Tao Soh Ngun v. HSBC International Trustee Ltd
Court of First Instance
High Court Action No 3246 of 2016
Anderson Chow J in Chambers
21 December 2017, 12 January 2018

Civil procedure — pleadings — further and better particulars — denial of negative allegation — whether amounted to mere traverse (in respect of which no particulars would be ordered) or pregnant negative (in respect of which particulars would be ordered)

P claimed that there was a common understanding (the Alleged Common Understanding) between the Original Trustee and subsequently D (HSBC International Trustee Ltd, which became trustee in place of the Original Trustee in 1999), P and her husband (F, who died in 2006) in relation to the Trust in question. Under the Alleged Common Understanding, the Trust was to be established solely for the purpose of minimising the estate duty payable in respect of the assets of P and F, including their controlling interest in a group of companies (‘GE’), passing on their death and that the trustee would administer the Trust in accordance with the couple’s wishes. P further claimed that D departed from the Alleged Common Understanding and refused to follow P’s requests regarding the administration of the Trust since January 2016. P claimed against D for, inter alia, an order that D reconsider P’s requests or alternatively, that D be removed as trustee of the Trust. D’s case was that the Trust was a conventional discretionary trust and it disputed the Alleged Common Understanding. P applied for further and better particulars in relation to various paragraphs of D’s Amended Defence.

Held, allowing P’s application in part, that:

  • P was not entitled to the first set of particulars sought, namely in relation to paras. 26(1), 59 and 64 of the Amended Defence. By those paragraphs, D denied that, in acting in accordance with F’s wishes in relation to a number of specific matters as pleaded by P, the Original Trustee or D were not exercising discretions conferred on them as trustee of the Trust. Thus D was denying a negative allegation. Whether a denial of a negative allegation amounted to a mere traverse (in respect of which no particulars would be ordered) or a pregnant negative raising an affirmative case (in respect of which particulars would be ordered) was to be determined primarily on the basis of existing pleadings. Nevertheless, the Court was also entitled to act upon the confirmation by D’s counsel that the relevant paragraphs did not involve any traverse which imported affirmative allegations (Pinson v. Lloyds and National Provincial Foreign Bank Limited [1941] 2 KB 72, Tin Shui Wai Development Ltd v. AG [1991] 1 HKC 511 applied). (See paras. 26–27, 30–31).
  • A fair reading of paras. 26(1), 59 and 64 of the Amended Defence was that the denial was a mere traverse and not a pregnant negative raising an affirmative case. P’s allegations that the Original Trustee and D never properly exercised their discretionary powers under the Trust prior to 2016 but simply acted in accordance with the wishes of F and/or P was put forward for the purpose of evidencing the Alleged Common Understanding. There was no allegation on the pleadings that the Original Trustee or D failed to properly discharge their duties as trustee in acting in accordance with the wishes of F in relation to the specific matters pleaded. Further, P’s request for particulars went beyond D’s pleas. (See paras. 28–33.)
  • P was entitled to the second set of particulars sought in relation to para. 54(3)(b) of the Amended Defence. The request sought particulars of fact which went directly to D’s allegation that various named persons, including GE, F, P and their children, were “important” customers of the HSBC Group and would explain why the Original Trustee and D would be prepared to accept a fixed percentage fee for acting as trustee of the Trust which, according to P, was “relatively insubstantial compared with the value of the Trust Fund”. D’s submissions that those particulars related to matters of evidence or were wholly unnecessary for the fair disposal of this action or for saving costs were rejected. (See para. 38.)

Application

This was an application by the plaintiff for further and better particulars of various pleas in the Amended Defence. The facts are set out in the judgment.

Jurisdictions: 

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