Honey Bee Electronic International Ltd v. Goldenlucky Co Ltd

DCCJ 5125/2003

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 5125 OF 2003

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BETWEEN

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Coram : Deputy District Judge W.C. Li in Chambers (Open to Public)

Date of Hearing : 31^st October 2006

Date of Handing Down Decision : 2^nd November 2006

D E C I S I O N

1.The Plaintiff applied for leave to appeal against my decision refusing them leave to re-amend their statement of Claim. My decision which was handed down on 28^th August 2006 was based mainly on the issue of relevance, as stated in Paragraph 8 therein, and also that the Plaintiff was “filibustering” when they were not proceeding and delaying with their claim against the Defendant, as stated in Paragraph 9 of my Decision. In other words, I took the view that the Plaintiff’s re-amendment was not relevant and mala fide.

2.It is trite law that an amendment must relate to the real issue between the parties, the application must not be mala fide, and that the amendment must not cause prejudice to the other party. We were concerned with the relevance of the issue that the Plaintiff sought to introduce by way of the re-amendment, and whether the application to do that was mala fide. I found against the Plaintiff on both these points and the Plaintiff asked for leave to appeal.

3.Leave to appeal would be granted if the Plaintiff shows that they have an arguable case with reasonable chances of success on appeal (Ma Bik Yung  v.  Ko Chuen, HCMP No. 4303 of 1999, unreported).

4.The point argued by the Plaintiff was that the second machine would be taken out of the Mainland by the Defendant and delivered to them in Hong Kong under the contract of sale and purchase they made with the Defendant in HK. The illegality they alleged was that the Defendant would have avoided/evaded Mainland custom duty when they moved the second machine from the Mainland into Hong Kong. This point was argued by Plaintiff Counsel, Mr. Roland Lau, when they applied for leave to re-amend their Statement of Claim, and argued again by Plaintiff counsel, Mr. Raymond Tsui, in asking for leave to appeal. The contract between the Plaintiff and the Defendant was only to buy and sell used machines in Hong Kong. I could not see how the alleged mischief of the Defendant in avoiding/evading custom duty in Mainland China had anything to do with the legality of the contract between the Plaintiff and the Defendant in Hong Kong. Mr. Tsui appeared to change his stance today and alleged that if the Plaintiff were to take delivery of the second machine from the Defendant, they would incur criminal liability themselves in the Mainland. I could see no merit in this argument either. Either way, the Plaintiff ’s argument would fail for being irrelevant to the main issue they were contending, viz. the contract between them and the Defendant for the second machine was an illegal contract that was unenforceable in Hong Kong.

5.The Plaintiff did not file any affirmation in support of its proposed amendment. Nor did they set out the particulars of foreign laws that they sought to prove as a fact by expert evidence in their proposed amendment. It was held in Full Wisdom Holdings & Ors.  V.  Traffic Stream Infrastructure & Ors. CACV 266/2203 C.A. that expert evidence that contained legal analysis must be filed even for Order 14 application or else no weight would be attached to it. The Plaintiff pointed out that it was not mandatory that an affirmation must be filed in support of their application. If no affirmation was filed, it was difficult to see what arguable case the Plaintiff had in support of their application. For instance, the Plaintiff argued that in avoiding/evading custom duty in the Mainland as alleged, the purported sale and purchase between the Plaintiff and the Defendant was an act of smuggling under Rule 154 of the Criminal Law of the PRC; and by Rule 54 of the Contract Law of the PRC, such a contract was null and void. Firstly, the particulars of Rule 154 of the Criminal Law of the PRC and Rule 54 of the Contract Law of the PRC had not been particularised in the pleadings. Secondly, it was not properly pleaded why and how PRC laws were relevant to the contract of sale and purchase between the Plaintiff and the Defendant in Hong Kong. Thirdly, it was not shown how the contract of sale and purchase between the Plaintiff and the Defendant in Hong Kong would be rendered an act of smuggling under Rule 154 of the Criminal Law of the PRC. Without proper pleadings and without filing an affirmation in support, the Plaintiff’s case would be quite incomprehensible and could only be regarded as mere waffling.

6.The history of the pleadings showed that when the Plaintiff had not applied for Pre-trial Review, the Defendant applied for Pre-trial Review and Notice under Order 34, rule 4 Rules of the District Court (“RDC”) was given to the Plaintiff, the Plaintiff failed to file the Notice of Response, and on 17^th January 2006, the Defendant applied under Order 34 rule 5 of RDC to dismiss the Plaintiff action, it was only then the Plaintiff applied to amend their Statement of Claim in response. The Plaintiff had not at any stage of these proceedings explained why there had been delay to raise the point of illegality. The Defendant contended in the hearing before H.H. Judge Chow that the Plaintiff application to amend was mala fide. The Defendant was aware of this contention. No explanation was given why the delay on the Plaintiff’s part. When the Plaintiff made the application again to re-amend before Master T. Chan, leave was granted to the Plaintiff to file an affirmation in support. The Plaintiff did not file an affirmation. They did not take the opportunity to explain the delay when they knew fully well that the Defendant was contending that they were acting mala fide with the intention to delay trial. It was therefore understandable why the Defendant contended that the Plaintiff was acting mala fide in applying to amend and to re-amend its Statement of Claim in these given circumstances.

7.I do not think the Plaintiff has shown that they have an arguable case with reasonable chances of success on appeal at all. I therefore dismiss the Plaintiff application for leave to appeal. I also order the Plaintiff to pay the Defendant’s cost of and incidental to this application, to be taxed if not agreed, with certificate for counsel.

The Plaintiff: represented by Mr. Raymond W. N. Tsui instructed by Messrs. Kong & Chang, Solicitors

The Defendant: represented by Mr. Kenneth Wong instructed by Messrs. Yung, Yu, Yuen & Co., Solicitors