Jack Gordon Leslie Smith and Another v. Tam Michael Wing Wah and Another

HCA 2638/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2638 OF 2004

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BETWEEN

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Before: Deputy High Court Judge Gill in Chambers

Date of Hearing: 13 March 2007

Date of Judgment: 20 March 2007

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J U D G M E N T

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1.This is a dispute between neighbours which has erupted into an expensive and drawn out action.  The wrongs complained of lie in breaches of a deed of mutual covenant (the DMC) and in nuisance at common law.

2.The parties own and occupy houses and gardens that are next door to each other in a private residential development in Sai Kung.  They and all the other owners are contractually bound to honour the terms of the DMC.  By clauses (c) and (e) of the second schedule of the DMC the parties covenant not to alter the external appearance of their properties and not to exhibit any unsightly objects which are visible from the front of the houses in the development.  Clause (g) of the second schedule prohibits the parties from doing or suffering anything to be done in their houses and gardens which causes or is likely to cause a nuisance annoyance or inconvenience to the owners or occupiers of any of the other houses.

3.As currently pleaded, the plaintiffs (the Smiths) complain that the defendants (the Tams) have without approval and in breach of clauses (c) and (e) of the second schedule of the DMC erected a metal fixture which is attached to a side wall of their house at an upper level thus to alter the appearance of their house.  On this fixture they have hung and exhibited flower pots containing plastic flowers and plants which are visible from the front of the houses in the development.

4.Further, the Tams have installed four loudspeakers in their garden and have repeatedly played music through them at high volume as to cause a nuisance at common law and in breach of clause (g) of the second schedule of the DMC.  This activity has been ongoing notwithstanding warnings and service of the writ.

5.The relief sought are injunctions:

(a)       to remove the metal fixture and the flower pots;

(b)      to restrain the Tams and others on their behalf from repeating or continuing the said nuisance or any nuisance of like kind,

and damages for wrongful interference with the value of the Smiths’ property.

6.In a recent amendment to the statement of claim for which leave was given without opposition the prayer for relief has been extended to include a declaration that the acts complained of are unlawful as constituting nuisance at common law and breaches of the DMC.  Further, the alleged financial loss has been quantified.

The Matters Before Me

7.The Smiths made two applications.  Both came before a Master in October 2006.  They wanted to include in their statement of claim details of a further breach of clause (g) of the second schedule of the DMC; namely, that since the beginning of the year 2005 the Tams or one or other of them have flicked live cigarette ends into their garden and on top of a canvas awning so as to burn holes in the awning.

8.Thus they filed an application for leave to amend their statement of claim.  This was the first application.  Pertinent to it is that the writ was filed in November 2004, a month or so before the advent of this nuisance.

9.The second application was for directions.  The first of these were consequential upon the granting of the first application.  The directions sought were for witness statements and evidence including expert evidence going to DNA investigations and findings in respect of the source of some of the cigarette butts that were recovered.  The remaining directions sought were for expert reports going to the quantified loss now detailed in the statement of claim following the recent, unchallenged, amendments to it.

10.The Master dismissed both applications.

11.The Smiths have appealed.  Thus the two applications are before me by way of rehearing.

12.And there is a third.  It turns out that the Smiths’ solicitors were tardy about filing and serving their notice of appeal, so that the first matter for me to deal with is an application filed on 9 March 2007 to enlarge time.

13.I shall deal with them in turn.

The Application for Time

14.The notice of appeal was filed on 7 November 2006, one day late.  No point is taken about this.  But it was not served until 8 December; thus 27 days late.  But there was earlier notice, by a letter of 28 November, from the Smiths’ solicitors to the Tams’ that they had filed a notice of appeal.

15.In an affidavit in support of the application, it was said by a solicitor having conduct of the matter that the reason for not serving the notice of appeal in a timely manner was that the parties were engaged in settlement negotiations, and service was withheld to save costs.  When those negotiations broken down they were instructed to proceed; then they served the notice.  It was also noted that with the appeal not set down to be heard until 13 March 2007 the Tams and their legal representatives were not disadvantaged, having ample opportunity to prepare for the hearing.

16.Mr Lam for the Tams took a robust position on the delay.  He submitted that their failure to serve until 27 days after the due date was a deliberate and conscious act and the reasons for being late were misleading and highly unsatisfactory.  And the application for enlargement was made only at the very last moment.  That conduct he suggested was a blatant disregard of the rules of court; furthermore, there was no merit in the appeal.  Thus I should strike out the appeal without further ado.

17.The modern approach to applications for time of this nature is encapsulated in the White Book at 58/1/9, in particular, page 854.  Hitherto it has been the case that an application would not have got off the ground unless the party out of time was able to present to the court an acceptable reason for delay.  But recent authorities indicate that in the exercise of discretion this is but one of several factors for consideration.

18.In the case Mortgage Corp Plc v Sandres [1997] PNLR 263, Millet LJ stated that the overriding factor was as to whether the refusal to give time might result in injustice, so that a dominant consideration is the likely prospect of success were the appeal to proceed.

19.This being now the principal emphasis, others for consideration include the length of the delay, the reason for the delay and the degree of prejudice.

20.I have to say that the reason for the delay given by those representing the Smiths is their weakest point.  The cost saving generated by not performing the simple act of service on another firm of solicitors would be minuscule in the overall cost of the litigation, particularly when weighed against the extra cost of having to apply for an enlargement, to say nothing of the risk of losing the right to pursue the appeal.  But in all other respects, including the dominant consideration, the Smiths have the advantage.  As Mr Lam conceded, given the timing of the hearing, there has been no prejudice to his clients.

21.I grant the application, but the costs order nisi will reflect that there was no good reason why the service was not timely.

The Application to Amend the Statement of Claim

22.It is conceded and accepted that the acts of the Tams of which the Smiths now complain began no earlier than the beginning of 2005.  The first indication is a letter of 5 January.  So this post-dated the writ by something over a month.

23.Mr Lam relies on the doctrine of relation back, by which it is said that a cause of action once begun cannot be added to by amendment if the further cause of action arose after the date of issue of the writ; see Eshelby v Federated European Bank Limited [1932] 1 KB 254.

24.The logic of this rule derives from the fact that an amendment to a statement of claim dates back to the date of the writ.  One cannot sue for the consequences of action or default which post-dates one’s writ, for it simply has not happened.

25.But the rule is not absolute; if for instance the parties consent to an amendment the prohibition falls away; see Lark International Finance Ltd v Lam Kim Marissa [2000] 4 HKC at p.699H, and Wing Siu Co. Ltd v Goldquest International Ltd [2003] 2 HKC 64, at p.68D.  Although this would appear to allow a legal fiction to emerge, one assumes it is permitted for convenience and good management where the parties agree there will be no prejudice or other injustice.

26.Applying the “good management” point, it is apparent from recent authorities that the courts of England and Hong Kong have been more ready to adopt a more lenient approach.  In Maridive & Oil Services (SAE) v CNA Insurance Co. (Europe) Ltd [2002] 2          Lloyd’s Rep.9, Mance LJ quoted from an earlier English Court of Appeal judgment in the case Hendry v Chartsearch Ltd [1998] CLC 1382 which reads at para.23:

“The scope of the Rules of the Supreme Court has been extended since the days when Eshelby was decided in 1932.  In accordance with modern practice generally, the court has a general discretion which should not be restricted by hard-and-fast rules of practice, if not of law, such as that which is suggested here.  The judge therefore was wrong to consider that the court had no power to give leave to make the re-amendment. … It is a general power which in modern parlance has to be exercised in accordance with the justice of the case.”

He went on to state:

“We are in my view bound by Hendry v Chartsearch Ltd which appears to me also to reflect the modern approach.”

27.In Wing Siu Co. Ltd (supra), Rogers VP quoted the above and then stated at p.70:

“The distinction which was thus drawn by the Court of Appeal in the case appears to be between permitting an amendment which allows the real dispute in the case to be determined and one which introduces into the action a cause of action which could be said to be incurably bad because it did not exist at the date of the original claim.  Both Ward LJ and Chadwick LJ in the Maridive case expressed the view that there should be a flexible attitude dependent on the justice of the case.

In the light of those cases it cannot be said that the original rule in the Eshelby case has disappeared.  The courts in England have clearly been disposed to adopt a more flexible attitude, specifically, where they have permitted the pleading of subsequent events which clarify why a claim could be made based on a cause of action which existed at the date of the issue of the writ.  No decision has been brought to our attention which has gone so far as permitting, in the face of opposition, an amendment which would introduce into a writ a cause of action which simply did not exist at the date of the issue of the writ.”

28.In the case of Vax Appliances Ltd v Hoover Plc [1990] RPC 656, Mummery J adopted what is said to be a benevolent view towards an amendment sought by a defendant to his counterclaim.  He said:

“I do not find in the rules or in the cases any absolute rule against granting leave to amend to introduce a new cause of action which has arisen since the date of the writ or the relevant pleading.”

29.He then went on to distinguish those cases where a plaintiff had no cause of action at all at the date of the writ, specifically a situation where if the cause of action was subsequently to arise the original writ must accordingly be incurably bad.

30.In the case before him he came to the view that the amendment sought in the counterclaim did not contribute a wholly new cause of action and he allowed it, regarding it sensible and convenient in the circumstances.

31.Mr Lam submitted that this line of recent authorities does not alter the essential principle that a cause of action cannot be pleaded before the incident which gives rise to it has taken place.

32.Mr Mok, SC for the Smiths took a contrary position, which was that the amendment does not purport to introduce a new cause of action.  The cause of action originally pleaded is that of nuisance committed by the Tams in breach of clause (g) of the second schedule of the DMC and at common law.  The incidents now complained of do not introduce a new cause of action.  They particularize further acts of nuisance at different times, and serve to record that as part of the Smiths’ pleaded case they are the victims of ongoing misconduct by the Tams which are deliberate and malicious and warrant the injunction that they are suing for.

33.He produced for my assistance recent correspondence, namely a letter of 5 February 2007 from the Smiths’ solicitors to the Tams’, which stated on instruction that the Tams have at designated times between early December 2006 and latish January 2007 resorted to playing music and singing through a karaoke microphone and amplifier at a high volume, which amounts to more harassment of their clients and additional loss of quiet enjoyment of their property.  This, he ventured, represents recent conduct and, in one sense, a new nuisance. 

34.Then he asked the rhetorical question: would this activity warrant a new action, given that it began after the writ?  He submitted the answer must be ‘No’; this does not amount to a new cause of action.  The cause of action remains the tort and contractual breach of nuisance the subject of the writ.

35.I agree with the contention.  Assuming that in a fallout between neighbours one of them committed a series of different acts of nuisance designed to harass the other, both before the issue of a writ and afterwards, it would seem to me that to treat each act as a separate cause of action would render proceedings hopelessly cumbersome.  There would be common parties, a common cause of action (nuisance) and common prayers, no doubt the principal one amongst all being for an injunction to cease such conduct.  That the nuisance has been carried out by various different ways and means should not be a bar to there being one action only.

36.It seems to me and I so find that it is an appropriate exercise of my discretion to allow the appeal and grant the application to amend the statement of claim.  This is to incorporate as clause 11A the proposed clause in the proposed amended statement of claim attached to the application of 19 October 2006.  There is also consequential leave to amend the defence and reply; say 21 days in each case.

The Application for Directions

37.As I have said, these fall into two categories.  The first at numbers 1 to 10 deal with the adducing of evidence including expert evidence to prove the allegations in the new clause 11A.

38.Mr Lam submitted that the evidence is not necessary, relevant or probative; in particular, the pursuit of DNA data would be expensive and wholly out of proportion to the matters at stake.

39.I disagree.  It seems to me from a reading of the evidence that this may be the only way to establish or refute the allegations of wrongful conduct.  The Smiths should not be denied the opportunity to prove their case in this way.

40.The second category at numbers 13 to 16 goes towards establishing the loss suffered by the Smiths as quantified in the statement of claim that was amended without challenge post the orders giving rise to these appeals.

41.Mr Lam’s objection is on the same grounds, those of necessity, relevance and probative value.

42.Again I have to disagree.  The Smiths having specified financial loss are entitled to prove their claim in this way.

43.The appeal is allowed and the application for directions is granted.

Costs

44.These are nisi.

45.The appeals having been allowed and the applications granted the costs here and below are to the Smiths, the plaintiffs, taxed if not agreed in any event.

46.In respect of the application for enlargement of time the granting of this amounts to an indulgence.  Costs are to the Tams, the defendants, taxed if not agreed in any event.

47.For the assistance of taxation I rule that of the three hours used up for the hearing, 30 minutes was devoted to the issue of enlargement of time, and 2 hours 30 minutes to the appeals.

Mr J Mok SC, instructed by Messrs Lily Fenn & Partners, for the 1^st and 2^nd Plaintiffs

Mr S Lam, instructed by Messrs Hui & Lam, for the 1^st and 2^nd Defendants