Ying Ho Co Ltd and Others v. The Secretary for Justice

HCA10834/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 10834 OF 1998

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BETWEEN

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Before : Hon Poon J in Chambers

Dates of Hearing : 16 July and 20 November 2009

Date of Decision : 23 December 2009

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DECISION

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A. INTRODUCTION

1.This action has a long history. I can do no better than referring to the summary of facts by Ribeiro PJ in Ying Ho Co. Ltd & others v Secretary for Justice [2004] 7 HKCFAR 333, at paras.37-91 at pp.354E-367E. I shall also adopt the abbreviations that His Lordship had used for present purposes.

2.Although the Court of Final Appeal had already dismissed the bulk of the Developers’ claims, the causes of action arising from the matters pleaded in para.29 of the Re-Amended Statement of Claim (“RASOC”) remain unresolved. Pursuant to the order for a spilt trial made by Deputy High Court Judge Muttrie upon the parties’ application on Day 2 of the trial (9 October 2001), they had been stood over for a separate trial.

3.The Developers now applied to re-re-amend the RASOC in the form of the Re-Re-Amended Statement of Claim (“RRASOC”) and the Amended Voluntary Further and Better Particulars (“AVFBP”) annexed to the summons dated 30 October 2008. The Secretary for Justice objected to most of the proposed amendments on the ground that they went beyond the scope of para.29 of the RASOC, amounting to an unjustifiable attempt to expand the outstanding claims beyond its original bounds.

B. GENESIS OF PARA.29 AND THE ORDER FOR A SPILT TRIAL

4.To put the parties’ arguments in perspective, it is necessary to re-visit how para.29 of the RASOC came into being which eventually resulted in the order for a spilt trial.

5.Between May 1994 and 9 June 1995, the Developers submitted MLPs 4 to 8 based on the grand design of “the tallest building in the world”. They were all rejected. MLP 9 was submitted on 2 July 1996, which showed a tower within the permissible limit but with provision made for the contingency that would enable the proposed height to be fully achieved later. That was rejected for inadequacy of plans. The Developers’ concept then changed to encompass a scheme for two towers comprising office and hotel accommodations. That led to MLP 10 and two further revised versions (referred to as MLPs 11 and 12). The latest revised version was conditionally approved on 2 January 1998.

6.In the Amended Statement of Claim (“ASOC”), the Developers complained about the Government’ breaches of implied terms in relation to MLPs 4 to 8 (paras.12 to 15) and MLP 7 submitted on 17 January 1995 and the revised MLP 10 submitted on and after 27 January 1997 (para.29 in its original form). (It is not clear the revised MLP 10 referred only to MLP 11 submitted on 27 January 1997 or also included MLP 12 submitted thereafter.)

7.The trial was due to commence on 8 October 2001. On 27 September 2001, the Developers applied to re-amend para.29 of the ASOC in these terms :

“Further and alternatively, in breach of the implied terms pleaded in paragraphs 8(1), 8(2), 8(3), 8(4), 8(7) and 8(8) above, the Government was guilty of delay in processing the Plaintiff’s applications for approval of MLPs.

Particulars

The Government delayed the approval of the Plaintiff’s MLPs submitted after mid-April 1996 by not approving the MLP subject to conditions, instead of delaying the entire process by withholding overall approval whilst minor or irrelevant matters were questioned or prohibited.  The Government delayed the approval of the Plaintiff’s MLP between July 1996 and November 1997, a total of 16 months, without any corresponding free extension of the building covenant for that period.

….”

8.On 6 October 2001, the Developers served a set of Voluntary Further and Better Particulars of para.29 of the RASOC (“VFBP”), which read :

“The Plaintiffs volunteer the following further and better particulars of paragraph 29 of the Re-Amended Statement of Claim :

1.  By the Particulars and Conditions of Grant of the Agreement, the Plaintiffs were required :

(a)  to submit to the Director of Lands, prior to the submission of building plans to the Building Authority, Master Layout Plans (“MLP”) ‘for the development of the Lot in accordance with these Conditions’ containing outline plans for the intended development of the Lot including the buildings, roads, pathways, open spaces, plant and equipment and all other significant features of the intended development : Special Condition 5(a)(i);

(b)  to submit detailed proposals for the landscaping of the developed Lot : Special Condition 5(a)(ii);

(c)  not to commence building or landscaping works until the MLP and landscaping proposals have been approved by the Director of Lands : Special Condition 5(b);

(d)  to develop the Lot by the erection thereon of buildings complying in all respects with all Ordinances, by-laws and regulations relating to building, sanitation and planning in the New Territories : Special Condition 6.

2.  The effect of those contractual requirements was that the Plaintiffs were obliged to obtain both MLP approval from the Director of Lands and, subsequently, approval from the Building Authority to the building plans.  As is well known to the staff of the Director of Lands, the screening process for the approval of building plans by their colleagues in the office of the Building Authority is detailed and meticulous with extensive consultation with all other Government Departments (including the Director of Lands) whose areas of responsibility might be affected e.g. the Fire Services Department, the Transport Department and others.  Under the Agreement, the role of the Director of Lands when processing applications for approval of MLP is to ensure that the proposed lay-out conforms with the development rights and obligations conveyed in the Agreement.  In particular, it is not part of the role of the Director of Lands when processing proposed MLPs to duplicate the statutory functions of the Building Authority which have to be performed by the Building Authority after the MLP is approved.

3.  By his Performance Pledge and his Practice Note for Authorised Persons, Surveyors and Registered Structural Engineers Issue No. APSRSE 2/94 dated March 1994 the Director of Lands has pledged that a substantive reply will be given to any submission for approval of an MLP within 12 weeks of submission.

4.  Following the matters pleaded in paragraph 14 of the Re-Amended Statement of Claim, the Plaintiffs were required to redesign the MLP.  That process took about 3 months.

5.  During July, August and part of September 1996, the Plaintiffs redesigned their proposed MLP into a new layout design which would accommodate two tower structures above a podium.  That MLP, the 10^th MLP submission made by the Plaintiff was submitted to the Director of Lands for approval on the 24^th September, 1996.

6.  The 10^th MLP submission could and should have been approved within the period 25^th September 1996 to 19^th December 1996.  Instead it was conditionally approved only on 7^th January 1998 in a form slightly altered from the original submission after the following exchanges between the Plaintiff’s architect and the Director of Lands :

(i)  On 4^th December 1996, some 3 days before the expiry of the original building covenant period stipulated in Special Condition 6(a) of the Agreement, the Director of Lands wrote to the Plaintiffs’ architects stating that their 10^th MLP was disapproved due to 13 reasons (of which only 2 related to possible non-compliance with the terms of Agreement) all of which could and should have been imposed as conditions of approval of the MLP—as they subsequently were to become.  By so doing the Director of Lands’ staff required the Plaintiffs’ architects to re-submit as a new proposed MLP a slightly modified version of MLP submission No. 10.

(ii)  The primary grounds of rejection of MLP No. 10 were :

‘(a)  The hotel area should be domestic GFA countable.

(b)  The back of house should be non-domestic GFA countable.’

The other grounds were all very minor and/or irrelevant to the role of the Director of Lands and would in any event be addressed at the time of submission of building plans to the Building Authority, e.g.

‘(c)  The 3 taxi spaces on the 2^nd basement floor were not acceptable’—a matter not subject to any stipulation in the Agreement.

‘(e)  The headrooms of [10 floors] were excessive and not acceptable’—which is irrelevant to the Director of Lands role, since the two towers were lower than 324mPD, and which were not the subject of any stipulation in the Agreement.

(iii)  The Primary grounds of rejection concerned the calculation of gross floor area—which is the subject of stipulation in the Agreement.  However, the Director of Lands knew that the relevant issue, the support of the Hong Kong Tourist Association, had to be resolved at the Building Authority stage—since the Hong Kong Tourist Association would only commit themselves at the stage of consideration of Building Authority plans.  Thus, the MLP could and should have been approved subject to the requirement that the support of the Hong Kong Tourist Association be obtained by the time of approval of the building plans.

(iv)  On the 27^th January 1997, the Plaintiffs’ architects re-submitted their slightly amended MLP No. 10 with the points raised in the Director of Lands’ letter of 4^th December 1996 all addressed.  On the 24^th February 1997, the approval in principle of the Hong Kong Tourist Association was provided to the Director of Lands.  On the 5^th August 1997, some 8 months after receiving the revised MLP No. 10, the Director of Lands wrote to the Plaintiffs’ architects stating that the MLP had been disapproved due to 8 reasons—none of which was subject to any stipulation in the Agreement and all of which would and should have been either not raised at this stage or imposed as conditions of approval of the MLP, e.g.

‘(a)  The headroom of 76-77F for presidential suite and VIP suites and the 1^st BF carpark floor were excessive …’

‘(b)  The location of the 3 taxi waiting spaces at ground floor level was acceptable however the lay-bys fronting the development entrance should be deleted.’

(v)  On 5^th November 1997, the Plaintiffs’ architects wrote to the Director of Lands submitting a further revised version of MLP No. 10 addressing all of the points raised by the Director of Lands in August 1997.  Additionally, the re-submitted MLP contained a change of design (without any material change to the gross floor area concerned) of the hotel Tower from a square Tower to a curved shaped Tower for aesthetic reasons and in order to have hotel rooms on each side of the corridors.

(vi)  On 7^th January 1998, the Director of Lands conditionally approved the Plaintiffs’ MLP subject to 26 conditions—the satisfaction of which would be vetted at the Building Authority stage when the Building Authority, inter alia, consulted the Director of Lands as to whether the proposed building plans comply with the terms of the lease conditions i.e. the Agreement.

7.  As a result of the Director of Lands’ breach of the implied terms of the Agreement, the Plaintiffs lost at least 16 months of construction time.  It is accepted that 2 months of the period lost between the 5^th August 1997 and 5^th November 1997 was due to the Plaintiffs’ decision to redesign the hotel Tower although had conditional approval been given in December 1996, that time would have been recovered within the Plaintiffs’ construction programme.”

9.On a fair and proper reading of the proposed amendments together with the VFBP, para.29 of the RASOC focused on the Government’s delay in processing of MLPs 10 to 12. In other words, the complaint of delays concerned those MLPs encompassing the “two-towers” concept only.

10.Indeed, that was how Mr Barrow, counsel for the Developers, submitted to the Deputy Judge when the parties applied for a spilt trial of the causes of action arising from the matter pleaded in para.29 of the RASOC. The relevant transcript on 9 October 2001 recorded :

“MR BARLOW:  The issue concerned, I think, can fairly be characterised as the discrete issue.  The questions of fact and law relating to that issue don’t, I would suggest, overlap with the issues that we are here to try at the moment.

COURT:  This is really the delay on the approval of the two tower …

MR BARLOW:  My Lord, yes, the building that was built eventually.

COURT:  … version.

MR BARLOW:  Exactly.

COURT:  Yes.

MR BARLOW:  Yes.

COURT:  I guess so.  All right, thank you, this is all agreed.

MR TANG:  We believe that that is the best way forward, because I’m afraid we will need time to deal properly with paragraph 29.  So the alternative is to have the trial adjourned, and neither party wishes that.  And it would be a terrible waste of, I think, resources, because both parties must have spent hundreds of hours preparing for this trial.  And it would also mean a waste of the court’s time as well.

We confirm that paragraph 29 raises a discrete issue which can be tried separately.  But I would rather leave it to be determined later whether it should be tried together with quantum.  It may be that quantum should be deferred even further if we should ever come to that.  But that is an issue, of course, that the court will have to deal with in due course, but not in the course of this part of the trial.  Because otherwise a very unfair burden will have been put on the defendant.

COURT:  All right, well so be it.”

11.Plainly, Mr Tang, SC (as he then was), for the Government, agreed for a spilt trial because the issues raised by para.29 of the RASOC exclusively concerned MLPs 10 to 12. It was also upon that basis that the Deputy Judge acceded to the joint application for a spilt trial.

12.However, as will be seen in a moment, Mr Pennicott, QC, for the Developers who did not appear at the trial or appeals before, now argued that the scope of para.29 of the RASOC is not so limited. I will deal with his submissions in detail when I consider the amendments that touch upon this question of scope.

13.I now turn to examine the proposed amendments by way of the RRASOC and AVFBP in detail.

C. THE PROPOSED AMENDMENTS IN RRASOC

14.The proposed amendments are dealt with under separate headings below.

C.1. Implied terms

15.One of the major issues before the Deputy Judge was whether the Government was in breach of a number of implied terms as pleaded in paras.8 and 9 of the RASOC. After trial, the Deputy Judge found that the only term which could be implied was that the building covenant period would be extended if there was culpable conduct or undue delay on the part of the Government resulting in the Developers’ not being able to complete the building within that period. This particular finding of the Deputy Judge was not disturbed by the Court of Appeal or the Court of Final Appeal.

16.In the Court of Final Appeal, Ribeiro PJ dealt with the subject thus :

“127.  Not much separates the parties regarding the nature of the applicable implied terms.  The Developers are required by the Conditions to submit a complaint MLP for approval by the Director and to complete specified stages of construction within the defined periods while being prevented from proceeding beyond site formation works until approval of the MLP has been obtained.  In such circumstances, performance of the obligations imposed on the parties obviously requires each to cooperate in good faith with the order.

128.  As it pointed out in Chitty on Contracts (29^th ed., 2004) Vol.1 at para.13-011, the court is often willing to imply a term that the parties shall co-operate to ensure the performance of their bargain.  Mackay v Dick (1881) 6 App Cas 251 is often cited in this context for Lord Blackburn’s statement as follows:

I think I may safely say, as a general rule, that where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect.  What is the part of each must depend on circumstances.

129.  To give the Conditions business efficacy, Mr Sumption submitted that it is necessary to imply a two-fold duty on the Government, namely:

(a)  to deal with the MLP and to give or refuse approval with reasonable dispatch; and,

(b)  if rejecting any submitted MLP, to inform the Developers of the respects in which the MLP is deficient.

130.  I agree with this submission and did not understand Mr Neoh to be submitting anything to the contrary.”

17.By para.8 of the RRASOC, the Developers deleted all previous pleas on the implied terms. Replacing them are :

“(1)  that in dealing with the Plaintiffs’ applications for approval of MLPs and other building and planning applications the Government would give or refuse its approval with reasonable dispatch;

(2)  that upon rejecting an MLP submitted by the Plaintiffs, the Government would inform the Plaintiffs of all respects in which the MLP was deficient;

(3)  that the Government was, at all times, under an obligation to co-operate with the Plaintiffs and to act in good faith;

(4)  that the Government would not reject or withhold approval of an MLP application or impose conditions on an approval or otherwise conduct itself arbitrarily, irrationally or capriciously;

(5)  that the Building Covenant period would be extended if there was culpable conduct on the part of the Government resulting in the Plaintiffs not being able to complete the development within that period.”

18.Para.9 of the RRASOC went on to plead :

“Further or alternatively, it is an implied term of the Agreement which is implied by law and/or is necessary to give business efficacy to the same that if the non-completion of development within the Building Covenant period or the Transport Terminus Covenant was or is due to culpable conduct on the part of the Government or alternatively if the Government was in breach of any of the implied terms pleaded in paragraph 8(1) to (4) above, then:-

(1)  the Government shall refrain from exercising or threatening to exercise its power of re-entry under General Condition 11;

(2)  the Government shall not be entitled to demand or exact and the Plaintiffs shall not be liable to pay any charges premiums penalties or liquidated damages pursuant to the Agreement or otherwise by reason of such delay, or as the result of any extension of the Building Covenant period rendered necessary by reason of such delay.”

19.Para.8(1) and (2) are in fact the implied terms found by the Ribeiro PJ at paras.129 and 130 of his judgment. They are not opposed. I will allow them.

20.For para.8(3), Mr Pennicott relied on what Ribeiro PJ said at paras.127-128 of his judgment. He submitted that his Lordship did find that an implied term that the Government was under an obligation to co-operate with the plaintiffs and act in good faith.

21.I am unable to accept Mr Pennicott’s submissions. Despite what was stated in paras.127-128, Ribeiro PJ did not go on to find that such an implied term existed. His Lordship proceeded from the general propositions in paras.127-128 and went on to set out the two implied terms in paras.129-130. These are the only two implied terms as found by His Lordship. The amendment in terms of para.8(3) is refused.

22.Para.8(4), according to Mr Pennicott, is the “flip-side” of para.8(3). It should go as well.

23.Para.8(5) is a reproduction of the implied term found by the Deputy Judge. Ms Cheng, for the Government, submitted that the Court of Final Appeal had reformulated the implied terms as set out in paras.129-130 of Ribeiro PJ’s judgment. She suggested that the implied term as found by the Deputy Judge could not stand. I disagree.

24.As observed by Chan PJ at paras.35 and 36 at p.354A-D, despite the implied term found by the Deputy Judge, the Developers faced with the concurrent findings of fact by the Judge and the Court of Appeal to the effect that the delay was not caused by the Government. The Developers sought to deploy the “partial responsibility argument” to overcome the concurrent findings, which was rejected by Ribeiro PJ : see paras.131-161 at pp.380D-390B. His Lordship did not even need to deal with the correctness of the implied term found by the Deputy Judge.

25.I do not think on a proper reading of the judgment, the Court of Final Appeal had rejected the implied term as found by the Deputy Judge. I will allow the amendment in terms of para.8(5).

26.The Deputy Judge rejected the implied term as pleaded in §9 of RASOC. His finding was not disturbed on appeals. So any proposed amendment in para.9 of RRASOC, which has the effect of reviving the implied term already rejected by the Deputy Judge, must be refused. And any amendment that is based on para.8(3) and (4) of the RRASOC is not allowable. As agreed by the parties at the hearing, I will leave the precise formulation of para.9 of RRASOC to them.

27.Finally, all pleas in the RRASOC and AVEBP relating to breaches of the implied terms sought to be introduced by para.8(3) and (4) are refused.

C.2. Breaches concerning or arising from Government’s processing of MLP 9

28.Para.16 of the RRASOC replaced para.29 of the RASOC. It pleaded :

“In breach of the implied terms pleaded in paragraphs 8(2)-8(5) above, the Government wrongfully rejected the Plaintiffs’ MLP applications, Nos. 9, 10 and 11 and, in breach of the implied term pleaded at paragraph 8(1) above, was guilty of delay in processing the Plaintiffs’ applications for approval of those MLPs and MLP No. 12.

Summary Particulars

(1)  The Government delayed the approval of the Plaintiffs’ MLPs submitted after mid-April 1996 by not approving the MLP subject to conditions, but instead delayed the entire process by withholding overall approval whilst minor or irrelevant matters were questioned or prohibited.  The Government wrongfully rejected and/or delayed the approval of the Plaintiffs’ MLPs between late July 1996 and early January 1998, a total of 17 months, without any corresponding free extension of the building covenant for that period.

(2)  Further, the Plaintiffs contend that but for the Government’s breaches in wrongfully rejecting MLP No. 9 and/or MLP No. 10 and/or MLP No. 11 the Plaintiffs would have completed the construction of the minimum gross floor area (GFA) on the Lot substantially earlier than in fact was the case and, in the premises of paragraphs 13 and/or 14 above, the Plaintiffs are entitled to repayment of the premium wrongfully extracted and paid under protest.

(3)  Full particulars of the Plaintiffs case as summarized above are set out in the Amended Voluntary Further and Better Particulars of paragraph 16 of the Re-Re-Amended Statement of Claim.”

29.The reference to para.8(3) and (4) is not permissible.

30.The complaint about MLP 9 goes beyond the original scope of para.29 of the RASOC. It cannot be allowed.

31.Mr Pennicott submitted that para.29 of the RASOC, on its face, did not exclude MLP 9 or limit itself to MLPs 10 to 12. I disagree. While para.29 of the RASOC did plead that the Government delayed the approval of the Developers’ MLPs submitted after mid-April 1996, which might on a first blush include MLP 9, the VFBP put the position beyond doubt : the delays only concerned MLPs 10 to 12.

32.Mr Pennoictt then relied on the Reply to Defence to para.29 of the RASOC which pleaded the Government was guilty of culpable conduct or undue delay in processing MLP 9 (paras.9 and 22). The reliance is misplaced. The Reply was filed in February 2003, months after the trial was over. The alleged breaches concerning MLP 9 were simply not before the Deputy Judge when he ordered a spilt trial for para.29 of the RASOC. Any suggestion that the separate trial ordered by him covers MLP 9 cannot stand. Further, as rightly submitted by Ms Cheng, a cause of action must be pleaded in the statement of claim and not in the reply.

33.Mr Pennicott’s submission that MLP 9 is included in para.29 of the RASOC flatly contradicts the Developers’ position before the Deputy Judge. Having pleaded their case as they did in para.29 of the RASOC and the VFBP, represented to the Deputy Judge that para.29 of the RASOC only concerned MLPs 10 to 12 and obtained an order for a spilt trial on that basis, the Developers cannot now resile from their previous position. It would be an abuse of process if they were allowed to do so.

34.All the pleas in AVFBP relating to para.16 of the RRASOC which contain the references to para.8(3) and (4) of the RRASOC and MLP 9 are refused.

35.For completeness, I need to deal with the pleas in para.4E of the AVFBP. There the Developers raised complaints in relation to MLP 8 to support their case on MLP 9. It is an impermissible attempt to re-litigate the complaints concerning MLP 8. It is also beyond the original scope of para.29 of the RASOC. Para.4E is refused.

C.3. LAM decisions

36.Para.17 of the RRASOC, which is a new paragraph, complained :

“Further or in the alternative to the allegations of breach set out above, the Plaintiffs will contend that in breach of the implied terms pleaded at paragraphs 8(3) and/or (4) above, the Government wrongfully failed and/or refused to grant to the Plaintiffs a 12 month extension to the Building Covenant period pursuant to the Land Administration Meeting (LAM) Decision dated 6 August 1997 or alternatively 13 August 1997.

Particulars

(1)  In or about March 1996 the Government introduced a new policy pursuant to which, in relation to new land grants, if the grantee was required to submit a MLP then a Building Covenant period of 60 months would be imposed (see paragraph 11 of the LAM Decision dated 6 August 1997).

(2)  At paragraph 12(ii) of the LAM Decision dated 6 August 1997 it was recommended that, in light of the new policy aforesaid members be prepared to consider a further 12 month extension to the Plaintiffs at the end of December 1997 free of premium.

(3)  At paragraph 16 of the LAM Decision dated 6 August 1997 members determined and agreed (DPS/K+NTE dissenting) that a free Building Covenant extension of 12 months should be granted to the Plaintiffs.

(4)  For reasons which are not apparent from the Government’s current discovery, at the Land Administration Meeting held on 13 August 1997 the members ‘further considered the dissenting comments made by DPS/K+NTE at LAM on 6.8.1997.’ LAM confirmed its previous decision  to grant to the Plaintiffs a free BC extension but subject to the condition that it be made clear to the Plaintiffs that the extension was offered on the conditions that (i) no litigation would be pursued by the Plaintiffs and (ii) any subsequent BC extensions would only be considered subject to the payment of premium.

(5)  For reasons which the Plaintiffs cannot explain until further discovery herein neither of LAM’s Decisions were implemented.

(6)  The Plaintiffs contend that the Government’s conduct in failing or refusing to implement either LAM’s first decision or LAM’s second decision aforesaid constituted breaches of the implied terms referred to above.”

37.The matters complained of are premised on the alleged breaches of the implied terms sought to be introduced by para.8(3) and (4) of the RRASOC. With para.8(3) and (4) of the RRASOC being disallowed, the stratum for para.17 is gone. On that ground alone, the proposed amendment in para.17 must be refused.

38.Further, the causes of action arising from the LAM decisions are new and not raised until now. Mr Pennicott submitted that had the causes of action based on the Lam decisions been raised at the trial, they would have to be stood over for trial because they arose after April 1996. I disagree. The only matters which had been ordered to be deferred for the separate trial are those pleaded in para.29 of the RASOC only. They did not possibly include the matters arising from the LAM decisions. It will be abuse of process to allow the Developers to raise them now. Amendment must be refused on this ground as well.

39.The above is sufficient to dispose of para.17. Just for completeness, I would very briefly deal with the submissions on time bar. I agree with Ms Cheng’s written submissions on this point. I find that the causes of action based on the LAM decisions are time-barred and that the Government would suffer prejudice if the amendment were allowed. It would be unjust to allow the amendment.

40.For these reasons, para.17 of the RRASOC is refused. Any pleas in the AVFBP relating to para.17 are also refused.

C.4. Breaches concerning the Transport Terminus

41.Para.18 of the RRASOC pleaded :

“Specifically with regard to the Transport Terminus the Plaintiffs aver as follows:-

(1)  as pleaded in paragraph 7(1) above, the Plaintiffs were required to complete and make fit for occupation a Transport Terminus by 8 December 1995 failing which the Plaintiffs were required to pay to the Government liquidated damages of HK$10,000 per day;

(2)  the Agreement contained no express or implied term pursuant to which the completion date for the Transport Terminus could be extended;

(3)  the works to the Transport Terminus could not commence until the Director of Lands had given approval to a MLP submission;

(4)  if an insofar as the Plaintiffs establish that the Government was in breach of contract in wrongfully rejecting and/or delaying the approval of MLP No. 9 or MLP No. 10 or MLP No. 11 or MLP No. 12 then it necessarily follows that

(i)  the commencement and completion of the Transport Terminus was delayed;

(ii)  time for completion of the Transport Terminus was set at large;

(iii)  the Government was not entitled to demand and the Plaintiffs were not obliged to pay liquidated damages in the sum of HK$12.75 million or any sum;

(iv)  the Plaintiffs are entitled to be reimbursed the sum of HK$12.75 million paid (under protest) as liquidated damages (together with interest).

(5)  Given that the Government has accepted that it culpably delayed the approval of MLP 11, which said acceptance is an admission that the Government was in breach of the implied term pleaded at paragraph 8(1) above, and has granted a 4-month extension to the Building Covenant period from 8 December 1997 to 7 April 1998 at a nil premium, it necessarily follows that time for completion of the Transport Terminus must be at large.  As pleaded at paragraph 12(1) above, the Government has imposed the payment of liquidated damages for a period which includes the period between 8 December 1997 and 7 April 1998.  This of itself constitutes a further breach of the implied terms pleaded at paragraphs 8(3) and/or (4) above.”

42.The pleas in relation to MLP 9 and the breaches of the implied terms under para.8(3) and (4) of the RRASOC are refused.

D. CLEAN COPY

43.The Developers submitted that a “clean” copy of the RRASOC should be filed, which would re-cast the pleading in its latest form without setting out the previous amendments.

44.I do not think it is appropriate to do so. As rightly submitted by Ms Cheng, at the separate trial, the nature of the case run by the Developers at the previous trial may be relevant. That has to be gleaned, at least partially, from the ASOC and RASOC. Further, the pleadings had already been considered by the courts, the use of a “clean” pleading, which obliterates the amendments and alters the paragraph numbering, will create unnecessary confusion.

45.The application for a “clean” copy of the RRASOC is refused.

E. DIRECTIONS AND COSTS

46.The parties had very sensibly agreed that they would go through the RRASOC and the AVFBP with this Decision in mind and then work out a draft order which would reflect my rulings fully and accurately. I will direct the Secretary for Justice to file a draft order for approval within 21 days from today.

47.Costs should follow the event and should be paid forthwith. The Secretary for Justice has substantially succeeded in opposing the applications. I will make an order nisi that the Developers do pay forthwith the costs of this application to the Secretary and the costs of and occasioned by the amendment, to be taxed if not agreed.

Mr Ian Pennicott, QC, instructed by Messrs Clifford Chance, for the Plaintiffs

Ms Yvonne Cheng, instructed by the Department of Justice, for the Defendant