CLIO TECHNOLOGIES HK LTD (formerly known as AGASTYA TECHNOLOGIES HONGKONG LTD) v. NARANG CHANDER PARKASH

HCA 2498/2017

[2020] HKCFI 2841

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2498 OF 2017

________________________

________________________

________________________

D E C I S I O N

________________________

1.  This is the Defendant’s appeal against the Order of Master Anthony H K Chan made on 16 July 2020 dismissing the Defendant’s application to strike out the Statement of Claim on the ground that it discloses no reasonable cause of action.

2.  The Statement of Claim pleads that:-

(1)  The Defendant was contracted to work for the Plaintiff as its Financial Controller on a part-time basis between 1 October 2014 and 30 April 2015.

(2)  In his capacity as Financial Controller the Defendant had control over the bank access keys and pin numbers of the Plaintiff’s bank account with HSBC.

(3)  The Defendant knew or should have known that transfers from the Plaintiff’s HSBC account should only be made with the knowledge and consent of Mr Manish Malhotra, the director of the Plaintiff.

(4)  The Defendant had made 6 unauthorized transfers from the Plaintiff’s HSBC account without the knowledge of Mr Malhotra between 18 November 2014 and 19 January 2015, totalling US$192,450, and the particulars of each of the alleged unauthorized transfers (date, amount, recipient) have been given.

(5)  Despite repeated demands, the Defendant has failed to repay US$192,450 to the Plaintiff.

(6)  By way of relief, the Plaintiff claims US$192,450, interest, and costs.

3.  For completeness, I should mention that after the Statement of Claim was filed in November 2017, the Defendant has filed a Defence on 5 March 2018 (settled by counsel representing the Defendant before the Master and in this court), following which the Plaintiff has filed a Reply on 3 April 2018. It appears that no further step has been taken in this action until the Defendant issued a summons to strike out on 1 November 2019.

4.  Although the Defendant apparently relied on 2 grounds in support of his application before the Master, in this appeal the Defendant only advances the ground that the Statement of Claim does not plead the cause of action, whether for breach of contract, breach of employee’s duty, breach of fiduciary duty or negligence, and what is the loss and damage allegedly suffered by the Plaintiff.

5.  In my view, the Defendant’s contentions are wholly without merit, and the application to strike out must fail.

(1)  It is only in plain and obvious cases that the court should exercise its summary powers to strike out. Disputed facts were to be taken in favour of the party sought to be struck out. The claim must be obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out: Hong Kong Civil Procedure 2021: 18/19/4 (1^st para).

(2)  A cause of action is simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person: Letang v Cooper [1965] 1 QB 232, 242. It is not necessary to plead, and a pleading will not be taken as defective if it does not contain, the legal effect of those facts: Kyocera Corporation (successor of Kyocera Optec Co Ltd) v W. Haking Enterprises Ltd & Anor [2020] HKCA 817, CACV 554/2019 (unrep., 9 October 2020), §§44.1-44.4.

(3)  In this case, as can be seen from paragraph 2 above, the Statement of Claim has pleaded the material facts – including the relationship between the Plaintiff and the Defendant as to give rise to obligations on the part of the Defendant in law; the acts of the Defendant which the Plaintiff alleges to be unauthorized and caused damage to it; and the amount of damage suffered by the Plaintiff as a result. Although the Statement of Claim does not specifically aver whether the Plaintiff is claiming for breach of contract or breach of the duty of fidelity, the absence of a plea on the legal effect of those pleaded facts would not render the pleading defective: see sub-paragraph (2) above. I also do not accept that loss and damage has not been pleaded. See paragraph 2(4) to (6) above.

6.  Accordingly the Defendant’s appeal is dismissed.

7.  Costs should follow the event. The parties have submitted their respective statements of costs for summary assessment. I have considered the Plaintiff’s statement of costs and would award a gross sum of HK$60,000 to the Plaintiff.