MAKHSSIAN TRAJAN VAHE v. HONG KONG CYBERPORT MANAGEMENT CO LTD

HCA 43/2017

[2019] HKCFI 577

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 43 OF 2017

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D E C I S I O N

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1.  This is the hearing of the Notice of Appeal (the “Notice of Appeal”) taken out on 14 January 2019 by the plaintiff (“P”). The Notice of Appeal relates to the Decision of Master Wong made on 28 May 2018 (“Master Decision”) striking out P’s Re-Amended Statement of Claim[1]of 14 December 2017 (the “Re-Amended Statement of Claim”). The main issue is whether leave should be granted to P to issue the Notice of Appeal out of time. Related to that main issue is the merits of P’s proposed appeal.

Events leading to this appeal

2.  For a fuller account of the background of this case, of the related case of HCA 2395/2016, and the events leading to the present appeal, I respectfully refer to the judgment herein of Lok J dated 5 December 2017 (the “Lok J Judgment”). I recite them briefly.  

3.  P is the sole director and shareholder of Musicasia Entertainment Hong Kong Limited.  It has in the past hosted an event known as “White Party”.  He is the plaintiff in both HCA 2395/2016 and the action herein.

4.  The defendant in HCA 2395/2016 is ISS Eastpoint Property Management Limited (“Eastpoint”).  It was at the time material to these actions the facility manager of Cyperport.  The defendant herein (“D”) is the owner of Cyberport.

5.  The dispute related to the booking of the Ocean View Court (“OVC”) of Cyberport by P to hold the White Party on 3 September 2016.  The event could not be held as P had intended.  P claimed that it was the result of the fault of Eastpoint and D.

6.  Acting in person, P took out the Writ herein on 9 January 2017.  It was indorsed with a brief Statement of Claim.  He pleaded therein (all typographic errors being those of the original) that:

“ [P’s] claim is for (i) infringement of intellectual property rights; (ii) breach of fiduciary duty and duty of confidentiality; and (iii) unlawful interference with [P’s] business, (iv) Tortious interference, (v) Defamation, that caused pure damages to [P]. [P] is unable to flourish due to [D’s] wrongdoings such as negligence, intentional falsifying, manufacturing evidences and using others to mislead and disrupt [P’s] affairs and to evade liabilities. [P] is very distracted due to [D’s] conducts and is unable to do business. [D] caused severe harm to [P’s] progress, monetary incomes, intellectual properties, reputation, and infliction of emotional distress.

[P] is the intellectual property and copyright owner of the brand and name White Party in Hong Kong and mynetfriends.com

[D] applied a TPPE license from the Food and Environmental Hygiene Department (FEHD) on behalf of White Party Hong Kong Without the authorization of [P].

[P] seeks a starting point of $20,000,000.00HKD twenty Million Hong Kong Dollars of compensation and damages for the conduct that occurred by [D] in settlement of any potential claim against [D].”

7.  On 27 January 2017, D took out an application for an Order that the Statement of Claim be struck out and P’s claim be dismissed (“D’s application to strike out”).

8.  On 20 February 2017, P filed his Amended Statement of Claim(indorsed as having been amended without leave, “Amended Statement ofClaim”). He pleaded therein his background and the nature of his business.  He then pleaded (all typographic errors being those of the original) that:

“ 4. [P] invited top international artists to perform for the event that was supposed be happened in Cyberport on the 3rd Sept 2016. In fact it was the 11^th anniversary of White Party Hong Kong.

5. [P] booked the venue ocean view court at Cyberport, the event was cancelled with an excuse that a car show was booked on the same day the 3^rd September 2016.

6. On the 3^rd September 2016 [P] discovered no car show ever took place.

7. On the 15 Sept 2016 The Plaintiff commenced the Action. HCA 2395/2016 to recover the loss and damages from [Eastpoint].

8. On 7^th October 2016, it has been discovered in a document about a Temporary Place for Public Entertainment (TPPE) license application submitted by [D] to the food and environment hygiene department (FEHD).

9. It was clear to [P] that a serious breach and wrongful conducts occurred, especially with the derogatory comments obtained by [D].

10. [D] applied a TPPE license from the Food and Environmental Hygiene Department (FEHD) on behalf of White Party Hong Kong without the authorization of [P].

11. [D] destroyed [P’s] business, his intellectual Properties rights and damaged the reputation of [P].

12. [D] has no care of any business ethics.

13. [P] is the intellectual property and copyright owner of the brand and name White Party Hong Kong and mynetfriends.com

14. [P] never breached any conditions or rules for booking [D’s] venue.

15. [P] never broke any laws, regulation or conditions by conducting business with [D].

16. Hence [D] has illegally interfered with [P’s] affairs and; that [D] is using special tactics that are calculated and artfully intended to compromise [P’s] rights.”

P then claimed damages for “breach of confidence and for breach of fiduciary duty” in the amount of $10 million, “damages for defamation” in the sum of another $10 million, “Punitive, aggravated and exemplary damages” in the sum of $5 million, and other unspecified “special damages in an amount to be determined prior to trial.”

9.  D’s application to strike out was subsequently heard, together with a number of other interlocutory applications, before Lok J.  On 5 December 2017, Lok J handed down his Judgment (ie the Lok J Judgment).

10.  I refer to the Lok J Judgment:

(a)  At §13 Lok J observed that:

“ As I see it, [P] is making two broad claims against the Defendants. Firstly, he seeks to argue that there was a binding agreement for the booking of the OVC on 3 September 2016 by relying on the oral assurance given by Wong on 11 August 2016. Secondly, [P] also alleges that both Eastpoint and Cyberport Management had committed various torts against him, including unlawful interference, fraudulent misrepresentation, defamation, breach of confidence and fiduciary duty, fraud, and inducing a breach ofcontract. From the pleadings (including the proposed re-amended pleadings), all of these claims arise from the same facts, namely the Defendants’ application of the TPPE Licence in relation to the White Party.”

(b)  Lok J then proceeded to consider those two broad claims;

(c)  In respect the contractual claim:

(i)  Lok J held that there were factual issues which need to be properly investigated at a trial.  He further observed that:

“ It is arguable that there is legal consequence from the making of the alleged oral assurance [on 11 August 2016] and the matter should be properly canvassed at the trial.” (§18)

(ii)  He observed however that:

“ 21. Unfortunately, this is not the end of the matter. First, [P] has not brought a contractual claim against Cyberport Management. The contractual claim is only pleaded against Eastpoint. Further, it is not clear from the pleadings (including the proposed re-amended pleadings) as to who [P] says was the proper contracting party for the booking of the OVC on 3 September 2016. If [P] says that the proper contracting party was Cyberport Management, then what is the nature of the claim against Eastpoint? In case that Eastpoint was the contracting party, then the claim against Cyberport Management may have to be dismissed because, as I will demonstrate in the latter part of this Judgment, [P’s] tortious claims against Cyberport are simply unarguable.

22. The existing pleadings and the proposed re-amended pleadings are therefore confusing and embarrassing, making it difficult for the Defendants to know precisely the nature of the case that they have to meet.  It is the duty of [P] to formulate his claims properly against the Defendants.  As I am not the legal advisor for [P], I cannot provide any assistance to him as tohow to do so.  But since there may be legal consequence arising from the making of the alleged oral assurance on 11 August 2016, I would give [P] another opportunity to formulate his case by filing fresh Statements of Claim relating to the possible contractual claim.”

(d)  In respect of the tortious claims:

(i)  His Lordship observed at §23 that:

“ [P] also alleges that both Defendants committed various torts against him, including unlawful interference, fraudulent misrepresentation, defamation, breach of confidence and fiduciary duty, fraud and inducing a breach of contract. From the pleadings (including the proposed re-amended pleadings), itseems that all of these claims relate to the Defendants’ application for TPPE Licence in relation to the White Party.”

(ii)  At §25, His Lordship expressed agreement with D that the TPPE Licence application was purely an internal matter of D to be handled with the licensing authority.  He further observed at §26 that there was nothing to prevent P from making a fresh application in relation to the White Party;

(iii)  Having considered the pleadings and the proposed amendments, Lok J ruled at §29 that:

“ There are simply no particulars to support any of the tortious claims. Neither is there anything in [P’s] proposed re-amended pleadings or affidavits which can remotely suggest that the Defendants were guilty of any of the alleged torts. These claims should therefore be struck out.”

(e)  In the end, Lok J concluded and observed at §§39 and 40 that:

“ 39. Since the tortious claims are totally unarguable and the pleadings for the contractual claims are ambiguous and embarrassing, I strike out the Amended Statements of Claim in both actions. Since [P] may have a possible claim based on the alleged oral assurance given on 11 August 2016, I refuse to dismiss the claims in both actions at this stage. I give general leave to [P] to file and serve fresh Statements of Claim in accordance withmy ruling above. Obviously, the Defendants would be at liberty to take out another application to strike out the fresh Statements of Claim if appropriate.

40. I must warn [P] that this is an indulgence given by the court for him to reformulate his claims properly.  If he decides to conduct the case himself and his fresh Statements of Claim still fail to comply with the rules for pleadings, then he cannot expect the court to give him the same sympathy and there is a real possibility that his claims will be dismissed without a trial.”

11.  On 14 December 2017, and pursuant to the leave granted by Lok J, P filed the Re-Amended Statement of Claim.  It was filed under both HCA 2395/2016 and the action herein.  I will return to the contents of the Re-Amended Statement of Claim.

12.  Also on 14 December 2017, P lodged his so-called Reasons forAppeal against the Lok J Judgment.  The Court of Appeal, having considered that and other documents lodged by P, dismissed his applications.  The Court of Appeal found and observed at §5 of its Judgment of 4 January 2018 that “the applications by [P] are totally without merit and vexatious.”

13.  On 2 January 2018, D took out a summons for an order that the Re-Amended Statement of Claim be struck out, that the proceedings be dismissed, and that the time for D to file and serve its Defence be extended until 28 days after the determination of the Summons.

14.  D’s application to strike out came before Master Wong on 28 May 2018.  Having heard parties, the learned Master struck out the Re‑Amended Statement of Claim “on the grounds that it discloses no reasonable cause of action and is frivolous or vexatious” and ordered that “This action against [D], including all interlocutory applications pending, be dismissed.”

The Notice of Appeal

15.  Under Order 58, rule 1, P had 14 days after 28 May 2018 to appeal against the Master Decision.

16.  The Notice of Appeal was issued on 14 January 2019, approximately 7 months out of time.

17.  The Notice of Appeal was issued by P acting in person, as he is entitled to.  In respect of the Order against which he is seeking to appeal,he puts down only, in manuscript:

“ Strike out (O.18, r.19)

paragraph 55 to 69 of the amended statement of claim”

And in respect of the order which he is seeking on appeal, he puts down only, again in manuscript:

“ (O.14, r.1) (O.41A, r.9) False statements.

(O.19, r.3)

(O.18, r.19) ”

18.  While the Notice of Appeal was issued on 14 January 2019, it was not filed until 8 February 2019.  On that same day, P also filed an affidavit (“P’s 8/2 Affidavit”).  In that affidavit, he says, amongst other things:

“ 2. The Plaintiff reasons for the late Appeal are the discovery of false evidences.

…

4. The evidence presented by the Defendant to the Honourable Court are false evidences, defective and very confusing.

5. Since the defendant has not filed any defence to crystalise the issues, the defendant chose to falsely avocate [sic] in there [sic] affirmation.

All the affirmations since the beginning of the proceedings by the defendant are false, fabricated, unreal, and inconsistent on its face of it.

6. The Defendant misguided Skeletons and false or fraudulent evidences attached with the Affirmations influenced the Court to obtain false Judgments and orders in the proceedings.”

P also says that he and Eastpoint have settled the case.

19.  According to Mr Au, solicitor appearing for D, the Notice of Appeal was only served on 8 February 2019.  A copy of P’s 8/2 Affidavit was not served at the same time, which D had to retrieve from the court file subsequently.

Relevant legal principles

20.  The applicable principles on enlargement of time to appeal are well established.  I refer to Hong Kong Civil Procedure 2019, Vol 1, paragraph 58/1/9.  The principles have recently been explained and repeated by the Court of Appeal (per Lam VP) in The Hong Kong and Shanghai Banking Corporation Limited v Sy Shun Wu & Ors [2018] HKCA 736.  They are equally applicable to proposed appeal against a master’s decision, that:

“ 8. This Court has discretion to grant or refuse an extension of time for appealing. The court’s approach in this type of application is well established. The factors normally taken into account are:

(1) the length of the delay;

(2) the reasons for the delay;

(3) the chances of success of the intended appeal; and

(4) the prejudice to the other party if time is extended.

9. Where the delay is inexcusable, the party seeking an extension of time must show a real prospect of success on the merits, not just a reasonable prospect of success: see Secretary for Justice v Hong Kong & Yaumati Ferry Co Ltd & Anor [2001] 1 HKC 125.

10. Although prejudice to the other party is a ground for refusing to extend time, the absence of prejudice is not a ground for extending time: see Jotz, Klaus-Bernhard Markus v Hamawy,Tarek Mahmoud & Anor [2018] HKCA 144 at paragraph 11.”

Discussion

21.  The issue of the Notice of Appeal was some 7 months late.  It was not an insubstantial delay.  Service of the same was also late.

22.  I have considered P’s 8/2 Affidavit.  I have also considered his submissions (both written and oral).  P asserts that the reasons for the delay “are the discovery of false evidence”.  The assertion that the evidence adduced by D was false was only P’s bare assertion.  More importantly for the present purpose, no particulars have been provided by P as to when he allegedly made the “discovery”.  Unless such alleged “discovery” were made after the Master Decision, it could not even start to constitute any reason for the delay. 

23.  During the hearing, P sought to rely on a statement he made tothe police on 17 January 2019.  That statement does not assist P’s application in any way.  It contains only his allegations, and is entirely self-serving.  I note also the penultimate paragraph of that statement, where P stated that:

“ This statement is for my record only. After communication with the police, I understand that I will have to settle the case through legal proceedings.”

24.  In my view, no credible explanation has been put forward for the delay. I find the delay to be inexcusable.

25.  Despite my findings above, I proceed to consider any merits which P’s proposed appeal may have.

26.  I have set out in quite some details the contents of P’s original Statement of Claim and of his Amended Statement of Claim.  They have been considered by Lok J. Lok J has, for the reasons set out in the Lok J Judgment (and as I have summarized above), struck out the Amended Statement of Claim.

27.  Having considered the contents of the Amended Statement of Claim, I respectfully agree with the Lok J Judgment and the reasons he has given.  In any event, P’s attempted appeal against the Lok J Judgment has been dismissed.

28.  As “an indulgence”, Lok J gave P leave and the chance to reformulate his claims properly, with a warning of the consequences should P fail to comply with the rules for pleadings. 

29.  I have considered the contents of P’s Re-Amended Statement of Claim filed pursuant to that leave:

(a)  As I have observed above, the Re-Amended Statement of Claim was filed under both HCA 2395/2016 and the present action.  There were therefore two defendants;

b)  Compared with the earlier versions, this Re-Amended version contains more facts on the course of discussions and dealings between P and persons acting apparently on behalf of Eastpointand/or D in relation to the booking of the OVC.  However, P’s claim remains focused upon the application of the Temporary Places of Public Entertainment Licence by D (ie the basis of the tortious claim as observed by Lok J). More importantly, P’s purported claims against Eastpoint and D have remained rolled up.  The following paragraphs from the Re-Amended Statement of Claim are illustrative of the problems (all the typographic errors are those of the Re‑Amended Statement of Claim):

“ 57. 1^stAccording to the terms and conditions of the Defendants It is very clear that the Plaintiff is responsible to obtain the TPPE licenses and not the defendants. On the website cyberport.hk it is clearly mentioned that the applicant should be responsible to obtain and submit the TPPE. The Plaintiff did agree to the Defendants Terms on 5^th July 2016.

58. 2^nd On the 11 August 2016 agreement that was sent by the Defendants. Paragraph 17 of the agreement it is also agreed that the Plaintiff is responsible to obtain the TPPE and not the Defendants.

59. The Plaintiff never authorized the Defendants to apply a TPPE on behalf of the Plaintiff event.

60. The Plaintiff never agreed nor gave any authorization to the Defendants to apply a TPPE on behalf of the Plaintiff event namely White Party Hong Kong 11th Anniversary on any given time.

61. It is illegal for the Defendants to apply a TPPE for White Party Hong Kong without the consent and the involvement of the Plaintiff. The Defendants furthermore contradicted and breach their own terms, conditions and agreements on 5^th July 2016 and 11^th August 2016.

…

64. General damages in respect of the pecuniary loss flowingfrom the conduct of the defendants, including loss of tickets sales,loss of food and beverages sales and loss of sponsors, loss of agreements with artist and performers.

65. The Plaintiff claims $20.000.000,00 HKD [sic] damages for loss of revenues.  Damages for deprivation of a commercial opportunity, damages for loss of reputation arising from breach of contract and agreements ….”

(c)  P has failed in the Re-Amended Statement of Claim to address the concerns expressed and explained by Lok J in paragraphs 21 and 22 of the Lok J Judgment (which reasons led to the Amended Statement of Claim being struck out);

(d)  In my view, for the same reasons as expressed by Lok J, the Re-Amended Statement of Claim remains liable to be struck out. 

30.  For the reasons set out above, I am of the view that Master Wongwas correct in striking out the Re-Amended Statement of Claim.  Once that decision had been reached, it followed that all pending interlocutory should also be dismissed. 

31.  I am therefore of the view that the proposed appeal by P via the Notice of Appeal, even if enlargement of time were to be granted, would have no chance of success, not to mention any reasonable or real prospect of success.

32.  I have considered P’s revelation that he and Eastpoint have reached settlement.  I assume that to be so.  But even on that basis, I am of the view that that has no relevance to the issues before this Court.  Those are matters between P and Eastpoint, and does not advance P’s application in any way.

Conclusion

33.  For the reasons set out above, I refuse P leave to appeal the Master Decision out of time. 

Costs

34.  Mr Au seeks costs should I refuse leave to enlarge time.  At this stage, I see no reasons not to award costs to D, and agree that summary assessment is appropriate.  I have considered the Skeleton Bill of Costs that has been provided to me.  The application is not complicated.  It was only set down for 30 minutes.  My view at this stage, and taking a broad brush approach, is that the stated amount of HK$65,226 is far too high, and that the appropriate amount should be HK$35,000.

Disposal

35.  I refuse P leave to appeal the Master Decision out of time.  I make a costs order nisi that the costs of the application, summarily assessed at HK$35,000, be paid by P to D through D’s solicitors within 28 days from the day hereof.  The costs order nisi shall be made absolute 21 days after the handing down of this Decision.