K & L GATES v. NAVIN KUMAR AGGARWAL AND OTHERS

HCMP 1749/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 1749 OF 2016

(ON AN INTENDED APPEAL FROM HCA NO 1061 OF 2011)

________________________

________________________

AND

(ON AN INTENDED APPEAL FROM HCA NO 349 OF 2012)

________________________

___________________________________

REASONS FOR JUDGMENT

___________________________________

Hon Lam VP (giving the Reasons for Judgment of the Court):

1. This is an application for leave to appeal against the decision of Au-Yeung J on 20 May 2016 by which the learned judge refused to strike out the Plaintiff’s claim and ordered discovery against the 2^nd Defendant. The 2^nd Defendant sought leave to appeal, which was refused by the judge on 27 June 2016.

2. Mr Lam SC renewed the application for leave before us on behalf of the 2^nd Defendant.

3. The appeal against the discovery order is an adjunct to the appeal against the refusal to strike out.  If the latter fails, Mr Lam accepted that there cannot be any appeal against the discovery order alone.

4. Having considered both written and oral submissions of Mr Lam, we are of the view that the intended appeal does not have any reasonable prospect of success.  Nor do we see any other grounds for granting leave in the interest of justice.  Our brief reasons are as follows.

5. The judge has applied the correct approach in the exercise of her discretion, see the approach set out at [20] to [22] of the judgment of 20 May 2016.  Mr Lam confirmed before us that he is not arguing that a claim of agency cannot be proved by inference.  With respect there is nothing in Mr Lam’s point as to pleadings.  We do not see anything wrong for the judge (applying to hold that all the relevant circumstances and evidence are to be considered together at the trial in assessing whether the inference is to be drawn though Simply Power Ltd v Billy Chau HCA 2452 of 2013 was decided in a different context.

6. The only point of substance, as far as we can see, is whether the matters now identified by the Plaintiff are capable of raising a case of agency by inference at the trial.  The striking out application can only succeed if the 2^nd Defendant persuaded the court that they are not so capable.

7. In that respect, the judge quite rightly said that she should not strike out a case simply because it is perceived to be weak at this stage.  The matters set out in the pleadings, including the particulars given, taken as a whole may establish an inference of agency between Sat Ieng Co [“SIC”] and the 2^nd Defendant on the balance of probabilities at the trial.  Though much depends on the evidence at the trial, we agree with the judge that such a possibility cannot be ruled out at this stage.  In this connection, there is much to be explored in evidence as to the relationship between these entities in light of the activities involved by both (which can be regarded loosely as activities of a junket operator) their common name and place of business.  Though these matters per se cannot prove conclusively that SIC was an agent of the 2^nd Defendant, it is not speculative to hold that such matters may form a valid basis for inferring such agency.

8. The Plaintiff has pleaded its case that SIC acted as the agent of the 2^nd Defendant in receiving the monies. That is the material fact.  The Plaintiff also pleaded that it is running a case based on inference.  The matters relied upon are pleaded as particulars. It is not necessary for the Plaintiff to plead evidence.  The judge was entitled to hold that for the time being sufficient particulars have been given.

9. Further materials may be obtained through discovery or interrogatories.  If the Plaintiff were to rely on additional matters after discovery and/or interrogatories or exchange of witness statements, the Plaintiff should add those by way of additional particulars.

10. This being a civil case with civil standard of proof in terms of drawing inference, with respect, we do not see the relevance of Chan Yuet Kwan v R CACC 212 of 1973.  The relevant principles guiding civil cases are set out in Ming v Ming (2006) 9 HKCFAR 334 [78] and [79].  The court should not indulge in conjecture under the guise of drawing an inference.  The facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied on the balance of probabilities.  But this is a question to be asked at the trial, not at this stage.

11. We are of the view at this stage the claim should not be struck out on the basis that it is plain and obvious that no inference of agency could be drawn at the trial.

12. We are not satisfied it is reasonably arguable that the judge’s exercise of discretion is plainly wrong or in any respect erred in principle.  This Court does not have any reasonably arguable basis to intervene with her refusal to strike out. 

13. For these reasons, we dismissed the application for leave with costs. We also ordered the 2^nd Defendant to pay the Plaintiff the costs of the application and having heard submissions we fixed such costs at $100,000.