Miss LEUNG SO HUNG SIEM v. Mr CARSON WEN AND OTHERS

HCA 121/2017

[2018] HKCFI 1505

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 121 OF 2017

____________

____________

____________________

D E C I S I O N

____________________

The appeal

1.  This is the appeal by the plaintiff against the Order of Master J Wong made on 21 July 2017 (“Master J Wong’s Order”) whereby the Court (1) stuck out the plaintiff’s claim against the 3^rd defendant (“D3”); and (2) ordered the plaintiff to pay D3 costs of the proceedings and the application with certificate for counsel, summarily assessed at HK$114,945 to be paid within 3 months.

2.  The relevant Notice of Appeal was filed by the plaintiff acting in person on 27 November 2017 (“the Notice of Appeal”).  By that notice, the plaintiff also seeks to appeal against a separate and later decision of Master K H Hui made on 17 November 2017 (1) allowing the summons dated 29 June 2017 taken out by the 1^st, 2^nd, 4^th, 5^th and 6^th defendants for Further and Better Particulars of the Further and Better Particulars previously given by the plaintiff on 5 June 2017; (2) extending the time for those defendants to file and serve their Defence and Counterclaim to 28 days from the date the plaintiff filed the Further and Better Particulars ordered; and (3) costs of the application including the hearing summarily assessed at HK$37,000 be payable by the plaintiff within 28 days from the date of the decision.  I have separately dealt with that part of the Notice of Appeal — see my Decision of 29 March 2018.

3.  The Notice of Appeal, in so far it concerns Master J Wong’s Order, was filed out of time.  On 27 February 2018, I gave inter alia the following written directions, that:

“ The plaintiff is directed to make an application for extension of time for appealing. The application for extension of time and the appeal, should extension be granted, will be heard at the same time during the new hearing date to be fixed (see paragraph 58/1/9 of Hong Kong Civil Procedure 2018 (a copy attached)).”

The plaintiff’s claim against D3

4.  The writ was issued on 16 January 2017.  It was amended once on 7 February 2017. The Amended Statement of Claim was prepared by the plaintiff in person.  Their contents are not easy to comprehend.  In broad terms, it is a claim by the plaintiff for outstanding introduction fees in the sum of HK$2,500,000,000.00 (HK$2.5 billion) which she said she was entitled to receive for having introduced certain investors to the 1^stdefendant (“D1”).

5.  D3 is a firm of solicitors.  It is not clear on the face of the pleadings what the plaintiff’s claim is against them.  It is not expressed to be contractual. There are no pleaded facts in support of any case that D3 were party to any contract which they have breached.  Nor is it expressed to be tortious.  There are no pleaded facts in support of any case that D3 for example owed her any duty which D3 have breached.  Mr D’Souza hasvery helpfully gone through the Amended Statement of Claim and reproducedin a schedule the contents of those parts of the Amended Statement of Claim where D3 are mentioned.  There are 9 such mentions (emphasis added):

•   “ 3)   Meeting at Mr Wen’s Jones Day Office dated May 12, 2015 ‌… At the request of Ms Siem Leung, meeting in debriefing and confirmation of the pages of legal contract by Mr Wen …” [page 4 of the Amended Statement of Claim]

•   “ Due Diligence done by the plaintiff, Ms Siem Leung, about the new business and the signed contract by Mr. Carson Wen of Sancus Group:-

1)   I have done the KYC (known your client background) and conducted company visit to your Jones Day office and obtained your debriefing of the contract terms you have signed to me;”            [page 6]

•   “ Contract terms:

…

3)   HK Listed company buying and selling—HK$10 million flat or 5% of the total considerations (current market fee quote), whichever is highest, paid by the buyers to me, net of professional fee and FAs fee, through:

a)   shares injection, exchanged by your portfolio of PRCinvestors, Jones Day’s clientele, using BVI company ‌… at your request instead of direct buying and selling of shares …

…

4)   Any other business subjected to fee commission arranged by your company and its subsidiaries, i.e. Sancus Group, Jones Day, the New Wealth Management platform and Investment Banking platform …” [page 8]

•   “ Conclusion:

As you have mentioned during the debriefing of the contract at your Jones Day’s office dated May 12, 2015, that you would like to dispose the PRC Government Joint Venture Putian Real Estate Private Equity Investment that you owned 40% for more than 3 years, the earliest the possible, in order to reinvest into other new projects, I therefore, finished most of my introductions with investors before June 2015.  Records of my introductions with investors by emails, whatsapp and meetings available upon your request plus other business associates, FAs, accountants, lawyers, consultants, brokers, financial advisors from PB and Corporate and Investment Bank that I am working on continuously that can be your potential business partners/Investors/party for the purpose of a potential transaction (collectively, the ‘Representatives’), and being part of the responsibilities of an agent’s job, for Sancus Group, Jones Day’s investors and your newly set up Bank of Asia (BVI) Ltd.”     [pages 9 – 10]

•   “ You disconnected with me and ignored all my emails communications since Aug 2015 after I found out the following incidents and questions raised:

…

4)   After I reported to the Law Society for investigation via Jones Day Dec 2015 you ignore with no response as well;”     [page 10]

•   “ If your intention is to invite me to introduce my long history tycoon clients to you as investors to Sancus Group, Jones Day, Bank of Asia (BVI) Ltd, and all the relevant information are true and genuine …”    [page 11]

•   “ The Claim Amount is projected and based on our contract and agreements:

1)   …

2)   Any other Private Equity Investment through subsidiaries of Sancus Group, Jones Day, Bank of Asia (BVI) Ltd range 1–3%”   [page 12]

6.  Those parts of the Amended Statement of Claim reproduced above represent the sum total of the plaintiff’s pleaded case against D3.  They do not, individually or together, inform D3 or the Court what the plaintiff’s case is against D3.

D3’s application for striking out

7.  On 10 March 2017, D3 took out a summons (“D3’s Summons”) for an order that the Amended Writ of Summons and the Amended Statement of Claim be struck as against them on the grounds that (a) they disclose no reasonable cause of action against D3; (b) they are frivolous; and/or (c) they are an abuse of the process of the Court.

8.  D3’s Summons is supported by the affidavit of Mr Robert Thomson dated 9 March 2017.  He is a partner of D3.  He confirms that the plaintiff has never been a client of D3, and that D3 have never entered into any agreement with the plaintiff.  He further deposes that D1 was employed as an Of-Counsel at the Hong Kong office of D3 and his employment ended on 31 December 2016.  In D1’s private capacity, D1 conducted business through companies he controlled or owned.  D3 have no dealings with the companies through which D1 conducted his private business.  He further says that D1 was not authorized to enter into any agreement for and on behalf of D3.  Mr Thomson has caused D1’s emails in his email account with D3 to be checked, and there was no email between him and the plaintiff.

9.  D3’s Summons first came before Master K Lo for call-over on24 March 2017.Directions for filing of evidence were given.  The learned Master further ordered for case management purposes that (1) the time for D3 to file and serve their Defence, if any, be extended for 28 days from the date of determination of the application for striking out; and (2) D3’s Summons be adjourned to a date to be fixed for argument with 2 hours reserved (“Master K Lo’s Order”).  The plaintiff subsequently on 17 July 2017 filed a Notice of Appeal (which was out of time) and sought to appeal against Master K Lo’s Order.  That appeal was heard by Deputy Judge Yee on 22 November 2017.  By his Decision handed down on 21 December 2017, His Lordship refused to grant the plaintiff leave to appeal out of time.  I will come back to this aspect of the case later. 

10.  The plaintiff on 18 April 2017 filled her affirmation in reply.  Amongst other things, she says that:

“ 9. On April 29 2015, a contract was signed by [D1] to me and the contract was being discussed, explained to me at the office of [D3] on May 2015.

10. During the 3^rd meeting with [D1] and [D5], at my request of referring back the buying and selling of HK listed company shares deals, [D1] clearly mentioned to me that he will provide legal service on his PRC clients in purchasing the HK listed company, by way of injection of shares, at US$9,500 per hour legal fee, through service provided by [D3] and [D5] was introduced and appointed by him assisting the whole process of the transaction and business thereafter, in related [sic] to HK listed companies buying and selling business with his PRC clients.

…

19. To avoid any confusion, a) I did not ever mentioned [sic] there was email communication between [D3], b) I don’t know the Job Description of [D1] in [D3] and whether he was also a Partner of the company during 2006–2016 c) I did not ever mention [D3] will pay for the introduction fee instead of the buyers as [D3] will only act as the legal adviser of the deal, as told; d) I don’t know how [D1] transacted his private business with his PRC investors while being employed by [D3] without competition on business; e) I don’t know [D1] so well as to compare with his ten years of working relationship with [D3]; f) Last, based on the mentioned a) b) c) d) e), and, they are ALL Professional Lawyers, I don’t understand why [D3] need to make an affidavit dated Mar 9 2017 on items no. 5, 6, 7, 8, 9 based on the content of my Writ of Summons delivered and I found no reasons [D3] can be out of the picture of these claims.”  

11.  D3’s Summons came before Master J Wong for substantive hearing on 21 July 2017.  Having heard the plaintiff appearing in person and Mr D’Souza for D3, the learned Master allowed the application and ordered the Amended Writ and the Amended Statement of Claim as against D3 to be struck out.

The applicable legal principles

12.  I remind myself of the following legal principles which are relevant and applicable to the present appeal.

13.  On extending time to appeal, the Court has to consider all relevant factors, particularly (1) the length of the delay; (2) the reasons for the delay; (3) the merits of the proposed appeal; and (4) the degree of prejudice to the other party — see Hong Kong Civil Procedure 2018, paragraph 59/1/9.

14.  On the nature of an appeal from a master to a judge in chambers, such an appeal is dealt with by way of an actual rehearing of the application which led to the order under appeal, and the judge treats the matter as though it came before him for the first time.  The judge will give the weight it deserves to the previous decision of the Master, but he is in no way bound by it.  The judge in chambers is in no way fettered by the previous exercise of the Master’s decision, and on appeal from the judge in chambers, the Court of Appeal will treat the substantial discretion as that of the judge, andnot of the Master—see Hong Kong Civil Procedure 2018, paragraph 58/1/2.

15.  On striking out:

(a)   “ It is only in plain and obvious cases that the court should exercise its summary powers to strike out the indorsement on any writ … There should be no trial upon affidavit.  Disputed facts were to be taken in favour of the party sought to be struck out.  Nor should the court decide difficult points of law in striking out proceedings.  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.  If the court does not think the matter to be clear beyond doubt or if it fails to be satisfied that there is no reasonable causeof action or that the proceedings are frivolous or vexatious, then, there should be no striking out. …”    (paragraph 18/19/4)

(b)   “ A reasonable cause of action means a cause of action with some chance of success when only the allegations in the pleading are considered …”    (paragraph 18/19/5)

(c)   “ No evidence is admissible on [an application to strike out as disclosing no reasonable cause of action]: the court simply looks at the statement of claim and determines whether, on the assumption that the facts pleaded in it are true, the plaintiff has a cause of action in law (see O.18, r.19(2)).”  (Polytechnic University v Next Magazine Publishing Ltd [1996] 2 HKLR 260, at 263H)

(d)   “ A proceeding is frivolous when it is not capable of reasoned argument, without foundation or where it cannot possible succeed.  A proceeding is vexatious when it is oppressive and/or lacks bona fides.”        (paragraph 18/19/7)

(e)   “ The categories of conduct rendering a claim frivolous, vexatious or an abuse of process are not closed but depend on all the relevant circumstances and for this purpose considerations of public policy and the interests of justice may be very material.”    (paragraph 18/19/9)

The appeal hearing—and the plaintiff’s submissions

16.  During the hearing on 5 June 2018, the plaintiff continued to appear in person.  She prepared for the hearing a small bundle of documents.  She drew my attention to documents within that bundle which she submitted were relevant or important.  I have considered them.

17.  At the beginning of the hearing, I reminded her of my directions given on 27 February 2018.  I explained to her briefly the law on time extension.  On the reasons for the delay in the filing of the Notice of Appeal, she orally gave me some explanations.  She said that as she had lodged an appeal against Master K Lo’s Order given during the call-over hearing, she thought there was no need for her to appeal against Master J Wong’s Order.  She said she thought that if Master K Lo’s Order went, so would Master J Wong’s Order.  She said further that she filed the Notice for the present appeal only when Deputy Judge Yee told her to do so during the appeal hearing on 22 November 2017.

18.  On the merits of her present appeal, the plaintiff submitted that in addition to the written agreement signed by D1, she also relied on two verbal agreements she said she had reached with D1:

(a)   She said that the first alleged verbal agreement was reached with D1 on 12 May 2015 when she met D1 at his office within the offices of D3.  In support of her case that the meeting did take place, she referred me to her email dated 11 May 2015 to D1 (asking “May I drop by your office and seek your (or someone as lawyer) advice on the legal terms in the contract I am going to sign with you?”), and D1’s reply of the same date(“Yes please come to my Jones Day office …”).  The effect of that verbal agreement, according to the plaintiff, and in so far as I can understand it, was that D1 told her there was no need for her to sign on the written agreement signed by D1;

(b)   The 2^nd verbal agreement according to the plaintiff was reached between her and D1 on 23 June 2015, to the effect that D3 would be the lawyers involved in the deal and that fees in the amount of US9,500 per hour would be charged.

19.  The plaintiff told me that there was nothing new about the two verbal agreements, and that she had incorporated the terms of the same in her Amended Statement of Claim.

20.  The plaintiff further submitted that as agreements were reachedinside the offices of D3, and that D1 was a partner of or otherwise employed by D3, she has a case against D3.

21.  On the employment history of D1, the plaintiff pointed me to a certain article apparently downloaded from the website of D3 suggesting that D1 was a partner of D3.  I noted that that article was dated 12 September 2006.  Mr D’Souza informed me that D1 had ceased to be a partner of D3 by 1 January 2015, and that by 31 December 2016, he had ceased even to be an Of-counsel.

Discussion

22.  I have summarized above the explanations which the plaintiff gave me on the delay.  I have serious reservation about the veracity of those explanations.  Master K Lo’s Order was made on 24 March 2017.  The plaintiff followed the directions on the filing of evidence and filed her affirmation on 18 April 2017.  Preparation for the substantive hearing of D3’s Summons then became underway.  She did not seek to appeal against Master K Lo’s Order until 17 July 2017 (4 days before the substantive hearing), which Notice was itself more than 3 months out of time.  I have before me no explanation as to why the lodging of even that appeal was late.

23.  I however bear in mind that D3 by their Summons are seeking to have the plaintiff’s claim against them struck out.  The consequence on the plaintiff’s claim is grave.  On this basis, despite my reservation about the reasons for the delay, and given the applicable legal principles which I have summarized above, I proceed to consider the merits of the plaintiff’s proposed appeal before deciding whether to grant her extension of time to appeal.

24.  On the ground as to whether the Amended Statement of Claim discloses any reasonable cause of action, I have to consider the Amended Statement of Claim as it is.  No evidence is admissible for this purpose.

25.  I have summarized above the plaintiff’s pleaded case against D3 and my observations on it.  I will not repeat them.  I find that the claim as it is and as pleaded against D3 has no chance of success.  No reasonable cause of action has been disclosed against D3.  In my view, this is a plain case.

26.  I have also considered the grounds of appeal set out in the Notice of Appeal.  The relevant ones are:

“ 8) [D3] two affirmations were contradicted on Law Society complaint investigation and the real title of [D1], in the world’s leading Law Firm, during the 10 years of employmentnever been answered, clarified during the 2 hours of argument hearing (summons dated 3/10/2017 6) 10) 5/2/2017 3)) [sic];

9) The reason that orders being granted D3 to be struck out because the lawyer firm is big and Master J Wong prefers to trust them despite all arguments, evidence and facts was unfair and not according to any rules by HKSAR Law.”

27.  Those two grounds cannot cure the defects on the face of the Amended Statement of Claim, and verge on being non-sensical.  The complaint to the Law Society was made by the plaintiff after the event, and could have no bearing upon D3’s alleged liability in the context of the plaintiff’s claim.  The size of D3 as a law firm has absolutely nothing to do with anything before the Courts in Hong Kong.

28.  Having reached the view above, there is in fact no need for meto consider the evidence to see whether the claim against D3 is also frivolous or vexatious, or otherwise an abuse of process.  If necessary, I would find that it is.  What the plaintiff has said, whether in her affirmation filed in opposition of D3’s Summons or during the appeal hearing to me, do not assist her.  The fact that she met D1 inside his office within the offices of D3 does not mean that D3 was a party to any agreement she might have reached with D1. D1’s employment history with D3 equally does not of itself lead to any liability on D3’s part.  Then it was alleged and asserted that D1 had said that somehow D3 would be involved as the lawyers to the deal.  Quite apart from the hopelessly vague nature of the allegations, there is no elucidation from the plaintiff as to what D3’s alleged breaches were.  Those allegations and assertions are incapable of reasoned argument, without foundation and cannot possibly succeed. 

Disposal

29.  By reasons of the above, and principally on the basis that the plaintiff’s proposed appeal lacks merits, I refuse to grant her leave to appeal against Master J Wong’s Order out of time

Costs

30.  In respect of the costs of the present appeal, Mr D’Souza sought summary assessment.  I have considered the Statement of Costs submitted to me.  The sum of HK$111,752 is claimed.  I have considered the particulars set out therein.  I am of the view that both the work done and the amount charged are reasonable.  I order accordingly that the total costs of HK$111,752 should be paid by the plaintiff to D3 within 28 days from the day hereof.

The plaintiff appeared in person

Mr Robin D’Souza, instructed by Jones Day, for the 3^rd defendant

Attendance of the 1^st – 2^nd, 4^th – 6^th defendants were excused