LEE SEE WOO v. CHU HONG PONG

HCA 2537/2018

[2020] HKCFI 2569

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2537 OF 2018

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JUDGMENT

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A. Introduction

1.  This is an application by the Defendant (“Mr Chu”) for:

(1)  an order that the Statement of Claim (“SOC”) be struck out and the action be dismissed on the ground that the matters pleaded disclose no reasonable cause of action; and  

(2)  insofar as necessary, a determination of a question of law under RHC Order 14A as to whether the tort of maliciously prosecuting civil proceedings generally is recognised under Hong Kong law. 

2.  In the present action, the Plaintiff (“Mr Lee”) relies on two specific torts, namely, malicious prosecution and abuse of court process. Mr Lee’s case is that these torts arise from HCMP 1318/2007 (“HCMP Proceedings”). The HCMP Proceedings were commenced against Mr Lee on 12 July 2007, were eventually resolved in his favour, and the result was upheld in the Court of Appeal.

3.  On behalf of Mr. Chu, Mr Anson Wong SC submitted that the SOC should be struck out because it did not disclose a reasonable cause of action in either the tort of malicious prosecution or abuse of court process. This was on the assumption that it was arguable that, under Hong Kong law, the tort of malicious prosecution should extend to civil proceedings generally. His primary case was advanced without prejudice to his alternative position that there should be a determination under Order 14A that Hong Kong law should not recognise the tort of malicious prosecution as extending to civil proceedings generally.

The Pleaded Case of the Plaintiff

4.  Mr Lee’s case is that under a loan agreement dated 20 April 2000 he agreed to loan HK$10 million to Madam Leung Oi Wah (“Madam Leung”) in connection with the listing of New Chinese Medicine Holdings Limited (“Company”). The original repayment date was 30 April 2002, but this was eventually extended to 30 April 2005 under two supplemental agreements.

e supplemental agreement dated 7 March 2003 provided that the extension of the repayment date was in consideration of Madam Leung procuring two BVI companies owned by her, namely, Great Fair Limited (“Great Fair”) and Wealth Way Limited (“Wealth Way”) to immediately execute a charge of 48% of the issued share capital in the Company (“Shares”) in favour of Mr. Lee. The Shares comprised of 200,800,641 shares of a nominal value of HK$0.10 each.  

6.  By a share charge dated 7 March 2003 (“Charge”), Great Fair and Wealth Way created a charge over the Shares as a continuing security for repayment of the debt owed by Madam Leung to Mr. Lee.

7.  On 11 March 2003, Mr. Lee attended a meeting at the Company’s office in Hung Hom at which he was introduced to Mr Chu.  Mr Lee was informed that Mr. Chu wanted to become the majority shareholder of the Company and proposed to purchase from Mr Lee through a BVI company Richfair Limited (“Richfair”), 85% of the Shares for HK$14 million, leaving the remaining 15% of the Shares to Mr. Lee.

8.  Upon Mr Lee’s acceptance of the proposal, the Plaintiff signed a Deed of Assignment, consisting of two pages, which provided that Mr Chu was required to pay HK$14 million in consideration of the Charge being assigned from Mr Lee to Richfair and that Mr. Lee would be allotted 15% of the shares in Richfair (“Genuine Assignment”). Because Mr Chu did not pay the HK$14 million, Mr Lee caused two stop notices to be issued in respect of the Shares on 18 and 21 November 2003 (“Stop Notices”). 

9.  Mr Lee’s case is that Mr Chu took a number of steps in order to obtain for himself the benefit of Mr Lee’s interest in the Shares and to become the majority shareholder of the Company.

10.  Specifically, in August 2005, it is alleged that Mr. Chu caused Madam Leung to procure Great Fair and Wealth Way to transfer 85% of the Shares in breach of the loan agreements and the Charge to Mr. Chu’s daughter, Chu Cheong Hing, Jenny (“Jenny”), Mr. Chu’s son-in-law, Pang Wing Keung (“Pang”) and Mr. Chu’s friend Chan Chun Fai (“Chan”).

11.  At SOC §§14-16, it is pleaded that:

“14. On 13 July 2007, the Defendant caused Chan, Jenny and Pang to commence [the HCMP Proceedings] against the Plaintiff to discharge the Stop Notices.

15. In support … the Defendant made an Affirmation dated 12 July 2007 on their behalf in which he made false allegations that the Plaintiff was indebted to Richfair in the sum of HK$14 million, and that the Plaintiff had accepted an assignment of Madam Leung’s debt and the Charge to Richfair in full and final satisfaction of his debt due to Richfair.

16. In the said Affirmation, the Defendant produced a forged Deed of Assignment in that the first page of the Genuine Assignment was replaced by another page falsely alleging that the Plaintiff was indebted to Richfair for HK$14million and that the Plaintiff agreed to assign Madam Leung’s debt and the whole benefit of the Charge to Richfair in full and final settlement of Richfair’s claims against him”.

12.  It was further pleaded that at the trial of the HCMP Proceedings, Mr. Chu gave false evidence, which included the fact that the Forged Assignment was a genuine document. 

13.  Mr Lee relies on by a judgment by DHCJ Whitehead SC dated 21 December 2012 under which HCMP Proceedings were dismissed.  It was found by the judge that the Forged Assignment was not the document Mr Lee executed. 

14.  At SOC §24, the causes of action are identified as the abuse of process and malicious prosecution of the HCMP Proceedings, and the appeal. The pleaded loss and damage is set out at SOC §25. It is useful to set this out in full:

“(1) On 13 July 2007, the Defendant caused Chan, Jenny and Pang to commence [the HCMP Proceedings] against the Plaintiff to discharge the Stop Notices.

(2) Alternative to (1) above, 7,530,024 (consolidated) shares in the Company;

(3) The Plaintiff paid a total sum of HK$3,400,988.00 for legal costs in the HCMP Action and the Appeal and is only able to recover HK$2,658,704.98. Thus, the Plaintiff suffers a loss of HK$742,283.02.

(4) The Plaintiff incurred a total sum of HK$387,788.93 … in restoring the dissolved BVI [company] Great Fair Limited …”.

Legal Principles on Striking Out

15.  The legal principles on an application to strike out are not in dispute. Since striking out is a drastic remedy, it will only be in plain and obvious cases where the court should exercise its summary power to strike out.  The pleadings must be unarguably bad, and it must be impossible, and not just improbable, for the claim to succeed before they will be struck out: White Book 2020 at §18/19/4.

16.  For an application to strike out under Order 18, rule 19(1)(a), a reasonable cause of action is one with some chance of success when only the allegations in the pleading are considered. Generally speaking, the pleaded facts are assumed to be true. Where a pleading is defective in not containing particulars to which the other side is entitled, the proper course is for an application for particulars to be provided, and not for an order to strike out to be made: White Book 2020 at §18/19/5.

17.  It is inappropriate to determine a novel or emergent legal principle on a strike out application because this would deprive the court full argument on the issue after trial: Tadjudin v Bank of America National Association, [2010] 3 HKLRD 417 at §7 per Stone J (CA).

Legal Principles on Malicious Prosecution

18.  Mr Anson Wong SC accepted that it is reasonably arguable as a matter of Hong Kong law that the tort of malicious prosecution should be extended to cover civil proceedings generally. In my judgment, this was sensible in view of the majority decisions of the Privy Council in Crawford Adjusters (Cayman) Ltd v Sagicor General Insurance (Cayman) Ltd [2014] AC 366 and the UK Supreme Court in Willers v Joyce [2018] AC 779.  Both judgments confirmed such an extension as a matter of Cayman and English law respectively.

19.  There does not appear to be any local authority which has definitively resolved the issue.  In the meantime, our courts have proceeded on the basis that the point is reasonably arguable under Hong Kong law. In particular:

(1)  In Yanfull Investments Ltd v Datuk Ooi Kee Liang (HCA 6872015, 15 April 2016), Louis Chan J held at §§34-37  that there was not enough material to warrant the conclusion that a claim alleging the malicious prosecution of a civil proceeding was so devoid of merit to justify it being struck out.  The judge did not accept that the tort was plainly not viable under Hong Kong law to justify the claim being struck out.

(2)  The matter went to the Court of Appeal in Yanfull Investments Ltd v Datuk Ooi Kee Liang [2017] 5 HKC 42.  Kwan JA stated at §52 that the gravamen of the claims in abuse of civil procedure and malicious prosecution lay in the bringing of civil proceedings maliciously, without reasonable cause, and for an ulterior and improper purpose.  This analysis was premised on the underlying tort being a viable one, although the issue of whether the tort extended to civil proceedings was not argued on appeal.

(3)  In General Nice Resources (Hong Kong) Ltd. v Ningbo Iron and Steel Co Ltd. (HCA 854/2015, 17 May 2016), DHCJ Kent Yee refused to strike out an action in based on the malicious prosecution of winding-up proceedings.  At §30, the judge that the tort is not confined to criminal proceedings, an action may lie for the abuse of civil process, and that winding-up proceedings could amount to prosecution. There was no detailed analysis of whether the tort should be extended to civil proceedings generally. This was most likely because winding-up proceedings had already previously been established as one of the limited categories of civil proceedings which could form the basis of a claim for malicious prosecution.

(4)  In Sum Cheung Wai v Tsui Hin Yuet [2016] 4 HKLRD 742, Lam VP stated at §21 (referring to Willers and Crawford) that there was a debate as to whether the tort should embrace abuse of civil proceedings generally. It was unnecessary for the Court of Appeal to decide the issue in that case because the underlying proceedings were criminal.

(5)  In Chua Grace Gonzales v Sobrevilla Rhennie Boy Fernandez (DCCJ 3750/2015, 24 August 2017), after reviewing the authorities, Winnie Tsui DJ held at §97 that it was clear that a claim could not be struck out on the ground that the tort of malicious prosecution of civil proceedings is not recognised under Hong Kong law. The judge held at §96 that the Court of Appeal’s decision in Yanfull Investments amounted to an “implicit acceptance” that the tort was viable even though it was in relation to civil proceedings.

20.  On the basis of the above, I agree that it is reasonably arguable that Hong Kong law recognises that the tort of malicious prosecution should extend to civil proceedings generally. I will determine the strike out application on that basis. To avoid any doubt, this decision should not be regarded as a definitive ruling on whether Hong Kong law should be so extended.

21.  There is no dispute that the essential elements of the tort of malicious prosecution are stated in Clerk & Lindsell on Torts (23^rd ed) at §16-12:

“In an action of malicious prosecution the claimant must show first that he was prosecuted by the defendant, that is to say, that the law was set in motion against him on a criminal charge; secondly, that the prosecution was determined in his favour; thirdly, that it was without reasonable and probable cause; fourthly, that it was malicious. The onus of proving every one of these is on the claimant.”

22.  This statement of the law has been approved in Hong Kong: see Chin Ham Chiu v FTI Consulting [2020] 2 HKLRD 878 at §27 and Eugene Jae-Hoon Oh v Kate Gaskell Richdale [2005] 4 HKC 28 at §10.

The Malicious Prosecution Claim

23.  On the malicious prosecution claim, Mr Wong SC argued that the SOC is fundamentally defective because the essential elements of the tort were not satisfied in that:

(1)  The law was not set out in motion by Mr Chu;

(2)  Mr Chu was not the prosecutor of the HCMP Proceedings;

(3)  There was no plea of absence of reasonable or probable cause, nor any plea of malice; and

(4)  The losses pleaded were either irrecoverable as a matter of law or are not attributable to the alleged malicious prosecution.

24.  Mr Wong SC’s submitted that the law was not set out in motion by Mr Chu because the HCMP Proceedings were only a responsive step to discharge the Stop Notices. He reasoned that the law was actually first set in motion by Mr Lee in obtaining the Stop Notices under RHC Order 50. Therefore, in the absence of the Stop Notices, there would have been no occasion to commence the HCMP Proceedings.  Accordingly, the action was defensive in nature and could not be regarded as a “prosecution” of civil proceedings.

25.  On behalf of Mr Lee, Mr Damien Wong confirmed that he did not argue that the tort of malicious prosecution should extend to include a “malicious defence” in the context of civil proceedings.  His submission was that the HCMP Proceedings could fairly be regarded as a prosecution even though their purpose was to discharge the Stop Notices.  

26.  A stop notice may be used to prevent securities being dealt with without first giving the party issuing it an opportunity to assert his claim. Under Order 50, rule 12, a person on whom a stop notice is served shall not register a transfer of securities until 14 days after sending notice to the person on behalf the stop notice was filed. Therefore, the effect of a stop notice is merely temporary and the person obtaining it must proceed to obtain a restraining order or injunction: White Book 2021 at §50/14/4.

27.  In my view, it is at least arguable that the HCMP Proceedings can fairly be regarded as a prosecution. To start with, the issuance of a stop notice under is not equivalent to the commencement of a civil action. Moreover, the legal effect of a stop notice is merely temporary, and not equivalent to an injunction. On the facts, as submitted by Mr Damien Wong, it is also arguable that the Stop Notices had lost their practical effect since the transfer of the shares to Chan, Jenny and Pang had already taken place in August 2005 despite the Stop Notices having been issued in November 2003. Viewed in this light, and as a matter of substance, it is at least plausible that the HCMP Proceedings may be regarded as an “offensive” judicial process seeking to establish the beneficial ownership of the relevant shares on the false basis contended for in those proceedings in order to take control over them from Mr Lee. In sum, I am not satisfied that the matter is so plain and obvious to merit striking out on this ground.

28.  Mr Wong SC next argued that Mr. Chu was not the “prosecutor” of the HCMP proceedings because he was not a party to that action which was commenced by Chan, Jenny and Pang. In this context, the law looks to substance and not form, and will look to see whether a person was in fact instrumental in bringing the prosecution: Martin v Watson [1996] AC 74, 84C-D per Lord Keith; Davis v Gell (1924) 35 CLR 275, 282 per Isaacs ACJ. I believe those principles can be applied, by parity of reasoning, in the context of civil proceedings.

29.  SOC §14 pleads that Mr Chu caused them to commence the action, and for the purpose of a strike out application, the pleaded facts are generally assumed to be true. In my view, it is a question of fact as to whether it could be proved that Mr Chu caused the HCMP Proceedings to be commenced. I do not consider the allegation to be fanciful or completely without foundation, particularly given Mr Chu’s involvement in providing supporting evidence and his personal relationship with the Plaintiffs in the HCMP Proceedings. In my view, that Mr Chu was not a party to the HCMP Proceedings is not determinative of the matter. To conclude otherwise would be to prefer form over substance. Therefore, I disagree that this is a valid basis to strike out the cause of action.

30.  Mr Wong SC then argued that there was no plea of absence of reasonable and probable cause, and that it did not follow from the adverse findings in the HCMP Proceedings that Mr Chu should be liable in malicious prosecution.

31.  Although the SOC does not expressly refer to the absence of reasonable and probable cause, I do not consider the lack of the incantation to be fatal. In my view, it is important to read the SOC holistically and in context. SOC §15 refers to the false allegations made Mr Chu in his affirmation dated 12 July 2007, and SOC §16 sets out the production of the forged Deed of Assignment. Moreover, SOC §18 pleads out particulars of the false evidence which Mr Chu gave at trial, and SOC §19 alleges that Mr Chu also caused others to give untruthful evidence.

32.  In my view, it is at least arguable that the pleaded facts can support a conclusion that the HCMP Proceedings were commenced without reasonable and probable cause. I have not lost sight of the strong criticism of DHCJ Whitehead SC made against Mr Chu in his judgment. There were serious findings of dishonesty against him. This was not an ordinary case where an account of events given by a witness was not accepted at trial as being improbable. I consider that whether it can be proved that there was an absence of reasonable and probable cause is essentially a question of fact to be determined at trial. 

33.  Mr Wong SC also submitted that there was no express plea of malice. I do not agree that this is fatal. Once again, viewing the SOC as a whole is essential. The SOC makes it clear that the cause of action relied upon is one for malicious prosecution, and sets out the steps which Mr Chu allegedly took in order to obtain for himself the benefit of the shares and to become the majority shareholder of the company. I do not think there is any ambiguity that malice is alleged in the SOC or any doubt as to the facts and matters relied upon in support of that conclusion. Malice can be inferred from a lack of reasonable and probable cause, and a finding of malice is always dependent on the facts of the individual case: Williamson v AG [2015] 2 LRC 717 at §13 per Lord Kerr. The question of whether malice can be proved at the end of the day is a question of fact. I decline to strike out on this basis.

34.  I turn to the question of damages and losses suffered.

35.  In order to establish a claim for damages for malicious prosecution, it must be pleaded and established that the claimant has suffered loss as a result: Bullen & Leake & Jacob’s Precedents of Pleadings, Vol 1, (19^th ed) at §5-16. Mr Damien Wong accepted, correctly in my view, that there must be a viable plea of loss and damages in order to have a sustainable cause of action.  

36.  I will first address with the claim for legal costs in the prior action. SOC §25(3) claims HK$742,283.02 as the unrecovered legal costs arising from the HCMP Proceedings and the appeal. In essence, this is the difference between the actual legal costs incurred and that which was eventually recovered from the other parties.  In my view, a claim for such costs is irrecoverable as a matter of principle in an action for malicious prosecution.

37.  Extra costs over and above those awarded in a prior civil action cannot ground or be recovered in an action for malicious pursuit of that prior action: Willers at §124 & §145; Quartz Hill Consolidated Gold Mining Co v Eyre (1883) 11 QBD 674, 690. I respectfully agree with Lord Mance JSC’s explanation of the rationale behind the rule in Willers at §124: 

“There is an obvious policy imperative behind this rule. A court awarding costs in a civil action is entitled to have regard to all relevant matters, including the absence of any prospects of success and the state of mind in which it was pursued, when deciding what costs, and whether on an indemnity or standard basis; should be recoverable. To permit litigation about these issues after the close of an unsuccessful action would be to invite or risk re-litigation of issues which were or could have been decided in the first action. And in so far as the costs assessed by a costs judge are not likely to or may not enable full recovery of all costs incurred, the reason is likely to be that the costs incurred were not in the eyes of the law necessary, reasonable or proportionate in the context of the issues. To allow a claim for their recovery in a separate action for malicious pursuit of the original action would in each of these cases run contrary to the general policy of the law regarding costs”.

38.  In my view, a party should not be encouraged to seek to effectively re-litigate the amount of costs he ought to have been awarded in a prior civil action in a subsequent action for malicious prosecution. Costs orders are subject to argument as to the scale of taxation at the time when they are granted, and also as to reasonableness in quantum at taxation. To permit re-litigation would amount to a collateral challenge to a prior order of the court and would be contrary to the principles of finality and certainty. To allow such a claim would, in most cases, likely be disproportionate and lead to a waste of judicial resources.

39.  Mr Damien Wong referred to McGregor on Damages, (20^th ed) at §21-020 where the learned editors expressed doubt over the rule in Quartz Hill. With respect, I am unable to place much weight on the views expressed since they does not take into account the analysis of the Supreme Court decision in Willers, which I accept as being correct.

40.  There are two other points I should mention:

(1)  The fact that the claim for extra costs was allowed to proceed in Willers turned on its specific facts. Willers involved an action which had been discontinued, and costs were awarded on the standard basis because a full trial would have been required in order to determine whether indemnity costs were warranted. It was only on those specific facts that Lord Toulson JSC at §58 concluded that there was no collateral attack or abuse of process involved. The position would have been different, however, if there was full argument on the issue of costs after trial.

(2)  I do not consider that the fact that Mr Chu was not a party to the prior proceedings (and not prima facie liable to pay costs) affects the above analysis. On Mr Lee’s pleaded case, Mr Chu was the person responsible for instigating those proceedings. A claim for malicious pursuit of prior proceedings against those responsible for their instigation is in effect a claim between the parties to the prior proceedings: Willers at §145 per Lord Mance JSC.

41.  For the above reasons, my conclusion is that SOC §25(3) seeks to claim loss and damages which are irrecoverable at law. I now turn to the other heads of alleged loss and damage.

42.  Mr Damien Wong stressed that the question of causation of loss is a question of fact which should be determined at trial. I do not accept that this is a conclusive answer in this case. When faced with a strike-out application, the court must still be entitled to examine whether there is any logical or evidential basis to suggest that the loss suffered flowed from the tort in question. If the causal nexus is completely lacking, the court may still decide that the claim for loss is unarguably bad.

43.  SOC§25(1)-(2) alleges that but for the malicious prosecution that Mr Chu would have enforced the Charge to fully recover the loan due by Madam Leung. The alternative plea is for 7,530,024 shares. As I will explain below, I am of the view these are plainly not losses which can fairly be said to be attributable to the alleged malicious prosecution.

44.  It is important that the HCMP Proceedings were only commenced in July 2007. However, on Mr Lee’s pleaded case, the 42,670,136 shares had already been transferred in August 2005 by Wealth Way and Great Fair to Chan, Jenny and Pang in breach of the Charge.

45.  Accordingly, at the time when the HCMP Proceedings were commenced, the transfer of the shares had already taken place.  As Mr Wong SC submitted, there was nothing to stop Mr Lee from seeking to enforce the Charge after August 2005. On a proper analysis, the true complaint is directed at Mr Chu’s alleged conduct in procuring the transfer of shares in August 2005. Although this conduct might arguably be the subject-matter of a different tort, it is clear to me that this is not related to the alleged malicious prosecution of the HCMP Proceedings which were only commenced about 2 years later. The alleged loss could not, in my judgment, conceivably be regarded as following from the commencement or continuation of the HCMP Proceedings.

46.  Equally, I take the view the claim in relation to the 7,530,024 shares is not viable. The effective cause of this loss was the fact that earlier steps were not taken to recover these shares, and the eventual dissolution of Great Fair. In my view, this was unrelated to the HCMP Proceedings, and it is difficult to see how this head of loss is attributable to that action. Moreover, the costs of HK$387,788.93 incurred in seeking to restore Great Fair in the BVI also, in my view, cannot be said to have been caused by the HCMP Proceedings. These costs were simply asset recovery expenses, and I am unable to see their connection with the HCMP Proceedings.

47.  I conclude that the alleged losses sought in the SOC are either irrecoverable as a matter of law, or plainly not caused by the alleged tort of malicious prosecution. In the absence of a viable case of loss and damage, I consider that the claim itself is not sustainable because that it is an essential ingredient of the tort.

The Abuse of Process Claim

48.  I turn to the claim in tort for abuse of process. The essence of this tort is the abuse of civil proceedings for a predominant purpose other than that for which they are designed. This refers to a purpose of obtaining some wholly extraneous benefit other than the relief sought and not reasonably flowing from or connected with the relief sought. It does not extend to cover cases where the defendant was genuinely seeking relief prayed for in the writ for an ulterior motive, even if that motive were malicious or improper. These cases are “extremely rare”: Crawford at §149 & §153 per Lord Sumption JSC.

49.  As Isaacs J stated in the High Court of Australia in Varawa v Howard Smith Co Ltd (1911) 13 CLR 35, 91:

“If the proceedings are merely a stalking-horse to coerce the defendant in some way entirely outside the ambit of the legal claim on which the court is asked to adjudicate they are regarded as an abuse for this purpose”.

50.  It is clear that this tort is rarely encountered in practice and its scope is very limited. I was not referred to any case in Hong Kong where the tort has been successfully invoked. However, the relevant legal principles of this tort were referred to by Au J in Chief Executive of the HKSAR v President of Legislative Council [2017] 4 HKLRD 115 at §§238-244 in the context of an unsuccessful application for a permanent stay of disqualification proceedings for members elected to the Legislative Council. 

51.  Having set out the relevant legal principles, I turn to their application in this case. I consider that it is plain and obvious that the abuse of process claim is unsustainable for three main reasons.

52.  First, the SOC does not identify the relevant predominant purpose or the basis upon which it is alleged that this was wholly extraneous to the relief sought in those proceedings. In my view, this goes to the essence of the tort and should have been specifically pleaded.  An essential element of the tort is lacking.

53.  Second, it is important not to lose sight of the essence of the tort of abuse of process and its limits. However objectionable the relevant underlying conduct might have been, the objective sought to be achieved in that action, in taking control over the shares, still reasonably flowed from the relief claimed in the HCMP Proceedings. It was viewed as a genuinely desired by-product of the litigation, even though on Mr Lee’s case it was conducted improperly and with an ulterior motive. As Lord Sumption JSC made clear in Crawford, the tort does not extend to cases where a party genuinely seeks the relief sought even if there was an improper motive involved. There is no allegation that the action amounted to extortion or coercion in the present case. There is no wholy extraneous purpose pleaded by Mr Lee. In sum, I am unable to see any valid basis to conclude that the proceedings were used for a predominant purpose other than for which they were designed.

54.  Third, for the reasons identified in the context of the malicious prosecution claim, there is no viable claim for loss and damage either. The same logic would apply to the abuse of process claim because the pleaded items of loss are identical for both torts.

The Order 14A Application

55.  Since I have decided that the action should be struck out, it is unnecessary to make the determination of law sought in the Order 14A application. However, had I not decided to strike out the action, I would have declined to make the Order 14A determination.

56.  The Court of Appeal has cautioned against summary determination of emergent legal principles in the context of interlocutory applications. In Tadjudin v Bank of America National Association, [2010] 3 HKLRD 417, Stone J (CA) stated at §7:

“In principle it seems to me to be inappropriate, in a case wherein an "emergent" legal principle is at stake, favourably to entertain an interlocutory application - whether in the guise of a strike-out or pursuant to O.14A - which would have the effect of negating full argument on the point when advanced in face of the facts as established on the evidence led at trial”.

57.  In my view, the issue of whether the tort of malicious prosecution should be extended to cover civil proceedings generally is precisely the type of “emergent legal principle” which should not be summarily determined on a strike out or Order 14A application. Although there was legal argument presented on the issue, it mostly consisted of assertions that either the majority or minority judgments in Willers and Crawford were correct. This is perhaps understandable since the matter was argued at an interlocutory hearing fixed together with a strike out application. But this would have been the first occasion on which a Hong Kong court has been called upon to squarely determine this issue. There are important implications for Hong Kong law if the tort were to be extended. I take the view that in-depth analysis of other overseas jurisprudence would have been of assistance, together with a detailed analysis of how the tort of malicious prosecution should be developed, if at all, in the local context. In the absence of full argument on these matters, and bearing in mind that I do not have the benefit of a full set of facts at trial, I am not satisfied that it would have been appropriate to make the Order 14A determination.

Conclusion

58.  I make an order in terms of §1 of the summons dated 23 April 2019 to strike out the action as disclosing no reasonable cause of action.

59.  I make a costs order nisi that:  

(1)  the Plaintiff pay the Defendant the costs of this action, to be taxed if not agreed; and

(2)  the Plaintiff pay the Defendant 50% of the costs of the summons dated 23 April 2019, to be taxed if not agreed.

60.  The reduction in costs awarded on the summons is made to reflect the fact that the Plaintiff was not successful on a number of grounds raised in the strike out application, and I would have declined to make the Order 14A determination in any event. Viewing the matter globally, and taking into account the time spent on the issues at the hearing, I consider that a reduction of 50% would be appropriate.