Citibank N.A. (Nominees) Ltd and Another v. Deacon Te Ken Chiu

CACV000032/1979

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Coram: Huggins, J.A. and Cons, J.

Date of Judgment: 18 January 1980

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JUDGMENT

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Huggins, J.A. :

1. Two of the Defendants appeal against the dismissal by Yang, J. of an appeal against the refusal of a Registrar to order further and better particulars of the Statement of Claim. The Registrar had ordered particulars of two paragraphs and no appeal was made to the judge in respect thereof.

2. The action relates to a complicated transaction by which the 2nd and 3rd Defendants came to the aid of the Far East Bank Ltd., of which the Plaintiff was the founder and controlling shareholder. The Plaintiff sold 76% of his interest in the Far East Bank to the 3rd Defendant and the remaining 24% to the 1st Defendant, a nominee company in which the Plaintiff and the 3rd Defendant held an equal number of shares and were equally represented on the Board of Directors. The 1st Defendant was to hold that interest in trust for the 3rd Defendant until specified conditions had been fulfilled. They have been fulfilled and it is not in dispute that the Plaintiff is entitled to have the 24% interest conveyed back to him. The dispute relates to the manner in which this is to be done. The 2nd and 3rd Defendants want the 1st Defendant to give back the shares which it holds and then to go into liquidation. The Plaintiff, on the other hand, wants the 1st Defendant to continue in existence and to retain the shares, but subject to his complete control. It is not necessary to go into the details of the consequences to which that might lead: it is sufficient to say that the 2nd and 3rd Defendants are apprehensive that some consequences might prejudice their interest in the remaining 76% of the Far East Bank. Hence their objection. The basis of the Plaintiff's claim is that there is a constructive or resulting trust.

3. The Statement of Claim alleges the execution of several documents and twice states that the Plaintiff will refer to them at the trial for their full terms, true meaning and effect. I must say quite clearly that I agree with Mr. Yorke that this formula has no place in our modern system of pleading. In the days when pleadings were highly technical and prolix and were required to follow set patterns it may have been necessary and permissible to use such a long-stop to avoid the necessity of setting out in full a document the interpretation of which might not be in Issue. Today the formula is inconsistent with 0.18 r.7. If the precise words of the document are material, they must be stated. Otherwise the effect of the document must be briefly stated. It is not necessary, as has been submitted, to use this formula in order to reserve a right to the party pleading to refer to the entire document for the purpose of interpretation. Not only is the formula unnecessary but it tends to be misleading, for it suggests to the other side that the pleader intends to rely in addition upon an effect other than that stated and that he will argue that it entitles him so to do. That is why the present application for particulars is made under paras. 6 and 9. Mr. Yorke concedes that this is not the strongest part of his case and in my judgment there is nothing alleged here of which particulars could be given: there is an irrelevant statement of intention and not a statement of material facts. Accordingly the judge was right to refuse particulars. At the trial the Plaintiff should be compelled to limit himself to the effect of the document specifically pleaded.

4. The substance of the application is in relation to paras. 12 and 19. It is in these paragraphs that the pleader alleges a constructive trust. It is a matter for passing comment that no appeal was made against the order of the judge that particulars be given of the facts relied upon as creating the resulting trust alleged in para. 18 of the Statement of Claim. The Plaintiff contends that it is clear what facts are relied upon as creating a constructive trust. I do not agree. It may not be too difficult to guess what facts are relied upon, but the object of pleading is to define the issues and the Defendants are entitled to insist that any camouflaged bolt-holes there may be are stopped up. The pleader was not unaware of what was required, for in para. 21 of the Statement of Claim he expressly stated that the matters relied upon as entitling the Plaintiff to call upon the 1st Defendant to transfer the 24% interest back to him are contained in preceding paragraphs. I would order that particulars be given as asked.

5. It is suggested that para. 21 may contain a negative pregnant and that the Defendants are entitled to know whether such is intended. As we have seen what the paragraph alleges is that, for the reasons given, the Plaintiff is entitled to call upon the 1st Defendant to transfer back to him the 24% interest. I do not think there can be a negative pregnant in a first pleading, for it is by definition an evasive answer. Quite apart from that, the fact remains that the Plaintiff has not pleaded a call for the transfer of the interest and it will not be open to him at the trial, unless he amends, to allege that a call has been made. This is not a proper subject for particulars.

6. In relation to para. 24 the Plaintiff was in some difficulty. It alleges a breach of contract and the prayer includes a prayer for damages for that breach, although no damage, either general or special, is alleged in the main body of the pleading. Particulars of general damage would not, of course, have been required. It was open to the Defendant to apply to strike out the prayer for damages as being vexatious, but counsel sought to force the Plaintiff's hand in a less aggressive manner. The Plaintiff has not taken the hint and the application has to be decided as it stands. In my view the learned judge rightly held that it was not proper to order particulars of something which has not been alleged. The position now is that without amendment the Plaintiff would not be entitled to damages for this alleged breach of contract and, if leave to amend were sought hereafter, it would have to be considered very carefully whether an amendment would be just.

7. In the result I would allow the appeal but only to the extent of ordering the further and better particulars sought under paras. 12 and 19.

Cons, J. :

8. I agree.

18th January 1980.

Representation:

Yorke, Q.C. & Allman-Brown (Wilkinson & Grist) for Appellants.

Litton, Q.C. & D. Fung (K.K. & Winston Chu) for Respondent.