MAKHSSIAN TRAJAN VAHE v. ISS EASTPOINT PROPERTY MANAGEMENT LTD

HCA 2395/2016 & HCA 43/2017
(Heard together)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2395 OF 2016

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 43 OF 2017

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JUDGMENT

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1.  These are applications taken out by the Defendants in both actions to strike out the Plaintiff’s claims which have been ordered to be heard together.[1]

2.  The Amended Statements of Claim in HCA 2395/2016 and HCA 43/2017 were filed on 13 October 2016 and 20 February 2017 respectively.  After the making of the striking out applications, the Plaintiff also took out summonses to further amend the Amended Statements of Claim in both actions.[2] On 19 April 2017, W Chan J adjourned the amendment applications for directions until after the determination of the striking out applications.  For the purpose of the present striking out applications, I will also take into account the Plaintiff’s case as pleaded in the proposed amendments.

Background

3.  The Plaintiff, Mr Makhssian Trajan Vahe (“Makhssian”), is the sole director and shareholder of Musicasia Entertainment Hong Kong Limited (“Musicasia”), a limited company incorporated in Hong Kong on 31 May 2013.  Musicasia has hosted an event known as “White Party” in the past.

4.  The Defendant in HCA 2395/2016, ISS Eastpoint Property Management Limited (“Eastpoint”), is the facility manager of Cyperport since 2002 up to 30 September 2016.  The Defendant in HCA 43/2017, Hong Kong Cyberport Management Company Limited (“Cyberport Management”), is the owner of Cyberport.

5.  This dispute relates to the booking of the Ocean View Court of Cyberport (“OVC”) to hold the White Party on 3 September 2016.  As Makhssian’s pleadings (including the proposed re-amended pleadings) in both actions have been drafted by lay person without the benefit of legal representation, it is difficult to understand the proper basis of Makhssian’s claims against both Defendants. From the pleadings, it seems Makhssian is claiming that there was a binding agreement for the booking of the OVC on 3 September 2016.  As the Defendants failed to provide the venue as agreed, Makhssian has suffered loss and damages.

6.  In early July 2016, Musicasia or Makhassian first made an online booking for the Podium and Multi-Purpose Court in Cyberport (“the Podium”) to host the White Party on 3 September 2016.  The sales and promotion officer of Eastpoint, Dominic Wong (“Wong”), was assigned to follow up on the application.  As the Podium was not suitable to hold the event because of the possibility of noise complaints, the parties began to discuss the alternative venue at OVC.  By that time, Wong informed Makhssian that the OVC had tentatively been reserved by another client on 3 September 2016.

7.  Wong requested Makhssian to provide more information about the White Party for consideration by the landlord who would also have to conduct a background check on the applicant.  Wong also supplied a revised quotation of the charges of using the OVC to Makhassian on 28 July 2016.  In the end of July and early August 2016, Makhssian requested Wong to expedite the booking process.  On 10 August 2016, Wong informed Makhassian that the applicant had passed the background check.  On 11 August 2016, Wong requested Makhassian to submit the booking form stating that he need it to confirm the details of the licence agreement.  On the same day, Makhassian submitted the booking form (“the Booking Form”) and Wong also supplied a revised quotation to Makhssian.

8.  According to Makhassian’s case, which is denied by the Defendants, Wong told him on 11 August 2016 that he had already obtained the approval of the “management”, presumably referring to Cyberport Management, to grant the licence to use the OVC on 3 September 2016, and Musicasia or Makhassian could proceed to promote the event in public.  In reliance on such oral assurance, Makhassian approached some artists inviting them to perform in the White Party and started to promote the event.

9.  On 15 August 2016, there was an email from Wong to Makhassian informing that latter that the Defendants had made a mistake and the OVC was still tentatively reserved for another client.  If that client were to confirm the booking, the White Party could not be held on 3 September 2016.  Then there were some discussions between the parties about an alternative date for the event, but ultimately no new date could be agreed.

10.  Cyberport Management made an application for a Temporary Places of Public Entertainment Licence (“the TPPE Licence”) on 25 August 2016 in respect of all the proposed functions which would be held in the OVC and Seaview Terrance of Cyberport in the period from 1 October 2016 to 31 March 2017, with the proposed date for the White Party on 22 October 2016.

11.  On 2 September 2016, one Ms Kalam Cheung of Eastpoint sent an email to Makhassian informing the latter that his booking application was rejected by the landlord.  On 29 September 2016, the licensing authority informed Cyberport Management that the police raised no objection to all the events included in the TPPE Licence application except the White Party.  Due to such objection, the licensing authority refused to proceed with the application.

12.  Most of the matters mentioned above are not in dispute because of the existence of contemporaneous emails and whatapp messages.

13.  As I see it, Makhssian 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, Makhssian 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 of contract.  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.

14.  I will deal with these claims in turn.

The contractual claim

15.  The principles for striking out applications are trite.  The power to strike out a pleading should only be exercised in a plain and obvious case. There should be no trial on affidavit.  Disputed facts were to be taken in favour of the party sought to be struck out.  If there is reason to believe that the case can be improved by amendment, an opportunity should be given for the amendment of pleadings.[3]

16.  There are various grounds for striking out a pleading.  In the present case, the issues are: (i) whether the pleadings disclose reasonable cause of action; (ii) whether Makhassian’s claims are obviously unsustainable; (iii) whether the pleadings are confusing and embarrassing.

17.  In arguing that Makhssian’s contractual claim is wholly unsustainable, the Defendants are seeking to rely on the following matters:

(i) There was no binding contract for the booking of the OVC whether on 3 September 2016 or any other dates.  No formal licence agreement had been signed.  The earlier correspondence between Makhssian and Wong indicates that a formal licence agreement need to be signed and the Booking Form submitted by Makhssian was not a binding licence agreement at all.

(ii) Wong also told Makhssian that it was necessary to obtain the approval of Cyberport Management before the making of any binding agreement for the booking of the venue.  For the alleged oral assurance given by Wong, it is clear that Wong was not in a position and did not have any authority to provide the oral assurance which would constitute a binding contract between the parties.

(iii) In case that there is a valid contractual claim, the proper party to sue is Musicasia and not Makhssian because the former was the applicant making the booking for the venue.

18.  In my judgment, these are factual issues which need to properly investigated at a trial.   According to Makhssian, Wong expressly told him on 11 August 2016 that he had already obtained the approval of Cyberport Management for the booking of the OVC on 3 September 2016 and Makhssian could proceed to promote the event in public.  It is true that Wong had sent an email to Makhssian on 15 August 2016 informing the latter that there was still a tentative booking by another client, but that does not disturb the fact that there might be a prior binding contract and Makhssian only agreed to change the date as a gesture of goodwill.  It is arguable that there is legal consequence from the making of the alleged oral assurance and the matter should be properly canvassed at the trial.

19.  Who was the proper applicant for the booking application is also a fact sensitive matter which can only be resolved at trial.  In support of the contention that the proper applicant was Musicasia and not Makhssian, the Defendants are relying on the Booking Form submitted by Makhssian on 11 August 2016 which bore the company chop of Musicasia.  However, there were two entries at the top of the Booking Form.  Whilst the “Organisation” for the booking of the venue was stated to be “Musicasia”, the “Applicant” was stated to be Makhssian himself.  In such case, the court may need to obtain more information from the parties before the making of any final decision on such matter.  At least, the Defendants cannot say that Makhssian’s case on the true identity of the applicant is wholly unarguable.

20.  Despite the existence of an arguable claim, since the present actions are brought in his own name, I must remind Makhssian that the damages claimed by him have to be limited to the damages suffered by him in his personal capacity.

21.  Unfortunately, this is not the end of the matter.  First, Makhssian 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 Makhssian says was the proper contracting party for the booking of the OVC on 3 September 2016.  If Makhssian 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, Makhssian’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 Makhssian to formulate his claims properly against the Defendants.  As I am not the legal advisor for Makhssian, I cannot provide any assistance to him as to how 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 Makhassian another opportunity to formulate his case by filing fresh Statements of Claim relating to the possible contractual claim.

The tortious claims

23.  Mahkssian 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), it seems that all of these claims relate to the Defendants’ application for TPPE Licence in relation to the White Party.

24.  As explained in the 2^nd Affirmation of Shek Po Ming, the TPPE Licence application was prepared by Eastpoint and made by Cyberport Management for all proposed events at the OVC in the half-year period from 1 October 2016 to 31 March 2017 regardless of whether the proposed events had been confirmed or approved or not.

25.  I agree with the Defendants that the TPPE Licence application was purely an internal matter of the Defendants to be handled with the licensing authority.  As the occupier and owner who “keeps” the temporary place of public entertainment i.e. the OVC, the Defendant are required by s 4 of the Place of Public Entertainment Ordinance (Cap 172) to obtain a TPPE Licence for the events to be held in their premises.  Under such circumstances, the Defendants were clearly within their rights and entitled to apply for the TPPE Licence for all potential events to be held there.

26.  In any event, there was nothing to prevent Makhassian from making a fresh application in relation to the White Party. Makhassian simply cannot point to any unlawful or fraudulent act on the part of the Defendants to substantiate his claim for unlawful interference, fraudulent misrepresentation or fraud.  Hence, these claims are made without proper basis and are obviously unsustainable and frivolous.

27.  In the pleadings (including the proposed re-amended pleadings), Makhassian has also failed to provide any particulars as to: (i) how any duty of confidence or fiduciary duties would arise, and how the Defendants had breached such duties; and (ii) how any contract was breached and how the Defendants had induced any breach of contract.

28.  In respect of the defamation claim, Makhassian has failed to plead: (i) what were the alleged defamatory statements made by the Defendants; and (ii) how any of such statements made by the Defendants were defamatory towards Makhassian.

29.  There are simply no particulars to support any of the tortious claims.  Neither is there anything in Makhassian’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.

30.  In his affidavits, Makhassian seems to suggest that there was some fraud on the part of the Defendants by making a false excuse that the OVC had been reserved for a car show on 3 September 2016 where there was indeed none held on that day.  Even assuming that the excuse was not a true one, it would not add any weight to Makhassian’s claims.  If there was no contract, the Defendants could make whatever excuse to refuse the booking application.  On the other hand, if there was a binding contract, the so-called “false excuse” does not add anything more to his contractual claim.  Hence this is a non-point.

31.  The Defendants also complain that Makhassian has failed to supply any particulars to substantiate the claim for damages.  But assuming that Makhassian does have a properly pleaded case against the Defendants, then such complaint only justifies an application for further and better particulars and the court should not strike out a claim simply because of the lack of supporting particulars for damages.

32.  I have also considered the Defendants’ argument that the quantum of the claim should not be substantial.  After knowing the unavailability of the OVC on 3 September 2017 as early as 15 August 2016, it is arguable that, in order to mitigate his loss, Makhssian should have looked for alternative venue by that time.  If he had done so, the damages would be minimal.  Although such argument may perhaps justify the case to be heard in the District Court, it does not form a proper basis to strike out Makhassian’s claims.

33.  Finally, it is alleged that Makhassian has included a lot of scandalous remarks in the pleadings.  Since I will give an opportunity to Makhassian to reformulate the claims in fresh pleadings, I would not deal with such complaint in this stage.

Application to file further evidence after the hearing on 18 May 2017

34.  After the hearing on 18 May 2017 and before the delivery of judgment, Makhassian took out an application to file further evidence to oppose the striking out applications.  He made an ex parte application before DHCJ Lee on 31 August 2017 and, not surprisingly, the learned judge refused to entertain the application on an ex parte basis.  Makhassian then took out inter parte application returnable before me on 27 September 2017.  However, he was late for 30 minutes on that day and as a result the application was dismissed in his absence.  He later appeared in the courtroom.  Upon knowing the dismissal of his application, he threw all his papers on the floor causing disruption to the subsequent hearing.  He made another ex parte application before L Chan J on the same day and again the learned judge refused to deal with his application.  He then took out an application under O32 r5(4) to restore the summons and that application came before me on 17 October 2017.  After the hearing, I decided to give my ruling on such application together with the striking out applications.

35.  The main points in the “new” evidence are as follows:

(i) Makhssian claims that the Defendants had ruined his reputation by making an unlawful application for TPPE Licence.

(ii) Makhassin is the owner of the various intellectual property rights in respect of the White Party.

(iii) Mr Mark Clift Owen who made the affirmations on behalf of Cyberport Management had passed away on 16 July 2017.

36.  Although Makhassian claims that he was not feeling too well in the hearing on 18 May 2017 because he suffered from food poisoning a few days before, Makhassian still had the duty to present all the relevant materials to the court before the substantive hearing.  There had been previous directions for the filing of evidence and so he should have complied with those directions.  In any event, parties should not generally be allowed to file additional evidence after the substantive hearing, otherwise it would prolong the proceedings unnecessarily by giving the applying party a second chance to reargue the case.  The fact that Makhassian failed to attend the hearing on 27 September 2017 at the scheduled time is another reason why the court should not grant indulgence in his favour.

37.  In any event, the new evidence would not affect the outcome of the striking out applications.  The new evidence adds no weight to Makhssian’s case.  Apart from making the TPPE Licence application, the Defendants had done nothing against Makhassian which can remotely be regarded as tortious act.  As mentioned above, it was within the Defendants’ right to apply for TPPE Licence.  In fact, the statute imposes a duty for them to do so.  There was also nothing to prevent Makhassian from applying the licence himself for the White Party, and so there is no substance in any of the alleged tortious claims against the Defendants.

38.  For the above reasons, I dismiss the O32 r5(4) application.

Leave to file fresh Statements of Claim

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 Makassian 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 Makhassian to file and serve fresh Statements of Claim in accordance with my 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 Makhassian 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.

41.  After the making of the striking out applications, Makhassian has also taken out summary judgment applications against the Defendants.  On 19 April 2017, W Chan J adjourned the latter applications for directions until after the determination of the striking out applications. By reason of my ruling on the striking out applications, I adjourn the summary judgment applications sine die with liberty to restore.

42.  I therefore make the following order:

(i) the Amended Statements of Claim in both actions be struck out;

(ii) general leave be granted to Makhassian to file fresh Statements of Claim in both actions within 14 days;

(iii) application to restore the summons dated 13 September 2017 (i.e. the application to adduce new evidence) be dismissed;

(iv) Makhassian’s summonses filed on 20 and 28 April 2017 for related directions in both actions be dismissed.

43.  I also make a costs nisi that the costs of striking out applications, the summonses dated 20 and 28 April 2017, the application to restore the summons dated 13 September 2017, be paid by Makhassian to be taxed if not agreed.  The order nisi shall be made absolute 21 days after the handing down of this Judgment.