Yu Man v Chief Commodities Ltd
Court of First Instance
Miscellaneous Proceedings No. 1170 of 2016
Cheung and Chu JJA
20 July 2016

Striking out – statement of claim – failure to plead particulars and disclose reasonable cause of action – whether action properly struck out

In an action in the District Court against D, a broker in futures and forex trading, P sought HK$1 million in damages alleging he had suffered a substantial loss caused by the improper conduct of D. On D’s application, the Judge struck out the statement of claim for inter alia lacking in particularity, failing to disclose any reasonable cause of action and having no chance of success under O. 18 r. 19(1)(a) of the Rules of the District Court (Cap. 336H, Sub. Leg.) (the “RDC”), and dismissed the action. The Judge refused P’s application for leave to appeal against the decision and P now renewed the application before the Court of Appeal.

Held, refusing the application, that:

  • P’s intended appeal was wholly without merit, had no reasonable prospect of success and there was no other reason in the interests of justice why it should be heard. The Judge was entitled to exercise his discretion under O. 18 r. 19(1)(a) of the RDC and order the statement of claim to be struck out on the ground that it disclosed no reasonable cause of action.
  • Inter alia, in civil proceedings, the purpose of pleadings was to clearly define the issues in dispute and the substantive questions of law involved, enabling the parties to gather relevant evidence, disclose relevant documents and prepare for trial. The rules of pleadings must be strictly observed. A statement of claim must expressly state the cause of action and its factual basis with the necessary particularity to establish a reasonable cause of action.
  • Here, the statement of claim did not set out any particulars to support the allegations of “improper acts”, “dishonesty” and “wilful tortuous acts” or their factual basis, and no cause of action was made out.
  • As for P’s argument that the defective pleading could have been amended without restriction instead of struck out, under the RDC, a litigant did not have an absolute right to amend pleadings at will and at any time. Here, P never even applied for leave to amend the statement of claim.
  • The law did not prescribe any time limit for an application to strike out a pleading. It was not too late for D to make such an application about two- and-a-half months after the close of pleadings and the Trial Judge did not err in exercising his case management discretion in D’s favour.

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