Chan Chun Chuen v. Kao, Lee & Yip (A Firm)

CAMP 133/2018

[2019] HKCA 170

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 133 OF 2018

(ON AN INTENDED APPEAL FROM HCA NO 597 OF 2015)

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J U D G M E N T

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Hon Kwan JA (giving the judgment of the Court):

1.On 12 October 2017, Deputy High Court Judge Anson Wong, SC handed down his decision (“the Decision”) allowing in part the defendant’s application to strike out a part of the statement of claim. He ordered that the words “(in particular via Mr Yip Wan Tak) concluded orally in or around mid‑1993” in §4 of the statement of claim[1] be struck out, on the ground of abuse of process in that the case advanced by the plaintiff in that part of the pleading ordered to be struck out is “fundamentally inconsistent with and diametrically opposite to” the position adopted by the plaintiff in previous proceedings for judicial review, namely, HCAL 76/2010 (“the JR Application”).

2.The defendant sought leave to appeal to the Court of Appeal against the Decision contending that the whole of §4 of the statement of claim should be struck out so as to include the further or alternative allegation of an agreement “inferred from conduct between the Plaintiff and the Defendant (in particular via Mr Yip Wan Tak) since around mid‑1993”.  By his decision given on 27 August 2018, the judge refused leave to appeal (“the Leave Decision”).

3.The defendant issued the present summons on 10 September 2018 to renew its leave application before the Court of Appeal.

4.Having considered the papers, we have decided to exercise the power under Order 59 rule 2A(5)(a) of the Rules of the High Court to determine this application on paper without an oral hearing.

5.For the background matters to the striking out application, they are set out in some detail in the Decision in §§1 to 20.  We do not propose to repeat them here.

6.The legal principles for granting leave to appeal and the exercise of the summary powers to strike out are well established.  Leave would not be granted unless the court is satisfied that the intended appeal has a reasonable prospect of success, or there is some other reason in the interests of justice that the matter should be heard by the Court of Appeal.  The power to strike out a pleading is exercised only in plain and obvious cases.  Disputed facts are to be taken in favour of the party sought to be struck out.  And if the court does not think the matter to be plain and obvious, striking out will not be ordered.

7.The grounds of appeal in the draft notice of appeal annexed to the present summons are the same as those placed before the judge.  They have been considered by him and dealt with in the Leave Decision.

8.As mentioned earlier, the main ground of appeal in the intended appeal is that the judge had erred in law and in principle in not striking out the other allegation that there was an agreement between the parties “inferred from conduct” over a period of time since around mid‑1993.

9.It was specifically noted by the judge in the Decision (at §43) that the defendant’s counsel, Ms Eu, SC[2], “does not suggest” that the above plea “runs contrary to the Plaintiff’s case in the JR Application”.  In support of this, the judge had quoted the written submission of Ms Eu and Mr Lam (at §13), in which they set out the pleas in the statement of claim that are said to run directly contrary to the plaintiff’s case in the JR Application.  This was in turn based on the 5^th affidavit of Yeung May May Betty, filed by the defendant in support of the striking out application (at §17).  It is a compelling inference, and we agree with the judge, that the plea about an agreement to be inferred from conduct was “deliberately omitted” from §17 of the supporting affidavit[3].

10.The judge had also said in the Decision (at §43) that “Ms Eu is plainly right in not making such suggestion [that the alleged agreement to be inferred from conduct is directly contrary to the plaintiff’s case in the JR Application] since … reference was in fact made to the existence of the Informal Arrangement in the JR Application.”

11.In raising this contention in the intended appeal, the defendant is in effect seeking to retract from its previous position.

12.The judge does not think it is open to the defendant to appeal against the Decision so as to strike out an allegation it had chosen not to pursue.  We agree entirely with the judge[4]. Where the basis of striking out is that the position adopted in present proceedings is “diametrically inconsistent” with the case adopted in previous proceedings, it is incumbent on the applicant to identify with clarity specifically which parts of the pleading are said to be so inconsistent.  It is no answer at all to say that the summons seeks to strike out the entirety of the statement of claim, or that another part of the supporting affidavit mentioned the Informal Arrangement referred to in the JR Application, or that parts of the skeleton submissions of both parties deployed before the judge covered the Informal Arrangement.  There is no getting away from §17 of the supporting affidavit and §13 of the defendant’s skeleton argument that the defendant had stated clearly that the “relevant pleas … which run contrary to the Plaintiff’s case in the judicial review proceedings” are only in respect of the alleged oral agreement made in or around mid-1993, and had deliberately excluded the other allegation concerning the agreement to be inferred from conduct.

13.In the circumstances, we do not think it unfair to hold the defendant to the basis it has chosen to rely on to mount the strike out application.  This is sufficient to dispose of the intended appeal.

14.In any event, even if the defendant were to be permitted to raise on appeal a new basis to strike out the statement of claim (notwithstanding it was deliberately not pursued first time round), we are firmly of the view that this has no merit.

15.Mr Lam submitted that the Informal Agreement cannot amount to an agreement as pleaded because the plaintiff is bound by his position in the JR Application that there was “no retainer”.  We do not think it is plain and obvious, as a matter of law, an assertion that there was no retainer must mean that there was no agreement of any kind, notwithstanding the reference to the Informal Arrangement (which was supported by evidence) in the JR Application.  Besides, as rightly pointed out by Ms Po Wing Kay[5], the existence or lack of an agreement between the plaintiff and the defendant was just not the focus of the JR Application.  The plaintiff’s position was quite simply that the Informal Arrangement did not result in his receiving the notices of tax assessment.  We think there is much to be said for Ms Po’s submission[6] (and reject Mr Lam’s submission to the contrary) it was not argued by the plaintiff in the JR Application that the Informal Arrangement did not amount to any agreement.

16.Ultimately, whether the effect of the Informal Arrangement did or did not constitute a legally binding agreement would depend on a number of factual matters, and that could only be resolved properly after trial.  The judge is plainly correct in taking the view[7] that the alleged agreement to be inferred from conduct ought not form part of the basis to strike out.

17.The other grounds of the intended appeal relate to striking out §§5 to 8 of the statement of claim as a consequential order, alternatively to direct an amendment of these paragraphs so as not to rely on any matters liable to be struck out for abuse of process.  They are premised on the striking out of the whole of §4.  We do not find it necessary to deal with them.

18.For all the above reasons, we decline to grant leave to appeal as the intended appeal clearly has no reasonable prospect of success, nor is there any other reason why it should be heard in the interests of justice.

19.Further, as this application is entirely without merit, we make a further order under Order 59 rule 2A(8) that no party may under rule 2A(7) request the determination to be considered at an oral hearing inter partes.

20.There is no reason why costs of this application should not follow the event.  We make an order nisi the defendant should pay the plaintiff’s costs of this summons.  We have considered the plaintiff’s revised statement of costs for summary assessment.  We bear in mind the application for leave to appeal was made to the judge on the same grounds, although the plaintiff is represented by different counsel in this application. We reduce the amount of reasonable costs from $94,402 to $79,902.

21.The costs order nisi and gross sum assessment will be made absolute if no application for variation is made by any party within 14 days of the handing down of this judgment.

Written submissions by Ms Wing Kay Po and Mr Acorn Lau, instructed by Bough & Co, for the Plaintiff (Respondent)

Written submissions by Mr Justin Lam, instructed by P C Woo & Co, for the Defendant (Applicant)