FAN KIN NANG v. PROVIEW INTERNATIONAL HOLDINGS LTD

HCA 934/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 934 OF 2005

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J U D G M E N T

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1.  This is an appeal from the Master’s decision refusing to strike out certain paragraphs in the amended statement of claim and re-amended reply and defence to counterclaim.  The paragraphs relate to the last-minute deletion of certain disclosure provisions in the financial statements of the defendant by which the plaintiff was employed.  Part of his job was to oversee the preparation and completion of the financial statements for publication in satisfaction of the Stock Exchange requirements.  The deadline for the preparation of the financial statements was 10 pm on 29 October 2003 and the plaintiff failed to meet the deadline.  He was summarily dismissed for that reason on 3 November.

2.  The plaintiff sues in respect of the dismissal, which he says is wrongful.  He now says in the affirmation evidence that he has filed that the reason or part of the reason or contributing circumstances leading to his inability to finish proof-reading the financial statements in their final form, was the last-minute deletion of the disclosure provisions relating to a Taiwanese company known as MAG.

3.  Those paragraphs that the defendant seeks to strike out relate to, as I say, the last-minute deletion of the disclosure provisions.  Several points have been advanced by Mr Arthur Wong, counsel for the defendant in this appeal.  First, he argues that the paragraphs relating to MAG are simply irrelevant.  I understand why he says this, particularly if one were simply to look at the amended statement of claim.  On the face of it there is nothing specifically to link the last-minute deletion of the disclosure provisions to the purported summary dismissal of the plaintiff by the defendant or the plaintiff’s reasons for saying that the dismissal has not been lawful.

4.  If one goes on to read the subsequent pleadings as well, which is what I have done, the picture will become clearer, even though I must at once add that there will still be doubts regarding what the plaintiff’s case on the relevance of MAG is.  But as I have also mentioned, his case on MAG and the last-minute deletion of the disclosure provisions has now been made tolerably clear in his affirmation evidence.

5.  Whether looked at from the angle of pleadings only or together with evidence, the latter course being legitimate only in cases where the striking-out ground is that the pleading is frivolous or vexatious, the plaintiff’s case, as one now understands it, is not beyond cure.  It is trite that the draconian power of striking out should only be exercised by the court in a plain and obvious case.  If a case or a pleading is capable of cure by suitable amendment, the court should be very slow to exercise the power to strike out the pleading and (where appropriate) dismiss the action.  Instead, what the court should do insofar as circumstances permit, is to allow the plaintiff to amend his pleading or pleadings to properly put his case. 

6.  One proviso that I should immediately add is that any such amendment should be supported by believable evidence.  Here, I have in mind the distinction between whether something is believable and whether it should be believed.  If the proposed amendment is not supported by anything believable, it should not be allowed to cure a pleading defect.

7.  On the other hand, if the supporting evidence is believable, even though for the time being it does not appear to be particularly impressive, that, in my view, in a normal case, should not be a ground for refusing amendment and exercising the draconian power of striking out the pleading and dismissing the action.  Of course, here, one is not talking about dismissing an action but then I have been talking in general terms.

8.  The plaintiff has indicated to the Court that he has no difficulty in formulating suitable amendments in relation to the supposedly offending paragraphs in question in terms of what he has set out to be his true case relating to MAG and the last-minute deletion of the disclosure provisions in his affirmation evidence.  So on the basis that the plaintiff is going to formally amend his pleadings in that manner, I do not accept Mr Wong’s first ground.

9.  Secondly, Mr Wong submits that, and this is a point foreshadowed by my discussion relating to whether a proposed amendment is supported by believable evidence, the plaintiff’s present case, as disclosed in his affirmation evidence, is simply frivolous or vexatious in the sense that it is not believable.  He says the asserted relevance of MAG in terms of the plaintiff’s failure to complete his task by the deadline resulting in his summary dismissal, is wholly contradicted by contemporaneous documents.

10.  Mr Wong refers the Court to various documents filed and relied on by the plaintiff at different stages of the disputes between the parties, which have, I must observe, resulted in various proceedings and applications before this court and before that, the District Court and, still earlier, the Labour Tribunal.  In short, Mr Wong’s point is that the suggested relevance of MAG is only an after-thought.

11.  The Court, at this stage of the proceedings, does not seek to try the case on paper.  It would be an impossible task to perform.  On the other hand, day in and day out, factual, particularly bare oral assertions made by parties, are thrown out of the court because they are hopelessly contradicted by undisputed or reliable contemporaneous documents or evidence.

12.  Having reviewed the evidence available to the Court, I cannot come to the conclusion, despite Mr Wong’s most persistent submission, that the explanation given for the relevance of the MAG matter by the plaintiff in his affirmation evidence is wholly unbelievable.  I recognise there are contemporaneous documents which, depending on how they should be read and understood, can be taken to contradict the plaintiff’s present claim; but it seems to me that they are really matters for trial and cross-examination, a matter on which I would refrain from expressing any comment if possible.  All I would say, by way of general statement only without any specific reference to the facts in the present case, is that the fact that a party may have a strong case on evidence or documentary evidence, does not mean that his opposite party’s case is wholly unbelievable or should be shut out without a proper trial.

13.  Moreover, Mr Wong’s claim that the plaintiff’s present explanation for the MAG matter and its relevance is a recent invention would seem to be an overstatement on the facts, if I may say so with respect to counsel.  At the very least, the MAG matter and its relevance to the preparation of the financial statements in question in general, were raised by the plaintiff with the Labour Tribunal when the matter was still pending before the Tribunal in as early as February 2004, just a few months after the events in issue.

14.  Furthermore, the plaintiff has, in some paragraphs in his skeleton submission, given explanation for his failure to make clear his case in the earlier documents used in the proceedings.  Whether those explanations should be believed is, I believe, a matter for trial but certainly, for my part, I am unable to say that they are unbelievable claims.  Mr Wong is right in the sense that these factual assertions cannot be made in a skeleton submission but that is just a technical point, bearing in mind, in particular, that the plaintiff has been acting in person.  What a legally represented party would have done in the circumstances of the plaintiff would be to include what has been asserted in the relevant paragraphs in the skeleton submission in a supplementary affirmation or affidavit.

15.  Mr Wong, to be fair to him, does not press his point further in this regard.  On the other hand, the plaintiff, having realised the distinction between his skeleton submission and affirmation evidence, has undertaken to the Court that he will file a further affirmation to verify and confirm as true and correct what he has given by way of explanation in his skeleton submission in relation to his failure to clearly set out the suggested relevance of the MAG disclosure matter in the documents filed in the legal proceedings before.  All in all, I am unable to accept Mr Wong’s second ground. 

16.  Finally, Mr Wong says that the allegation relating to the MAG disclosure matter is done with an ulterior motive, namely, to complicate the issues in this straightforward employment dispute, “straightforward” being a word used by counsel, in relation to which I wish to make no comment, and particularly as a plank to support his application to subpoena the chairman of the defendant to give evidence at trial.  Mr Wong says it is designed to embarrass the defendant, a public-listed company, and those responsible for managing and running the company.  It puts undue pressure on the defendant.  It is an abuse of the process of the court.

17.  These are serious allegations.  Whilst I can see Mr Wong’s point and understand his line of thinking, again, for my part I am unable to accept these allegations.

18.  On the materials before me, I am not satisfied that the MAG allegation is motivated by something that amounts to an abuse of the process of the court.  The fact that it may give rise to embarrassment to the defendant or individuals connected with the defendant, or that it may raise issues of law or fact, including Taiwanese law, is an inevitable consequence of it being an issue between the parties.  That is not a reason by and of itself to stop the plaintiff from raising the matter in question as an issue.  As I said, I am unable to conclude, the burden being squarely on the part of the defendant, that the matter has not been raised bona fide as an issue by the plaintiff.  In short, I reject Mr Wong’s last ground as well.

19.  I have also considered all other miscellaneous points made in the oral as well as written submissions of counsel.  All I wish to say is that I have considered all those points.  I believe I have dealt with the main points raised by counsel.  For the reasons given, subject to what I would formally say in relation to amendment and undertaking to file evidence, the appeal must be dismissed and I so order.