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HCCW 226/2014
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
COMPANIES (WINDING-UP) PROCEEDINGS NO 226 OF 2014
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| IN THE MATTER of Hin-Pro International Logistics Limited (軒輝國際物流有限公司) |
| and |
| IN THE MATTER of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Chapter 32 of the Laws of Hong Kong |
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| Before: Hon Ng J in Chambers |
| Date of Hearing: 21 May 2015 |
| Date of Judgment: 28 January 2016 |
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J U D G M E N T
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Introduction
1. The disputes between the Petitioner, Compania Sud Americana De Vapores S.A., and the Company, Hin-Pro International Logistics Limited, have a chequered history[1]. Thankfully, this application raises an interesting legal question: whether the Court has jurisdiction to give leave to amend a creditor’s winding up petition to include debts which have accrued only after its presentation, and if yes, whether the Court should exercise its discretion to give leave.
2. The application before this court is for leave to re-amend the Amended Petition. The Petition was presented by the Petitioner on 18 August 2014 and was subsequently amended on 8 October 2014. The proposed re‑amendments, at paragraphs 8 to 25 of the draft[2] attached to the Petitioner’s summons, set out the additional debts arising from Judgments and Orders made by the Courts in Hong Kong and England after 18 August 2014. These debts are said to be still owing to the Petitioner.
3. The application is opposed by the Company on the grounds that (i) it constitutes an abuse of the Court’s process and the proposed re‑amendments are immaterial and useless [3]; and (ii) the proposed re‑amendments are bound to fail: see the Company’s skeleton submissions at paras. 1.4 & 5.11. The evidence in support of the Company’s opposition can be found in the 4th Affirmation of Mr Shea Ying Fai.
4. The original Petition included only one debt in the sum of HK$433,430 (“Original Debt”) payable by the Company to the Petitioner pursuant to a costs order of Deputy High Court Judge Saunders dated 21 July 2014 in HCMP 1449/2014. On 25 July 2014, the Petitioner served a statutory demand on the Company. The Petition was based on the Company’s non‑compliance with the demand: paragraphs 5 to 7 of the Petition.
5. It is not in dispute that the Saunders Order was discharged by Deputy High Court Judge W. Chan on 15 October 2014. The discharge of the Saunders Order was subsequently affirmed by the Court of Appeal. As a result, Mr Scott SC, appropriately, indicated to this court at the hearing that the Original Debt no longer subsisted and paragraphs 5 to 7 of the Petition should be crossed out.
6. The question is whether the Petitioner can substitute the Original Debt with a number of subsequently arisen debts (“Subsequent Debts”) by amendment. They are:
| |
Order /
Due Date |
Amount due
to Petitioner
(excluding
interest) |
Proceedings |
Order by |
| 1. |
15/9/14;
29/9/14 |
HK$43,222 |
HCMP 1449/2014 |
DHCJ B. Chu
(as she then
was) |
| 2. |
3/10/14;
17/10/14 |
£47,000 |
English
proceedings 2013
Folio No. 1248
(“English Action”) |
Flaux J |
| 3. |
14/10/14;
14/10/14 |
US$360,000 |
English Action |
Cooke J |
| 4. |
14/10/14;
14/10/14 |
RMB100,000 |
English Action |
Cooke J |
| 5. |
14/10/14;
14/10/14 |
US$489,692.71 |
English Action |
Cooke J |
| 6. |
14/10/14;
28/10/14 |
£286,036.5 |
English Action |
Cooke J |
| 7. |
4/11/14;
18/11/14 |
£2,561 |
English Action |
Cooke J |
| 8. |
10/11/14;
10/11/14 |
HK$132,250 |
HCMP1932/2014 |
Cheung CJHC,
Lam VP |
7. Save for items (3) and (4) above, the Subsequent Debts arose as a result of costs orders made by the Courts identified.
The Governing Principles
8. I shall first remind myself of some of the well‑established principles concerning amendments, summarized in a Judgment of this court in Hsu Ming Chi v Lam Shu Chit unrep.; HCCL8 of 2013; 22 October 2014 at [13] – [18]:
“13. It is a guiding principle of cardinal importance on the question of amendment that generally speaking, all such amendments ought to be made “for the purpose of determining the real question in controversy between the parties to any proceedings or of correcting any defect or error in any proceedings”: Re Playmates Investments Ltd [1996] 4 HKC 577 at 582E‑H (per Le Pichon J as she then was); Natamon Protpakorn v Citibank NA [2009] 1 HKLRD 455 at para. 25 (per Cheung JA); Hong Kong Civil Procedure 2014 Vol. 1 para. 20/8/6.
14. Leave is readily granted to amend before trial unless it can be shown that the new claim based on the proposed amendment is bound to fail. While the court is entitled to have regard to the merits of the case, it should only do so when the merits are readily apparent, and are so apparent as not to require prolonged investigation: Natamon Protpakorn v Citibank NA supra at para. 25 (per Cheung JA).
15. If the proposed amendments are bound to fail, no leave to amend should be granted. In this regard, the court will take the applicant’s proposed pleaded case to the highest: Bank of China v Leigh Hardwick unrep., HCA 1110 of 2006, 28 August 2013, per Anthony Chan J at para. 2.
16. Absent any real prejudice, an application for amendment, albeit late, must be decided upon the general principle that a court of law seeks to adjudicate on the real issues and disputes between the parties and, if possible, technical and procedural rules should not stand in the way of allowing the parties to raise their real claims or defences before the court for adjudication: VSC Building Products Co Ltd v Kono Insurance Ltd., unrep. HCA 947/2005, 9 September 2009, per A Cheung J (as he then was) at [22].
17. Where prejudice is claimed, the burden is on the party opposing the amendment to show prejudice. There is no injustice to the opposing party if he can be compensated by appropriate orders as to costs: Re Playmates Investments Ltd supra at 582H, 584C (Le Pichon J as she then was).
18. Lastly, in giving effect to the underlying objectives of the Rules of the High Court, the court shall always recognize that the primary aim in exercising the powers of the court is to ‘secure the just resolution of disputes in accordance with the substantive rights of the parties’: RHC O 1A r 2(2).” (emphasis added)
Deliberation
9. Mr Scott SC submits that the re-amendments to the Petition do not involve the addition of any cause of action as such and limitation period is not engaged. He further submits the Court has a wide discretion to allow them at any stage of the proceedings for the purpose of determining the real question in controversy between the parties under RHC O 20 rr 5(1), 7 and 8.
Jurisdiction
10. In Re Richbell Strategic Holdings Ltd [1997] 2 BCLC 429, Neuberger J (as he then was) allowed the petitioning creditor’s application to re‑amend the petition to rely on the non-payment of a post-petition debt. At 452g to 455c, Neuberger J set out his careful analysis of the issues involved:
“I have not been referred to any authority where the question of whether, and if so in what circumstances, a petitioner should be given leave to amend his petition so as to rely on a debt which has accrued after the petition was presented. However, Miss Newman, quite rightly in my judgment, does not suggest that the court has no power to allow such an amendment…
…
The law governing the right to amend a writ or statement of claim to add a cause of action which accrued after the issue of the writ has been considered in a number of recent cases. In Vax Appliances Ltd v Hoover plc [1990] RPC 656, Mummery J gave leave to the plaintiff to add such a new cause of action. He distinguished the earlier decision of the Court of Appeal in Roban Jig & Tool Co Ltd v Taylor [1979] FSR 130 on the basis that the Court of Appeal had refused leave to amend in that case on the ground that ([1990] RPC 656 at 660):
‘it was wrong to validate . . . an action by granting leave to amend the writ in the case where the plaintiffs had no cause of action at all at the time when they started the proceedings . . . It also appears from the decision . . . that there does not exist any absolute rule that a plaintiff is unable to recover on a cause of action which has accrued to him only after the writ has issued . . .’
…
Accordingly, he gave leave to amend the counterclaim. That decision was cited with implied approval by the Court of Appeal in Banks v CBS Songs Ltd [1992] FSR 278 at 294 and, more recently, was fully considered and followed by Jacob J in Beecham Group plc v Norton Healthcare Ltd [1997] FSR 81 at 92‑95. I note that, apparently without the assistance of those authorities, Rix J reached the same conclusion in Bastone & Firminger Ltd v Nasima Enterprises (Nigeria) Ltd (20 May 1996, unreported).
These cases appear to leave open the question of how bad the unamended writ has to be before the court would refuse leave to amend by adding a post-writ cause of action. In the absence of any authority, it appears to me unlikely that the plaintiff has to establish that he will certainly get some relief at trial on his original writ before he can have leave to amend to plead a post-writ cause of action…
…
Aldous J took the same view in Chiron Corp v Organon Teknika Ltd (No 4) [1994] FSR 252 at 256 where, after quoting from the judgment in Vax, he said:
‘Mummery J. clearly had in mind that a plaintiff who has a cause of action at the date of the writ might not succeed in that action at the trial.’
Accordingly, Aldous J held that he had jurisdiction to grant leave to the plaintiff to amend the writ to plead a post-writ cause of action, even though he had dismissed the plaintiff's claim…
Assuming, for the moment, that the test of whether or not...
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