Au Kar Man v. Woo Kwok Yin t/a K Y Woo & Co and Another

DCCJ 2391/2017

[2018] HKDC 1338

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2391 OF 2017

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DECISION

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Introduction

1.This is the plaintiff’s appeal against the decision of Master D To made on 17 January 2018 striking out the amended statement of claim and dismissing the plaintiff’s action with costs.

2.The appeal came before me on 1 June 2018.  Three days before that hearing, the plaintiff lodged her skeleton submissions, to which was attached a draft re-amended statement of claim.  In the submissions, she sought leave to further amend her pleading in the form of the draft.  The proposed amendments are extensive and substantial.  A large portion of her amended statement of claim was to be deleted and many new paragraphs inserted.

3.In view of the extensive nature of the proposed amendments and the lateness of the application, I acceded to the defendant’s application and adjourned the hearing to today.  I also ordered that the costs thrown away by the adjournment be borne by the plaintiff, to be summarily assessed at today’s hearing.

4.It is trite that an appeal from a master to a judge under Order 58, rule 1(1) of the Rules of the District Court is by way of re-hearing.  The judge treats the matter as though it came before him for the first time, save that the party appealing has the right and obligation to open the appeal: Hong Kong Civil Procedure 2018 at 58/1/2.

5.There are therefore effectively two applications before me – the defendant’s application to strike out the amended statement of claim and the plaintiff’s application to amend it.

6.Mr B K Ho, counsel for the defendant, submitted that at today’s hearing, the plaintiff has the burden to demonstrate to the court that “the Master was wrong to strike out her ASC and dismiss her action, no more and no less”.  If the plaintiff succeeds in whole or in part, the amended statement of claim, Mr Ho submitted, will be “restored” accordingly.  If not, given that the action has already been dismissed, the amended statement of claim has not survived and that would be the end of the matter.  The court does not have the jurisdiction to hear the amendment application as “no RASC can raise the ASC from the dead”.

7.That submission is contrary to the established principle that an appeal from a master’s decision is an actual re-hearing.  I therefore reject that submission.

8.Where a striking out application and an amendment application are before the court at the same time, it has been said that it would be more expedient and convenient to deal with the striking out application on the facts as set out in the proposed amended pleading.  If the amended pleading should not be struck out, the amendment application should be allowed and the striking out application be dismissed.  On the other hand, if the amended pleading cannot survive the striking out application, it would be futile to allow the amendments.  See Hong Kong Civil Procedure 2018 at 18/19/4, sub-para (2).  That passage has not, however, dealt with the question of costs arising out of the striking out application.

9.In the present case, notwithstanding that the proposed amendments are wide-ranging and can fairly be described as radical, at the adjourned hearing, the plaintiff has maintained that the amended statement of claim, as it now stands, is not defective and not liable to be struck out.  The master was therefore wrong and she should have costs of the hearing below and costs of the present appeal.  The application to amend is a separate and fresh application.

10.Because of the plaintiff’s position on costs, it is necessary for me to consider the appeal first and then, regardless of whether it succeeds or not, the proposed amendments.

Factual background

11.The plaintiff was employed by the defendant, a firm of solicitors in Hong Kong, as a trainee solicitor for about eight months in 2016.  In this action, the plaintiff contends that the defendant committed various breaches of the employment contract and are also liable to her for various wrongful conduct in the course of her employment and for some time afterwards.

12.The trainee solicitor contract between the plaintiff and the defendant followed the standard format prescribed by the Law Society.  It was dated 1 March 2016.  The plaintiff’s employment as a trainee solicitor was for a period of 21 months commencing on 15 February 2016 at a monthly salary of $20,000. The plaintiff had previously trained with another law firm.  Hence the term of 21 months, instead of the standard qualifying period of 24 months, in the contract.

13.The material clause is clause 2 which provided as follows:-

“This contract shall not be terminated except by mutual agreement of the parties or by the Law Society of Hong Kong (the “Society”) in the exercise of its powers under section 22 of the Legal Practitioners Ordinance.”

14.Things started to go wrong between the plaintiff and the defendant from about July 2016.  The plaintiff alleges a series of wrongdoings on the part of the defendant from then onwards.  The situation came to a head on 6 October 2016 when the defendant communicated to the plaintiff their wish to terminate her trainee solicitor contract.  The defendant proposed they pay her one month’s salary in lieu of notice and the trainee solicitor contract be terminated by mutual consent in accordance with clause 2.  But the plaintiff refused and asserted that the contract was for a fixed term and the defendant could not terminate it without paying her the salary for the remaining months of the term.

15.In the end, the defendant suspended the plaintiff from her work duties and asked her not to come back to the office.  On 18 October 2016, the defendant made an application to the Law Society by letter seeking approval to terminate the trainee solicitor contract on 6 October 2016.  The defendant’s ground of termination was that basic trust and confidence had broken down and that was irreparable.

16.After some exchange of correspondence, the Law Society resolved on 21 March 2017 that the trainee solicitor contract be terminated with effect from 7 October 2016.

17.Shortly after the resolution, the plaintiff commenced proceedings against the defendant at the Labour Tribunal under action no LBTC 1213/2017 in April 2017.  On 8 May 2017, by consent, the defendant were ordered to pay a sum of about $6,800 to the plaintiff for unpaid salary, annual leave and travelling expenses.  The proceedings were transferred to the District Court in view of other non-employment related claims made by the plaintiff.

18.On 26 September 2016, the plaintiff filed the amended statement of claim.  It is 63 pages long.  The document contains a lengthy narrative recounting events as early as from when the plaintiff attended interviews with the defendant and undertook written assessments in the recruitment exercise in February 2016 all the way to some time in May 2017 after the Labour Tribunal ordered the case be transferred to the District Court. 

19.In the narrative, the plaintiff sets out and, in many instances, repeats her complaints about the defendant’s conduct and behaviour.  Amongst the many allegations, the plaintiff contends that the trainee solicitor contract was wrongly repudiated by the defendant on about 6 October 2016 and that she accepted the repudiation thus bringing the contract to an end.  She referred to it as “repudiation of the Trainee Contract/ renunciation of the Trainee Contract/ impossibility/ constructive dismissal/ wrongful termination committed by the Defendant”.  Overall, she claims damages of up to $1,000,000 from the defendant.  That sum includes general damages, special damages, aggravated damages, exemplary damages and punitive damages. 

20.As part of the background information, during her employment with the defendant, the plaintiff mainly worked with, and under the supervision of two solicitors, Mr Alan Woo and Mr Charles Sin.  She worked on litigation matters and IPO projects.

The striking out application

21.The defendant’s application is made under Order 18, rule 19(1)(a) to (d) and the inherent jurisdiction of the court.  It is the defendant’s submission that:-

(a)   The amended statement of claim violates fundamental rules of pleadings.  It does not contain a summary of material facts and is in breach of the express requirement stipulated in Order 18, rule 7(1) which provides that:-

“… every pleading must contain, and contain only, a statement in a summary form of the material facts on which the party pleading relies for his claim …. but not the evidence by which those facts are to be proved, and the statement must be as brief as the nature of the case admits” (emphasis added)

(b)   Instead it contains paragraphs after paragraphs of evidence at great length, which have no place in a pleading and ought only to appear in a witness statement (see paras 34, 38, 39(1) to (6), 38(8)(a)(5) to (17) and 40(2)).

(c)   At times, documents are enumerated or set out in items in the amended statement of claim as if it were a list of documents by way of discovery (see paras 11, 12, 39(8), 39(8)(b)(vii) and 39(8)(c)(vii)).

(d)   The amended statement of claim is prolix.  It is so because it contains both statements of necessary facts of unnecessary length and statements of unnecessary facts.  It is therefore guilty of the two limbs of prolixity as expounded in Davy v Garret (1878) 7 Ch D 437 at 486.  Same as the pleading in that case, the amended statement of claim offends against the rules both by needless prolixity and by stating evidence (at 487).

(e)   The outcome is that if the amended statement of claim is allowed to stay, the defendant will have to answer to the unnecessary statements.  Given the prolixity of the pleading, much time and efforts may have to be spent on an exercise which may after all serve no meaningful purpose. 

(f)   The pleading is therefore vexing, embarrassing and oppressive and would prejudice, embarrass and delay the fair trial of the action.

22.Having read and re-read the amended statement of claim, I accept Mr Ho’s submissions.  I share Mr Ho’s observations as they are on the whole fair, reasonable and to the point.

23.The observation made by Thesiger LJ in Davy v Garret applies to the present amended statement of claim:-

“I am disposed to agree with the contention that the mere stating material facts at too great length would not justify striking out a statement of claim. But when in addition to the lengthy statement of material facts we find long statements of immaterial facts, and of documents which are only material as evidence, a Defendant is seriously embarrassed in finding out what is the case he has to meet.”

24.In addition to the above, I would identify below further problem areas in the amended statement of claim, with some examples cited, to show that the various problems affecting the amended statement of claim, when taken as a whole, are pervasive and therefore it ought to be struck out in its entirety.

25.To add to what has been submitted by the defendant regarding the pleading of evidence, I would highlight the following examples:-

(a)   Para 11 takes up three pages and identify in detail (stating, eg, the dates, the appendix numbers and the page numbers) the various documents filed by parties in the Labour Tribunal proceedings and the documents submitted to the Law Society regarding the termination of the trainee solicitor contract.  This is pointless, as it serves no meaningful purpose.

(b)   Para 34 runs from pages 12 to 31.  According to the introductory paragraph, this paragraph itself is to set out the “particulars of the Defendant’s and/or his servant(s)’ performance during the Employment Period and the Defendant’s and/or the Defendant’s servant(s)’ feedback and/or reactions and/or their treatments and/or their subsequent treatments during the Employment Period and/or in the submissions in the Defendant’s 18 October 2016’s Letter to the Law Society and in the Defendant’s Submission Documents in LBTC 1213/2017 Claim …”  A perusal of this paragraph would show that it clearly contains too lengthy an account of unnecessary facts.

(c)   Pages 44 to 53 contain allegations which are described as “Particulars of the Plaintiff’s subsequent material actions after receipt the Defendant’s Application to the Law Society to Terminate the Trainee Contract”.  The heading itself and a perusal of the content would suggest that most of the allegations there are unnecessary and irrelevant as they relate to matters after the termination of the trainee solicitor contract.  A chronology is included there detailing how the Labour Tribunal proceedings had unfolded, what was said at the hearing and the plaintiff’s complaints about the defendant’s filing of documents.  These are all immaterial and irrelevant allegations.

26.Another problem area which stands out from the amended statement of claim is the inclusion of a vast number of allegations which have no seeming relevance to any cause of action which the plaintiff may be pursuing.  One cannot tell if they are included as part of the factual background (in which case, they should not be allowed as they are not material facts) or they do in some oblique way go to support one or more of the plaintiff’s claims as pleaded.  Therefore, the relevance of these voluminous allegations cannot be determined and is not understood.  The defendant would suffer real prejudice as he cannot know how to deal with all these allegations.  The more prominent examples are as follows.

27.First, paras 34(1)(l) and (m) read:-

“(l) Below are the contents/the purposes of the emails and the Defendant’s and/or the Defendant’s servant(s)’ feedback and/or reactions and/or treatments:-

(i) In or about 21 July 2016 to 25 July 2016, the Plaintiff was asked by Charles Sin not to attend most of the meetings of a IPO case, but was asked by Alan Woo to assist in handling some important issue of the IPO case. (pages 17-13, EA-6).

(ii) The Plaintiff started an email conversation on 26 July 2016, faithfully and diligently discussing the case pursuant to clause 4(1) of the Trainee Contract. (page 12, EA-6).

(iii) Despite what have been discussed, the Plaintiff prepared the required questionnaire on disqualification issue as required and according to Alan Woo’s instructions. However, the Plaintiff never received feedback on it after that.

(iv) During the email conversations on 30 July 2016 (pages 11-9, EA-6), the Plaintiff was forced to take the opportunity to address some working issues with the Plaintiff’s traineeship (page9-10, EA-6) (“Working Issues”), including:-

1) the work relationship (especially the relationship with Charles Sin);

2) the opportunity to learn pursuant to clause 5(1) of the trainee contract;

3) expecting feedback/comments of works done as a part of learning process; and

4) the work arrangements for handling Charles Sin’s works and Alan Woo’s works.

(v) The Plaintiff raised the above issues therein with the hope that Alan Woo would help to solve those issues amicably as a supervisor and as a mediator and (as Alan Woo, Charles Sin and the Plaintiff were sitting in the same room).

(vi) Reply email from Alan Woo of 30 July 2016 (pages 6-8, EA-6) was received but he did not solve the issues and left the issues open.

(vii) Instead, Alan Woo further bullied and humiliated the Plaintiff in the email chain.

(viii) After receiving the reply email from Alan Woo, the Plaintiff kept on working faithfully and diligently and try to explore more opportunity to learn, including always ask whether the Plaintiff can attend meetings of the IPO project (page 1, EA-7). It could be evidenced by some extract of the WhatsApp messages (Refer as EA-7).

(ix) However, the Plaintiff would normally get invitations to ask the Plaintiff to attend meetings of the IPO project, but when the meeting time came, the Plaintiff was asked not to join or the meeting was being cancelled or changed time, but the Plaintiff was not notified. (pages 2-3, EA-7)

(x) On around 26 August 2016, the Plaintiff was called by Alan Woo to attend a performance review.

(xi) However, the purpose of the performance review was not to solve the issues being raised.

(xii) It has other purposes. The purposes can be noted in the Plaintiff’s feedback notes of the Plaintiff’s performance review dated 31 Aug 2016 (pages 1-5, EA-6) and the reply of Alan Woo dated 1 September 2016 (his reply is in red therein).

(xiii) The issues being raised was not properly solved by Alan Woo/Charles Sin and/or the Defendant. In addition, the purposes of the meeting set by Alan Woo/Charles Sin and/or the Defendant further injured the Plaintiff.

(xiv) Charles Sin also told the Plaintiff in the performance review that he is not bound to teach the Plaintiff anything as he is not the Plaintiff’s principal.

(xv) Alan Woo also told the Plaintiff in the performance review that he will not interrupt any acts done by Charles Sin towards the Plaintiff as Charles Sin brought about HKD10 million business to the Defendant’s firm.

(xvi) Most issues remained unresolved.

(xvii) Further, the Plaintiff’s other purpose in the said email conversations was to discuss about the safe work system and competent co-workers under common law and OL Ordinance.

(xviii) However, the Plaintiff was further humiliated. It is evidenced by the reply email of Alan Woo dated 1 September 2016 (his reply is in red therein) (pages 1-5, EA-6). The contents of such emails humiliated the Plaintiff.

(xix) As such the Plaintiff was injured by the Defendant’s and/or Alan Woo’s and/or Charles Sin’s failure to maintain and/or to provide safe work place to the Plaintiff under common law and OL Ordinance.

(m) The Emails conversations between the Plaintiff and Alan Woo (ie EA-6) further evidenced the Defendant and/or Alan Woo and/or Charles Sin did bully and/or humiliate the Plaintiff and/or allow such bullying and/or humiliating activities be continuing made against the Plaintiff by the Defendant and/or Alan Woo and/or Charles Sin despite the Plaintiff asked for the ratification and/or improvement.” (emphasis added)

28.It is not apparent on the face of the plea to what legal cause of action the alleged incidents would give rise.  One cannot ascertain with any clarity or precision what conduct amounted to the alleged bullying or humiliating behaviour on the part of Alan Woo and Charles Sin and how the plaintiff was being “injured” or “further injured”.  How is the defendant supposed to plead to these allegations?

29.Another example is para 39(1).  The plaintiff states: “After the plaintiff’s acceptance of the repudiation in the morning of 7 October 2016, at about 15:43, 7 October 2016, Alan Woo sent the Plaintiff WhatsApp message to her personal mobile, saying something threatened her”.  But she does not set out the words in the message which had the effect of threatening her.

30.Lastly, some of the complaints, which the plaintiff is apparently relying on as causes of action, are not known to be viable legal causes of action.

(a)   In para 19(1), the plaintiff contends that the trainee solicitor contract contained an implied term that the defendant has a duty “to provide the Plaintiff … competent co-workers”.  See also paras 29(2) and (3).

(b)   In para 34(2)(b), the plaintiff complained about Charles Sin by recounting a series of incidents. Ultimately a decision was made that the plaintiff would no longer work for Charles Sin.  In para 34(2)(b)(xv), the plaintiff pleads: “Charles Sin’s acts made the Plaintiff lost opportunity to continue training in IPO matters under the Trainee Contract”.

31.There are many more examples that can be quoted but it is not necessary to do so in this decision.  In reply to the defendant’s complaint about the prolixity of the amended statement of claim, the plaintiff says in her written submissions that the purpose of the pleading is to let the other party know what case he has to meet and it follows that the inclusion of “more particulars or more statements in the AOSC would benefit the Defendant rather than detriment the Defendant”.  While the first part of the submission about the purpose of pleadings is correct, the second part is clearly a misconception.  That may explain the prolixity of the amended statement of claim in its present form. 

32.On the whole, a number of fundamental pleading problems permeate through the amended statement of claim rendering it extremely difficult, if not impossible, for the defendant to plead to in a proper and meaningful way.  The problems are not far and few between.  They are everywhere.  The amended statement of claim is therefore frivolous and vexatious.  To allow the action to proceed to trial based on this piece of pleading would mean hours and hours of time being spent on immaterial, irrelevant or meaningless pleas.  This would be embarrassing and oppressive to the defendant and it would not serve the interests of justice.  That should not be allowed to happen.  This is a case where the court should exercise its discretion to strike out the entire pleading.

The amendment application

33.A very large portion of averments are deleted in the draft re-amended statement of claim and more than 50 new paragraphs are inserted.  I do not accept the plaintiff’s submission that the difference between the amended statement of claim and the draft re-amended statement of claim is a “matter of writing style”.

34.Mr Ho submitted that although a number of offending pleas are taken out in the draft, it still violates fundamental rules of pleadings and is defective in the same way as the amended statement of claim, as described in the paragraphs above and for that reason, the draft is frivolous, vexatious, embarrassing and oppressive to the defendant and the proposed amendments should not be allowed.

35.I agree.  It is true that the overall length of the document is cut down.  It is also true that quite a number of irrelevant paragraphs, such as those containing detailed lists of documents, are taken out.  However, the draft as a whole still suffers from the same problem of prolixity (in the Davy v Garret sense).  It still contains many seemingly irrelevant allegations which would leave the defendant in grave doubt as to what case they are supposed to meet.

36.For instance, in the new para 34G which seeks to recount what happened in a performance review which took place in August 2016 between the plaintiff, Alan Woo and Charles Sin, the plaintiff refers to the following incidents:-

“(iii) In addressing the unresolved working issues, Charles Sin came back with a comparison between the Plaintiff with David Chow, a legal assistant in the quality of work and other abilities.

(iv) The Plaintiff felt being insulted in the workplace upon receiving such unfair, unjustifiable and unreasonable comparison between herself and other staff members, in addition to the extreme harshness applied by Charles Sin on the Plaintiff.”

37.There is no elaboration on why the comparison was “unfair, unjustifiable and unreasonable” and (even assuming that to be the case) one cannot tell or it is not clear whether it amounts to a cause of action in itself, it relates to one of the pleaded causes of action or it is simply a piece of background information.

38.Another example is para 34H(vi) which states that in an email sent by Alan Woo to the plaintiff in September 2016 following up on the performance review, “Alan Woo expressed that a trainee solicitor should not make complaints and use certain legal terms to describe the work related issues”.  The statement is simply not understood and its relevance and materiality therefore not known or ascertainable. 

39.Mr Ho drew the court’s attention to paragraphs under various headings which are mostly evidence.  I set out the more obvious examples below as an illustration:-

Heading	Paragraphs
Employment process	14A, 14B, 14C
IPO project incident	34A, 34B, 34C, 34D, 34E, 34F
Performance review	34G, 34H
Work assignment issue	34I, 34J, 34K, 34L, 34N, 34O, 34P
Arrangements after complaint	34Q, 34S

40.In addition, a separate point arises in respect of the plea that the defendant had wrongfully refused to sign on a Form 4, which is a document required by the plaintiff to apply to the Law Society for qualification as a solicitor. The plaintiff suffers loss as a result as her qualification has been delayed. See paras 39W to 39AA. 

41.As pleaded, the defendant committed the wrongful act on 27 March 2018 when they informed the plaintiff that they would sign the form only on the condition that the plaintiff would agree to give an “undertaking restricting the use of the Form 4”.  Mr Ho submitted that this amounts to a fresh cause of action which has accrued after the present proceedings were commenced at the Labour Tribunal in about April 2017.  It is well-established that a statement of claim cannot be amended, without the defendant’s consent, where the effect of the amendment is to add a cause of action which accrued since the issue of the writ: Wing Siu Co Ltd v Goldquest International Ltd (No 1) [2002] 4 HKC 408 at para 22, per Ma J.

42.I accept that submission.  The outcome is that in respect of the fresh cause of action, a new action is needed in any event.

43.To sum up, this is the plaintiff’s second attempt to put together a proper piece of pleading so that the action can be proceeded with smoothly and efficiently.  However, the draft re-amended statement of claim still falls far short of the basic requirements of pleadings.  It is therefore vexing, frivolous and embarrassing.  As a matter of discretion, leave ought not to be granted to the plaintiff to proceed with the proposed amendments.

Order

44.I dismiss the appeal and the plaintiff’s application to amend the amended statement of claim.  The action therefore do stand dismissed.

( Discussion re costs )

45.I order that the defendant do have costs of the appeal and the plaintiff’s amendment application, with certificate for counsel.  The above costs, together with the costs thrown away by the adjournment of the last hearing, be summarily assessed in the sum of $140,000, payable by the plaintiff on or before 23 November 2018.

46.My brief reasons are as follows.  Costs should follow the event.  Both the amended statement of claim and the re-amended statement of claim are lengthy documents.  They are difficult to read.  Much time was required to go through them.  The number of hours spent by the defendant is therefore justifiable.

47.The plaintiff asks for payment of costs be in instalments but has not provided any ground or reason.  Therefore, the request is refused.  But I have given 14 more days than what the rules prescribe for the plaintiff to pay the assessed costs.

The plaintiff was not represented and appeared in person

Mr B K Ho, instructed by SSW & Associates, for the defendant