YU MAN v. CHIEF COMMODITIES LTD

[English Translation – 英譯本]
HCMP1170/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 1170 OF 2016

(ON AN INTENDED APPEAL FROM DCCJ NO 3590 OF 2014)

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JUDGMENT

Hon Chu JA (giving the Judgment of the Court):

1.  The plaintiff applied to this court for leave to appeal against the ruling made by Deputy District Judge Tam (“the trial judge”) on 14 December 2015.

2.  The plaintiff had applied for leave to appeal from the trial judge but the application was refused on 6 May 2016.

3.  Having considered the circumstances of this application, this court finds it fit to determine the application without a hearing on the basis of written submissions only under O.59, r.2A(5)(a) of the Rules of the High Court, Cap. 4A.

Factual Background

4.  The plaintiff, Mr Yu, opened an investment account with the defendant company on 14 October 2009 for futures and forex trading. He made a claim in the District Court for damages against the defendant on 18 September 2014.

5.  The plaintiff stated in his statement of claim that owing to the improper conduct of the defendant, he suffered huge loss in the futures and forex markets, and he asked for compensation of one million dollars. The defendant denied the allegations.

6.  After filing the defence, the defendant asked the plaintiff for further particulars in relation to the allegations in the statement of claim but the request was refused. Upon the application by the defendant, a master of the District Court ordered the plaintiff to provide further particulars of the allegations in his statement of claim. As the plaintiff failed to comply with the order, the defendant applied to strike out the statement of claim and dismiss the action.

7.  After the hearing, the trial judge found the statement of claim vague and lacking in necessary details, it not only did not disclose any reasonable cause of action but also had no chance of success, and so he considered it frivolous or vexatious. If the plaintiff were to be allowed to continue the proceedings with the present pleading, it would prejudice or delay the fair trial of the action and cause an abuse of the process of the court. Therefore, on 14 December 2015 the trial judge ordered that the statement of claim should be struck out and the action be dismissed.

The plaintiff’s grounds of appeal

8.  The plaintiff set out his grounds of appeal in a document titled “Reply to deputy Judge Tam’s judgment dated 22 December 2015” when he applied for leave to appeal before the trial judge. I shall summarise as follows:

(1) The trial judge’s judgement was empty and without substance, and the allegations against the plaintiff were not true.

(2) The pleading only needed to state the time, place and a brief description of the case such as the wrong of the defendant and how the plaintiff’s loss was caused; other details should be dealt with during the formal trial. Further, the defendant, who was the persecutor, should know their wrongs and collect relevant information on their own.

(3) The pleading, though imperfect, was not a reason to strike out the action since there was no limit on the number of times to amend it.

(4) The defendant’s application to strike out the statement of claim was too late.

(5) The judge had granted leave to proceed before the commencement of this action for the reason that there was a cause of action and reasonable prospects of success.

(6) The judge had indicated many times during case management hearing that the statement of claim was clear and required no amendment.

(7) The court was biased in favour of the defendant.

(8) The appointment of the trial judge was against the Basic Law and common law.

9.  The plaintiff added two new grounds of appeal in his summons by which he made an application for leave to appeal to this court. In normal cases the Court of Appeal would only deal with the grounds of appeal when the applicant made his application for leave to the trial judge. Since the plaintiff did not raise these grounds in his summons to the trial judge and these grounds consisted of only two simple sentences and were without any specific content, this court will not accept them.

10.  The plaintiff had filed an affirmation in support of his application for leave to appeal. He also submitted a number of documents by way of mail on 1 June 2016, which included the hearing bundle of the District Court hearing on 19 April 2016. After that, on 11 July 2016, the plaintiff submitted a document named “appeal submission” with attachments including a few pages of an authority, and the first page of a 5-page monthly statement dated 30 April 2010. This court must say that documentary exhibit must be submitted by way of affirmation instead of letters and submissions. Furthermore, an application for leave to appeal should not refer to documents and evidence that were not adduced during the hearing in the lower court. Also, any documentary exhibits and authorities submitted must be complete.

11.  The defendant did not submit any written reply to the plaintiff’s application for leave to appeal.

Discussion

12.  Section 63A of the District Court Ordinance (Cap 336) provides that leave to appeal in respect of a judgment, order or decision of the District Court shall not be granted unless the court is satisfied that the appeal has reasonable prospects of success; or there is some other reason in the interests of justice why the appeal should be heard.

13.  Striking out the pleading and dismissing the action is a matter of discretion for the trial judge. It is a well-established legal principle that the appeal court will not interfere with or set aside a decision of the lower court in exercise of its discretion unless the plaintiff can show that it was exercised in an erroneous application legal principle or in disregard of legal principle, or by taking into account irrelevant matters or under a misapprehension as to facts (Hong Kong Civil Procedure, vol 1, §59/0/54).

14.  We shall apply the above legal principles and examine the plaintiff’s grounds of appeal one by one.

15.  As to ground 1, whether the judgment is in detail terms or not, that does not in itself constitute a ground of appeal. The plaintiff must state precisely in what way the trial judge was plainly wrong in his findings of law or basic facts. This ground must fail.

16.  Grounds 2 and 3 must fail, too. The plaintiff’s understanding of the requirements for the content of pleadings was misconceived. In civil proceedings, the intention and purpose of the pleadings are to clarify and clearly define issues in dispute between the parties and the substantial questions of law involved in those issues, so that the parties would be able to collect the relevant evidence, disclose relevant documents, and prepare for trial (see ADS v. Wheelock Marden & Co Ltd [1994] 2 HKC 264).

17.  The court has stressed countless times in many cases the importance of pleadings and what the court expects in pleadings. The case cited by the plaintiff in his “appeal submission” also made reference to this point (Yu Man v. Chan Bing Foon and another (unreported) HCA68/2005, date of judgment: 14 September 2005, para 24). After the implementation of the Civil Justice Reform in 2010, the court has imposed stricter requirements on pleadings. In Sinoearn International Ltd v. Hyundai-CCECC Joint Venture (2013) 16 HKCFAR 632, the Court of Final Appeal reiterated that when the litigants and their legal representatives prepared pleadings, the rules of pleadings must be strictly met.

18.  A statement of claim must state expressly the cause of action of the plaintiff and its factual basis. Even if the plaintiff has a factual and legal basis for his claim, where there is no point of substance whatsoever in the pleading that can outline the cause of action, and there is a lack of necessary and substantive particulars, so that no reasonable cause of action can be established, the court is entitled to strike out the statement of claim and dismiss the action.

19.  Moreover, Order 18, rule 19(1) of the Rules of the District Court provides that the Court may at any stage of the proceedings order to be struck out any pleading or the action to be dismissed on any one of the following grounds:

(1) it discloses no reasonable cause of action or defence; or

(2) it is scandalous, frivolous or vexatious; or

(3) it may prejudice, embarrass or delay the fair trial of the action; or

(4) it is otherwise an abuse of the process of the Court.

20.  We have examined the plaintiff’s statement of claim very carefully. Various allegations were made in the statement, but none of them was supported by substantive particulars, and no cause of action was clearly established. The plaintiff claimed that he was the victim and the defendant was the persecutor, so that it was the defendant’s responsibility to provide details and explanation of his tortious acts. The plaintiff also raised a point that since the defendant had submitted the accounts statements, it was the defendant’s duty to explain liability, risk, profit and loss and etc. These propositions are wrong. The well-established legal principle is that the plaintiff who makes the claim has the burden of proving his allegation and claim, it is also his duty to provide in his pleading the details of his allegations such as “improper acts”, “dishonesty” and “blatant tortious acts” and the factual basis and particulars involved.

21.  Besides, although the Rules of the District Court allow amendments to be made to the pleadings, that does not mean it is not subject to any restriction. A litigant may not amend the pleading freely, or amend an imperfect or defective pleading without any limit to the number of occasions. When a party has amended the pleading at any time before the pleadings are deemed to be closed, the Court may, as the case requires, order the amendment to be struck out under Order 20 rule 4. Order 20 rule 5 requires that after the date for the filing of a pleading has expired, the litigant may amend the pleading only when the Court has granted such leave.  Order 20 rule 8(1A) also provides that the Court shall not grant leave for a pleading to be amended unless it is of the opinion that the amendment is necessary either for disposing fairly of the cause or matter or for saving costs. It is obvious that a litigant does not have the absolute right to amend the pleading freely and at any time.

22.  In this case, the plaintiff never made any application to a master of the District Court or the trial judge to amend the statement of claim. Even if he had intended to amend the statement of claim, he must submit to the court the proposed amendment and show the court that the proposed amendment can assist in establishing a reasonable cause of action and clarifying the issues in dispute.

23.  Having reviewed the situation, this court is of the view that the trial judge was entitled to exercise his discretion under the Rules of the District Court Order 18 rule 19(1)(a) and order the plaintiff’s statement of claim to be struck out on the ground that it disclosed no reasonable cause of action. In the circumstances, this court needs not discuss whether the plaintiff’s pleading was scandalous, frivolous or vexatious, or an abuse of the process of the Court as described in Order 18 rule 19(1)(a).

24.  As far as ground 4 is concerned, an application to strike out a pleading no doubt should be made as early as possible, but the Rules of the District Court Order 18 rule 19(1A) expressly stipulates that a party may apply to the Court to strike out a pleading at any stage of the proceedings. The trial judge was of the view that since the law does not set any time limit for the application to strike out a pleading, it was not too late for the defendant to make such an application about two and a half months after the pleadings in the action were closed. Therefore, the trial judge exercised his case management discretion and granted the defendant’s application. This court does not find the trial judge to be wrong on a matter of legal principle or a matter of factual basis, the Court of Appeal should not interfere with his decision.

25.  As to ground 5, the plaintiff did not specify which judge considered his case had a reasonable prospect of success and granted him right to proceed. More importantly, the plaintiff’s proposition revealed his misconception about the legal proceedings. Civil proceedings in Hong Kong do not require a litigant to obtain approval from the court before making a claim, let alone confirmation by a judge of the cause of action and reasonable prospect of success before proceeding with his case.

26.  As to grounds 6 and 7, the plaintiff did not provide substantive evidence to support his allegation and this court shall ignore them.

27.  Ground 8, which was unrelated to this case, could not constitute a ground of appeal.

Order of this court

28.  Given the above analysis, the plaintiff’s appeal does not have any reasonable prospect of success and there is no reason why it should be heard in the interest of justice, accordingly, this court refuses to grant leave to appeal

29.  Since the plaintiff’s application is totally without merit, under Order 59 rule 2A(8) of the Rules of the High Court, this court orders that either party shall not request the Court of Appeal to reconsider the determination at an oral hearing inter partes under rule 7 of that Order.

30.  We make no order as to costs in respect of this application.