XCHRX TRANE SERVICE HONG KONG v. HIGH CASTLE PROJECT & INDUSTRIAL TRADING CO. and LELIDOO CAF?CO. LTD. (Third Part)

HCA5977/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.5977 OF 1998

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J U D G M E N T

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1. The Plaintiff applied to strike out Paragraphs 7 and 8 of the Defence. The Master dismissed the application and the Plaintiff now appeals.

2. The Plaintiff claims $105,000 being the price of goods sold and delivered and services rendered by the Plaintiff to the Defendant. The defence raised is that the Defendant is not personally liable to the Plaintiff because it was merely acting as an agent for a company call Lelidoo Café Company Limited ("Lelidoo"). The Plaintiff had agreed to provide goods and services to Lelidoo and the amount now claimed by the Plaintiff is the responsibility of Lelidoo.

3. The two paragraphs that the Plaintiff wishes to strike out are paragraphs 7 and 8 :

"7. Lelidoo Cafe refused to pay the Plaintiff the said balance sum of HK$105,000.00; the main reason being that the renovation work carried out by the Plaintiff at the Site did not correspond with its sketch drawings which was submitted to the Government, rendering Lelidoo Cafe's application for a restaurant licence unsuccessful.

8. At a meeting held on 14th May 1998 where representatives of both the Plaintiff and Lelidoo Cafe were present, the Plaintiff and Lelidoo Cafe have agreed, inter alia, as follows :

(a) the Plaintiff shall submit a new set of sketch drawings to satisfy the Government for approving Lelidoo Cafe's application for a restaurant licence;

(b) Upon issuance of a restaurant licence, Lelidoo Cafe shall settle the balance payment of HK$105,000.00 by 3 instalments, respectively in the sum of HK$50,000.00, HK$34,000.00 and HK$21,000.00."

4. The Plaintiff says that these two paragraphs are embarrassing because they are not pleaded as an alternative to the defence that the Defendant was merely an agent. In order to respond to these two paragraphs, the Plaintiff would be put to greater inconvenience and expenses. It has to call evidence on the work allegedly not properly done by the Plaintiff. The Plaintiff further alleges that the Defendant has not provided particulars of these two paragraphs.

5. I think the application to strike out is misconceived. The stance of the Defendant is clear. On the pleadings, it is not relying on any alternative defence at all. The fact that no alternative defence is made does not mean the two paragraphs must be struck out. The issue in this case is the existence of an agency. The Defendant is clearly entitled to plead paragraph 8 where he pleads that in the meeting, his principal was present and his principal and the Plaintiff agreed on how the sum was to be repaid. These are matters that are clearly relevant to the existence of the agency. Paragraph 7 provides the background to the meeting. The lacking of particulars is not a ground for striking out.

6. It is for the Plaintiff to decide how it should respond to these pleadings. As to possible amendments to the defence later on, this is a matter to be considered later when it is in fact raised. As the matter now stands, in my view, the Master was correct to dismiss the Plaintiff's application. The appeal is dismissed.

7. [The case is transferred to the District Court].