HUANG CAIYUN v. LIN JINGJING

HCA 1012/2024

[2024] HKCFI 3358

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1012 OF 2024

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D E C I S I O N

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Background

1.  The Plaintiff filed a general indorsement of claim (“the IOC”) making a claim in breach of contract, unjust enrichment and money had and received. The Defendant considers that the nature of the Plaintiff’s claims are not proprietary in nature, and yet 2 prayers sought proprietary reliefs with regard to a bank account. So the Defendant took out the summons for striking out the 2 prayers (“the Summons”) on the ground that they disclose no reasonable cause of action.

2.  This is an appeal by the Defendant against the Master’s decision which dismissed the Summons and order the Defendant to pay costs of $60,000.

Legal principles

3.  An appeal from a master’s decision operates by way of rehearing. The judge considers the matter afresh.

4.  Striking out should only be ordered in plain and obvious cases: Hong Kong Civil Procedure 2024, Vol 1, §18/19/4.

5.  Where the basis of the striking out is lack of reasonable cause of action, no evidence shall be admissible: Order 18, rule 19(2). In the present case, the court would not look beyond the IOC.

6.  There is no dispute that, for a contract claim for damages, there cannot be any proprietary reliefs.

Application of the legal principles

7.  As pleaded, the breach of contract claim is premised on an agreement between the parties, as confirmed by a loan receipt on or around 20 December 2012, “being the entirety of the amount of the funds in [a JB Account] totalling approximately HK$12,358,237 as of the date of the Writ, and interest thereon.”

8.  As pleaded, the unjust enrichment claim avers that the Defendant was enriched by the receipt of HK$10,500,000 from the Plaintiff and the Plaintiff was entitled to repayment of the HK$12,358,237.

9.  The Plaintiff has conceded before the Master that these are personal and not proprietary claims.

10.  The prayers for relief sought, amongst others,

(1)  “the sum of all the funds currently in the JB Account in accordance with the agreement” (“prayer 1”) and

(2)  “alternatively, the sum of all the funds currently in the JB Account for unfair (sic) enrichment” (“prayer 2”).

11.  I agree with Mr Joseph Wong (counsel for the Defendant) that if the Plaintiff were to succeed, the Defendant would only be liable to a monetary judgment in the principal sum plus interest. The money to satisfy that judgment does not have to come out of the JB Account.

12.  The Defendant submits that the 2 prayers seek proprietary reliefs. I am unable to agree. Before the learned Master, Mr Martin Wong, counsel for the Plaintiff, submitted that prayer 1 may be understood both as a proprietary claim and a personal claim. “Proprietary” claim meant that the judgment sum must be that sum of money in that account. “Personal” claim meant it could be a sum of money equivalent to the amount in that account; and the reference to the account balance was for contractual quantification. In the way the prayer was drafted, rightly or wrongly, he submits that it was a matter of clarifying and not for striking out.

13.  The learned Master accepted that submission and so do I. Prayer 1 included the phrase “in accordance with the agreement”. Whether or not the Plaintiff can claim the entirety of the amount standing in the JB Account as of the date of the writ or another date or another amount depends on the agreement. It is not plain and obvious that prayer 1 cannot be interpreted to apply to a personal claim.

14.  Prayer 2 is, in my view, obviously unsustainable because the cause of action in unjust enrichment involved enrichment of HK$10,500,000 from the Plaintiff and has no pleaded connection with the JB Account or the money in it. Mr Martin Wong conceded these at this hearing. The learned Master made no distinction between prayers 1 and 2 and his reasons for dismissal did not deal with prayer 2 on its own.

15.  In the premises, I allow this appeal to the extent of striking out prayer 2 on the ground that it discloses no reasonable cause of action.

Costs

16.  Mr Martin Wong draws to my attention that, at the hearing below, the Statement of Claim (“SOC”) was already filed. It was apparent that prayer 1 was maintained but prayer 2 was not included in the SOC.

17.  However, the fact remained that Mr Martin Wong did not make the concession in §14 above before the Master. The Master and the parties considered the 2 prayers as one. The learned Master should have struck out prayer 2 but not prayer 1, in which case the proper order on costs should have been no order as to costs.

18.  As for this appeal, the attempt to strike out prayer 1 has failed. Although striking out prayer 2 serves no useful purpose when the Plaintiff has abandoned it already in the SOC, it has the practical effect of setting aside the costs order before the Master. Accordingly, I order the Plaintiff to bear half of the costs of this appeal with certificate for counsel. The matter has no complexity and involves a re-run of the arguments before the Master. The claim of $184,900 as costs is plainly wild. I summarily assess the costs at $35,000 to be borne by the Plaintiff.

Conclusion

19.  I allow the appeal to the extent of:

(1)  Striking out prayer 2 for disclosing no reasonable cause of action, but otherwise upholding the Master’s decision to dismiss the Summons;

(2)  Setting aside the costs order before the Master and ordering, instead, that there be no order as to costs.

(3)  Costs of this appeal be to the Defendant, summarily assessed at $35,000.

20.  I thank counsel for their assistance.