Yeh Tso Lin v. Leong Siew Tuck and Others

HCA000986/1970

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO. 986 OF 1970

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Coram: Pickering, J.

Date of Judgment: 5th November, 1971.

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JUDGMENT

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1. The four defendants herein seek Further and Better Particulars of the plaintiff's Amended Statement of Claim. The first defendant is represented by Mr. Brook Bernacchi and Mr. Michael Asome and the second, third and fourth defendants by Mr. John Swaine. Mr. Martin Lee appears for the plaintiff.

2. The Statement of Claim, as amended, alleges that the first defendant was the lawful attorney of the Chung Khiaw Bank Limited (hereinafter called The Bank) and was a colleague, confidant and close personal friend of the second defendant, the solicitor advising and acting for the Bank; the third defendant is described as a solicitor employed at the material times by the second defendant as an assistant solicitor; the fourth defendant is said to be the wife of the second defendant.

3. The Amended Statement of Claim goes on to allege that at all material times the plaintiff was a building contractor and that by an Indenture of Mortgage dated 10th of August, 1966 made between the plaintiff of the first part and Kason Engineering and Construction Company Limited of the second part and the Bank of the third part, the plaintiff assigned to the Bank all that one equal undivided 48th part or share of and in all that parcel of ground registered in the Land Office as Section B of Rural Building Lot No. 403 and of and in the buildings thereon known as Sea Cliff Mansion, Nos. 19A, 19B, 19C and 19D Repulse Bay Road, Hong Kong together with a car parking space, to secure banking facilities for the sum of $60,000, with interest, from the Bank to Kason. By an Indenture of Further Charge dated 22nd of July, 1968 the amount of the banking facilities was increased to the sum of $100,000, the premises being charged with that principal sum.

4. It is then recited that by letter dated 24th December, 1969, the second defendant, for and on behalf of the Bank, informed the plaintiff that the Bank would exercise its power of sale under the mortgage and further charge if the principal sum and the interest thereon were not paid within one month from the date of that letter. On the 23rd of January, 1970, the plaintiff, through his then solicitors, Messrs. Seu & Liang, offered or suggested to the second defendant, as solicitor for the Bank, that the said premises be released or discharged from the mortgage and further charge in consideration of the sum of $150,000 to be paid by the plaintiff within one month from the date thereof; the plaintiff claims that he was able to find a purchaser for the premises at the price of $150,000 on the said 23rd January, 1970.

5. By an Assignment dated 24th of February, 1970, the Bank, in the exercise of its power of sale under the mortgage and further charge, assigned or purported to assign the mortgaged premises to the fourth defendant for the sum of $105,000 by way of private sales as opposed to public auction; the plaintiff alleges that in the negotiation and effectuation of the Assignment by the Bank, the second and third defendants acted as the solicitors for both the Bank as vendor and for the fourth defendant as purchaser, and prepared the assignment which, it is alleged, the first defendant entered into as the Attorney of the Bank, such assignment being witnessed by the third defendant who, it is said, was then acting as gent for and in the course of his employment by the second defendant.

6. It is the plaintiff's contention that if the premises had been sold, whether by public auction or private contract, to a person or persons other than the fourth defendant, or her agent or agents, the consideration therefor would have been greater than the $105,000 actually paid; the plaintiff says that the true market value or the fair and reasonable sale-price of the premises, at the date of the sale by the Bank, was $220,000.

7. The narrative, so far as related, covers the first ten paragraphs of the plaintiff's Statement of Claim, and the two summonses before me, are summonses by (a) the first, and (b), the second, third and fourth defendants respectively for Further and Better Particulars of some or all of the four succeeding paragraphs of the Statement of Claim, that is paragraphs 11 to 14 inclusive. Paragraph 11 thereof alleges that the second defendant, as husband of the fourth defendant, was the real or beneficial purchaser of the premises and that the fourth defendant, in her purported purchase of the premises, was acting as the agent or trustee of the second defendant.

8. Paragraph 12 alleges that all four defendants knew or ought to be deemed to have known that the market value of the premises was $220,000, and Paragraph 13 claims that the sale price was not the true market value or not the price of a true or genuine sale. It is contended in Paragraph 14 that the four defendants, fraudulently and/or recklessly and/or unlawfully, conspired and/or combined and/or joined together with the common purpose or intention of suppressing and/or cutting down or otherwise reducing the price of the premises from the mortgage value or the fair and reasonable value or price, to the sale price of $105,000.

9. The plaintiff claims:-

10. By his Summons for Further and Better Particulars, the first defendant seeks such particulars:-

11. Under a similar summons, second, third and fourth defendants, who are not concerned, for this purpose, with Paragraph 11 of the Statement of Claim, seek similar further and Better Particulars of Paragraphs 12 to 14 thereof.

12. In the course of a full day's hearing in chambers many authorities were cited to me. I have considered them all carefully but do not propose here to review them, though I will refer to some of them. I took a full note of the arguments addressed to me and will make that note available to the Full Court should the matter go further.

13. Mr. Lee, for the plaintiff, whilst arguing that Further and Better Particulars of Paragraph 11 of the Statmment of Claim should not be ordered, conceded that such particulars should be supplied by the plaintiff in respect of Paragraphs 12, 13 and 14 but only at a later stage, that is after discovery has taken place. I am unable to accept that argument in regard to Paragraphs 12 and 13 which allege that the defendants knew or ought to be deemed to have known the market value of the premises and that the sale price was not the true market value. These are general allegations as to knowledge of the state of the property market and it is difficult to see how discovery could assist the plaintiff to particularize the source of such alleged general knowledge. I refer also to the case of Fox v. H. Wood (Harrow) Ltd.⁽¹⁾ which is a strong case for saying that particulars of the facts and circumstances from which it is alleged that knowledge ought to have been acquired should be given.

14. Mr. Lee appeared to place some reliance upon Paragraph 7 of the Statement of Claim as indicating that the defendants must have been aware, in January 1970, that the property was worth, at any rate, $150,000.00. This is because on the 23rd January 1970 the plaintiff's then solicitors wrote to the 2nd defendant as solicitor for the Bank, suggesting that the premises be discharged from the mortgage within one month, in consideration of the sum of $150,000.00. Nowhere in that letter, however, was it stated that a purchaser existed at that figure and there was no reason why the Bank, or the 2nd defendant, should have assumed that the money was to come from a sale of the property and not from some extraneous source. Thus Paragraph 7 cannot be regarded as supplying or containing facts from which the defendants ought to have derived knowledge. As it seems to me, and despite the fact that no Statement of Defence has yet been filed, the defendants are entitled at this stage to Further and Better Particulars of Paragraphs 12 and 13 of the Statement of Claim.

15. The situation in regard to Paragraphs 11 and 14, however, appears to me to be different. The former paragraph alleges that the 2nd defendant was the real purchaser of the premises and that his wife, the 4th defendant, acted as his agent or trustee in regard to the assignment thereof. The latter paragraph alleges an unlawful conspiracy between all the defendants to cut down the purchase price of the premises from the true market value. The particulars sought, if they exist, are far more likely to be within the knowledge of the defendants than of the plaintiff. And whilst the defendants are undoubtedly entitled to particulars of what is, in essence, an allegation of fraud, the plaintiff, as it seems to me, is equally entitled in the circumstances of this case, to discovery before being called upon to supply those particulars - and this despite the lack of any affidavit on the part of the plaintiff to the effect that he is unable to supply the particulars sought until after discovery. The need for discovery, as it seems to me, is glaring. The cases of Millar v. Harpar⁽²⁾, Waynes Merthyr Co. v. D. Radford & Co.⁽³⁾ and Ross v. Blakes Motors Ltd.⁽⁴⁾ are all very much in point. In the first of those cases, Bowen L.J., said, in a dictum of great simplicity and equal truth:-

"It is good practice and good sense that where the defendant knows the facts and the plaintiffs do not, the defendant should give discovery before the plaintiffs deliver particulars."

Accordingly I order:-

I will hear counsel as to costs.

Representation:

Martin Lee (Samuel Soo & Co.) for Plaintiff

Bernacchi Q.C. and Asome (Peter Mo & Co.) for 1st Defendant.

J. Swaine (C.P. Lai & Co.) for 2nd, 3rd and 4th Defendants.

(1) 1963 (2) Q.B. 601.

(2) 1888 (38) Ch. D. 110

(3) 1896 (1) Ch. D. 29

(4) 1951 (2) A.E. 689.