Tsui Yuen (Formerly Known As Ho Wai Hung) v. Ho Tse Wai, Philip Li & Partners (A Firm) (Formerly Known As Ho, Tse & Wai & Partners)
Read the full judgment text of CACV 57/2020 on BabelCite. This Court of Appeal judgment was delivered on 29 October 2021.
1. On 26 November 2018, a master struck out the plaintiff’s statement of claim in HCA587/2015 on all the grounds under Order 18 rule 19 of the Rules of the High Court and under the inherent jurisdiction of the court (“the master’s Strike-Out order”).
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CACV 57/2020 [2021] HKCA 1613 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO 57 OF 2020 (ON AN APPEAL FROM HCA NO 587 OF 2015) ________________________ BETWEEN
________________________ Before: Hon Yuen, Barma & G Lam JJA in Court Date of Hearing: 21 October 2021 Date of Judgment: 29 October 2021 ________________________ J U D G M E N T ________________________ Hon Yuen JA: Introduction 1.On 26 November 2018, a master struck out the plaintiff’s statement of claim in HCA587/2015 on all the grounds under Order 18 rule 19 of the Rules of the High Court and under the inherent jurisdiction of the court (“the master’s Strike-Out order”). 2.1.The plaintiff wished to appeal the master’s Strike-Out order, but was late by 11 days. On 21 December 2018, he applied to the Court of First Instance (“CFI”) for an extension of time to appeal. The application was heard by M Ng J (“the judge”) on 15 March 2019. 2.2.On 13 June 2019, the judge handed down a 38-page Judgment (“the Judgment”)[1] dismissing the application, not for delay, but because the judge decided that the appeal had no merits[2]. 3.On 3 July 2019, the plaintiff filed a notice of appeal against the Judgment in CACV305/2019 but on 5 August 2019, it was struck out by Kwan VP as the Judgment was interlocutory and leave to appeal had not been obtained. 4.1.Accordingly, on 11 September 2019, the plaintiff issued a summons in the CFI for an extension of time to apply for leave to appeal the Judgment (“the 9.2019 summons”). The application was heard by the judge on 26 September 2019. 4.2.On 4 October 2019, the judge dismissed the 9.2019 summons on the grounds that the intended appeal had no merits and there was no satisfactory explanation for the delay. 5.1.On 11 October 2019, the plaintiff renewed his application for leave to appeal out of time in a summons filed in this court in CAMP257/2019. This court decided to determine the summons on the basis of written submissions only. 5.2.On 23 December 2019, this court[3] handed down judgment giving the plaintiff leave to appeal the Judgment out of time (“the CA Leave Judgment”)[4]]. Accordingly, the plaintiff filed CACV57/2020 on 9 March 2020, and a hearing was fixed before this court on 21 October 2021. 5.3.Ms Sara Tong, counsel for the defendant in this court, took the point in her written submissions that the present appeal was only concerned with the question of whether the plaintiff should have been granted extension of time to appeal against the master’s Strike-out order (and not whether the Strike-out order should be set aside). 5.4.However, as noted above, the Judgment contained a detailed discussion of the merits of the proposed appeal against the Strike-out, and before this court, comprehensive submissions have been filed by the parties’ respective counsel. Even if Ms Tong were correct in her submissions above, it would be a waste of time and costs if the hearing on 21 October 2021 was confined only to a determination of the issue whether an extension of time should have been given. At this court’s invitation, counsel for both parties agreed that the hearing would deal not only with the issue whether the judge should have extended time for the plaintiff to appeal the master’s Strike-out order, but also the proposed appeal against the actual Strike-out order. Factual background 6.The factual background has been extensively recounted in the Judgment, but in view of the arguments before this court, it is necessary to list the following events:
Plaintiff’s claim against the defendant in the Retainer Action 7.1.The plaintiff’s claim against the defendant in the Retainer Action, in a nutshell, is that in breach of contract and negligently, the defendant failed to exercise care and skill when acting as his solicitors in the PI Action in that they:
7.2.The following pleadings in the SOC[21] are relevant to the issues raised before this court:
7.3.On 26 May 2015, the plaintiff provided further and better particulars (“1st FBP”) which included the following statement as particulars:
Question (26) under §23 was as follows:
Answer (26) was as follows:
8.On 6 March 2017, the plaintiff filed a notice to act in person. 9.On 5 April 2017, the parties exchanged witness statements. It is noted that the plaintiff’s witness statement was signed more than 8 months ago (on 27 July 2016) and had apparently been prepared by his former solicitors. It is pertinent to the issues before this court that in §34, the plaintiff stated (translation from Chinese):
10.1.On 5 January 2018, the defendant made a second request for further and better particulars of §28 of the SOC which pleaded “by reason of the matters pleaded from paragraphs (1) to (26) hereinabove, the plaintiff has suffered loss and damages to be assessed”. The request was for:
10.2.Pausing here, the particulars for the claims under the heads of “abnormal disbursements” and “the wife’s exploitation” in §§22-23 respectively had already been provided in Answer (26) of the 1st FBP quoted in §7.3 above. 10.3.On 15 January and 2 February 2018, the plaintiff (acting in person) provided further and better particulars (“2nd FBP”) as follows[22]:
Strike-out application 11.1.On 9 April 2018, the defendant issued a summons to strike-out the Retainer Action. 11.2.On 8 May 2018, the plaintiff filed an affirmation in opposition. In §4, he refers (among other things) to financial exploitation by his relatives. In §§5-6, he refers to the fact that he is not legally represented, and asked for the opportunity to amend his pleadings and supplement his witness statement. 11.3.As mentioned earlier, on 26 November 2018, a master struck out the action, and the matter eventually came before the judge as an application for extension of time to appeal the master’s Strike-out order. The plaintiff was then still acting in person. The judge’s Judgment 12.1.The judge refused an extension of time, not for delay[23], but because the judge considered that the claim had no merits[24]. 12.2.The following summary of the Judgment is taken from Ms Tong’s submissions (“holdings (1) to (5)”):
Appeal 13.1.Following the CA Leave Judgment, DLA assigned legal representatives for the plaintiff who filed a notice of appeal with two broad grounds:
13.2.There was no respondent’s notice. Discussion 14.I shall first discuss the judge’s holding (3). It is well-established in law, and both counsel before this court agree, that a plaintiff needs to show that the defendant’s breach is the effective cause of his loss, and that the loss is not too remote in that the loss is of the type that would be normally anticipated. 15.In §49 of the Judgment, the judge took the view that the loss from the wife’s exploitation was too remote, and it was her act of exploitation (and not the defendant’s breaches) which was the effective cause of the plaintiff’s loss. 16.1.With respect, I disagree. For the purposes of the strike-out application, it must be assumed[25] that the plaintiff was mentally incapacitated at the time when he received the settlement monies in May 2000. In this respect, although Ms Tong sought to argue that the defendant was entitled to rely on Dr Kwok’s report that the plaintiff was “considered to have recovered from mental illness”,
16.2.It is in my view arguable that had the defendant made an updated enquiry in April 2000 and become aware of the plaintiff’s mental incapacity, it should have protected his interests by seeking approval from the court under O.80 r.11 to consider if the proposed settlement was in his best interests; and directions from the court under O.80 r.12 as to how any settlement monies should be invested, applied or dealt with so that they would not be lost, e.g. by his falling victim to exploitation. 16.3.In Reeves v Commissioner of Police of the Metropolis[28], X was placed in police custody. The police were alerted to the risk that he might commit suicide, but a doctor who examined him stated that he showed no signs of any psychiatric disorder or clinical depression. However, X then hanged himself when the police inadvertently left open a flap in the cell door, to which X tied his shirt. X’s estate sued the police for negligence. The commissioner of police argued that since X was of sound mind, his deliberate act of hanging constituted a novus actus interveniens or was volenti. 16.4.The House of Lords held that a deliberate and informed act (in that case, X hanging himself) intended to exploit a situation created by a defendant did not negative causation where the defendant was in breach of a specific duty imposed by law to guard against that very act. 16.5.At p.368, Lord Hoffmann also referred to cases “in which liability has been imposed for causing events which were the immediate consequence of the deliberate acts of third parties [such as the wife] but which the defendant had a duty to prevent or take reasonable care to prevent”. 16.6.The abnormal disbursements made by the plaintiff himself and the subsequent exploitation by the 3rd wife[27] were the very acts that the defendant should have guarded the plaintiff from. As such, it is reasonably arguable that, contrary to holding (3), the wife’s act did not negative the defendant’s breach as the effective cause of the plaintiff’s loss, and the loss was not too remote. 17.1.As for holdings (1), (4), and (5), these are all based on the assumption that the 2nd FBP contained the only or final particulars of loss and damage. With respect, there is no ground for making that assumption. The 1st FBP had provided figures of the loss and damage caused by the abnormal disbursements and the wife’s exploitation pleaded §§22-23. Those particulars were never withdrawn. 17.2.The defendant then made another request of FBP, this time of §28, which pleading includes §§22-23. If the plaintiff had been legally represented, the answer to the request would have said “in addition to Answer (26) in the 1st FBP, [etc]”. Whilst he did not say that in the 2nd FBP, neither did he say anything to give the impression that the 1st FBP were being withdrawn or deleted or superseded. 17.3.In other words, the plaintiff was claiming the figures in the 1st FBP for the heads of damage in §§22-23, and the figures in the 2nd FBP represented what he would have used the settlement monies for, had he obtained court-approved compensation in the higher amounts specified, and had the settlement monies not been disbursed by himself abnormally, or been taken away by his 3rd wife while he was mentally incapacitated. 17.4.At the very least, it could not be said in holding (1) that the SOC was contradicted by, or (in Ms Tong’s words) “inconsistent with”, or “not supported” by, the 2nd FBP. 17.5.As for holding (4), if the 1st FBP are considered together with the 2nd FBP in light of the above, it would be seen that the SOC does provide material facts in support thereof. 17.6.In any event, in respect of holding (5), if the judge considered that the 2nd FBP were unclear (on the incorrect assumption that they superseded the 1st FBP), the plaintiff should have been given an opportunity to clarify himself as to whether he intended the 2nd FBP to supersede the 1st FBP. 18.1.Finally, as to holding (2), first, it can be seen in §34 of the witness statement that the plaintiff did refer to being cheated by others, although he did not identify whom. The defendant could of course administer interrogatories for the identity of the person(s) who the plaintiff claims had cheated him. In fact, in §4 of his affirmation in opposition to the strike-out application, the plaintiff referred to being cheated by his relatives although they were not identified by name. 18.2.Secondly, as for the complaint that the plaintiff’s list of documents did not disclose documents in relation to pecuniary loss and damages, the plaintiff had disclosed in Answer (25) of the 1st FBP that he had an account with the Bank of East Asia, that he had lost the passbook, and that he had withdrawn monies through ATM or at bank counters. If the defendant had wanted these bank records disclosed, an appropriate application could have been made under the discovery procedure. 18.3.Thirdly, it is said that the plaintiff’s witness statement claimed that his loss was his inability to seek a more favourable settlement from HA which was not his pleaded case in the SOC. Whilst it is correct that it was not pleaded in the SOC what figure the plaintiff asserts he should have obtained from the HA in the PI Action, it was pleaded in §26(f) that the defendant had failed to seek court approval of the settlement and the proper costs order. The defendant could have, but did not, request FBP of the specific assessment of damages that the plaintiff claims he could have obtained in the PI Action had the defendant sought court approval. 18.4.It is well-established that a strike-out order is a last resort. This is especially important in a case where it should be assumed that the plaintiff was mentally incapacitated at the time of the settlement and when he received the settlement monies, where the duty of the defendant to the plaintiff is not disputed, where the plaintiff had supplied the 1st FBP but did not have the benefit of legal representation to navigate the second request for FBP, and had asked expressly for an opportunity to amend his pleadings or to supplement his witness statement. 19.1.In light of the above discussion, I take the view that in respect of the 1st ground of appeal, the judge had erred in law, and in respect of the 2nd ground of appeal, that she had failed to properly take the 1st FBP into account. As such, the exercise of discretion in refusing an extension of time to appeal the master’s Strike-out order must be set aside, and considering the matter afresh, an extension of time should have been given for the plaintiff to appeal the master’s Strike-out order, which order should be set aside. 19.2.Having said that, it is clear that the plaintiff’s case would benefit from a thorough review, and it is to be hoped that that can be done expeditiously now that he has been given legal aid. A properly thought out and clearly pleaded claim can only be of benefit to both parties, as well as the court. Order 20.For the reasons set out above, I would allow the appeal, set aside the Judge’s order of 13 June 2019, set aside the master’s Strike-out order of 26 November 2018, and make a costs order nisi that the plaintiff should have the costs of the appeal and of the hearing before the judge and the master. The plaintiff’s costs are to be taxed in accordance with Legal Aid Regulations. Hon Barma JA: 21.I agree. Hon G Lam JA: 22.I agree.
Mr Erik Shum, instructed by WT Law Offices, assigned by the Director of Legal Aid, for the plaintiff Ms Sara Tong, instructed by Howse Williams, for the defendant [2] Judgment, §44. [3] Kwan VP and Yuen JA. [5] SOC in the PI case, §6 (2/315). [6] “HCY-2” (2/329). [7] “HCY-2" (2/330). [8] SOC, §10. [9] SOC, §11. [10] Defence, §18(8) and (9). [11] SOC, §13. [12] SOC, §15. [13] SOC, §17. [14] Further and Better Particulars of the SOC, 26.5.2017, §18. [15] SOC, §21. [16] SOC, §22. [17] SOC, §23. [18] SOC, §§23-24. [19] SOC, §25. [20] SOC, §26. [21] Drafted by counsel, but not Mr Erik Shum who appeared for the plaintiff before this court. [22] Translation taken from affirmation of Ho Chun Yan, Albert filed 9 April 2018, §22, with correction from “defendant” to “defendant’s solicitors” in (5). [23] The judge also found the delay did not cause any substantial prejudice to the defendant: Judgment, §44. [24] Judgment, §44. [25] Ms Tong does not dispute this. [26] SOC, §15. [28] [2000] 1 AC 360. [27] This allegation being assumed to be true. |
Cases cited in this judgment