Profit Step Development Ltd and Another v. Sun Rising Development (Agriculture) Ltd and Another

HCMP 2152/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 2152 OF 2010

(ON AN INTENDED APPEAL FROM HCA NO. 1649 OF 2008)

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BETWEEN

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Before: Hon Tang Ag CJHC and Stone J in Court

Date of Hearing: 28 October 2010

Date of Judgment: 28 October 2010

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JUDGMENT

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Hon Tang Ag CJHC:

1.The trial in this action is set down to commence on 2 November 2010. On 4 October 2010, the 1^st and 2^nd defendants applied, together with Cheong Lee International Trading Company Ltd. (“Cheong Lee”), for joinder of Cheong Lee and three other parties as the 3^rd, 4^th, 5^th and 6^th defendants respectively. If the application had been granted, an adjournment would have been necessary, because the 3^rd defendant intended to counterclaim against the proposed 4^th, 5^th and 6^th defendants, who are closely related with the plaintiffs. I will not go into their connection of the plaintiffs because it is not relevant to this decision.

2.Fok J dismissed the application on 8 October 2010, and on 19 October 2010, he refused leave to appeal.

3.This is the 1^st and 2^nd defendants’, and Cheong Lee’s, application for leave to appeal from the Order of 8 October 2010.  Because of its urgency, we agree to sit at 2:30 today. 

4.Mr Kwok Kam Kwan, the counsel for the applicants/defendants, submitted that the learned judge had dismissed the application because he took the view that under O. 25 r. 1B(3) of the Rules of the High Court, Cap. 4A, the court should not grant an application by a party to vary a ‘milestone date’ unless there are exceptional circumstances justifying the variation.  The learned judge was also influenced by the fact that was no explanation why the application was made so late.

5.Mr Kwok’s essential complaint is that the learned judge had not paid sufficient attention to the fact that: first, Cheong Lee, as the intervener, was one of the applicants; secondly, that Fok J was asked to exercise his discretion both under O. 15 r. 6(2)(b) as well as O. 20 r. (5) for leave to amend the pleadings.

6.But, as Fok J has pointed out when he refused leave to appeal, it is artificial to treat the intervener as if it were a complete stranger to the action.  Indeed, in para. 6(2) of the original Defence, which was filed as long ago as 2008, it was pleaded that the 2^nd defendant was and continued to be the major shareholder and the managing director of Cheong Lee.  That was repeated in the amended Defence of November 2009. 

7.It is clear, reading the Defence, that Cheong Lee had featured prominently in the pleadings throughout.  It is clear to me that those concerned with the defence then should have considered whether it might be necessary to join Cheong Lee as a party to the proceedings.  It seems to me that the proposed joinder at this late stage is an 11^th-hour attempt by the 1^st and 2^nd defendants to put their house in order, and for this reason alone, the dismissal of the application is fully justified.  There is no inconsistency, so far as I can see, with the learned judge’s refusal to grant the application, and the fact that accompanying the application there was an application for leave to further re-amend the Defence.

8.The learned judge, when he dismissed the application, as well as when he refused leave to appeal, had given ample reasons in support of his decision.  I will not repeat them.  I will simply say, with respect, that I agree with them fully.  And for those reasons, as well as the reasons that I try to give this afternoon, I would dismiss the application.

Hon Stone J:

9.I entirely agree with the judgment of Tang Ag CJHC.  In my view, the learned judge below was completely right in the view that he took in the circumstances of this case before him; I would add only that even now, at this extremely late stage, there remains no evidence before the court to explain the delay in making the application for joinder, which, of course, is made in a bid fundamentally, to reconstitute this action.  By the reasons given by my Lord, this application must fail.

Hon Tang Ag CJHC:

10.Accordingly, leave to appeal is refused with costs, such costs to be taxed if not agreed.

Mr. Kwok Kam Kwan instructed by Messrs Johnnie Yam, Jacky Lee & Co. for the Defendants and the Intervener

Ms. Sylvia Lee and Mr. William Chan instructed by Messrs Fred Kan & Co. for the Plaintiffs.