Competition law — Competition Tribunal proceedings— application to amend Response and file new witness statements in substitution for statement already filed — whether application made at late stage should be granted
Civil procedure — Competition Tribunal — enforcement action — approach — application of Rules of the High Court to Tribunal Rules — Rules of the High Court (Cap.4A, Sub.Leg.) — Competition Tribunal Rules (Cap.619D, Sub.Leg.) r.4
Rs were contractors appointed to perform decoration work for tenants of public housing units in an estate in Kwun Tong. The Competition Commission (the Commission) brought an enforcement action against them in the Competition Tribunal (the Tribunal), alleging that they had made arrangements between themselves contravening the first conduct rule of the Competition Ordinance (Cap.619) and that the arrangements amounted to serious anti-competitive conduct in the form of market sharing and price-fixing. At the pre-trial review of the proceedings on 2 October 2018, R4 applied to amend its Response which had been filed under r.75 of the Competition Tribunal Rules (Cap.619D, Sub.Leg.) and file three new witness statements in substitution for a statement already filed. The trial was originally scheduled to begin on 12 November 2018. R4’s explanation for the need to make the applications and for their lateness was that KCH, the individual empowered to engage lawyers and conduct the defence on their behalf, had not been authorised to conduct the defence without reference to their partners, and he had failed to keep them informed. R4 also argued that the Commission would be well prepared to deal with the new case, that the factual evidence required by the Commission was already in place and that no significant prejudice would be caused.
Held, refusing R4’s application, that:
- Although the present proceedings concerned an enforcement action under the Ordinance, which was not the same as ordinary civil litigation, the public interest in maintaining the integrity of the litigation process was no less important. Section 144 of the Ordinance enables the Tribunal to follow “the practice and procedure of the Court of First Instance in the exercise of its civil jurisdiction”, the Competition Tribunal Rules to a significant extent incorporate the Rules of the High Court (Cap.4A, Sub.Leg) (r.4 of Cap.619D, Sub.Leg.). It was in the interest of the Commission, as well as the other respondents to resolve these proceedings without delay. Practice Direction 1 of the Tribunal also supported this position (Ketteman v Hansel Properties Ltd  1 AC 189, Li Shiu To v Li Shiu Tsang (HCA 416/2003,  HKEC 1153), Jose Miranda da Costa Junior v Lorenzo Yih (HCA 156/2010,  HKEC 703) applied). (See paras.26–28.)
- Delay on its own was not sufficient to justify a refusal of leave to amend pleadings, but given the context of the procedural history and the forthcoming trial dates, refusal was justified (Topwell Corp Ltd v Kwan Kam Kee  5 HKLRD 1 considered). (See paras.15, 30.)
- Even if R4 faced any problems, these had been brought upon by itself. The evidence showed that PW, who held a wide power of attorney on behalf of all the partners of R4, had not been kept completely in the dark by KCH and had given input on the existing Response. Instead, the picture was one of utter complacency. R4’s partners only began to take an interest in the proceedings in around early September 2018 when they learnt that the maximum pecuniary penalty that could be imposed under the Ordinance was referable to the turnover of the undertaking and not just the turnover of the estate project in question. (See paras.21–22, 29.)
- R4’s argument that the Commission would not require significant time to respond to its new case was specious. The proposed amended Response was a wholesale substitution of a new document for what had previously been pleaded, and the scope of an undertaking and whose acts might be attributed to it were fact-sensitive questions. Further, if the application were allowed the trial dates would inevitably have to be abandoned. The trial had been anticipated for over a year to take place in November 2018, and the parties were under a very tight timetable for taking preparatory steps. (See paras.12, 15, 23–25, 29.)
- (Obiter) There was also a broader public interest in dealing with these enforcement actions as expeditiously as reasonably practicable, as the outcome of these proceedings might well serve as guidance to others in the regulation of their economic conduct. (See para.28.)
This was an application by the fourth respondent to amend its Response and file three substitute witness statements in an enforcement action by the Competition Commission under the first conduct rule. The facts are set out in the judgment.