TANG SUM MOON AND ANOTHER v. FUNG CHUI LIN AND OTHERS

HCA 32/2020

[2021] HKCFI 1734

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 32 OF 2020

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DECISION

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1.  By agreement of the parties, I order that the appeals brought by the 3^rd and 4^th defendants against the master’s decision made on 18 September 2020 be allowed, and the summons taken out by the plaintiffs on 3 August 2020 be dismissed, with costs of the appeals and the summons be to the respective defendants.

2.  In addition to the order that I have just made, on my own motion, I exercise my discretion to strike out the general indorsement on the writ and the statement of claim as against the 3^rd and 4^th defendants, and further order that the action as against the 3^rd and 4^th defendants be dismissed pursuant to Order 18, rule 19 of the Rules of the High Court. 

3.  My reasons are as follows.

4.  There was no application before the master by the 3^rd or 4^th defendant for the above striking out relief.  Hence the present appeals only concern master’s decision to allow the plaintiffs’ amendment summons.

5.  However, the court has the express power granted under Order 18, rule 19 to strike out an indorsement or any pleading on its own motion.  I am satisfied that I have the power to grant the above order today.

6.  The writ does not comply with Order 6, rule 2.  The indorsement reads:

“The 1^st and 2^nd Plaintiffs’ claim is for HK$5,750,000.00 being the amount of money due to the Plaintiff from the 1^st, 2^nd, 3^rd, 4^th, 5^th and 6^th Defendants.

And the Plaintiff Claims:-

(1) the said sum of HK$5,750,000.00;

(2) Interest on the said sum of HK$5,750,000.00 at the rate of 8% per annum from the date of writ to the date of judgment and thereafter at the judgment rate until payment;

(3) Damages to be assessed;

(4) Costs;

(5) Further or other relief.”

7.  The writ was not endorsed with a concise statement of the nature of the claim made.  See Moulin Global Eyecare Holdings Limited v Olivia Lee Sin Mei (2014) 17 HKCFAR 466 at para 23 for the proper interpretation of the rule.

8.  The indorsement on the writ, as it stands, should therefore be struck out.

9.  I also accept the 3^rd defendant’s submission that the issue of the writ in its present form is an abuse of the court’s process.  For that reason, the indorsement on the writ should also be struck out.

10.  The action was commenced just six days before the expiry of the limitation period with respect to the claim made on the 1^st Representation. The general indorsement violates the basic requirement of Order 6, rule 2, as ruled above.  At the time the writ was issued, the plaintiffs were not in a position to identify even the nature of the claim.  In the circumstances, by issuing a fundamentally defective writ with a view to stopping the limitation period running and thus depriving the 3^rd and 4^th defendants of a potential limitation defence is clearly an abuse of process.  The plaintiffs were trying to obtain an illegitimate benefit here, which must not be allowed.  See Nomura International plc v Granada Group Ltd [2008] Bus LR 1 at paras 37 to 41.

11.  The statement of claim should be struck out since its averments exceed the purview of what has been set out in the writ.  This is contrary to Order 18, rule 15(2).

12.  In any event, at today’s hearing, the plaintiffs accept that (a) the 3^rd and 4^th defendants have a reasonably arguable defence of limitation, (b) the principle in Global Bridge Assets Limited v Sun Hung Kai Financial Limited [2012] 4 HKLRD 474 (at paras 21 to 24) applies, and (c) the plaintiffs’ proposed amendments should not be allowed.  Applying Global Bridge, if the plaintiffs nonetheless wish to pursue the claim against the 3^rd and 4^th defendants, they should bring a fresh action and any issue of limitation can be explored in that action.

13.  In light of that prospect, as a matter of case management, there is no reason whatsoever to allow the present action as against the 3^rd and 4^th defendants to stand.  It serves no useful purpose.

14.  In the circumstances, the only logical thing to do is to strike out the plaintiffs’ indorsement on the writ and the statement of claim against the 3^rd and 4^th defendants, and dismiss the action against them.

[Submissions on costs]

15.  The 3^rd and 4^th defendants do have costs of the action as against the plaintiffs. 

16.  The 3^rd defendant’s costs of the action and the appeal be summarily assessed at $150,000. 

17.  The 4^th defendant’s costs of the action and the appeal be summarily assessed at $180,000.

18.  It is a straightforward appeal.  The grounds put forward are mainly legal arguments.  They should not require the amount of time that has been spent by either defendant.

19.  In the 4^th defendant’s case, counsel has been instructed to consider and settle pleadings.  There is clearly a duplicate of work between counsel and solicitors.

20.  The 3^rd defendant’s claim for a total of $436,100 is plainly excessive and disproportionate. 

21.  Hence deductions are made accordingly.