Chinabase Holdings Ltd v Robert Chun Chung Ip

Court of First Instance
High Court Action No. 1892 of 2015
Deputy Judge Manzoni SC in Chambers
20 July 2016

Economic torts – conspiracy to injure – instructions received and conveyed by solicitor from client not sufficient to establish conspiracy – in order to found good cause of action, solicitor must adopt representations as his own

P contended that it and D2 entered into a framework agreement to acquire a PRC development project; and an agreement to acquire a joint venture company, JVC (the “JV Agreement”). P acquired 75 percent of the total interest in the project and claimed that JVC guaranteed a minimum return from the contribution, while D2 guaranteed the due performance by JVC of its obligations under the JV Agreement. D2 as the owner of shares in D3 and D4–5 as the owners of shares in D2 also executed two share mortgages in P’s favour to secure JVC and D2’s performance of their obligations. P claimed that JVC failed to comply with its obligations. P agreed to sell its 75 percent interest in the project to D2 (the “ASP”) but alleged that completion did not take place, as D failed to pay the full purchase price. As the ASP provided that until completion the JV Agreement remained valid, P’s agent (“ABM”) exercised P’s rights under the share mortgages by giving notice to D2’s registered BVI agent (“PCL”) that ABM would replace PCL as D2’s agent; and instructing BVI lawyers (“G&P”) to effect the transfer of the shares in D2–3 to P. D2–5 instructed a solicitor, D1, to act for them in these matters. P brought proceedings against D1–5. P relied on two letters sent from D1 to ABM (the “Letters”) which it alleged gave rise to a conspiracy to injure and actionable misrepresentation. P asserted that the Letters contained inconsistent representations, in that the first letter represented that D2–5 had not signed the documents concerning inter alia the purported appointment of ABM as the new administrator of D2 and the purported transfer of shares of D3 from D2 at all; while in the second letter it was accepted that the documents had been signed and the JV Agreement was terminated by the ASP. P sought an order that D1 undertake to withdraw, and not make further, false representations to ABM, PCL and G&P together with damages. D1 applied to strike out certain paragraphs of P’s statement of claim (the “Paragraphs”) on the ground, inter alia, that they disclosed no reasonable cause of action.

Held, striking out the claim against D1, but not the Paragraphs save insofar as they related to him, that:

  • With respect to P’s claim of a conspiracy to injure, the Letters simply contained two propositions: (a) that the documents were not signed on a specified date, not that they had never been signed; and (b) P was not entitled to seek a transfer of the shares because of completion of the ASP. These were not inconsistent and did not necessarily reflect a change in stance. Further, D1 expressly identified the representations in the Letters as his instructions from D2–5. A solicitor was entitled to rely on and convey his client’s instructions to the counterparty in a dispute, without necessarily implicating himself in a conspiracy. Pleading the mere existence of such representations was wholly inadequate to found a good cause of action for conspiracy against D1. P had not pleaded a sustainable claim that D1 had in some way adopted the representations as his own. Further, there was no evidence to establish any such conspiracy involving D1.

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