Tiong King Sing v. Sam Boon Peng Yee and Another

HCA1517/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1517 OF 2011

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D e c i s i o n

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1.This is the defendants’ application for leave to amend the defence and counterclaim filed on 28 October 2011. Given the fact that the issue before me is extremely discrete and narrow, I think I will be forgiven if I do not recount in detail the background leading to these proceedings.

2.Of all the new amendments proposed, the plaintiff only objects to paras 26E(vii) and 38A.  To put these amendments in context, one has to start with para 26D of the defence and counterclaim.  And I quote :

“26D. It is an implied term of the Formal Agreement, the First Variation Agreement and/or the Second Variation Agreement that:

(a) The Plaintiff, whether by himself, his servants and agents or otherwise, shall not interfere with the Defendants’ performance of the said contracts:

(b) The Plaintiff, whether by himself, his servants and agents or otherwise, shall not interfere with the Defendants’ development of the Ba Nan Project, including but not limited to its financing and construction; and

(c) The Plaintiff, whether by himself, his servants and agents or otherwise, shall not interfere with or obstruct the Defendants from generating the Anticipated Profits from the Ba Nan Project within the Expected Completion Period.

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26E(vii). In about February 2012, the Plaintiff lodged another malicious report with Chongqing Public Security Bureau by making false allegations of fraud against the 1^st Defendant in relation to the transfer of the Company shares to the 2^nd Defendant, as a result of which the 1^st Defendant was subjected to ‘border control’ (邊控) preventing him from travelling out of the Mainland China during the investigations.

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38A.  Paragraphs 26A-H hereinabove are repeated.  The Defendants avers the Plaintiff’s Acts constituted a breach of the implied terms as pleaded in paragraph 26D hereinabove.”

3.Mr Lam, for the plaintiff, argued that the matter complained of in para 26E(vii) took place in February 2012, some four months after the filing of defence and counterclaim.  It raised a new cause of action and therefore offends the well established rule of relation back.  He would have no objection to para 38A if the reference to para 26E(vii) is deleted.  Mr Lam, in the course of his submissions, placed heavy reliance on Lark International Finance Ltd v Lam Kim Marisa [2000] 4 HKC 688.

4.Ms Eu, SC, for the defendants, submitted that para 26E(vii) did not raise any new cause of action as such.  It only pleaded a further act to support the cause of action based on interference with and obstruction of performance of the contract, which had already accrued at the time of the filing of defence and counterclaim.  In support of her submissions, she referred me to Hong Kong Jie Hing Trading Company Limited v Pacific Commercial Co Ltd, HCA2167/2005, unreported, 18 October 2006, Deputy Judge Gill and Dornan v JW Ellis & Co Ltd [1961] 1 QB 583.

5.In my view, upon a closer analysis of paras 26D and 26E, the cause of action based on breach of the implied term that the plaintiff should not interfere with or obstruct the defendants from performing the contracts had accrued at the time of the filing of defence and counterclaim.  Para 26E(vii) did not raise a new cause of action as such.  It is a further act complained of, which took place after the defence and counterclaim.  The cause of action remains the breach of the implied term of not interfering with or obstructing the performance of the contract. 

6.The Court of Appeal decision in Lark can be distinguished in that the post-writ non-payment there did raise a new cause of action whereas the act complained of in para 26E(vii) here did not.

7.I will therefore allow the amendments in paras 26E(vii) and 38A.

[Submission on costs]

8.I think costs should follow the event.  Costs of and occasioned by the amendment will be borne by the defendants in any event, to be taxed if not agreed.  Costs of today should be borne by the plaintiff, to be paid forthwith and to be taxed if not agreed.  The defendants’ application for a certificate for two counsel is refused.  This matter is simple and straight forward. Appearance by two counsel is not warranted.  I will only grant a certificate for one counsel.

Mr Douglas Lam, instructed by Wilkinson & Grist, for the plaintiff

Ms Audrey Eu, SC leading Mr Tong Chow, instructed by C L Chow & Macksion Chan, for the defendants