Tan Kim Chua v. Leonard K.P. Chiu

CACV000018/1989

BETWEEN

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Coram: Hong. Cons, V.-P., Clough & Power, JJ.A.

Date of hearing: 3 March 1989

Date of delivery of judgment: 3 March 1989

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J U D G M E N T

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Cons, V.-P:

1. The question raised by this appeal lies within a very small compass.

2. On the 21st February 1987 the Plaintiff issued his Writ against the Defendant. The cause of action pleaded in the Statement of Claim was simply contribution due from a co-surety in respect of a payment made by the Plaintiff under a guarantee upon which the Plaintiff and the Defendant were severally and jointly liable. The guarantee had been signed in 1979. The payment had been made, in response to a letter of demand from a bank, the beneficiary of the guarantee, on the 30th April 1981.

3. The Statement of Claim was amended on the 3rd March merely as to the address of the Defendant. For the record I should say that a Defence was filed on the 27th March, but the contents thereof are of no concern in these proceedings.

4. The action then went to sleep for some time, but on the 16th May last year the Plaintiff gave notice of his intention to proceed. On the 5th December, with leave of Master Perrior, he re-amended his Statement of Claim. The effect of the amendment was to introduce two new claims, one simply in debt, the other upon breach of an agreement which it was alleged had been made prior to the Plaintiff's payment to the bank, - (which by an obvious typing error was put then as the 31st August 1981, but has since been corrected to the original date of the 30th April 1981) - by which the Plaintiff and the Defendant had agreed that the Plaintiff should satisfy the whole of the amount demanded by the bank and that the Defendant should settle his share by monthly instalments of $100,000 to the Plaintiff. It was further alleged that the Defendant had paid the first such instalment to the Plaintiff on the 15th April. I should also mention that the original claim was reduced by $100,000.

5. Three days later, on the 8th December, Notice of appeal to a Judge of the High Court was served. The hearing came before Jones J. on the 18th January this year.

6. It was conceded then, as it had been earlier, that the amendment did introduce a new cause of action and that the new cause of action was by then already time barred. Reliance was therefore placed upon Order 20 rule 5. Paragraph (1) of rule 5 gives general power of the Court to allow amendments at any stage of the proceedings. The relevant parts of paragraph (2) and (5) read -

"(2) Where an application to the Court for leave to make the amendment mentioned in paragraph ….. (5) is made after any relevant period of limitation current at the date of issue of the writ has expired, the Court may nevertheless grant such leave in the circumstances mentioned in that paragraph if it thinks it just to do so.

(5) An amendment may be allowed under paragraph (2) notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of ….substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment."

7. In giving his decision the judge below referred to the comment of Cross L.J. in Brickfield Properties Ltd. v. Newton [1971] 1 W.L.R. 862. The question in that case was whether a claim for negligence in the design of a building arose out of the same or substantially the same facts as a claim for negligence in supervising the erection of the building. At p.880D Lord Cross said -

"It is no objection to amendment under Ord. 20, r.5(5), that some of the facts out of which the new cause of action arises are peculiar to it and that some of the facts out of which the old cause of action arises are peculiar to it. It is enough if the overlap is so great that the new cause of action can fairly be said to arise out of substantially the same facts as the old cause of action."

8. Applying that principle the judge below concluded -

"Although the amendments sought relate to a specific oral agreement by the defendant with the plaintiff to pay the amount claimed by instalments, it does not detract from the liability that is contended for by the plaintiff under the guarantee. If, in fact, liability cannot be established under the guarantee, I cannot see how the plaintiff can succeed independently under the oral agreement to pay by way of instalments which is founded upon that guarantee.

The amendments constitute a narrative of events from 1981 until 1986 which concerned the manner of payment. Be that as it may, I am quite satisfied that the amendments relate to substantially the same facts upon which the original claim was based."

9. The substance of the appeal is that the new cause of action does not arise from substantially the same facts.

10. In order to succeed on the original claim it seems to me that the Plaintiff will have to make good at least four matters. (1) the guarantee; (2) the liability of the principal debtor; (3) the demand by the bank; and (4) the payment by the Plaintiff. The amended pleading does not expressly set out what is alleged to be the consideration for the agreement, or how otherwise it is to be enforced, which perhaps puts the present proceedings on a somewhat artificial basis. Leaving that aside however, it seems to me that although to succeed on the agreement the Plaintiff would have to prove matters which are not included in the original Statement of Claim, he nevertheless could not possibly succeed thereon without bringing before the Court the four matters that I have already enumerated. Thus I find myself in agreement with the judge below that there is sufficient overlap so that it can fairly be said that the new cause arises out of substantially the same facts as the old.

11. The Notice of Appeal does not challenge the judge's exercise of his discretion, nor has Mr. Li advanced any argument in that respect, but perhaps for completeness I should say that I see no reason to interfere. I would therefore dismiss the appeal.

Clough, J.A.:

12. I agree and there is nothing I can usefully add.

Power, J.A.:

13. I agree and have nothing to add.

Representation:

Andrew Li, Q.C. (M/s Lo and Lo) for Defendant/Appellant

Patrick Fung (M/s Oscar Lai & Ho) for Plaintiff/Respondent