sum at the time of her cessation of employment and therefore disagrees that the Defendant received the Sum from AIA pursuant to the Exception. The Plaintiff says her claim is not statute-barred. Alternatively, since the Defendant received the Sum from AIA on/about 27^th February 1998, she was within the time limit when she commenced her claim in the Small Claims Tribunal on 6^th December 2003.

10.Pursuant to the Memorandum of Agreed Directions and Orders dated 29^th January 2005, the parties exchanged and filed witness statements. The Plaintiff herself is the sole witness for her claim. The Defendant filed the witness statements of Ms Chan, the Defendant’s senior supervisor, and Ms Pang, AIA’s assistant manager. On 7^th November 2005, leave was granted to the Defendant to issue subpoenas against Ms Pang, Ms Auw Yang and Mr Chan Kwok Kit Desmond, all of AIA. Ms Auw Yang was successfully served with the subpoena.

11.A pre-trial review hearing was held on 5^th July 2005. The checklist filed by the Defendant’s solicitors foreshadowed further discovery, amendment of pleadings and witness statements pending further instructions from the Defendant and counsel’s advice. The Defendant’s solicitors opined that it was not appropriate to fix a date for trial “[pending] further instructions from client on whether there is any further document to be disclosed and intend to ask Counsel to advise on the need to file witness statement”. Such stance did not find favour with the learned Listing Master who fixed the trial dates at the pre-trial review hearing.

Further discovery

12.I first turn to the Defendant’s application in respect of its own further discovery. Mr Lam, counsel for the Plaintiff, confirms that the Plaintiff does not oppose the Defendant’s application for filing a supplemental list of documents. Ms Chan in her affirmation explained her recent discovery of further relevant documents. I note here, and will return to this point later, that the Defendant has been asserting from the beginning that the long lapse of time has rendered it difficult to look for the relevant documents. 

13.Before leaving this topic, it will be useful to briefly describe the two new categories of documents (the “New Documents”) since they also feature in the other aspects of the Defendant’s application discussed below :

(a) The first category consists of copy monthly Reports of Termination from December 1992 to March 1994 signed by the Defendant, each of which sets out in table form the identity of the employee Member, the last date of employment/coverage, the expiry of the contribution and the reason for termination. The table has a box for particulars of receipt marked for AIA use. The copy Report of Termination for January 1994 contains the Plaintiff’s particulars and it was marked in original ink in the corresponding box for AIA’s use inter alia “by cash on 27.7.94” with a notation “OK” outside the box. At the hearing, Mr Chain, counsel for the Defendant, produces the original folder containing these and similar documents. Upon perusal of this folder, Mr Lam informs me that the Plaintiff does not challenge their authenticity.

(b) The second category consists of several individual employee files (not the Plaintiff’s) that spanned the period from 1994 to 1998, each of which consists of a Member’s termination benefit statement by AIA, a cheque/payment advice that AIA issued to the Member and a confirmation of receipt apparently signed by or on behalf of the Member. The Plaintiff has not yet inspected the original of these employee files, but Mr Lam believes it is unlikely their authenticity will be challenged.

Amendment of pleadings and supplemental or further witness evidence

(a) Plaintiff’s objections

14.In respect of the proposed draft amendments to the Defence (the “Draft”), I am informed by Mr Lam that the Plaintiff only objects paragraphs 11C to 11F (the “Disputed Amendments”). In respect of the additional witness evidence, Mr Lam objects to the entirety of the supplemental witness statement of Ms Chan and paragraph 10 of the witness statement of Ms Auw Yang.

(b) Background to the witness statement of Ms Auw Yang

15.There can be no doubt that the witness statements of Ms Pang and Ms Auw Yang are substantially similar. I propose to first deal with the background leading to the Defendant’s application to rely on the witness statement of Ms Auw Yang.

16.The Defendant filed the witness statement of Ms Pang, an employee of AIA since 1993, in the course of these proceedings. At about the end of October 2005, the Plaintiff’s solicitors discovered Ms Chan would leave AIA’s employment on 1^st November 2005 and AIA would not provide another witness to give evidence for the Defendant. A subpoena was then served on inter alia Ms Auw Yang, a current employee of AIA. The Defendant’s solicitors could not serve the subpoena on Ms Pang because they did not have her contact details. Ms Auw Yang informed them Ms Pang would be out of Hong Kong on the proposed appointment date for service of the subpoena and on the scheduled trial dates. But by then Ms Auw Yang indicated she was willing and available to give evidence for the Defendant. Due to these recent developments, Mr Chain submits and I agree that it will be necessary to file and serve a witness statement from Ms Auw Yang.

17.As noted above, Ms Auw Yang’s witness statement, including the disputed paragraph 10, is substantially similar to Ms Pang’s witness statement. Until the hearing before me, the Plaintiff has not objected to the equivalent of such paragraph 10 in Ms Pang’s witness statement. But apart from Mr Lam’s objection to such paragraph 10, which touches on similar grounds as his objections to the Disputed Amendments and the supplemental witness statement of Ms Chan (see discussion below), Mr Lam has not alluded to any prejudice that may be suffered by the Plaintiff in substituting Ms Auw Yang as the Defendant’s witness. As Mr Chain points out, given Mr Lam’s vigorous complaint as to the lack of personal knowledge on the part of the Defendant’s witnesses, the detriment (if any) is more likely to befall the Defendant since Ms Pang worked for AIA since 1993 whilst Ms Auw Yang started to do so in 1998.

(c) Disputed Amendments

18.I now move to the crux of the dispute between the parties. Although counsel’s submissions have concentrated on the Disputed Amendments, it is useful to briefly note that the purport of the proposed amendments in paragraphs 5B, 5C, 8, 7A and 8A of the Draft is to aver that the Defendant’s leaflet dated 1^st March 1989 introduced the Scheme to its employees and that the provisions of the Deed, the Rules of the Scheme and the leaflet were binding on the Plaintiff. The leaflet provides that “[benefits] shall be given by a cheque issued by AIA within 2 weeks after the acceptance of Termination Report or necessary contribution payment whichever was latest. The Benefit Cheque will be issued under the name of each Member but be sent to the [Defendant] by AIA”.

19.The nub of the Disputed Amendments is that since AIA was frequently late in paying retirement benefits (including payment of the Benefit to the Plaintiff), the Defendant, at the request of its ex-employees who were Members, agreed to make partial payments/advances from its own monies (including paying the Sum or part thereof in cash to the Plaintiff after taking into account the indebtedness due to the Defendant under the SIA and/or severance or long service payment made by the Defendant), so AIA paid the Defendant by cheque in October 1994. Such cheque was not presented for payment and AIA paid the Defendant by a replacement cheque in 1998. In short, the Defendant claimed AIA’s payment of the Sum was for its own benefit.

(d) The approach

20.Mr Chain submits that the court should consider the application to amend pleadings first because if that is allowed, the application for filing the supplemental witness statement of Ms Chan will naturally follow. Mr Chain does not shy from the fact that the Disputed Amendments introduce some new facts, but he says that is due to the New Documents, further discovery of which the Plaintiff has no objection.

21.Mr Lam takes a different approach. He says that the Disputed Amendments should not be allowed because they are unsupported by evidence, a fatal defect which even the supplemental witness statement of Ms Chan cannot remedy since its contents are inadmissible, or, alternatively, they are contradicted by the existing evidence.

22.I propose to consider the Disputed Amendments and the additional witness evidence together as they appear to be inter-related.

(e) Consideration of the lateness of the application

23.Mr Lam says that the application is late since the trial is to commence in two weeks’ time. It is true that discovery of documents (save for the New Documents) and exchange of witness statements have long been completed. But I see no evidence of bad faith or attempt to overreach. The Defendant’s solicitors have already alluded to the possibility of further amendment of pleadings and further witness evidence at the pre-trial review hearing. As I understand from Mr Chain, the Disputed Amendments are substantially premised on the recently discovered New Documents. In any event, Mr Lam does not assert that the present application is made mala fides.

24.Whilst the adherence to goal posts is of importance in any modern civil litigation, there is a need to strike a balance between the timely progress of cases and their proper adjudication. The principles are well summarised by Sir Thomas Bingham MR in Costellow v Somerset County Council [1993] 1 WLR 256, 263-264 as follows :

“As so often happens, this problem arises at the intersection of two principles each in itself salutary.  The first principle is that the rules of court and associated rules of practice, devised in the public interest to promote the expeditious despatch of litigation, must be observed.  The prescribed time limits are not targets to be aimed at or expressions of pious hope but requirements to be met.....

The second principle is that the plaintiff should not in an ordinary way be denied an adjudication of his claim on its merits because of procedural default, unless the default causes prejudice to his opponent for which an award of costs cannot compensate.....

Neither of these principles is absolute.  If the first principle were rigidly enforced, procedural default would lead to dismissal of actions without any consideration of whether the plaintiff’s default has caused prejudice to the defendant.  But the court’s practice has been to treat the existence of such prejudice as a crucial, and often a decisive, matter.  If the second principle were followed without exception, a well-to-do plaintiff willing and able to meet orders for costs made against him could flout the rules with impunity, confident that he would suffer no penalty unless or until the defendant could demonstrate prejudice....  The resolution of problems such as the present cannot in my view be governed by a single universally applicable rule of thumb.  A rigid, mechanistic approach is inappropriate.”

25.The above echoes the principles governing the amendment of pleadings as re-stated by the Court of Appeal in Tang Kam Wah & Ors v Tam Ming Yat & Anor [2003] 1 HKC 532, a case cited by Mr Chain. Whilst the circumstances of each case are different, I can do no better than to refer to the citation by Stock JA of what Ching JA (as he then was) said in Chau Mei Lee Fragrance v Ng Yee Tim [1996] 4 HKC 46, 52 :

“… Amendments should not be refused however late the application is made provided that they are not designed to over-reach and provided that no prejudice is caused to the other side which cannot be cured by costs and an adjournment if necessary.”

26.Mr Lam does not dispute the above principles but submits that in the context of the present application, the court’s discretion should not be exercised in favour of the Defendant.

(f) Submissions

27.Mr Lam says that paragraphs 11C and 11D of the Disputed Amendments raise new facts, namely, (a) in about 1994 there were substantial delays in AIA’s payment of retirement benefits to Members and (b) at the requests of the Defendant’s ex-employees who were Members, the Defendant agreed to make advance payments to them from its own monies. He argues that (a) is unsupported by either Ms Pang’s or Ms Auw Yang’s witness statement. In respect of the alleged requests referred to in (b), since Ms Chan did not work for the Defendant at the material time, the contents of her supplemental witness statement are mere speculation as to what has happened as a result of reading the discovered documents and New Documents, and such statement is therefore inadmissible. Mr Lam makes a similar complaint in respect of paragraph 10 of the witness statement of Ms Auw Yang, so that she should not be allowed to deal with AIA’s practice and the relevant events prior to her joining AIA in 1998.

28.Mr Chain in exemplary fairness accepts that Ms Chan and Ms Auw Yang do not have personal knowledge of the material events. Nevertheless, the Defendant says it is not a problem of its own making, From the beginning, the Defendant complained that the lapse of almost 10 years for the Plaintiff to bring the present claim has severely hampered its ability to adduce appropriate witness and/or documentary evidence to support its defence and that it is now constrained to formulate its defence on the limited available documents and on inferences and understandings drawn from them.

29.Mr Chain says that the assertion of substantial delay by AIA is supported by the disparity between the dates of cessation of employment of various employees and the date of AIA’s corresponding Benefit Statement, a document which has already been discovered. Since the Defendant had no obligation to pay the retirement benefits under the Scheme (which obligation fell on AIA) and since the receiving parties were the ex-employees who were the Members, Mr Chain suggests that in the context of the delay referred to above, inferentially the Defendant’s advance payments in cash would have been made at the ex-employees’ requests.

30.Mr Lam seizes on Mr Chain’s above submission to say that the court is quite capable of reading the documents on its own and that the supplemental witness statement of Ms Chan, which is nothing but a guise for counsel’s final submissions, should not be allowed. He also complains that Ms Auw Yang (who was not with AIA at the material time) should not be allowed to “copy” and adopt the entirety of Ms Pang’s witness statement as her own. Since the supplemental witness statement of Ms Chan and paragraph 10 of Ms Auw Yang’s witness statement are inadmissible, Mr Lam says there is nothing to support the Disputed Amendments, which must therefore be disallowed. He asks me to particularly bear in mind the scheduled trial is just around the corner. In fact, Mr Lam goes further in his oral submissions at the hearing to say that the discovered documents and the New Documents are incapable of supporting any of the inferences contended by the Disputed Amendments.

31.Mr Lam submits that by paragraph 11E of the Disputed Amendments the Defendant seeks to argue that the Sum advanced to the Plaintiff in cash had taken into account (a) the Plaintiff’s indebtedness to the Defendant under the SIA and/or (ii) severance or long service payment made by the Defendant. He points out there is no express statement in the Reports of Termination as to who made the cash payments to whom. Although the existence of the SIA has been previously pleaded, Mr Lam says the Disputed Amendments must be disallowed because there is no witness evidence from persons who have personal knowledge at the material time that the aforesaid indebtedness was actually incurred.

32.Mr Chain submits that to make the retirement benefits payable to the Defendant and not the ex-employee who was a Member, AIA had to do so under the Exception, ie there should be a written acknowledgment of indebtedness due to the Defendant by the Member. But before the New Documents were discovered, the available information only supported a plea of the SIA as a source of such indebtedness. Mr Chain frankly accepts that in light of the Plaintiff’s then limited salary, there may be conceptual difficulty in the suggestion that her SIA indebtedness was allowed to accrue up to the Sum. However, the New Documents that recently came to light support the proposed plea of advance payments in cash by the Defendant because (a) AIA was substantially late in paying the retirement benefits (see above), ie substantially more than 2 weeks as provided in the leaflet, (b) AIA would pay the retirement benefits to the Members by cheque according to the leaflet, (c) but cash payments to the Plaintiff and other employees were recorded on the Defendant’s copies of the Report of Termination, (d) the date of the cash payment for the Plaintiff so recorded was in July 1994, (e) such date was before theinstructions for AIA to pay HK$347,188.23 (including the Sum) to the Defendant and to issue inter alia a cheque to the Plaintiff for the Balance as noted in the accounting memorandum of October 1994 and (f) there has been no record of complaint from 18 other ex-employees whose retirement benefits were handled in a similar manner at the material time.

33.Mr Chain further submits that inferentially the cash advance to the Plaintiff was the Sum because of the indebtedness under the SIA (which has been pleaded) and the statutory provision that allows severance and long service payments to be deducted from retirement benefits under the ORSO Scheme.

34.Mr Lam says such averments are not permissible because they are contradicted by Ms Chan’s witness statement, which says that “from the available records of [the Defendant]” the sum of HK$440,436.60 paid by AIA to the Defendant in 1998 (which includes the Sum) was treated in the ledgers as receivables towards settlement or adjustment for SIA. He says the Disputed Amendments should not be allowed unless the Defendant is able to call a witness who has personal knowledge of the events who can explain the discrepancy.

(g) Analysis

35.In my view, when considering whether the amendments and the additional witness evidence should be allowed, whilst the court should generally grant leave to amend and/or to adduce evidence to enable the real question or controversy to be determined, the court must take into account all relevant factors in the exercise of its discretion (see Lord Griffiths in Ketteman v Hansel Properties [1987] 1 AC 189, 220). Some of the relevant factors are the importance of the amendments and the further evidence to the party seeking to introduce them and the prejudice to the other party, if any, and whether any such prejudice can be compensated by costs. I accept there is a difference between amendments that clarify the issues and those that raise a new focus. The latter is of course more likely to cause prejudice that cannot be compensated by costs but whether it will actually cause such prejudice depends on an analysis of the facts and circumstances of each case. Ultimately, it is a balancing exercise in order to achieve fairness and justice.

36.Having carefully considered the circumstances and counsel’s submissions, I am persuaded that I should exercise my discretion to allow the Defendant’s application for the amendment of the Defence, including the Disputed Amendments, and for filing and service of the supplemental witness statement of Ms Chan and the further witness statement of Ms Auw Yang (including paragraph 10 thereof).

37.As a start, I note that whether by the existing Defence or by the Disputed Amendments, it is the Defendant’s consistent case that the Plaintiff was indebted to the Defendant and hence AIA was required to and did pay the Sum to the Defendant. It is true and Mr Chain, again in exemplary fairness, accepts that such defence is now proposed to be put on a somewhat different factual basis. Consequently, the Disputed Amendments do raise some new dimensions. Since it is close to the trial, if it had not been for the particular circumstances and background of this case (see discussion below), arguably strong and powerful factors are required to balance any likely prejudice that may be caused to the other party.

38.This is, as Mr Chain puts it, a stale case dealing with events that happened more than 10 years ago. Even when the Plaintiff commenced her claim in the Small Claims Tribunal, the Defendant was quick to complain that the availability of witness and documentary evidence was seriously hampered by the long lapse of time. The Defendant has never been shy with the fact that its defence is premised on inferences and on its understanding of the practice in handling retirement benefits and of the circumstances vis-à-vis the Plaintiff’s Benefit at the material time as drawn from the available documents. The Defendant has never suggested that its witnesses speak from personal recollection or personal involvement in handling the Benefit. This forms part of the Defendant’s defence of laches and as the matter is to proceed to trial, the less I say on this the better. But suffice to say the above serves to illustrate the background to the Defendant’s defence, which the Plaintiff cannot be unaware.

39.Similar to the existing Defence, the proposed amendments in the Draft (including the Disputed Amendments) are crafted on inferences and understandings drawn from the available documents, mainly the recently discovered New Documents, as to the practice/system adopted by AIA and the Defendant in handling retirement benefits at the material time and as to what happened vis-à-vis the Benefit.

40.I bear in mind that the Plaintiff does not object to further discovery of the New Documents and it is not envisaged that their authenticity will be challenged. Mr Lam therefore accepts the New Documents will be part of the evidence at the trial. However, I disagree that it is only a matter of the court reading the documents or of counsel making final submissions. A case remains a positive case whether it is one by inference or by direct evidence. As such, it ought to be pleaded before evidence can be adduced or the court will allow such issue to be canvassed during submissions or otherwise. Contrary to what Mr Lam suggests, the Defendant’s legal representative will not be able to address the court on the assertions set out in the Disputed Amendments at the trial unless they are pleaded. In my view, given the nature of the defence case, the lapse of time, the recent discovery of the New Documents, fairness and justice require that the Defendant be permitted to amend the Defence as requested.

41.In coming to the above conclusion, I am not persuaded by Mr Lam’s submission that the discovered documents and New Documents do not support any of the inferences drawn in the Disputed Amendments. At the stage of amendments, the court is normally only concerned with whether the amendments are arguable. If the proposed amendment is late, the court may take into account its strength in the balancing exercise, but it will be undesirable for the court to express a view on the proposed amendment and the evidence if it is unnecessary to do so. In light of Mr Chain’s submissions on how the documents should be interpreted in support of the Disputed Amendments, I cannot agree with Mr Lam’s bold suggestion. It is possible that the defence outlined in the Disputed Amendments may crumple at trial, but it is too strong to say at this stage that it is unarguable on the presently available documents.

42.Mr Chain drew my attention to Gale v Superdrug Stores Plc [1996] 1 WLR 1089. In that case, there was an admission of liability by correspondence and interim payment was made. But when proceedings commenced, the defendant denied liability. The Court of Appeal held that the court has to balance the respective prejudice caused to the parties (if any) if the admission was withdrawn and the lack of a good reason for withdrawal was only one factor to be considered. The discretion was a general one in which all circumstances had to be taken into account. Since there was no evidence of any specific matter which would render it more difficult for the plaintiff to prosecute her claim in liability than if the admission had never been made, the defence ought not be struck out. Lord Millett LJ said at p.1110 as follows :

“…… In my judgment leave should normally be granted if the application is made in good faith, raises a triable issue with a reasonable prospect of success, and will not prejudice the plaintiff in a manner which cannot be adequately compensated. ……

Of course, the unexpected nature of the defence must have been a disappointment to the plaintiff; but I cannot think that this should count for anything. The sounder the defence sought to be raised by the amendment, the greater the disappointment to the plaintiff if it is allowed and the greater the injustice to the defendant if it is not. What the court must strive is to avoid injustice, not disappointment.”

43.I respectfully agree with the above principles and Mr Lam does not dispute them in the course of his submissions. Mr Chain submits that any prejudice that may be caused to the Plaintiff by the proposed amendments will and can be adequately compensated by costs and in fact the Plaintiff has not identified any specific prejudice. As I understand the Plaintiff’s case, she contends she is entitled to the Sum, which the Defendant received from AIA, so such Sum was imbued with a trust for which the Defendant is liable to account to her on demand. On such basis, the Disputed Amendments do not affect the Plaintiff’s stance. Mr Lam accepts that, if the court is in favour of the Defendant’s application, no adjournment of the trial will be necessary and all that will be required is for the Plaintiff to amend the Reply and to file and serve a supplemental witness statement to, say, deny any indebtedness owed to the Defendant. The situation is, I think, more of a disappointment that the Defendant is able to raise what it hopes to be a firmer case that the Plaintiff was not entitled to the Sum rather than specific prejudice that will be suffered because of the Disputed Amendments.

44.In coming to the aforesaid conclusions on the Disputed Amendments, I have borne in mind Mr Lam’s complaints in relation to the additional witness evidence. Mr Chain accepts that one should start with the best evidence rule, but in my view there cannot be rigid insistence on having the “best evidence” (eg only witness with personal knowledge to give evidence) in every case. Sometimes, the demise of a material witness or a fire destroying records may reduce a party’s case to recounting events based on inferences from the remaining available evidence. To insist on having the “best evidence” may murder such a case before it starts. Likewise, the unusual exigencies of a case may not permit the “best evidence” to be adduced. Here, the long lapse of time since the material events, the lack of complete records, the departure of employees who worked at the relevant time, the fact that the Defendant no longer operated the Scheme with AIA all suggest that it is not an ordinary situation. Against such background, fairness and justice require the further dimensions canvassed in the Disputed Amendments and in the supplemental witness statement of Ms Chan that arise from the New Documents be allowed to go to trial.

45.I do not consider the hearing before me to be an appropriate forum to challenge or object to the additional witness evidence. It is for the trial judge who is seized of the merits of the case to determine whether the witnesses’ evidence goes beyond what is permissible and what weight, if any, can be given to the documents and the witnesses’ evidence. Further, the issues of whether the new dimensions asserted in the supplemental witness statement of Ms Chan amount to unacceptable contradictions or whether the “cut and paste” approach to Ms Auw Yang’s witness statement will undermine its reliability should properly be left to be canvassed at the trial. I note, however, that Ms Chan’s reference to SIA in her witness statement (see paragraph 34 above) is based on the then available records of the Defendant, so it is arguable that when more records (eg the New Documents) are unearthed, Ms Chan should be able to deal with such further records. Given the available documents, including the New Documents, and their interpretation as contended for by Mr Chain, I cannot at this stage say the additional witness evidence from Ms Chan and Ms Auw Yang as to role of the available documents and the system or practice they illustrate is entirely without foundation. They may well be fodder, even rich fodder, for cross-examination, but the fact that they are not the “best evidence” do not justify the exclusion of either the proposed amendments or the additional witness evidence in all the circumstances at this stage.

46.Mr Chain accepts that once the battle lines are clearly drawn, it will be legitimate for the Plaintiff to complain of any contradiction and weakness in the evidence, if she sees fit, at the trial. I agree and hasten to make clear that nothing said in this decision is intended to form a definitive view on the merits or to constrain the parties’ conduct of the trial.

Conclusion

47.I therefore grant the following orders :

(a) the Defendant do have leave to amend its Defence in the manner shown and underlined in red as per the copy annexed as annexed A to the Summons;

(b) the Plaintiff do have leave to file and serve consequential amendments by way of an Amended Reply, if so desired, on or before 12^th December 2005;

(c) the Defendant do have leave to file the Supplemental List of Documents dated 22^nd November 2005 attached as Annex B to the Summons within 3 days from the date hereof;

(d) the Defendant do have leave to file the supplemental witness statement of Ms Chan attached as Annex C to the Summons within 3 days from the date hereof;

(e) the Defendant do have leave to file the witness statement of Ms Auw Yang as per the copy shown at pages 105-113 of the hearing bundle within 3 days from the date hereof;

(f) the Plaintiff do have leave to file and serve supplemental witness statement in reply to the supplemental witness statement of Ms Chan and the witness statement of Ms Auw Yang, if so desired, on or before 12^th December 2005; and

(g) service of the Defendant’s Amended Defence, Supplemental List of Documents, the supplemental witness statement of Ms Chan and the witness statement of Ms Auw Yang be dispensed with.

48.Mr Chain concedes that the Plaintiff should be entitled to costs of the application. Given the consequential directions, I consider it appropriate to award costs of and occasioned by the application in favour of the Plaintiff against the Defendant to be taxed if not agreed with certificate for counsel. The Plaintiff’s own costs shall be taxed in accordance with the Legal Aid Regulations.

Mr Allen Lam instructed by the Director of Legal Aid for the Plaintiff.

Mr Benjamin Chain instructed by Messrs Sit, Fung, Kwong & Shum for the Defendant.