Chiu Butt York v. Chiu Kwok Lim and Others

Read the full judgment text of HCA 4305/1979 on BabelCite. This High Court CFI judgment.

1. In the two applications before me the defendants seek an order that the plaintiff's statement of claim be struck out under the Rules of the Supreme Court, Order 18, rule 19 and under the Inherent Jurisdiction of the Court. The grounds on which the 1st and 2nd defendants seek to have the statement of claim struck out are twofold namely that (i) it is frivolous and vexatious and (ii) it is otherwise an abuse of the process of the Court. The third defendant bases his application not only on thos

Case No.HCA 4305/1979
Court
High Court CFI
Date
Judge
Case Document
100%Judiciary

HCA004305/1979

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

ACTION NO. 4305 OF 1979.

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BETWEEN    
  CHIU BUTT YORK Plaintiff
  and  
  CHIU KWOK LIM 1st Defendant
  CHIU SZ KAN 2nd Defendant
  CHIU SZE HOI 3rd Defendant

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Coram: Hon. Mr. Justice Macdougall in Chambers.

Date of Judgment: 7th July, 1980.

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JUDGMENT

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1. In the two applications before me the defendants seek an order that the plaintiff's statement of claim be struck out under the Rules of the Supreme Court, Order 18, rule 19 and under the Inherent Jurisdiction of the Court. The grounds on which the 1st and 2nd defendants seek to have the statement of claim struck out are twofold namely that (i) it is frivolous and vexatious and (ii) it is otherwise an abuse of the process of the Court. The third defendant bases his application not only on those two grounds but also on the ground that the statement of claim discloses no reasonable cause of action.

2. The statement of claim alleges that all three defendants have been guilty of misconduct in their capacity as trustees of an entity known as Lun Tak Company (which I will refer to henceforwards as Lun Tak) and that they are not fit and proper persons to continue to act as trustees thereof. The relief sought under the statement of claim is in essence comprised of a claim for inquiries and accounts relating to the affairs of Lun Tak and a claim that the defendants be removed as trustees and some other fit and proper persons be appointed in their place. The statement of claim also seeks ...(illegible) subsidiary relief that is closely related to the two principal heads of claim.

3. Mr. Thomas Q.C., who appeared for the 1st and 2nd defendants, contended that one averment of breach of trust set forth at paragraph 12(e) of the statement of claim alleging that the 1st and 2nd defendants in or about June 1978 without the consent of the beneficiaries of Lun Tak attempted to enter into an agreement for the sale of the land held by Lun Tak for $46,800.00, was in fact pleaded in an earlier action in respect of which judgment was given in 1978. He also contended that the other averments in the statement of claim in the present action relate to matters of which the plaintiff had knowledge prior to judgment in the earlier action and which therefore could and should have been pleaded by the plaintiff in that action.

4. Mr. Swaine, who appeared for the 3rd defendant, contended that although the averment contained in paragraph 12(e) of the statement of claim is neither alleged against his client in the present action nor was it alleged against him in the earlier one, paragraph 26 of the statement of claim in the earlier action did aver that he and the other two defendants "are and have been guilty of breach of trust", and that paragraph 20 of the prayer in that statement of claim sought relief that would have enabled the court, had it been satisfied that the claim had been made out, to award general damages to the plaintiff against the 3rd defendant. Mr. Swaine further contended that the averments against his client in the statement of claim in the present action relate to matters of which the plaintiff had knowledge, at least prior to judgment, in the earlier action and which therefore could and should have been pleaded by the plaintiff in that action.

5. In order to understand the implications of both counsel's contentions for the defendants and the counter arguments mounted by Mr. Jackson-Lipkin on behalf of the plaintiff it is necessary to examine some of the historical background to the two actions and to analyse briefly both the relief claimed and the judgment given in the earlier action.

6. In or about the year 1916 three persons surnamed Chiu purchased in the name Lun Tak from the Crown an area of land at Tin Shui Wai, Ping Shan in the New Territories. The three defendants in due course of time became managers of the land and were in fact registered as such in the relevant District Office. Over the years the membership of Lun Tak changed as members passed on their respective shares to other persons. Indeed the original membership increased over the years from three to more than twenty persons.

7. In 1978 the plaintiff commenced proceedings against the three defendants and others in High Court Action 1984 of 1978. The object of the action was to frustrate the attempt of an unidentified purchaser or purchasers who was endeavouring to purchase the Lun Tak land through the agency of a person surnamed Chiu and a company called Rostock Enterprises Limited.

8. Although throughout the years no one appears to have been sufficiently interested to determine the precise legal nature of Lun Tak or the tenure of it's members, the 1978 action required that these matters be resolved. It seems from the 29 page statement of claim, in which every possible legal status of Lun Tak was explored, that the plaintiff was of the view that the land had been granted by the Crown to Lun Tak or trustees for Lun Tak and that the members of Lun Tak held as tenants in common in equal undivided shares.

9. In order to simplify matters there was a trial of a preliminary issue in which the parties to the action framed a number of questions for the trial judge to answer. Argument on the preliminary issue went on for several days, at the conclusion of which the Judge gave his ruling. He ruled, inter alia, (a) that Lun Tak was a group of persons beneficially entitled as tenants in common to interests under a trust in proportion to their "shareholdings" for the time being and from time to time.

(b) that the three defendants in the present action held the property as trustees upon a bare trust for the "shareholders" or members absolutely and beneficially in proportions corresponding to those in which they were purportedly registered as shareholders, and

(c) that the "articles" of Lun Tak were no longer valid because of desuetude or abandonment at least since 1955.

10. The trial judge's ruling was given on 26th October 1978 and the proceedings were then adjourned until 30th October to enable the parties to consider what further action, if any, should be taken in respect of the proceedings before the court.

11. On 30th October the trial judge gave final judgment. By consent of all parties it was ordered and adjudged that the answers given in the ruling on 26th October be treated as the order and ruling at the trial of the action on the claim.

12. Mr. Jackson-Lipkin agreed that all the material on which the present action is founded was known to the plaintiff at and during the time of the 1978 proceedings. Indeed an analysis of the record by both counsel for the defendants clearly showed this to be so.

13. Mr. Thomas referred the court to a number of authorities in order to establish his contention that the doctrine of cause of action estoppel applied so as to estop the plaintiff from setting up in the present proceedings the same cause of action, namely an action for breach of trust, when that cause of action was one of the several claims in the 1978 action. He argued that these authorities made it clear that the doctrine applies not only to the situation where the same claim in a cause of action which had been the subject of adjudication in previous proceedings is resurrected in subsequent proceedings, but also to all claims included in the later action which are under or referable to the same cause of action litigated in the earlier action and which with the exercise of reasonable diligence might have been brought forward in that action.

14. The rock of authority upon which the principle is founded is the case of Henderson v. Henderson (1843) 3 Hare 100. The words of Sir James Wigram V-C that enshrine the principle have been cited throughout the years with approval in numerous cases and by courts of the highest authority. The relevant passage appearing at pages 114-115 of the judgment bears further repetition.

"          In trying this question I believe I state the rule of the Court correctly when I say that, where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time."

15. Indeed, as was pointed out in the judgment of the Privy Council in Yat Tung Co. v. Dao Hang Bank [1975] A.C. 581, 590, the Vice Chancellor's phrase "every point which properly belonged to the subject of litigation" was expanded in Greenhalgh v. Mallard [1947] 2 All E.R. 255, 257 by Somervell, L.J.:

"....... res judicata for this purpose is not confined to the issues which the court is actually asked to decide, but that it covers issues or facts which are so clearly part of the subject-matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them."

16. Although Greenhalgh's case was one of issue estoppel, Mr. Thomas contended that the words of Somervell L.J. apply a fortieri to cases of cause of action estoppel.

17. The case of Wright v. Bonnett [1948] 1 All E.R. 227 was cited principally to demonstrate that where a matter is res judicata and the statement of claim is thereby an abuse of the process of the court, the court may strike out the statement of claim, or such part of it as is objectionable, in advance of defence on the basis that if and when res judicata is pleaded it will succeed. Mr. Thomas emphasised that if the plea of res judicata had been raised in this case it would have been so on the basis of cause of action estoppel and not issue estoppel. In Wright's case the defendants in their application to have the statement of claim struck out were content to rely on the ground that it was frivolous and vexatious. It is clear however from the judgments that in the appropriate case an application to strike but a statement of claim can properly be made on the additional ground that a plea of res judicata would inevitably succeed. In this connexion Tucker L.J. said:

"There may be some minor details showing a few variations from the matters set out in the first action, but, in substance, it is the same story. That being so, the court was asked to strike out this statement of claim as being frivolous and vexatious. That means that, in effect, it is an abuse of the process of the court that the defendants are, in substance, being called on to meet the same allegations covering the same ground, and that they find themselves once more charged with fraud, but fraud which is the basis of a somewhat different cause of action. Counsel for the plaintiff has drawn our attention to all the relevant authorities and has cited a number of cases in most of which the courts have had to consider whether or not an action should be stayed owing to the fact that it was clear that a plea of res judicata, which had been pleaded, was bound to succeed, or that such a plea, if pleaded, would be bound to succeed. In many of those cases the matter was considered under two heads, namely, whether the action should be stayed or dismissed because a plea of res judicata would inevitably succeed, or whether the court would stay the action under its inherent jurisdiction to prevent a frivolous and vexatious action which would be oppressive to the defendants. Those two points are inclined to overlap each other in these cases."

18. In that context the learned Lord Justice then went on to cite with approval the passage quoted above from Greenhalgh v. Mallard, thus giving support to Mr. Thomas' contention that the principle enunciated therein applied also to cases of cause of action estoppel.

19. Having cited that passage Tucker L.J. said :

" I agree that that is the result of the cases and that the plea of res judicata is not necessarily confined to the identical nature of the issues in each action. What has to be considered are the issues and facts which are part of the subject-matter of the litigation. I do not think it is necessary, as I have already indicated, to express a view with regard to res judicata because I think that this case is one in which the court clearly should exercise the inherent jurisdiction which it has to prevent its own process being used in any way which would be an abuse by calling on defendants in substance and in reality to meet the same old charge.
            In McDougall v. Knight (2) the distinction between stopping a case in limine on the ground of res judicata and stopping it on the ground of the exercise by the court of its inherent jurisdiction is made clear. In that case a libel action had been brought in respect of part of the contents of a document and subsequently a second libel action was brought with regard to another part of the contents of the same document. After dealing with the matter on the basis of res judicata, Lord Esher in the concluding part of his judgment, said (25 Q.B.D. 9):
            On that ground I think the action should be stayed; but even if the plaintiff could in law split up the defamatory matter in the report into different causes of action, I think such a course would be vexatious, so that either way I am of the opinion the appeal must be allowed and the action stayed."

20. Mr. Thomas further contended that Wright's case clearly demonstrated that he had two independent platforms from which to strike down the statement of claim, namely, that being res judicata, it was an abuse of the process of the court, and secondly, it was vexatious. As to the latter, Mr. Thomas argued that it would be ridiculous if a plaintiff was to be permitted to store up a number of known claims and to vex a defendant by bringing them up one by one in a series of units over a period of time limited only by such finity as there is. Res judicata apart, it was Mr. Thomas' contention that it was difficult to imagine a better example of the aptness of the word vexatious than its use in that context.

21. To further bolster his argument Mr. Thomas referred to the judgment of Lord Esher M.R. and Fry L.J. cited the case of Macdougall v. Knight [1890] 25 Q.B.D. 1. The point was succinctly stated by Fry L.J. at page 10 of the report.

"The short ground for this application is either that a plea of res judicata, if put on the record, must succeed; or that the proceedings in this action are shewn to be vexatious and an abuse of the process of the Court. In my opinion, the defendant is right in both these contentions."

22. Both Mr. Swaine and Mr. Thomas claim that it matters not that Macdougall's case was one of libel and the present case is one of breach of trust. They maintain that the general nature of the principle for which they contend, namely, that a plaintiff must include in one action all his available claims under and referable to the one cause of action, is clearly enunciated in that passage of the judgment of Fry L.J. that follows immediately on the one just quoted.

"Upon the first ground, Reichel v. Magrath (1) is in point. In that case the House of Lords decided that it was within the jurisdiction of a Court of justice to prevent a defeated litigant raising the very same question which the Court had decided in another action. The question in the present case turns on whether the former action between these parties was for the same cause of action as that in the case before us. Both actions are for libel contained in a pamphlet, and, therefore, I conclude the cause of action is the same. In my opinion, it is impossible that two actions should be properly brought in respect of the same libel. The injustice of allowing a litigant to select one portion of a libel as the ground for one action and another as the ground for a second action, and so on indefinitely, is obvious. The whole publication would be before the jury in each case, and it would be quite impossible for the jury in each case to separate the damages due to the particular part of the libel relied on in that case from the damages arising from other parts of the libel. I think, therefore, that a plea of res judicata would succeed, and that we are bound to stay the action. Suppose, however, this to be otherwise, still in such case, I do not hesitate to say that such successive actions in respect of the same libel would be an abuse of the process of the Court, and so, quacunque via, the application should succeed, and the action be stayed."

23. Counsel also referred to the case of Phosphate Sewage Company v. Molleson [1878-79] 4 App. Cases 801 and in particular to a passage in the judgment of Earl Cairns L.C. at page 814 of the report.

"As I understand the law with regard to res judicata, it is not the case, and it would be intolerable if it were the case, that a party who has been unsuccessful in a litigation can be allowed to re-open that litigation merely by saying, that since the former litigation there is another fact going exactly in the same direction with the facts stated before, leading up to the same relief which I asked for before, but it being in addition to the facts which I have mentioned, it ought now to be allowed to be the foundation of a new litigation, and I should be allowed to commence a new litigation merely upon the allegation of this additional fact. My Lords, the only way in which that could possibly be admitted would be if the litigant were prepared to say, I will shew you that this is a fact which entirely changes the aspect of the case, and I will shew you further that it was not, and would not by reasonable diligence have been, ascertained by me before.",

and to a passage in Lord Hatherley's judgment at page 818

"Therefore, my Lords, I come round again to this question, Is it or is it not the law (I do not know any authority going to that extent) that if a man has been the victim of a fraud of this description in the purchase of a mine or the like - if a man has been led and induced to become the purchaser of property by a variety of fraudulent misrepresentations - he may bring forward his case and enter upon a litigation for the purpose of putting himself in the position in which he was before the fraud was committed; and that he is to be allowed to select a certain number of instances of that conduct which led up to the successful result of the fraud, to select as many of those instances as he may think proper, and to put them in the forefront of his proceedings to set aside the transaction; and afterwards, having a certain number of other circumstances within his knowledge, he is to be allowed to bring forward those circumstances and say, This is a new medium concludendi with regard to the case I am now bringing forward; this will be an independent case, which I shall be entitled to assert. If so, we might go through all the various circumstances and acts of fraud which led to the result; we might go through them one by one and year by year, so far as I can see, according to that line of argument. From time to time, as the matter passes through all the stages of litigation, the Plaintiff might say, I have now brought forward another fact; this is the fact which you have not yet decided upon; this is not res judicata, because it is a portion of evidence which I have not presented to your minds before; I have failed to prove, or I have failed to satisfy you of the sufficiency of the proof with respect to the several facts I alleged in my original attempt to obtain justice, and now I proceed to bring forward other facts of a still stronger character, which I think will persuade the Court I am addressing to give me the relief which upon the first shewing of the case they were not satisfied to give me upon the evidence I was then able to produce. My Lords, I should be very much surprised if that was held to be the doctrine of any Court, or if in any civilized country litigation could be protracted in the endless manner that it would be if that were the state of the law."

24. Another case that Mr. Thomas cited as lending support to his major contention in respect of cause of action estoppel is Overstone Ltd. v. Shipway [1962] 1 WLR 117. Although this was a case in which the court held that the two actions were not founded on the same cause of action and therefore the plea of estoppel on the second action failed, Mr. Thomas claims that the general extended principle of cause of action estoppel is nonetheless clearly to be deduced from the judgments.

25. Overstone's case involved a hire purchase agreement for a motor car. The hirer failed to pay the monthly rentals and the owners repossessed the car and succeeded in an action for recovery of the outstanding rentals. Meanwhile they sold the car for an amount less than the balance due under the hire purchase agreement. They then brought a second action for the recovery of the balance, and it was to this claim that the hirer pleaded res judicata.

26. Although the majority of the Court of Appeal held that there were two different causes ofiaction and that therefore the plea of res judicata must fail it clearly recognised that had it not been for the fact that the first action, although stemming from a contract, was founded in debt and the second action claimed damages in breach of in contract, the plea would have succeeded.

27. Holroyd Pearce L.J. at page 123 of the report said,

"There is clear authority which establishes that a plaintiff may not bring separate actions for different heads of damage arising from the same cause of action. But here the first cause of action was based on a different cause of action from the second. The first was a claim for money due under the contract, namely, instalments which fell to be paid before the hiring was terminated. The fact that the agreement had been terminated before the issue of the summons does not alter the nature of that cause of action. The second action claimed damages for breach of the contract resulting in the termination of the hiring. In my judgment is is impossible to hold that a claim for sums due under the hiring is the same cause of action as a claim for damages for breach."

Davies L.J. at page 129 of the report made the following observation,

"          If one looks at the particulars of claim in that action, one sees that the plaintiffs claim the sum of £42 3s. 8d., being the arrears of hire-rental instalments due under the hire-purchase agreement. That was all that it was necessary for the plaintiffs to aver and prove in order to succeed in that action. But for the plaintiffs to succeed in the present action they had to aver and prove a breach of the contract. Willmer L.J. has pointed out (as is, of course, the fact) that the claim in the first action was not made until after the plaintiffs had exercised their right to terminate the contract on the ground that there had been a breach by the defendant. But, as I think, all that that comes to is that the claim in the first action was made after the first contract had been broken; but it was not made because the first contract had been broken. The two causes of action, namely, that for debt or money due under the contract and that for damages for breach of contract, are quite different. It might, of course, have been possible - though at the date of the institution of the first proceedings in January the car had not yet been sold, and so the damages had not been quantified-for the plaintiffs, as Willmer L.J. has suggested, by amendment at the hearing of the first action to add the claim for damages for breach of contract. As I see it, that would not have meant that the two causes of action are one and the same. It would merely have meant that the two causes of action were being joined in the same action."

28. The dissenting judge Willmer L.J. in finding that the first action, although in form one for arrears under the contract, was therefore in fact and in substance one for damages in breach of contract, concluded that the plea of res judicata must succeed. His reasoning therefore, although erroneous as to the finding that both claims were founded on the same cause of action, was nevertheless consistent with that of the majority of the Court as to the consequences that flowed from such a finding.

29. Although he was unable to cite a breach of trust case in which the principle of cause of action estoppel was exemplified, Mr. Thomas contended that the Phosphate Sewage case, Macdougall's case and Overstone's case, based on fraud, libel and contract respectively, were vivid examples of how the plea operated or could operate in its extended form and that the same principle applied with equal force to the present breach of trust action.

30. Both Mr. Thomas and Mr. Swaine contended that for the plea of res judicata based on cause of action estoppel to apply it is not necessary for there to be a trial on the merits in the first action; all that is necessary is that there has been a final judgment in that action that disposes, of the cause in action in contention, and this is so even though the final judgment is a consent judgment. One must not confuse, they say, issue estoppel with cause of action estoppel.

31. In support of the first ground of his application, namely, that the statement of claim discloses no reasonable cause of action, Mr. Swaine referred to four specific allegations against his client contained in paragraphs 9 (c) (iii) and (iv) and 12 (h) and (i). These allegations do not purport to relate to the defendant's interest in Lun Tak but are in essence complaints as to their conduct some 22 years ago in relation to the interest of other members of Lun Tak. As these allegations do not in any way assert that the plaintiff's share in Lun Tak in in jeopardy, Mr. Swaine contends that they amount to nothing more than irrelevant gratuitous complaints and, as such, do not constitute a reasonable cause of action.

32. Mr. Jackson-Lipkin strenuously argued that if two writs had been issued in 1978, one being that actually issued that year, and the other being the same as the present writ, no judge could properly have permitted their consolidation; likewise, if the claims contained in the present writ had been included in the 1978 writ an application to have the issues tried separately would undoubtedly have succeeded.

33. Mr. Jackson-Lipkin's reasoning appears to be rooted in his contention that the cause of action in the 1978 writ was not one of breach of trust but one aimed at the prevention of the takeover of the Lun Tak land by outsiders, and that therefore it would have been improper to plead in that action the breaches of trust alleged in the present action. In his submission it would have been vexatious to add the 1979 claims to the 1978 claims since as there was no link between the two actions the combination of the two sets of claims would have prejudiced and embarrassed the trial of the 1978 action.

34. In my view this argument is misconceived. One has only to look at paragraphs 25, 26, 27 and 28 of the statement of claim in the 1978 writ and paragraphs 13, 14, 15 and 20 in the prayer for relief therein to see that a cause of action of breach of trust is pleaded and that relief is sought in respect of it. As Mr. Thomas says, the argument confuses what is a cause of action with what was the cause of the 1978 action. No doubt the cause of the 1978 action was the attempt by outsiders to purchase the Lun Tak land at a price far below its true market value. This, however, has no bearing on the question of whether the 1978 statement of claim contained a cause of action of breach of trust.

35. Since the plaintiff was aware of the existence of all the material on which he based his 1979 action, indeed that material was closely analysed in the 1978 action, I fail to see how a judge properly exercising his discretion could have struck out the 1979 claims from the 1978 writ had they been included there in or how, after discovery of documents when all the material would have been known to the plaintiff, he could properly have refused to grant leave to the plaintiff to amend his 1978 writ so as to include the 1979 claims. Likewise, if the plaintiff had simultaneously issued two writs, one containing the 1978 claims and the other the 1979 claims, I fail to see how any judge could properly have refused to grant leave to consolidate all the claims in one action.

36. In this connexion it is pertinent to emphasise that after the determination by the trial judge of the preliminary issue in the 1978 action, the parties had four days within which to decide what action to take on the claims in the pleadings. In the event, the plaintiff, content that the answers to the questions posed in the preliminary issue had effectively prevented the attempted takeover of the Lun Tak land, decided to abandon the remaining claims in his statement of claim. Had he decided otherwise and elected to proceed on the breach of trust cause of action that is repated in the 1979 writ and to seek leave to amend his statement of claim to include the other claims in the 1979 writ, I have, as already indicated, no doubt that the judge would have granted leave to amend and that accordingly the action would have proceeded on precisely the same claims as are before this court in the present action unencumbered by the abandoned claims in the 1978 writ.

37. Mr. Jackson-Lipkin further contended however that for two reasons there had been no adjudication in the 1978 action on any cause of action in breach of trust. First, the breach of trust claim was contingent upon the court finding that Lun Tak was a family, clan or tong, and since the court did not make such a finding no breach of trust claim came into existence. Second, the trial judge did not investigate any allegation of breach of trust.

38. The paragraph in the statement of claim that Mr. Jackson-Lipkin relies on to support his first reason is paragraph 24. This paragraph recites the plaintiff's view of what consequences would follow if Lun Tak was ultimately found to be a family, clan or tong. None of these consequences mentions anything about the defendants being trustees or the commission of breaches of trust. Paragraph 25, however, clearly avers that the 1st and 2nd defendants have acted in breach of trust/fiduciary duty towards Lun Tak or its members and goes on to recite a number of specific breaches, whilst paragraph 26 alleges that if the three defendants are trustees, they have by reason of the breaches recited in paragraph 25, been guilty of breach of trust. Furthermore there is, as previously mentioned, a specific claim in paragraph 14 of the prayer for damages for breach of trust against the 1st and 2nd defendants, and a claim in paragraph 20 of the prayer that would enable the court to award general damages against the 3rd defendant for breach of trust, assuming, of course, that such a breach had been established.

39. However, on the trial of the preliminary issue the court did find that the defendants were trustees, thereby enabling the plaintiff, had he so decided, to proceed against the defendants for breach of trust even without amending the statement of claim. I am therefore unable to find any merit in Mr. Jackson-Lipkin's first reason.

40. As to the second reason, Mr. Jackson-Lipkin readily agreed that in a consent judgment it is not necessary for the judge to go through all the claims seriatim and formally pronounce upon each and every one of them. He took the approach that in order to determine whether the judge had adjudicated on a claim that was the subject of a plea of res judicata one must look at the whole action to ascertain what the judge had decided.

41. In my view one only has to look at the trial judge's judgment to see that by the consent of all parties the ruling of the judge on the trial of the preliminary issue was treated as and ordered and adjudged to be the order and ruling made at the trial of the action on the claim.

42. Bearing in wind the massive legal representation in the 1978 proceedings it is inconceivable to me that the intention of the parties was other than there be a compromise of the action and that the issues determined in the trial of the preliminary issues form the subject matter of the judgment and that the residue of the claims, excluding certain issues raised in the counterclaims, be abandoned.

43. I am conscious of the fact that the power to strike out a pleading or any part of a pleading is not mandatory, but permissive, and confers a discretionary jurisdiction to be exercised having regard to the quality and all the circumstances relating to the offending plea and that a court will not permit a plaintiff to be driven from the judgment seat except when the cause of action is obviously bad. As was pointed out by Lord Blackburn in Metropolitan Bank v. Pooley (1885) 10 App. Case at L. 221 the dismissal of proceedings may often be required by the very essence of justice to be done so as to prevent parties being harassed and put to expense by frivolous, vexatious or hopeless litigation.

44. I accept the submissions made by Mr. Thomas and Mr. Swaine and am satisfied that the two applications must succeed on the grounds that the statement of claim (a) is frivolous and vexatious, (b) is otherwise an abuse of the process of the Court in that a clear case of cause of action estoppel has been made out, and (c) in respect of paragraphs 9(c) (iii) & (iv) and 12(h) & (i), discloses no reasonable cause of action.

45. Accordingly, I order that the plaintiff's statement of claim be struck out and that the action be dismissed against all three defendants. I further order that all defendants be at liberty to enter judgment for their costs, including the costs of the applications to be taxed. There will be a certificate for two counsel for all defendants.

  (Neil Macdougall)
  Judge of the High Court

Representation:

Miles Jackson-Lipkin, Esq., Q.C. and A. Hoosen, Esq., (Arthur Au & Co.) for Plaintiff.

Neville Thomas, Esq., Q.C. and Philip Lee, Esq., (C.Y. Kwan & Co.) for 1st and 2nd Defendants.

John Swaine, Esq., Q.C. and Robert Kotewall, Esq., (Ho & Wong) for 3rd Defendant.