LEUNG CHUNG LAN LORRAINE v. MERCER (HONG KONG) LTD

HCA 627/2017

[2018] HKCFI 115

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 627 OF 2017

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J U D G M E N T

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Introduction

1.  This is the plaintiff’s (“P”) appeal against Master M Wong’s Order dated 11 October 2017 (the “Order”) made in respect of the summons taken out by D on 2 June 2017 to inter alia strike out P’s claim, and/or determine under O 14A, r 1 that P’s claim is barred by s 4(1) of the Limitation Ordinance (“Strike-out Summons”).

2.  Pursuant to the Order:

(1)   P’s statement of claim indorsed on the writ was struck out as it disclosed no reasonable cause of action, was scandalous, frivolous or vexatious, was otherwise an abuse of the process of the court; and

(2)   P’s action was dismissed with costs.

3.  On 14 November 2017, P issued the Notice of Appeal after the expiration of the 14 days period prescribed under O 58, r 1. P had not provided any explanation for the delay.  P has also sought to adduce new evidence by way of 4 affirmations filed after the hearing before Master M Wong.

Background

4.  P was a former employee of Merrill Lynch (Asia Pacific) Ltd (“Merrill Lynch”) and her claim was for a sum of HK$189,225.80 or US$24,281.62 (“Sum”) due to her under Merrill Lynch’s retirement scheme upon the termination of her employment with Merrill Lynch on 21 April 2005.

5.  P previously brought proceedings against Merrill Lynch for the recovery of the Sum in DCCJ 5145/2013 (“District Court Action”), which was struck out in February 2015.

6.  D was the administrator of the Merrill Lynch (Asia Pacific) Provident Fund (“Scheme”), a retirement scheme set up under the Occupational Retirement Scheme Ordinance (“ORSO”) by Merrill Lynch for the benefit of its employees.  The trustee of the Scheme was HSBC Trustee (Hong Kong) Limited (“Trustee”).

7.  D had/has no contractual relationship with P. D’s role as administrator of the Scheme, upon cessation of employment of an employee (including P) was to take the following steps in relation to distribution of benefits:

(1)   Upon being notified of the termination of employment by Merrill Lynch, D would calculate the sum of benefits payable to the employee under the Scheme;

(2)   D would then send the benefit statement and the calculation to Merrill Lynch and the Trustee;

(3)   D would then advise Merrill Lynch to issue the cheque for the relevant amount to the employee.

8.  Upon being notified of P’s termination of employment, D calculated the sum of benefits payable to P and instructed Merrill Lynch by way of a fax dated 18 May 2005 to issue a cheque for the Sum[1] and provided a copy of P’s exit statement to the Trustee by way of a letter dated 19 May 2005[2].  On the fax dated 18 May 2005, D’s name was stated to be “Leung Chung Lan” and on the letter dated 19 May 2005, D’s name was stated to be Leung Chung Lan, Lorraine”.

9.  Merrill Lynch issued a cheque for the Sum in the name of “Leung Chung Lan” on 19 May 2005.

10.  There was no record of the cheque going stale[3].  In fact, according to a letter dated 26 January 2016 from the Trustee, the cheque was paid on 30 May 2005[4].

11.  According to D, omitting the Christian names of the exit members would not affect members’ ability to cash the cheque[5].  According to the Trustee, it is a common practice to issue benefit cheque in full member name without the first name or English name unless it is clearly stated in the payment instruction that the first name or English name has to be included and that the benefit cheque can be deposited to the bank account of the member even if the bank account name or the name on the Hong Kong identity card does include the first name or English name and the bank may require some additional information for cheque deposit[6].

12.  In any event, D was not responsible for the issuance or mailing of the cheque to P.  The cheque was issued by Merrill Lynch.

13.  P first contacted D over 6 years later, in November 2011, to enquire about the outstanding payment under the Scheme and was told by D that according to D’s record a cheque for the Sum was issued and sent to her residential address on or around 19 May 2005.

14.  P denied receiving the cheque and commenced the District Court Action on 31 December 2013 against Merrill Lynch to recover the Sum.

15.  By a judgment dated 13 February 2015 (“District Court Judgment”), P’s claim against Merrill Lynch was struck out and P was ordered to pay Merrill Lynch’s costs.  Deputy District Judge Lawrence Ng found that:

(1)   P as a beneficiary under the Scheme only had a claim against the Trustee;

(2)   P’s claim in contract against Merrill Lynch was not sustainable and in any event time-barred as the cause of action founded on contract would have accrued on 21 April 2005 upon the termination of P’s employment with Merrill Lynch;

(3)   Merrill Lynch did issue and mail a cheque for the Sum to P and there was no stale cheque.

16.  Subsequently, on or around 27 March 2015, Merrill Lynch and the Trustee entered into a Settlement Agreement with P (“Settlement Agreement”)[7]. In exchange for Merrill Lynch’s agreement not to enforce the costs order, P agreed amongst other things, that :

(1)   not to appeal against the District Court Judgment;

(2)   not to commence proceedings against the Trustee; and

(3)   not to seek to pursue via the courts the matters raised by P in the District Court Action.

17.  Despite having agreed not to pursue the matters raised in District Court Action in the Settlement Agreement, P subsequently commenced the following proceedings against D for recovery of the Sum:

(1)   On 2 February 2016, P brought a claim against D in the Labour Tribunal (LBTC 359/2016), which she withdrew on 1 March 2016;

(2)   P then brought a claim against D in the Labour Tribunal (LBTC 695/2017) which was dismissed on 16 March 2017;

(3)   P applied to appeal against the dismissal of her claim in LBTC 695/2017 which was refused by L Chan J on 10 May 2017 in HCLA 6/2017;

(4)   P then took out a summons on 12 May 2017 to seek leave from the Court of Appeal to appeal against L Chan J’s decision in HCLA 6/2017.  The outcome of that was unknown.

18.  P commenced the present action on 16 March 2017.  This led to D issuing the Strike-out Summons following which the Order was made.

New/inadmissible evidence filed by P

19.  P apparently filed an affidavit on 9 October 2017.  According to Ms Liao, this was filed without leave and was not placed before Master M Wong at the hearing below.

20.  After filing the Notice of Appeal out of time, P filed the following in this appeal, namely:

(1)   P’s affirmation filed on 4 April 2014, the 1^st Affirmation of Lau Pui Wai, the Compensation Manager of Merrill Lynch filed on 14 February 2014 and the 2^nd Affirmation of Lau Pui Wai filed on 10 June 2014 in the District Court Action (served together with the Notice of Appeal);

(2)   P filed 4 further affidavits in these proceedings respectively on 24 November 2017, 8, 12 and 15 December 2017.

21.  O 58, r 1 (5) of the Rules of the High Court provides that save for evidence as to matters which have occurred after the date of the judgment under appeal, no evidence may be received in the hearing of the appeal under O 58 save on exceptional grounds.

22.  The special grounds are[8]:

(1)   The evidence could not have been obtained with reasonable due diligence for use at the hearing below;

(2)   The evidence must be such that, if given, would have had influence on the result of the case, though it needs not be decisive;

(3)   The evidence must be such that it is presumable to be believed.

23.  In relation to those affirmations filed in the District Court Action, as submitted by Ms Liao, which I accept:

(1)   They did not relate to matters which occurred after the Order;

(2)   P would have been in possession of such documents from as early as 2014 and there was no reason why P could not have adduced these at the hearing below;

(3)   The substance of such documents was reflected in the District Court Judgment, which was already part of the evidence at the hearing below.  Even if admitted as evidence, these documents would not add anything new and certainly should not have an influence on the result of the case.

24.  As for those affidavits filed herein on 24 November 2017 and 15 December 2017 by P in this action after the Notice of Appeal, she adduced:

(1)   P’s complaint to HSBC about an account in her name which was opened in July 2013 and closed in October 2013, and which she alleged was opened without her authorization;

(2)   P’s tax returns of years 2009/2010 and 2011/2012, and a notice of tax assessment dated 30 August 2010;

(3)   Practice Note 860.1 on the Audit of retirement Schemes issued by the Institute of Certified Public Accounts.

25.  Again, as submitted by Ms Liao, which I accept:

(1)   They did not relate to matters which occurred after the Order;

(2)   They could have been adduced at the hearing below but P chose not to;

(3)   They would have no relevance to the present matter.

26.  As for P’s affidavit filed on 12 December 2017, again, as submitted by Ms Liao, served no purpose except to make an allegation that P was absent from the direction hearings on 19 May 2017 and on 9 June 2017, in connection with the Strike-out Summons.  In fact, it was clearly reflected in the Court record and in contemporaneous documents that P did attend both hearings and made representations.  In any event, P did not deny attending the substantive hearing before Master M Wong on 11 October 2017.

27.  Having considered the above, I agree with Ms Liao that P should not be allowed to adduce or rely on the new evidence in her affidavits of 24 November, 12 and 15 December 2017.  In any event, even if P were allowed to rely on these “new evidence”, in my view the evidence would not affect my decision herein.  As for P’s affidavit of 8 December 2017 in which she produced the letters dated 26 January 2016 and 20 May 2015 from the Trustee, I will allow her to rely on the two letters as Ms Liao had also referred the matters therein to in her submissions.

Discussion

28.  It is trite that an appeal to a judge in chambers from the master is a hearing de novo[9].

29.  P submitted that she would only rely on her statement of claim which simply states as follows: -

“The Plaintiff’s claim is for HK$189,225.80 which is the ORSO money and the cheque was issued on 19 May 2005. However, the Defendant issue the cheque with the incorrect name LEUNG CHUNG LAN, my ID name should be LEUNG CHUNG LAN LORRAINE.”

30.  As seen above, P has not set out what cause of action she has against D.

31.  Insofar as P’s claim of any non-payment under the Scheme or any claim for breach of trust was concerned, as determined in the District Court Action, she as a beneficiary under the Scheme only had a claim against the Trustee under the Trust Deed as referred therein.

32.  As pointed out by Ms Liao, P does not have a claim in contract against D as there was/is no contractual relationship between P and D.

33.  To the extent P was alleging D of negligently issuing the cheque with an incorrect name, the evidence clearly showed that it was Merrill Lynch, not D which issued the said cheque[10].

34.  P’s position as stated in the Notice of Appeal was that she never received the cheque.  Ms Liao thus submitted even assuming D was responsible for the issue of the cheque with an incorrect name, there was no causal link between D’s alleged negligence and P’s alleged loss.

35.  Having regard to the above, I accept Ms Liao’s submission that P’s claim is frivolous and vexatious and obviously unsustainable, manifestly misconceived and has no prospect of success.

36.  In any event, in my view, any action which P might have in contract or negligence against D, such would have been time-barred.

37.  As Ms Liao submitted, P is really seeking to re-litigate matters raised and determined in the District Court Action.

38.  It is an abuse of process to raise in subsequent proceedings matters which could and therefore should have been litigated in earlier proceedings. 

39.  In the Settlement Agreement, P had agreed not to pursue the matters raised in the District Court Action.  Although D was not a party to the Settlement Agreement, by bringing this action, P is clearly in breach of an express contractual obligation not to pursue matters raised by P in the District Court Action.

Conclusion

40.  In fact, P did not provide any valid reasons for filing for Notice of Appeal out of time.  In any event, having considered all the matters set out above, I have come to the same view as Master M Wong, that P’s claim discloses no reasonable cause of action, is scandalous, frivolous or vexatious and/or an abuse of the process of the court.

41.  I am also of the view that P’s claim if based on contract or negligence is time-barred in any event.  I so determine under O 14A, r 1.

42.  I dismiss P’s Notice of Appeal issued on 14 November 2017.  I order costs to be paid by P to D.  Such costs to be summarily assessed.  P did not make any submissions on D’s statement of costs.  I allow P 14 days from today to file her list of objections to the statement of costs.