XCHRX NG WING SIN v. CHAN LAI FAN AND OTHERS

1992 No. A7089

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. This is an appeal concerning an order of Master Britton in relation to Further and Better Particulars of the Statement of Claim. I do not propose to give a lengthy judgment in this matter. The essential facts are helpfully set out in Mr. Warren Chan Q.C.'s outline submissions. The mother, the 1st Defendant and her son, the 2nd Defendant, were joint tenants of the property. The mother on behalf of herself and purportedly on behalf of the son entered into an agreement to sell the property to the Plaintiff, and the Plaintiff paid a deposit in part payment in the sum of $650,000. The mother produced a Power of Attorney apparently given by the son authorising her to sell the property, and not unnaturally the Plaintiff relied upon the Power of Attorney.

2. Before completion, the Plaintiff was informed by another law firm that the property had earlier been sold by the mother to another purchaser. The Plaintiff sued the mother and son for the return of $650,000. The Plaintiff has got judgment against the mother, but the mother has been sentenced to a term of imprisonment for the very fraud which is the subject matter of this unfortunate case.

3. Mr. Warren Chan appears in this case on behalf of the Plaintiff who appears to be (and I say no more about this) a perfectly innocent party in this matter who is seeking redress. He obviously got redress against the mother but that is an empty judgment. Therefore the Plaintiff joined the 3rd Defendant who is a clerk in the firm of the 4th Defendants. Mr. Yu appears today on behalf of the 3rd and 4th Defendants, and the issue is simply this; has the Plaintiff given sufficient particulars in relation to the pleaded case of deceit. Mr. Yu puts his case very simply that deceit involves knowledge that something was not true - it is not just a question of falsity.

4. What happened here was simply that the Power of Attorney was countersigned and witnessed by the 3rd Defendant, and in the Power of Attorney, it is stated that the 2nd Defendant there produced his identity card, and the 2nd Defendant's case is simply that he never went to the solicitor's office, never signed the document and never produced an identity card or even a photocopy of his identity card, and he has, in affidavits, set out that on the said day, when it was alleged that he went and signed this Power of Attorney, his wife was ill and he was with her in the hospital and he has produced some documents which lend some support to that state of events.

5. The allegation against the clerk, the 3rd Defendant, is that he knew that the person who purported to be the 2nd Defendant was not in fact the 2nd Defendant, and the 3rd Defendant not unnaturally says "tell me how do you say I knew that". Mr. Chan relies very heavily upon the fact that the Power of Attorney says that the I.D. card was produced, when in fact in an affidavit it is said that a photocopy was produced.

6. I feel a degree of sympathy here for the Plaintiff. Obviously the Plaintiff appears to have been duped but this matter will have to be gone into at a trial namely whether the 2nd Defendant's story is correct. If his story is correct he, too, has been duped, and what happened here was that the pleading was amended and the 3rd and 4th Defendants asked for a Further and Better Particulars of para. 13A(5), 13A(6) and 13A - particulars of loss and damage.

7. The matter came on before the Master and the Master made an order as I said on the 8th September of this year, in which he gave the Plaintiff 14 days to provide the best particulars which the Plaintiff can at present give under the paragraphs which I have just set out. Mr. Chan comes along today and says that the Master should not have made that order as the matter is fully pleaded and the 3rd and 4th Defendants know precisely what case they have to meet. He submits that the function of particulars is to give information about the case to prevent surprise and to know what evidence to prepare, and he says that has been done as they know precisely what it is and they are not taken by surprise.

8. There is a cross appeal by Mr. Yu who seeks the deletion of the words "the best particulars which the Plaintiff can at present give". He wants a simple order that they provide the particulars. In the course of Mr. Yu's submission, he invited me to consider striking out the claim in deceit, because he said it is clear from the particulars already given that there is no such case. A proposed re-amended Statement of Claim has been shown to me and also the submissions of Mr. Warren Chan make it clear that the case cannot be put any differently and the Plaintiff does not know any more than already said, and Mr. Yu submits that the Plaintiff cannot really answer the question in relation to knowledge. I think what Mr. Chan is really saying to me is that there is a very strong inference to be drawn, but he cannot really go any further than that, and he relies upon the matter relating to the Identity Card. I do not know whether this is fanciful or not - we know that a fraud was perpetrated; we know that the mother has been sentenced for fraud, so I am dealing with an unusual situation in this case, and it may be, I know not, that somebody came up to the solicitor's office pretended to be the 2nd Defendant and duped, not only the Plaintiff, but also the solicitor's clerk. That scenario may be the result which the trial judge will come to. If that is the case, one has to ask well how, on the assumption that the clerk was not involved in the fraud and no allegation is made to that effect, did he know that the person representing himself as 2nd Defendant was or was not the 2nd Defendant, and it seems to me this is the crucial point in so far as the case based upon deceit. I have listened with care to the extremely attractive way which Mr. Warren Chan has put this case and there is a lot of force in what he says from an evidential point of view. But at the end of the day, it seems to me that the 3rd Defendant and thus the 4th Defendant is entitled to know the basis upon which it is said that he knew the person who stood in front of him and signed the document was not the person who he purported to be, and that is the cause of action in deceit, and I really do not see how the Plaintiff can avoid facing this question squarely. I note that O.18 r.12 refers to the requirement to give particulars with power of the Court to order particulars in permissive and not mandatory language. Of course, I have a discretion, but the rules in relation to the pleading of knowledge are well-known and clearly set out in the Annual Practice, and I do not see that this is a case where one can just ignore it, and say "well it will all come out in the wash and the trial judge will sort it all out. He will work it out and let everybody know whether or not the 3rd Defendant did know." It seems to me that the 3rd Defendant is entitled at this stage to know the evidence upon which the Plaintiff relies. I recognise the difficulties that the Plaintiff has and the Plaintiff is, as I have said an apparently innocent party.

9. In all those circumstances in relation to both deceit and the request in relation to breach of duty, I am prepared to vary the order which may not make a great difference but I am going to vary the order so as to order the Plaintiff within 14 days from today to state the nature of his case in relation to the Further and Better Particulars requested by the 3rd and 4th Defendants on the 21st February 1994 under para. 13A(5) request nos. (i), (ii), (iii); para. 13A(6) request nos. (i) and (ii); and para. 13A particulars of loss and damages request no. 2. Now, I am giving the Plaintiff an opportunity to formulate his case in relation to the matters requested, to state the nature of his case, in the light of the matters that have been discussed today and no doubt to take cognizance of the matters which were put into the proposed re- amended Statement of Claim. I am not prepared at this stage to strike the matter out, although the striking out rule does state that the Court may at any stage strike out a claim or part of a claim.

10. It seems to me that if a strike out is what the 3rd and 4th Defendants want, they should issue a summons. No doubt, what would happen in this case is that the Plaintiff will give the matter his best shot now and set out the nature of his case, and if that does not satisfy the 3rd and 4th Defendants, they will no doubt make an application to the Court to strike out the claim in deceit, at least, and Mr. Chan has told me that he is able and willing to meet that application when it is made. I think one has to take this matter in stages. I am not going to pre-empt what is likely to happen. If those particulars are not sufficient then Mr. Yu can make the appropriate application. So that is what I propose to do - I have proposed an order and will allow the appeal to the extent of varying the Master's order as I have said.

11. In those circumstances, I think it must follow that the 3rd and 4th Defendants' appeal is dismissed, or is otherwise unnecessary and I will now hear the parties on the form of order and, of course, on the question of costs.