The Incorporated Owners of San Po Kong Mansion v. Shine Empire Ltd

HCA 2185/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2185 OF 2012

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BETWEEN

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D E C I S I O N

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Introduction

1.This is the hearing of the Defendant’s appeal against the decision of the master made on 19 April 2013 dismissing its summons requesting for further and better particulars of paragraph 5 of the Plaintiff’s statement of claim.

2.The Plaintiff is the Incorporated Owners of San Po Kong Mansion (the “Building”).  The Defendant is the registered owner of the roofs of the Building (the “Roofs”).  Since 1995, the Plaintiff had rented and/or granted licence to several tele-communication companies for their installation of aerials and transmitters on the Roofs.  In 2004, the Defendant obtained judgment in High Court Action 3444 of 2001 against the Plaintiff and the relevant tele-communication companies for possession of the Roofs and damages and/or mesne profit.  The Plaintiff’s appeal to the Court of Appeal was unsuccessful and its appeal to the Court of Final Appeal was also dismissed on 30 April 2007.  On 23 November 2012, the Plaintiff commenced the present action against the Defendant with the issue of a writ of summons with a statement of claim. 

3.On 4 January 2013, the Defendant through its solicitors requested for further and better particulars of paragraph 5 of the statement of claim.  The particulars were not provided.  On 14 January 2013, the Defendant took out a summons seeking the further and better particulars.  The Plaintiff’s solicitors declined to answer the request but provided some documents.  At the time, no defence had been filed.  The summons was dismissed by the master on 19 April 2013 with costs.  Against that decision, the Defendant now appeals.  A defence was subsequently filed on 10 May 2013.

The applicable legal principles

4.The purpose of pleadings, according to Hong Kong Civil Procedure 2013, Vol 1, paragraph 18/12/1, citing Aktieselskabet Dansk Skibsfinansiering v Wheelock Marden & Co Ltd [1994] 2 HKC 264 at 269E-270E, are:

(1) to inform the other side of the nature of the case that they have to meet as distinguished from the mode in which that case is to be proved;

(2) to prevent the other side from being taken by surprise at the trial;

(3) to enable the other side to know with what evidence they ought to be prepared and to prepare for trial;

(4) to limit the generality of the pleadings, the claim and the evidence;

(5) to limit and define the issues to be tried, and as to which discovery is required; and

(6) to tie the hands of the party so that he cannot without leave go into any matters not included (although if the opponent omits to ask for particulars, evidence may be given which supports any material allegation in the pleadings).

A plea is material if it is necessary for the purpose of formulating a complete cause of action: see Hong Kong Civil Procedure 2013, Vol 1, paragraph 18/7/7.  Counsel have no dispute about these principles.  Their dispute is as to how these principles are to be applied to the statement of claim in the present case.

The statement of claim and the request for further and better particulars

5.The statement of claim is very simple.  In paragraphs 1 and 2, the Plaintiff pleaded respectively that it is the incorporated owners of the Building and the Defendant is the owner of the Roofs of the Building.  In paragraph 3, it pleaded clauses 9, 15 and 18 of the Deed of Mutual Covenant of the Building (“DMC”).  These allegations are admitted by the Defendant.

6.In paragraph 4, the Plaintiff pleaded that in breach of clauses 9 and 15 of the DMC, the Defendant was and still is indebted to the Plaintiff for a total sum of about $1.3 million in respect of rates and government rent for the period between 1997 and 2006 and property tax for the period between 2001 and 2005.  The Defendant does not admit this allegation and puts the Plaintiff to strict proof.  There is no request for further and better particulars made of this paragraph.

7.In paragraph 5, the Plaintiff pleaded as follows:

“In breach of Clause 18 of the DMC, the Defendant was and still is further indebted to the Plaintiff for a total sum of HK$1,077,748.80. The Particulars of which are as follows :-

Purpose	Sum (HK$)
Changing of lift	107,200.00
Renovation work	272,000.00
Waterproof works	183,000.00
Payment of tax	9,600.00
Litigation fees	421,232.00
Changing a well of lift of    San Po Kong Mansion	75,716.80
Repairing works on B4 wall corner	9,000.00
Total :	1,077,748.80

This paragraph is not admitted and the Plaintiff is put to strict proof.  The request for further and better particulars is related to this paragraph.  The Defendant avers that without the particulars sought it cannot plead further.

8.Paragraphs 6 and 7 are about the demand for payment of the above sums made by the Plaintiff and the Defendant’s failure to pay.  In paragraph 8, the Plaintiff pleaded a claim for interest under section 48 of the High Court Ordinance.  It is then followed by a prayer for the relief sought.

9.The Defendant sought further and better particulars relating to all seven items of work or claim mentioned in paragraph 5 of the statement of claim.  The particulars sought are all similar. Invariably, they are about:

(a) the particular type of work, the location of lift and lift well, the type of tax, and the parties to the litigation referred to under the various items of work or expense;

(b) the total cost in respect of each item of work or expense;

(c) the date of the owners’ meeting or management committee meeting in which the resolution to execute the work or incur the expense was passed;

(d) the date when the work was executed or expense incurred;

(e) how the contribution allegedly payable by the Defendant was calculated; and

(f) the date of issue of demand note to the Defendant and/or other owners of the Building for payment of their contribution to the cost of work or expense.

Discussion

10.The Plaintiff takes the view that the statement of claim has adequately informed the Defendant the nature of the case which it has to meet; the issues are well defined; there is no surprise and there are no matters left out to establish the cause of action.  Miss Chan, counsel for the Plaintiff, argues that the pleadings are not so general that the Defendant could not plead its defence.  She submits that, in essence, the requests are requests for evidence of the particularized items claimed by the Plaintiff, which only serve to highlight what case is to be proved rather than what case the Defendant has to meet.  She says that the evidence will in due course be disclosed in the witness statements to be filed and in the documents to be disclosed during the discovery process.  She further argues that in response to the Defendant’s requests for particulars the Plaintiff had voluntarily provided copies of the minutes of four Committee members meetings on various dates together with enclosures and minutes of the Annual General Meeting dated 19 March 2011 from which the information sought could be found.  She therefore argues that the Defendant actually knows the Plaintiff’s case and what evidence it ought to be prepared and to prepare for trial. 

11.The Defendant’s position is basically that the pleading is not sufficient to enable it to know the case it has to meet and to properly plead thereto.  Mr Wong, counsel for the Defendant, argues that the Defendant had in mind a limitation defence but is unable to plead that defence due to lack of particulars of the basis of the Plaintiff’s claim.  He argues that the Plaintiff cannot avoid its obligation to give further and better particulars of its case by merely providing the minutes and other documents and ask the Defendant to look for the answer in those documents itself.

12.I first deal with the minutes and documents.  I agree with Mr Wong’s submission.  In Aktieselskabet Dansk Skibsfinansiering v Wheelock Marden & Co Ltd [1994] 2 HKC 264, Mortimer J, as he then was, said in paragraph 23:

“The basic rule of pleading is to be found in RSC Order 18 rule 7.  Sub-rule (2) deals with documents and conversations.  It provides “… the effect of any document or the purport of any conversation referred to in the pleading must, if material, be briefly stated, and the precise words of the document or conversation shall not be stated, except in so far as those words are themselves material.”  This rule applies equally to Further and Better Particulars as to the original pleading.”

It is trite that the answers to the request for further and better particulars of a pleading form part of the pleading.  Answers to the request for further and better particulars of the statement of claim form part of the statement of claim.  It must be for the plaintiff to plead its case and decide what particulars form part of its case.  Insofar as reliance on documents is concerned, rule 7(2) require the plaintiff to briefly state the purport of the document.  Therefore, it cannot be right for the plaintiff to give a bundle of documents to the defendant and ask the defendant to ascertain from those documents what the plaintiff’s case is.  The defendant may not know which document and which part of that document the plaintiff is relying on.  It is for the plaintiff to inform the defendant what its case is and not to ask the defendant to second guess or speculate what is in the plaintiff’s mind.  To give a bundle of documents to the defendant without answering the requests defeats the basic purpose of pleading, which is to inform the other side of the nature of the case they have to meet and to tie the hands of the plaintiff so that it cannot without leave go into any matters not included in the pleading.  Providing the minutes and documents is no answer to the Defendant’s request for further and particulars.  The remaining question is whether without considering the minutes and documents the statement of claim has been sufficiently pleaded as to inform the Defendant of the nature of case it has to meet.

13.The request arose out of paragraph 5 of the statement of claim in which the Plaintiff pleaded that in breach of clause 18 of the DMC, the Defendant was and is indebted to the Plaintiff in respect of the various items of claim totalling $1,077,748.80.  Miss Chan argues that the Defendant knows what case it has to meet and the particulars requested are just evidence.  I have no difficulties readily agreeing with her insofar as those particulars listed under items (a) and (c) of paragraph 9 are concerned.  The particulars of the type of work, the lift which was changed, the location of the new lift well, the type of tax and the litigation costs are matters of evidence, which will be disclosed in the course of discovery.  These particulars need not be pleaded in the statement of claim.  The date of the owners’ meeting or management committee meetings in which the resolution to execute the work is also a matter of evidence.  They are probably irrelevant.

14.Items (b) and (e) of paragraph 9 above (ie respectively, the total cost in respect of each item of work or expense and how the contribution was calculated) go to calculation of the contribution allegedly payable by the Defendant.  Usually, in such a claim by an incorporated owners, the total amount of cost of work, the defendant’s share of contribution under the deed of mutual covenant and the amount owed by the defendant would have been pleaded.  In the present case, only the amount owed was pleaded.  The total cost in respect of each item of claim and how the Defendant’s contribution was calculated were not pleaded.  The Defendant seeks those particulars.  Miss Chan submits that there is no special formula for calculating the Defendant’s contribution to the various items of work or claim as the contribution is calculated simply as pleaded, ie the Defendant is liable to contribute as an owner to the cost of work or expense incurred in the management of the Building in accordance with the DMC.  If indeed the Defendant’s share of contribution has been fixed by the DMC, the total cost of each item of work or expense could be ascertained by calculating backwards from the amount claimed in respect of each item of work or expense.  The particulars sought are matters of evidence which the Plaintiff will have to disclose in its witness statements and documents in the course of discovery and to prove at trial. 

15.But I have to give a fore warning.  The Plaintiff’s claim under paragraph 5 of its statement of claim is based on the Defendant’s breach of clause 18 of the DMC.  That clause provides:

“18. Each of the co-owners of the said building save and except the owner of the Theatre shall pay to the Manager in each and every calendar month in advance the sum set out against the class of premises owned by them in the Third Column of the Third Schedule hereto or such monthly sum as may from time to time be determined or fixed by the Manager as payment on account of his share of all the costs charges and expenses due and payable by him in connection with the management of the said building and each such co-owner shall on or before taking possession of the premises pay to the Manager a deposit equivalent to …”

The owner of the Roofs is not a contributing party under the first column of the Third Schedule.  On the face, there is no particular share of contribution payable by the Defendant as owner of the Roofs and the Defendant could not be in breach of clause 18 of the DMC. The Plaintiff’s case is based on breach of clause 18 of the DMC.  If that is its pleaded case and it refuses to give particulars of its calculation, it may not rely at trial on any other provisions under the DMC or any other calculation in support of its claim.  If the Plaintiff has some other basis for claim, it had better take prompt action to amend its statement of claim.  As the matter now stands, I agree with Miss Chan that the particulars sought under items (b) and (e) of paragraph 9 above need not be given.

16.As for items (d) and (f) of paragraph 9 above (ie respectively, the date when the work was executed or expense incurred and the date of issue of demand note in respect of payment for the work or expense), I would have thought the date of completion, rather the date of execution of work, and the date of demand for payment of contribution are usual particulars to be pleaded in such a claim.  These particulars are necessary to show that cause of action has accrued.  Without these particulars, the Plaintiff’s case is incomplete and the Defendant is unable to plead limitation.  I therefore allow the request for these particulars.

Conclusion

17.For the above reasons, the master’s order has to be set aside.  I therefore allow the appeal, set aside the master’s order dated 19 April 2013, and order the Plaintiff to answer the following request for further and better particulars as specified in the Defendant’s solicitors’ letter to the Plaintiff’s solicitors dated 4 January 2013:

Request No 1.1, items (d) and (e);

Request No 1.2, items (e) and (g);

Request No 1.3, items (d) and (f);

Request No 1.4, items (c) and (e);

Request No 1.5, items (a), (b), (c), (d), and (h); 

Request No 1.6, items (d) and (f); and

Request No 1.7, items (e) and (g).

I also make a costs order nisi that the Plaintiff shall pay the Defendant’s costs of this appeal and the costs in the court below with certificate for counsel, to be taxed if not agreed.