Lau Siu Lun v. Glory Sky Precious Metals Ltd and Others

DCCJ 2061/2019

[2021] HKDC 1582

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2061 OF 2019

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DECISION

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INTRODUCTION

1.There are two matters before this court:

(1) the 1^st defendant’s appeal against a Master’s order dated 26 April 2021 (“the 1^st defendant’s Appeal”)

(2) the 1^st defendant’s summons filed on 20 May 2021 (“the 2^nd Summons for Judgment”).

2.Both matters concern the adequacy of the further and better particulars provided by the plaintiff in relation to his Reply to the 1^st defendant’s Defence.

BACKGROUND

3.Before I consider the merits of the 1^st defendant’s Appeal and the 2^nd Summons for Judgment, it would be helpful if the relevant background is set out in the first place.

The Pleadings

4.I will first of all briefly summarise the pleaded case of the plaintiff and the 1^st defendant respectively below, so that the matters to be dealt with in this Decision will be more easily understood.[1]

5.In the Statement of Claim, the plaintiff alleged, among other things, that:

(1)     He had opened an investment account with the 1^st defendant (“the plaintiff’s Account”) upon the introduction of the 2^nd defendant;

(2)     The plaintiff came to know the 3^rd defendant upon the introduction by the 2^nd defendant;

(3)     The 2^nd and 3^rd defendants represented that they were knowledgeable and/or had expertise in the trade of precious metals;

(4)     The 1^st, 2^nd and 3^rd defendants had benefitted from a number of unauthorised transactions and/or by managing the plaintiff’s Account in charging the plaintiff administrative and/or similar fees and earning potential commission upon generating profit in respect of the Account;

(5)     As a result of mismanagement of the plaintiff’s Account, the 2^nd and 3^rd defendants were in breach of their fiduciary duties owed to the plaintiff;

(6)     The 1^st defendant was in breach of its fiduciary duties owed to the plaintiff in, among other things, failing to supervise the 2^nd and 3^rd defendants;

(7)     The 1^st defendant was in breach of its implied contract with the plaintiff in ensuring that the plaintiff’s Account would be managed with reasonable skill and care and that reasonable and sound advice in relation to the trade of precious metals would be provided to the plaintiff;

(8)     The plaintiff had suffered loss and damage in the sum of HK$230,000.

6.In its Defence, the 1^st defendant alleged, among other things, that the 2^nd defendant had been appointed by the plaintiff as the authorised person by virtue of a letter of authorisation dated 11 August 2017, pursuant to which the 2^nd defendant was given full power and authority to act for the plaintiff in the purchase and sale of metals by using the plaintiff’s Account at the plaintiff’s own risk, and that the loss and damage suffered by the plaintiff was trading loss which the plaintiff should be wholly responsible for himself.  It was further pleaded that it was the plaintiff who provided the 2^nd defendant with the User ID and password in respect of the plaintiff’s Account, and any use or misuse of the said User ID and password was governed by terms and conditions, which stipulated, among other things, that if the buying/selling orders were placed by the 2^nd defendant or anyone else by using the User ID and password, the plaintiff would be solely responsible for all the liabilities resulted therefrom.

7.In his Reply to the 1^st defendant’s Defence, the plaintiff alleged, among other things, that:

(1)     He had made a report to the police against the 1^st, 2^nd and 3^rd defendants on 7 September 2018 (“the Police Report”)[2], and the said report “contained all the details of the 1^st defendant’s business”[3];

(2)     He found out from the Commercial Crime Bureau of the Hong Kong Police Force that all the transactions carried out by the 1^st defendant were a scam;

(3)     The 2^nd defendant had acted mala fide and did not act in accordance with the instructions of the plaintiff. Therefore, all transactions carried out were not binding on the plaintiff.

The 1^st defendant’s requests for Further and Better Particulars (“FBP”)

8.By letter dated 9 February 2021, the 1^st defendant’s solicitors made a request for FBP of the Reply to the 1^st defendant’s Defence filed by the plaintiff.  A total of 16 requests was made.  They were basically about the plaintiff’s allegation that the whole thing about the operation of the plaintiff’s Account was a scam.

9.By letter dated 18 February 2021, the plaintiff’s former solicitors (Messrs. Chan & Tsu) purportedly answered the said requests (“the 1^st Answer”).  In respect of a number of requests, the plaintiff’s former solicitors simply referred to the Police Report without answering the requests in a self-explanatory way.  The relevant answers are set out in the 2^nd column of the table in the Annex attached hereto.

10.As the 1^st defendant was not satisfied with the 1^st Answer, the it took out a summons for FBP (“the FBP Summons”) on 25 February 2021.

11.The FBP Summons was heard on 18 March 2021. Having heard parties’ submissions, the learned Master took the view that it was inadequate for the plaintiff to answer the 1^st defendant’s aforesaid requests by referring to the Police Report which was of 6 pages’ long.  The learned Master therefore ordered the plaintiff to serve on the 1^st defendant FBP of the Reply to the 1^st defendant’s Defence (requests Nos.3 to 12 and 16 only) within 7 days (“the Initial FBP Order”).

12.On the following day, the plaintiff’s former solicitors purportedly answered the 1^st defendant’s aforesaid requests in compliance with the Initial FBP Order by a letter dated 19 March 2021 (“the 2^nd Answer”).  Unfortunately, despite the learned Master’s ruling, the plaintiff’s former solicitors still referred to the Police Report extensively when providing the FBP.  Those answers are set out in the 3^rd column of the table in the Annex attached to this Decision.

13.It should be noted that there were only 17 numbered paragraphs in the Police Report.  Hence, an obvious example of non-compliance is the revised answer given to request No.16 (“Please refer to para 1-17 of the PR for further details”) which in substance is not different from the previous answer (“Please refer to the PR for details”).

14.Attached to the 2^nd Answer was the Police Report together with 18 other pages of documents to which the plaintiff referred in his answers.

15.As the 1^st defendant took the view that the plaintiff had failed to comply with the Initial FBP Order, it applied to dismiss the action by summons filed on 1 April 2021 (“the 1^st Summons for Judgment”).

16.Having heard the 1^st Summons for Judgment, the learned Master made the following orders (“the Subject Orders”):

“1. unless the plaintiff within 14 days from the date hereof files and serves the Answer to the 1^st defendant’s Request for Further and Better Particulars, the plaintiff be debarred from filing and serving the same; and

2. the plaintiff do pay to the 1^st defendant the costs of the application summarily assessed at $700, payable forthwith”

17.The 1^st defendant then filed a Notice of Appeal to Judge in Chambers on 10 May 2021 and asked for the following orders:

“1. the plaintiff having failed or refused to comply with the Order of Master Jocelyn Leung dated 18^th March 2021, this action be dismissed with costs of this action be paid by the plaintiff to the 1^st defendant to be taxed if not agreed;

2. or alternatively, unless the plaintiff do within 7 days from the date of this Order serve upon the 1^st defendant the answers to further and better particulars of the Reply to the Defence of the 1^st defendant herein as requested in questions 3 to 12 and 16 of the letter of Ching & Co dated 9^th February 2021 which answers shall be in full and strict compliance with the provisions under Order 18, rule 12 of the Rules of the District Court, Cap.336H, including Order 18, rule 12(7) thereof, this action be dismissed with costs of this action be paid by the plaintiff to the 1^st defendant to be taxed if not agreed (or any other sanction as the Court may think fit to impose, instead);

3. the plaintiff do pay the 1^st defendant the costs of the Summons filed on 1^st April 2021, on party-party or indemnity basis, having regard to Order 62 rule 7 of the Rules of the District Court, Cap.336H, to be summarily assessed and payable forthwith;

4. further, if appropriate, the costs of the Summons as between the legal representative of the plaintiff and the plaintiff be disallowed, and the legal representatives of the plaintiff be directed to repay to the plaintiff costs which the plaintiff has been ordered to pay to the 1^st defendant as per paragraph 3 above, having regard to Order 62, rule 8 of the Rules of the District Court, Cap.336H;

5. the costs of this appeal be paid by the plaintiff to the 1^st defendant, on party-party or indemnity basis having regard to Order 62, rule 7 of the Rules of the District Court, Cap.336H, to be summarily assessed and payable forthwith; and

6. further, if appropriate, the costs of this appeal as between the legal representative of the plaintiff and the plaintiff be disallowed, and the legal representatives of the plaintiff be directed to repay to the plaintiff costs which the plaintiff has been ordered to pay to the 1^st defendant as per paragraph 5 above, having regard to Order 62, rule 8 of the Rules of the District Court, Cap.336H.”

18.In summary, as far as this appeal against the Subject Orders is concerned, the 1^st defendant is contending that:

(1)     The plaintiff having failed to comply with the Initial FBP Order, the court should either dismiss the plaintiff’s claim forthwith, or alternatively, impose an unless order with a sanction that the plaintiff’s claim be dismissed with costs;

(2)     The 1^st defendant should be awarded costs of the 1^st Summons of Judgment for an amount of more than $700.

19.In the meantime, in purported compliance with the Subject Orders, the plaintiff filed an Answer to the 1^st Defendant’s Further and Better Particulars On the Reply to Defence of the 1^st Defendant” on 7 May 2021 (“the 3^rd Answer”).  The answers which the plaintiff provided are set out in the right-most column of the table in the Annex attached hereto.  54 pages of documents were attached to the 3^rd Answer.

20.On 20 May 2021, the 1^st defendant took out the 2^nd Summons for Judgment, and, among other things, asked for the following order:

“the plaintiff having intentionally and contumeliously failed and refused, to comply with the Orders of Master Jocelyn Leung dated 18 March 2021 and 26 April 2021 (which is now under appeal), this action be forthwith dismissed with costs of this action be paid by the plaintiff to the 1^st defendant to be taxed if not agreed; or alternatively, paragraphs 14, 15, 28 and 45 of the Reply of the plaintiff to the Defence of the 1^st defendant, or the relevant parts thereof, be forthwith struck out, and the plaintiff be debarred from making the same or similar allegations against the 1^st defendant again, in this action”

AUTHORITY OF THE PLAINTIFF’S SOLICITORS

21.Before I deal with the 1^st defendant’s Appeal and the 2^nd Summons for Judgment, I need to say a few words about Messrs. Chan & Tsu’s authority in representing the plaintiff.

22.The 1^st defendant’s Appeal and the 2^nd Summons for Judgment were initially fixed to be heard on 8 September 2021.  The hearing was subsequently vacated as the parties agreed that those matters may be dealt with by way of paper disposal.

23.On 17 August 2021, this court directed, among other things, that:

(1)     The 1^st defendant do lodge and serve its full written submissions on or before 10 September 2021;

(2)     The plaintiff do lodge and serve his full written submissions on or before 8 October 2021;

(3)     The 1^st defendant do lodge and serve its full written submissions in reply on or before 29 October 2021.

24.While the 1^st defendant did lodge its full written submissions on 10 September 2021 pursuant to the aforesaid directions, the plaintiff did not lodge any submissions by 8 October 2021.

25.By letter dated 8 November 2021, Messrs. Chan & Tsu informed the court that:

(1)      Mr Chan Chi Man Oliver was the solicitor assigned by the Director of Legal Aid to act for the plaintiff herein;

(2)     Mr Chan had left Hong Kong on 31 July 2021, “leaving all the documents and files thereof unattended”;

(3)     Messrs. Chan & Tsu had spent a lot of time sorting out documents and correspondences from Mr Chan’s files.  As the court’s directions dated 17 August 2021 had been misplaced, those directions were not complied with;

(4)     Mr Chan had just returned to Hong Kong on 6 November 2021.

26.Attached to the said letter was a 2-page written submission.  By the said letter, Messrs. Chan & Tsu sought the court’s indulgence in allowing the plaintiff to lodge the same out of time.

27.What Messrs. Chan & Tsu did not do was to draw the court’s attention to the fact that a Notice of Discharge dated 1 November 2021 had been filed by the Director of Legal Aid (“the Director”) on 4 November 2021, pursuant to which the Director gave notice that the Legal Aid Certificate dated 11 January 2019 issued to the plaintiff has been discharged on 1 November 2021.

28.Regulation 9 of the Legal Aid Regulations (Cap.91A, Laws of Hong Kong), provided, among other things, that:

“(1) Subject to the provisions of this regulation, a person whose certificate is revoked shall be deemed never to have been an aided person in the proceedings to which the certificate related, and a person whose certificate is discharged shall, from the date of discharge, cease to be an aided person in these proceedings.

(2) Upon receipt by him of notice of revocation or discharge of a certificate by the Director or upon revocation or discharge of a certificate by the court, the retainer of any solicitor and counsel acting for the aided person in proceedings to which the certificate relates shall forthwith determine.

(3) Upon determination of proceedings under this regulation –

(a) the costs of the proceedings to which the certificate related, incurred by or on behalf of the person to whom it was issued, shall, as soon as practicable thereafter, be taxed or, as the case may be, assessed in accordance with the provisions of these regulations;

(b) the Director shall remain liable for the payment of any costs so taxed or assessed.

(4) – (10) […]”

29.When Messrs. Chan & Tsu’s attention was drawn to the said Regulation 9(2), it was contended by Messrs. Chan & Tsu by letter dated 15 November 2021, among other things, that:

“[…] Before the discharge of the legal aid certificate of the Plaintiff (“P”) was issued, a Notice of Appeal was made by the 1^st Defendant (“D1”) on 10^th May 2021 to which an issue of costs claimed by D1 is related. Pursuant to the Regulation 9(3)(b) of [Legal Aid Regulations], the Director of Legal Aid (“DLA”) shall remain liable for costs even after the discharge of legal aid certificate.

Since DLA is still liable for costs incurred/claimed on or before discharge of P’s LA’s certificate, it is justified to grant leave for P to lodge and serve a written submission as per the draft attached to our letter on 8 November 2021.

In this regard, we humbly pray this Honourable Court to grant a retrospective leave for P to lodge and serve the said written submission. […]”

30.The Director was then invited to comment on Messrs. Chan & Tsu’s letter dated 15 November 2021.   By letter dated 26 November 2021, the Director expressed his views as follows:

“[…] Pursuant to Regulation 9(2) of the Legal Aid Regulations, upon receipt of the notice of discharge of a certificate, the retainer of the solicitor and counsel acting for the aided person in the proceedings to which the certificate relates shall forthwith determine. Given the legal aid certificate of the Plaintiff was discharged on 1^st November 2021, the retainer of Messrs. Chan & Tsu shall cease on 1^st November 2021. The Director has given no authority to Messrs. Chan & Tsu to further act for the Plaintiff after 1^st November 2021 and shall not be liable for any costs arising out of such conduct.”

31.I am in no doubt that the Director is correct when he stated that Messrs. Chan & Tsu no longer had any authority to represent the plaintiff herein since the date of discharge of the legal aid certificate. 

32.I will therefore disregard the written submissions lodged by Messrs. Chan & Tsu allegedly for and on behalf of the plaintiff on 8 November 2021.

APPEAL AGAINST MASTER’S DECISION – THE APPROACH

33.It is well established that an appeal brought against Master’s decision is dealt with by way of an actual rehearing of the application which led to the order under appeal, and the judge treats the matter as though it came before him for the first time.  The judge will give the weight it deserves to the previous decision of the Master, but he is in no way bound by it.  The judge in chambers is in no way fettered by the previous exercise of the Master’s decision. (Hong Kong Civil Procedure 2021, Volume 1, paragraph 58/1/2).

34.However, if the appeal is made against a costs order made by Master, then the appeal would not be dealt with by an actual rehearing of the matter, for it is trite that a judge in chambers will not allow an appeal from a Master’s costs order unless it is unreasonable or the Master had erred in law.[4]

THE 1^ST DEFENDANT’S APPEAL ON THE SUBSTANTIVE ORDER

35.The 1^st defendant contended that since the plaintiff had failed to provide proper FBP pursuant to the Initial FBP Order, the court should dismiss the action forthwith, or alternatively, make an unless order against the plaintiff with the sanction that the action be dismissed, or any other sanction as the court sees fit.

36.It is trite that allegations of fraud must be pleaded distinctly and with the utmost particularity.  In any event, the plaintiff has not appealed against the Initial FBP Order.  He is therefore obliged to comply with it. 

37.Therefore, the first question is: Was the Initial FBP Order complied with by the plaintiff by virtue of the 2^nd Answer?

38.I have no hesitation in coming to the view that it was not.  FBP are part of the pleadings.  In Kwok Chin Wing v 21 Holdings Ltd [2013] 16 HKCFAR 663, Chief Justice Ma had the following to say in paragraph 21 of the Reasons for Judgment:

“It should by now really be quite unnecessary to issue yet another reminder on the rationale behind pleadings. The basic objective is fairly and precisely to inform the other party or parties in the litigation of the stance of the pleading party (in other words, that party’s case) so that proper preparation is made possible, and to ensure that time and effort are not expended unnecessarily on other issues:- Wing Hang Bank Limited v Crystal Jet International Limited [[2005] 2HKC 638, at 643G-H (para 6(1))]. It is the pleadings that will define the issues in a trial and dictate the course of proceedings both before and at trial. Where witnesses are involved, it will be the pleaded issues that define the scope of the evidence, and not the other way round. In other words, it will not be acceptable for unpleaded issues to be raised out of the evidence which is to be or has been adduced. As the Court of Appeal remarked in Wing Hang Bank Limited v Crystal Jet International Limited:

“(2) In a trial, particularly where evidence is given by witnesses, it becomes extremely important that each side knows exactly what are the live issues. Where issues are sought to be introduced that have not been adequately or properly pleaded, amendments must be sought unless the consent of the other party or parties has been obtained. It will simply not do for unpleaded issues to be ‘slipped in’ when evidence is being given in the hope that the other side is not sufficiently alert to object.”

39.The learned Chief Justice continued in paragraph 23:

“The purpose of pleadings, in clearly and unambiguously setting out the true extent and nature of a dispute not just for the benefit of the parties but also for the Court in managing and trying cases, remains important under our system of civil justice. The retention of the old rules as to pleading as well as the introduction of new provisions over four years ago under the Civil Justice Reform, reinforce this.”

40.What is important is that each party’s case should be set out in a clear and unambiguous way.  It is therefore unacceptable for the plaintiff to keep referring to other documents in the 2^nd Answer without replying to the requests for FBP directly.  The 1^st defendant is not supposed to find out the plaintiff’s case in this way, particularly when the plaintiff’s case in this regard is that the whole thing was a scam.  This is a very serious allegation.

41.Now that the 2^nd Answer has not been prepared in compliance with the Initial FBP Order, what should be the consequence?

42.While I am not at all impressed by the way this case was handled by the plaintiff’s former solicitors, I am of the view that it would be too drastic if the plaintiff’s claim is dismissed right away. 

43.I agree with the learned Master that an unless order should be imposed in the circumstances.  It can be seen from the transcript of the hearing held on 18 March 2021 that the learned Master had stated clearly that it is inadequate to refer to the Police Report when FBP are purportedly provided.  The argument made by the plaintiff’s former solicitor that it is clear enough to refer to such a report and to a letter of the CCB had also not been accepted (otherwise the learned Master would not have made the Initial FBP Order).  An unless order is therefore justified.

44.However, with greatest respect, I do not agree that the sanction of the unless order should be the prohibition on the part of the plaintiff to file and serve such particulars.  This is because, judging from the way the 1^st Answer and the 2^nd Answer were prepared, this is exactly what the plaintiff wanted – not to give the particulars, or at least not in a direct way.

45.What sanction should be imposed then?

46.In this regard, the court has to bear in mind the concept of proportionality.  In Schenker International (HK) Limited v Natural Dairy (NZ) Holdings Limited [2014] 1 HKLRD 274, Deputy High Court Judge Le Pichon held that:

“49. The concept of proportionality is a relevant consideration in circumstances where the court is minded to sanction a party for breach or non-compliance with the rules and court orders. The sanction has to be commensurate with the gravity of the ‘crime’. In Husband’s of Marchwood v Drummond Ltd [1975] 1 WLR 603, Russell LJ considered (at 606 G-H) that a condition requiring the defendants to pay the balance of the claim into court or be barred from defending the action because they had failed to comply with the discovery order to be “something which is quite inappropriate, in the sense that it is a punishment which does not fit the crime.”

50.  Proportionality of the sanction is a weighty factor in the weighing exercise to be undertaken on a fresh exercise the discretion: see per Fok JA in Daimler AG at §§ 57 et seq.”

47.Taking proportionality into account, I hold the view that the sanction for non-compliance with the Initial FBP Order should not be the dismissal of the plaintiff’s claim. This is because the plaintiff’s plea on the “scam” only appeared in the Reply to the 1^st defendant’s Defence and was not pleaded as part of the plaintiff’s causes of action.  It would be more appropriate if the consequence of non-compliance is restricted to the striking out of those parts of the Reply in respect of which FBP were sought.

48.I will therefore set aside paragraph 1 of the order made by the learned Master on 26 April 2021 and make an unless order with the aforesaid consequence in the event of non-compliance on the part of the plaintiff.

49.For the avoidance of doubt, I should make it clear that the unless order to be made herein is not a “time order”, but requires the plaintiff to provide full and proper FBP in response to requests Nos.3 – 12 and 16 made by the 1^st defendant by its solicitors’ letter dated 9 February 2021.

50.There are three more matters which I should consider in the light of the relatively complicated scenario caused by the discharge of the legal aid certificate, namely:

(1)     How should the plaintiff be notified about the unless order which is imposed by virtue of this Decision;

(2)     How much time should be given to the plaintiff in complying with the unless order; and

(3)     Whether the unless order should include a requirement that the Answer to be provided shall be in compliance with Order 18 rule 12(7) of the Rules of the District Court (Cap.336H) (“RDC”).

51.On the first matter, as aforesaid, the retainer of Messrs. Chan & Tsu had been terminated on 1 November 2021.  Be that as it may, the plaintiff has not filed any Notice to act in person so far.  There is therefore no address on which the unless order may be served upon him.

52.In these circumstances, until the plaintiff has filed a Notice to act in person (by himself) or a Notice to act (by his newly appointed solicitors), I think the only feasible way by which the plaintiff may be informed about the unless order made herein is for the plaintiff’s former solicitors, Messrs. Chan & Tsu, to notify him.  Messrs. Chan & Tsu had been the plaintiff’s solicitors in the present action since this action was commenced on 26 April 2019.  There is reason to believe that Messrs. Chan & Tsu had been in contact with the plaintiff all along, and that they would have the means to contact the plaintiff.  Hence, by delivering the unless order to Messrs. Chan & Tsu, such an order would come to the notice of the plaintiff in all reasonable probability.

53.On the second matter, the 1^st defendant suggested that in the event an unless order is made, only 7 days should be given to the plaintiff for compliance. 

54.In my view, if this court is to impose an unless order upon the plaintiff, such an order has to be a meaningful one, in the sense that, assuming that the plaintiff is minded to comply with such an order, adequate time would be given to the plaintiff to do so, otherwise, it would be unfair to the plaintiff.

55.In fixing the time to be allowed for compliance, I take into account the fact that the plaintiff has just lost his legal representative in Messrs. Chan & Tsu.  It may take time for him to appoint another firm of solicitors, if he is minded to do so.  If he is not going to engage any solicitor in the handling of the case for him, it will be quite a task for him to draft the particulars himself.   

56.On the other hand, the court should not be over-generous, otherwise the 1^st defendant would be prejudiced in having to wait for a long time before further progress in the present case can be made.

57.Taking all the circumstances into account, I would allow the plaintiff 21 days to comply with the unless order imposed herein.  Such time shall begin to run upon the service of the perfected order herein on the plaintiff, which may be effected on him, his newly appointed solicitors, or Messrs. Chan & Tsu, as the case may be, depending on whether a Notice to act in person (by himself) or a Notice to act (by his newly appointed solicitors) has been filed.  The date of service of the sealed order rather than the date of service of this Decision is chosen as the reference point of time because it may be difficult for the plaintiff, if he acts in person, to realise that the court has made an unless order against him by virtue of this Decision which is more than 30 pages long (including the Annex).

58.On the third matter, the 1^st defendant asks this court to include as part of the unless order that there be strict compliance with Order 18 rule 12(7) of the RDC which provides that:

“Where particulars are given pursuant to a request, or order of the Court, the request or order shall be incorporated with the particulars, each item of the particulars following immediately after the corresponding item of the request or order.”

59.The 1^st defendant further relies on paragraph 18/12/67 of Vol.1, Hong Kong Civil Procedure 2021, which states that:

“If the particulars are not contained in the pleading, but are served separately, either under request or order, they become part of the pleadings, and should be served as a formal document in the same way as a pleading, with the title of the action and the description of the document, and not in the form of a letter.” (emphasis of the 1^st defendant’s solicitors)

60.I am not minded to include the reference to Order 18 rule 12(7) of the RDC in the unless order for the following 2 reasons:

(1)     While the 1^st Answer and the 2^nd Answer were provided by way of letters issued by the former solicitors of the plaintiff, the 3^rd Answer filed on 7 May 2021 was in the form of a formal court document as required by the said rule (even though each item of the particulars did not follow immediately after the corresponding item of the request);

(2)     More importantly, now that the plaintiff’s legal aid certificate had been discharged, it is possible that he would be acting in person, and in such a case, he would be preparing the Answer to the Requests for FBP himself.  I consider that so long as he will provide full and proper FBP pursuant to the unless order, no sanction should be imposed on him for his failure to follow the specific format strictly. 

THE 2^ND SUMMONS FOR JUDGMENT

61.It may be recalled that, in purported compliance with the Subject Orders, the plaintiff had filed the 3^rd Answer on 7 May 2021.  However, as can be seen from the right-most column of the table in the Annex attached to this Decision, the plaintiff still failed to give proper FBP therein in directly stating the particulars, but referred to a large number of documents. 

62.By reason thereof, the 1^st defendant took out the 2^nd Summons for Judgment, and argued that since the plaintiff had intentionally and contumeliously failed and refused to comply with the Initial FBP Order and the Subject Orders, this action should be dismissed forthwith with costs, or alternatively, paragraphs 14, 15, 28 and 45 of the Reply of the plaintiff to the Defence of the 1^st defendant, or the relevant parts thereof, be struck out, and the plaintiff be debarred from making the same or similar allegations against the 1^st defendant again in this action.

63.From the transcript of the hearing held on 26 April 2021, it can be seen that Mr Oliver Chan once again argued that the plaintiff had already complied with the Initial FBP Order.  It is clear that, by making the unless order, the learned Master did not agree with his argument.  Indeed, the learned Master referred to what had been said in the hearing on 18 March 2021, and expressed clearly that it is not enough for the plaintiff to refer to documents when providing particulars.  Yet, there was no improvement in the 3^rd Answer.  I agree with the 1^st defendant’s solicitors that there had been intentional and contumelious breach of the Subject Orders on the part of the plaintiff.

64.Be that as it may, I do not think it is fair for the court to dismiss the action right away.  Firstly, this consequence is disproportionate to the breach committed by the plaintiff.  Secondly, there had never been any warning given to the plaintiff or his former solicitors that the plaintiff’s claim would be dismissed in the event of non-compliance of any of the orders for FBP. 

65.Therefore, I am of the view that one last chance should be given to the plaintiff.  An unless order along the line which I have discussed above should be made.

THE 1^ST DEFENDANT’S APPEAL ON COSTS

66.The learned Master ordered the plaintiff to pay the 1^st defendant’s summarily assessed costs in the sum of $700 for the hearing held on 26 April 2021, which was a call-over hearing.  The learned Master also refused to make a wasted costs order against the plaintiff’s former solicitors.

67.As mentioned above, a Judge in Chambers would not allow an appeal from a Master’s costs order unless it is unreasonable or the Master had erred in law.

68.This principle is applicable herein even though I have set aside the Master’s unless order and replace it with another one, because the only difference between the two orders is on the sanction to be imposed in case of non-compliance.  I do not think this court should exercise its discretion on costs afresh in relation to the 1^st Summons for Judgment and the hearing held on 26 April 2021.

69.As the 1^st defendant has not made any submission on why it is said that the learned Master’s costs order is unreasonable nor in what way she had erred in law, I would dismiss the 1^st defendant’s appeal on costs.

ORDER

70.By reasons of the aforesaid, I order, in respect of the 1^st defendant’s Appeal and the 2^nd Summons for Judgment, that:

(1)     Paragraph 1 of the learned Master’s order dated 26 April 2021 be set aside.

(2)     Unless, within 21 days of the service of this order effected pursuant to sub-paragraph (3) below, the plaintiff files and serves the Answer to Nos.3 – 12 and 16 of the 1^st defendant’s Request for Further and Better Particulars of the Reply to the 1^st defendant’s Defence (“the Reply”) made by virtue of Messrs. Ching & Co’s letter dated 9 February 2021 and provides full and proper particulars thereof, the following parts of the Reply be struck out forthwith:

(i)     Paragraph 14: “The Plaintiff had learned from various media that the London Gold investment was a scam as revealed by CCB in 11.7.2018”;

(ii)     Paragraph 15: “and the Plaintiff avers that the 2^nd Defendant had acted in mala fide and contravention with the intention of the Plaintiff.  Therefore, all the transactions carried out were not binding on him.”

(iii)     Paragraph 28: “However, the Plaintiff later on found out that, from CCB’s revelation, all the London Gold investments carried out by the 1^st Defendant were a scam.”

(iv)     Paragraph 45: “and the Plaintiff avers that he had found out from the Media revealed by CCB that all the London Gold investments carried out by the 1^st Defendant were a scam.”

(3)     The service of this order on the plaintiff shall be effected by, and the time under sub-paragraph (2) above shall begin to run from the date of:

(i)     If a Notice to act in person has been filed by the plaintiff, the 1^st defendant serving the sealed order herein on the plaintiff at the address as stated in the said Notice;

(ii)     If a Notice to act has been filed by his newly appointed solicitors, the 1^st defendant serving the sealed order herein on the plaintiff’s newly appointed solicitors; or

(iii)     If neither a Notice to act in person nor a Notice to act has been filed, the 1^st defendant serving the sealed order herein upon the registered address of Messrs. Chan & Tsu, the former solicitors acting for the plaintiff in this action.

(4)     The 1^st defendant’s appeal against paragraph 2 of the learned Master’s order dated 26 April 2021 be dismissed.

COSTS

71.I make a costs order nisi that the plaintiff shall bear the 1^st defendant’s costs of the 1^st defendant’s Appeal and the 2^nd Summons for Judgment on party-and-party basis.  The plaintiff’s own costs (up to the discharge of the legal aid certificate) shall be taxed in accordance with the Legal Aid Regulations.

72.While the 1^st defendant’s appeal against the costs order made by the learned Master (paragraph 2 of the order dated 26 April 2021) has been dismissed, I do not think it should have any bearing on the 1^st defendant’s entitlement on its costs of the appeal, because the 1^st defendant has made no submission at all on the appeal on costs. The cost incurred on paragraph 2 of the said order is therefore negligible.

73.The above order nisi shall become absolute in the absence of application to vary (which, if any, shall be made by letter, and will be disposed of on paper) within 14 days after the service of the sealed order on the plaintiff in accordance with the mode of service directed under paragraph 70(3) hereof.

74.The 1^st defendant’s costs shall be summarily assessed in lieu of taxation.  Unless any application for variation of the aforesaid costs order nisi is made within time, the 1^st defendant shall lodge and serve (in accordance with the mode of service directed under paragraph 70(3) hereof) its statement of costs within 7 days after the expiry of the said 14-day period.  The plaintiff shall lodge and serve his statement of objection within 14 days thereafter.  Summary assessment of the 1^st defendant’s costs of the 1^st defendant’s Appeal and the 2^nd Summons for Judgment will be conducted on paper (no matter whether any statement of objection is lodged by the plaintiff within time) thereafter.  The costs assessed shall be payable by the plaintiff within 14 days after assessment.

75.The 1^st defendant asked that a wasted costs order be made against Messrs. Chan & Tsu, the plaintiff’s former solicitors. 

76.Order 62 rule 8A(4) of the RDC stipulates that:

“An application for a wasted costs order shall not be made or dealt with until the conclusion of the proceedings to which the order relates, unless the Court is satisfied that there is reasonable cause for the application to be made or dealt with before the conclusion of the proceedings.”

77.The 1^st defendant did not address this court on any reasonable cause for the application for wasted costs order to be dealt with at this stage, when the proceedings herein are still ongoing. Indeed, my view is that it is undesirable for the court to consider this application now, since Messrs Chan & Tsu may not be able to defend this application properly without waiver of legal professional privilege on the part of the plaintiff.

78.I would therefore dismiss the 1^st defendant’s application for a wasted costs order, without prejudice to its right to make a fresh application at the conclusion of these proceedings.  

79.Apart from referring to the relevant Order of the RDC, the 1^st defendant did not make any further submission on the wasted costs order.  The cost incurred on this matter is therefore negligible.  I will therefore not deduct any costs which the 1^st defendant is entitled to as ordered above.

Chan & Tsu for the plaintiff (up to 4 November 2021)

Ching & Co for the 1^st defendant

Annex