West Coast International Trading Ltd t/a Dandelion Fine Arts v. Chelsea Art Co Ltd

HCA 1636/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. HCA 1636 OF 2010

BETWEEN

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DECISION

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The Application

1.This is the Plaintiff’s application to amend the re-amended statement of claim.  A copy of the draft “Re-Re-Amended Statement of Claim” incorporating the intended amendment (i.e. an addition of one new paragraph at paragraph 27) is attached to the Plaintiff’s Summons dated 7 January 2013.  Today, the draft re-re-amended statement of claim is further amended by deleting one item of lost property under paragraph 27.

2.The plaintiff’s claim is based upon a tort of conversion against the defendant in that the plaintiff’s former employee had stolen some pieces of artwork and sold them through an agent to the defendant.  The former employee had been convicted by the court and sentenced to imprisonment.  It is the plaintiff’s case that the Defendant had already returned two pieces of artwork to the Plaintiff through the assistance of the Hong Kong Police, and had “sold back” one piece of the artwork to the Plaintiff through another converter (i.e. Mr. Thomas Yeung), there are still other pieces of artwork that remained lost. The Plaintiff had recently finished stock taking, and discovered further properties were lost.  The Plaintiff has good reasons to believe that they are also lost as a result of the unlawful acts of conversion of the Defendant together with other people.

3.The plaintiff therefore applies for leave to re-re-amend its re-amended statement of claim by adding paragraph 27, in which the plaintiff pleads:

“In addition to the above, upon the completion of stock taking at the Plaintiff’s Shop, it was discovered that the following properties of the Plaintiff were also missing:

[a list of 9 items of artwork]”

Discussion

4.The defendant opposes this paragraph, saying that what the Plaintiff essentially seeks to do is to plead a speculative cause of action, in the hope that particulars can be provided pending possible future revelations.  The case of Wharf Properties v. Eric Cumine Associates [1991]2 HKLR 154 makes it clear that the Plaintiff should not be permitted to do so as the Privy Council at 166F of the report said:

“It is for the plaintiff in action to formulate his claim in an intelligible form and it does not lie in his mouth to assert that it is impossible for him to formulate it and that it should, therefore, be allowed to continue unspecified in the hope that, when it comes to trial, he may be able to reconstitute his case and make good what he then feels able to plead and substantiate…”

5.I agree.  The proposed amendment has clearly not pleaded any particulars in support of the list of additional lost artwork relating to the defendant.  Nor had the plaintiff pleaded damages against the defendant.  At best, it is only a list of lost items, with the speculation, based upon other admitted facts found against the defendant in respect of other lost items in question, that the defendant might have converted those pieces of artwork.  In this application, the plaintiff has to answer one practical question: what cause of action against the defendant has the plaintiff pleaded in the proposed paragraph 27 supported by pleaded facts?  If the plaintiff is unable to answer it, it must be struck out under Order 18 rule 19 (1)(a) immediately, even if it has already been pleaded in the statement of claim.

6.Ms. Tjia submits that paragraph 23 of the re-amended statement of claim will suffice to lay the factual foundation upon which the plaintiff would claim against defendant for other unlawful dealing and/or conversion of the plaintiff’s other properties.  With respect, I consider that this general pleading has not set out the causation of the lost properties in paragraph 27 of the proposed amendment.

7.Ms. Tjia has further asked this court to read the re-amended statement of claim as a whole: the fact that the ex-employee had been convicted of theft and the stolen properties were converted by the defendant and there had been 4 pieces of artwork proved or admitted to have been converted by the defendant.  The court can then draw the inference that those lost items in paragraph 27 must have been converted by the defendant as well.

8.I am afraid this court is unable to draw such inference as there has been no factual basis other than the background as stated by Ms. Tjia to support that it must be the defendant who had converted those lost properties.  I do not consider that the other 4 properties and the circumstances on which they were converted by the defendant have laid sufficient factual basis as suggested by Ms. Tjia.

9.For the reasons above, I consider that there has not been pleaded the causation in relation to the lost properties in paragraph 27, which if pleaded, should be struck out under Order 18 rule 19(1)(a) and the application should not be allowed.

10.As to the costs of this application, Mr. Lam asks for indemnity costs on the basis that the plaintiff has not given thought to the amendments to see if they should be pleaded within the spirit of the CJR.  Ms. Tjia argues that the plaintiff has not been, as submitted by Mr. Lam, negligent in paying attention to the pleadings.  It is only that this court disagrees with the plaintiff.  I agree with Ms. Tjia.  This is not a case that warrants indemnity costs against the plaintiff.

11.The costs should follow the event and the costs of the plaintiff’s application, including the costs reserved and for the hearing today (with counsel certificate) be to the defendant, to be assessed under Order 62 rule 9A at $28,000.  However, for today’s assessment of costs, the defendant has not complied with paragraphs 7 & 8 of the Practice Direction 14.3.  As a result, the hearing has to be stood down for the preparation of the schedule of costs, which has taken about 45 minutes. For this waste of time, the costs should be disallowed and the wasted costs should be given to the plaintiff, which I assess at $2,000 to be set off against the costs to the defendant today.  The net sum is $26,000.

Order

12.I shall now make an order in terms as follows:

i.   The plaintiff’s summons be dismissed;

ii.   Costs of this application, assessed at $26,000, are to be paid by the plaintiff to the defendant within 14 days from the date hereof.

Ms. Josephine Tjia, instructed by Messrs Hau, Lau, Li & Yeung, for the Plaintiff

Mr. Julian Lam, instructed by Messrs Kao, Lee & Yip, for the Defendant