CHAN SHING CHOI AND ANOTHER v. KOO MOO YU AND OTHERS

HCA 2271/2017

[2019] HKCFI 2995

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2271 OF 2017

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(Leading action)

HCA 9/2018

 IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 9 OF 2018

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D E C I S I O N

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1.  This is an appeal from the decision of Master Kate Li refusing the Defendants’ application to strike out part of para 10 of the Reply. 

2.  The Plaintiffs had filed a Respondents’ Notice to cross-appeal what appears to be an observation made by the learned Master that the averments in question were not relevant to the issues in these proceedings.  Such a step is plainly misconceived.  An appeal from a Master to the Court of First Instance is by way of rehearing.  Further, there is no order relevant to the cross-appeal.  Therefore, the Notice of Cross-Appeal must be dismissed, and I do so.

3.  There are few cases where the merits of a strike out are as plain as the present.  This is an action by the Plaintiffs for breach of promises made by their ex-employers to them for their continuous service, namely, to award the 1^st Plaintiff 10% of the employers’ business upon his retirement and to give each of them 20,000 shares in Hong Kong Stock Exchange Ltd upon their retirement.  There is also a claim for breach of the Employment Ordinance, Cap 57 and the Mandatory Provident Funds Ordinance, Cap 485.

4.  Paragraph 10 of the Reply pleaded as follows :

“Paragraph 17 is not admitted. The Plaintiffs avers that in further contravention of, inter alia, the relevant provisions under Securities and Futures Ordinance Cap. 517 and/or Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission, D1 and/or D3 induced unlicensed persons, including one 華千忠, to procure clients to trade stocks at HKSE. Some of the clients were induced to open accounts, through D3’s stocks shareholding account within CCASS, ie Central Clearing And Settlement System, at HKSE. CCASS is a securities settlement system established, used and maintained by HKSE for the stock market in Hong Kong. D1 and/or D3 gave commission rebates to華千忠 for the trades conducted in such clients’ accounts.”

5.  The Defendants sought to strike out the entirety of para 10 with the exception of the first sentence (“Offending Part”). 

6.  Essentially, paragraph 17 of the Defence pleaded an admission that the Plaintiffs’ employments were transferred from the 2^nd to the 3^rd Defendant in May 1999 and that such transfers were evidenced by letters.

7.  It can immediately be seen that the Offending Part has nothing to do with either para 17 of the Defence or the claims made in this action.  It contains very serious allegations which are lacking in proper particulars and wide ranging.  It would require much time and resources to deal with such allegations.

8.  It was said on behalf of the Plaintiffs that the Offending Part goes to support their case on deceit and misrepresentation. First of all, these allegations are not easy to understand because, on the Plaintiffs’ own case, the promises were made in March 1981 and July 2000.  I can see nothing in the Statement of Claim to support a case of deceit back in those days, as opposed to a case where the promises were not fulfilled many years later. 

9.  Secondly, the allegations of deceit and misrepresentation cannot justify boundless allegations of misconduct.  The Offending Part is simply allegation of misconduct, and quite irrelevant to this action: see Christie v Christie (1872-73) LR 8 Ch App 499 at 504.

10.  The principles for strike out are trite: see Hong Kong Civil Procedure 2020, vol 1, rubrics 18/19/6 and 18/19/8.  I am in no doubt that the Offending Part is scandalous and would prejudice, embarrass or delay a fair trial of this action. 

11.  For these reasons, I strike out the Offending Part.  The appeal is allowed and the order below is set aside. 

12.  The parties had agreed that costs should follow the event.  I therefore make an order that the costs of and occasioned by the Summons filed on 28 September 2019 (which should include the costs of the hearing below), this appeal and the cross-appeal be paid by the Plaintiffs, to be taxed if not agreed.