GENERAL NICE RESOURCES (HONG KONG) LTD v. NINGBO IRON AND STEEL CO., LTD

HCA 854/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 854 OF 2015

____________

____________

_______________

DECISION

_______________

Introduction

1.  This is an application of Ningbo Iron and Steel Co., Ltd. (“NIS”) by its summons dated 31 May 2016 (“the Summons”) for leave to appeal my decision handed down on 17 May 2016 (“the Decision”) whereby its application to strike out the malicious prosecution claim of General Nice Resources (Hong Kong) Limited (“GNR”) in this action was dismissed and the application of GNR to file and serve its Amended Statement of Claim was allowed.

2.  By the Summons, NIS also applies for a variation of the costs order nisi madein the Decision. In light of the 2^nd Corrigendum issued by this court, such an application is not necessary and NIS abandons this part of the Summons.

3.  The background facts were sufficiently narrated in the Decision and I shall make no repetition here. I also adopt the abbreviations used in the Decision.

Applicable legal principles

4.  There is no dispute about the applicable principles. Leave to appeal should not be lightly granted. Section 14AA(4) of the High Court Ordinance, Cap.4A requires the court be satisfied that the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard before granting leave: SMSE v KL [2009] 4 HKLRD 125 per Le Pichon JA at §17.

5.  A draft Notice of Appeal is annexed to the Summons and it contains 8 grounds. Whilst I have examined each of them in turn, I shall only focus on the major grounds.

Proposed grounds of appeal

6.  The first ground is that I erred in holding that the outcome of the Petition was arguably favourable to GNR when NIS agreed to discontinue the Petition only after receiving the Outstanding Sum. Ms Chark, for NIS, submits that NIS rather than GNR should be treated as the winner in the Winding-up Proceedings because it managed to recover the Outstanding Sum, which was the foundation for the Petition. This is a new argument and is the major ground advanced by Ms Chark in this application.

7.  Ms Chark principally relies on three authorities. First, she refers me to Re Lucky Ford Industrial Limited [2013] 3 HKLRD 550. There, some shareholders of a company filed a petition for a buy-out order and alternatively a winding-up order. At last, the respondent shareholders agreed that the company should be wound up and therefore a winding-up order was made by consent. The petitioning shareholders asked for costs whilst the respondent shareholders maintained that there should be no order as to costs.

8.  In arriving at the conclusion relating to costs, Harris J had this to say,

“In my view having regard to O.1A r.1, the correct approach to determining costs in cases which do not involve the court granting substantive relief is for the court first to consider the terms of settlement and assess whether the petitioner has obtained substantially what he sought in his petition. If he did it will not be necessary or appropriate for the court to consider evidence and arguments directed to the merits of the case and whether or not the petitioner would have been successful if the petition had gone to trial. The petitioner will be treated as having been successful and entitled to costs.”

9.  Ms Chark further relies on another decision of Harris J in Re HNA Group Co Ltd [2014] 4 HKLRD 463. At §21, Harris J, after referring to Re Lucky Ford Industrial Limited, said this,

“Generally, if a petitioner is successful in recovering the debt which is the foundation for the petition the court will not be interested in an investigation into the underlying merits of the claim or the way in which the proceedings have been conducted. The petitioner will have his costs of the proceedings.”

10.  Lastly Ms Chark relies on Tibbs v Islington Borough Council [2002] EWCA Civ 1682. There, the defendant recovered an amount in access of £2,000 though the amount he claimed as supporting creditor in the bankruptcy petition against the claimant was £54,482.74. The Court of Appeal held that the claimant in his proposed action for malicious prosecution had no real prospect of success because the defendant still succeeded in his recovery of a sum substantially exceeding the threshold of £750 required to launch a bankruptcy petition. Thus, the prosecution of the bankruptcy petition was not determined in the claimant’s favour.

11.  Ms Chark submits that, by the same token, the recovery of the Outstanding Sum from GNR indicates that the Winding-up Proceedings were determined in the favour of NIS rather than GNR.

12.  I do not think these authorities assist NIS. I have no problems with the analysis there but they dealt with very different questions.

13.  The facts here are clearly distinguishable and I have to set them out here to understand the full circumstances under which the Outstanding Sum was paid.

14.  NIS filed the Petition on 2 April 2015. GNR issued a summons to strike out the Petition on 13 April 2015. GNR offered to pay NIS the Outstanding Sum on 20 April 2015 on condition that NIS agreed to withdraw the Petition forthwith. NIS accepted the proposal save that it demanded GNR to pay its costs as well on the same day. GNR commenced the present action in which the bona fide of the Winding-up Proceedings was under challenge on 21 April 2015. On 22 April 2015, the next day, GNR issued a summons in the Winding-up Proceedings for the dismissal or discontinuance of the Winding-up Proceedings.

15.  On the following day, i.e. 23 April 2015, NIS sent a consent summons to GNR in the following terms:

1. GNR pays the Outstanding Sum to the Client Account of the solicitors for NIS;

2. Upon receipt of the Outstanding Sum, NIS has leave to discontinue the Petition;

3. Costs of these proceedings including the summons taken out by GNR on 13 April 2015 be in the cause of this action.

16.  Apparently GNR accepted the terms of the consent summons. However it appears that GNR sent another consent summons to NIS for its approval. With the approval of NIS, GNR filed its consent summons signed by NIS on 24 April 2015. Harris J approved the same on paper and made a consent order on the same day. The consent order consisted of the following terms:

1. GNR’s summons dated 22 April 2015 be dismissed;

2. NIS has leave to discontinue the Petition forthwith;

3. Costs of these proceedings including the summonses taken out by GNR on 13 and 22 April 2015 be in the cause of this action.

17.  The parties did not invite Harris J to decide on the question of costs of the Winding-up Proceedings as in the two cited decisions of his Lordship. Instead, they have expressly reserved the question of costs pending the determination of GNR’s claim in this action.

18.  It is obvious that in paying NIS the Outstanding Sum on 23 April 2015 despite the alleged Varied Payment Schedule, GNR did not, and could not be taken to, abandon his malicious prosecution claim in this action. Quite on the contrary GNR made it clear that it would proceed with the claim attacking the propriety of the Winding-up Proceedings. GNR could not be taken to accept that discontinuance of the Petition upon payment of the Outstanding Sum would mean that the Winding-up Proceedings were determined in the favour of NIS and hence his claim must be defeated. I cannot accept Ms Chark’s submission. I do not agree that my conclusion that the outcome of the Petition was arguably in the favour of GNR is plainly wrong.

19.  The second ground is that I erred in holding that the Petition was filed without reasonable or probable cause in that (a) Harris J refused to accede to the application of GNR to strike out the Petition on 17 April 2015 and (b) NIS only consented to discontinue the Petition upon receipt of the Outstanding Sum.

20.  I see no merit in this ground, which was not argued on the last occasion. The hearing of the summons was merely adjourned sine dine with liberty to restore at the first hearing of the Petition. In making this disposition, I cannot accept that Harris J made any assessment of the merit of GNR’s striking out application at all. Nor can I accept Ms Chark’s submission that this order of Harris J could be taken to negative the existence of the Varied Payment Schedule.

21.  Clearly my view is that if the Varied Payment Schedule did exist, which I find to be an arguable matter at this stage, NIS could not have a genuine belief of the insolvency of GNR and should not petition for an order to wind up GNR on that basis. This is the reason why I hold that it is arguable that the Winding-up Proceedings were instituted without reasonable and probable cause. The fact that NIS only agreed to discontinue the same with full payment of the Outstanding Sum is irrelevant.

22.  Ms Chark then goes on to complain about my conclusion that it is arguable that the Varied Payment Schedule existed. She submits that this court should find it plain and obvious that GNR can never prove the Varied Payment Schedule. For the reasons given in the Decision and in particular in light of the established legal principles relating to striking out applications, I am unable to agree with her.   

23.  The remaining grounds mostly concern the element of malice. It is noted in the Decision that in the proposed amendments, GNR relies on the Arbitration Clause and the Varied Payment Schedule to establish malice. This court only accepts that the latter may lend support to the allegation of malice.  I have come to the conclusion that arguably the particulars supplied in the proposed amendments can be sufficient to establish malice.

24.  Mr Chung, for GNR, confirms that it no longer relies on the Arbitration Clause in this connection. I need not deal with Ms Chark’s submission on the Arbitration Clause.

25.  Ms Chark pertinently refers to Jacob v Vockrodt [2007] EWHC 2403 (QB) (at §42) to remind this court that malice can include not only spite or ill will but improper motive in the presentation of the petition. Absence of reasonable or probable belief will not of itself amount to malice: see also Hicks v Faulkner (1878) 8 QBD 167, at 175.  

26.  Ms Chark impresses upon this court that the Outstanding Sum had long been owing to NIS and NIS merely presented the Petition to recover the undisputed and overdue indebtedness. Indeed due to the Petition, GNR agreed to make full repayment at long last. She further refers to the affirmation evidence of NIS to explain the motive in its presentation of the Petition. She submits that there could be no malice.

27.  In the Statement of Claim, it is pleaded that the Winding-up Proceedings were commenced despite the agreement of NIS to the Varied Payment Schedule and with a dominant intent to injure the business image, credit rating of GNR and its subsidiaries.

28.  In the proposed amendments containing the particulars of malice, it is averred that NIS well knew that the 1^st instalment under the Varied Payment Schedule was not due when it filed the Petition. It therefore could not have an honest belief in the alleged insolvency of GNR. Further complaints were made about the adverse effect of the Petition on the business of GNR.

29.  In my view, in light of the alleged Varied Payment Schedule, the existence of which I cannot rule out at this stage, it is at least arguable that NIS indeed harboured an improper motive in commencing the Winding-up Petition shortly after it had agreed to the Varied Payment Schedule and when the 1^st instalment thereunder (to be paid by 25 April 2015) was not yet due and payable. This is so despite the overall indebtedness was not disputed by GNR. 

30.  I am unable to come to a clear conclusion that the plea of malice of GNR with all the particulars pleaded is bound to be rejected. I cannot strike it out now.     

31.  Bearing in mind the extreme nature of striking out a claim, this court has formed the view that GNR should be allowed to pursue its plea of malicious prosecution albeit amendments are badly needed. Nothing advanced by Ms Chark for the purpose of this application can sufficiently cause me concern about the correctness of the Decision.

Conclusion and Order

32.  In the premises, I conclude that NIS cannot meet the threshold of section 14AA(4). This application falls to be dismissed.

33.  There is no reason why the usual rule of costs following the event does not apply here. I make an order nisi that NIS do pay GNR its costs of and occasioned by the Summons, to be taxed if not agreed.

HCA 854/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 854 OF 2015

____________

____________

_______________

DECISION

_______________

Introduction

1. General Nice Resources (Hong Kong) Limited (“GNR”) brought this action against Ningbo Iron and Steel Co., Ltd. (“NIS”), its creditor, for damages for malicious prosecution in its wind-up petition proceedings under HCCW 115/2015 (“the Winding-up Proceedings”). NIS now seeks to strike out the claim of GNR by its summons dated 1 September 2015 (“theStriking out Summons”) pursuant to O.1 rr.19(1)(a), (b) and (d) of the Rules of the High Court. In response, NIS took out a summons dated 2 February 2016 (“the Amendment Summons”) to apply for leave to amend its statement of claim. This court is thus seized with these two summonses.

2. Mr Chung, for GNR and defending his pleading, indicates that he is seeking leave to amend the statement of claim as per the draft attaching to his skeleton submissions (“the Draft”) and not the draft annexed to the Amendment Summons. Mr Fung, for NIS, has no objection and makes his striking out application first with reference to the Draft.

Background facts

3. The uncontroversial facts underpinning the claim of GNR can be summarized as follows.

4. NIS is a PRC company and GNR is locally incorporated. On 20 August 2014, GNR and NIS entered into a sales agreement whereby GNR agreed to supply to NIS a shipment of iron ore (“the Shipment”) at the provisional price of US$8,356,617.33 (“the Sales Agreement”).

5. The Sales Agreement contained an arbitration clause (“the Arbitration Clause”) which obliged the parties to resolve their dispute by arbitration in accordance with the Rules of Hong Kong International Arbitration Centre if after negotiation between the representatives of the parties they failed to resolve their dispute. The definition of “dispute” included any difference, disagreement, controversy and/or claim.

6. Pursuant to the Sales Agreement, the Shipment was made and the final price was US$7,987,908.06. By a final invoice dated 28 November 2014, GNR indicated that the amount to be refunded to NIS after price adjustment should be USD 1,298,668.32 (“the Balance”).

7. Pursuant to Clause 13.2(a) of the Sales Agreement, GNR had to refund NIS the Balance within 7 days from the date of the final invoice.

8. GNR defaulted. NIS and GNR subsequently agreed on a repayment schedule by 9 instalments in different amounts. The repayment schedule is evidenced by a table reproduced below:

Date	Payment
1.13-1.16	50k
1.19-1.23	50k
1.26-1.30	50k
2.2-2.6	250k
2.9-2.13	250k
2.16-2.20	250k
2.23-2.27	250k
3.2-3.6	70k
3.9-3.13	79k

9. GNR only managed to make the first two instalments in the total amount of US$100,000, leaving an outstanding sum of US$1,198,668.32 (“the Outstanding Sum”) remaining.

10. On 9 February 2015, NIS issued a letter to GNR and demanded that the final repayment to be made on or before 31 March 2015.

11. On 5 March 2015, NIS issued and served on GNR a statutory demand pursuant to section 178 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance demanding that the Outstanding Sum should be settled within 3 weeks from the date thereof, failing which NIS would petition for winding up without further notice (“the Statutory Demand”).

12. On 2 April 2015, NIS filed a petition and commenced the Winding-up Proceedings against GNR on the basis of its non-compliance with the Statutory Demand.

13. On 21 April 2015, GNR commenced these proceedings by reason of the Winding-up Proceedings. Three days later, on 24 April 2015, the Winding-up Proceedings were terminated by consent upon the full payment of the Outstanding Sum by GNR to NIS.

GNR’s claim

14. GNR’s plea of malicious prosecution is based on two principal allegations. First, it alleges that or around 26 March 2016 the parties agreed on a varied payment schedule in respect of the Outstanding Sum in consideration of the maintenance of a good commercial and operational relationship between the parties (“the Varied Payment Schedule”).

15. The Varied Payment Schedule consisted of 4 instalments and was in the following terms:

15 April 2015	USD 300,000
30 April 2015	USD 300,000
15 May 2015	USD 300,000
31 May 2015	the balance

16. The pleaded case is that the Varied Payment Schedule was made in written, partly orally and partly by conduct.

17. Next, GNR alleges that in light of the Statutory Demand, pursuant to the Arbitration Clause, it served on NIS an official written proposal to request for commencement of arbitral proceedings to resolve their dispute on 18 March 2015.

18. Hence, GNR contends that the Winding-up Proceedings were malicious and without reasonable and proper cause in that NIS knowingly failed to fulfill its obligations under the Arbitration Clause and paid no regard to the Varied Payment Schedule. As a result, GNR has suffered huge loss in its reputation, credit ratings and operation. GNR further alleges that its associated companies which are publicly listed in Hong Kong would also suffer detrimental effect due to the Winding-up Proceedings too.

19. Allegedly GNR was injured in its reputation, good will and was put to considerable trouble, inconvenience, anxiety and incur expenses and it has suffered loss and damage in the amount of USD100 million with full and better particulars to be provided in due course.

20. Apart from the plea of malicious prosecution, GNR also relies on promissory estoppel. At the hearing, Mr Chung expressly abandons this plea by reason of its unsustainability.

21. As regards the Winding-up Proceedings, it is pleaded that on 24 April 2014, Harris J made an order by consent that the petition therein be discontinued forthwith with costs to be in the cause of this action. It is averred that the Winding-up Proceedings were terminated in favour of GNR in that NIS was unsuccessful in obtaining the relief prayed in its petition or alternatively the Winding-up Proceedings were capable of terminating in favour of GNR.

The Striking out application and relevant principles

22. NIS seeks to strike out the Statement of Claim and therefore the entire writ on the ground that it is plain and obvious that (1) it discloses no reasonable cause of action, (2) it is frivolous and vexatious and (3) it is an abuse of process of the court albeit with the proposed amendments.

23. The relevant legal principles are well-settled. In this application, it is pertinent to remind myself that the following principles relating to striking out applications and malicious prosecution.

24. Striking out is a drastic remedy and it follows that no court should give effect to it unless it is satisfied that the legal basis of the claim is unarguable or almost incontestably bad and where the legal viability of the cause of action is sensitive to the facts, an order to strike out should not be made: per Litton VP in Yue Xiu Finance Co. Ltd. and Anor. v Dermot Agnew and Ors.[1996] 1 HKLR 137 at 141C.

25. The onus is on the applicant to demonstrate that the case is one in which it is “plain and obvious”. It is only in plain and obvious cases that the court should exercise its summary powers to strike out the pleading under this rule. 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: Hong Kong Civil Procedure 2016 Vol.1 §18/9/4 at p.448.

26. No evidence shall be admissible on an application under paragraph (1)(a) of RHC 18.19: RHC O.18 r.19(2). A proceeding is frivolous when it is not capable of reasoned argument, without foundation or where it cannot possibly succeed. A proceeding is vexatious when it is oppressive or lacks bona fides: Hong Kong Civil Procedure 2016 Vol.1 §18/9/8 at pp.451-452.

27. An abuse of the process of the court connotes that the process of the court must be used bona fide and properly and must not be abused. Abuse can be concluded in groundless claims or where the pleading is a sham or entirely without substance: Hong Kong Civil Procedure 2016 Vol.1 §18/9/10 at p.453

28. In line with the underlying objectives in Order 1A and the spirit of the Civil Justice Reform, it is within the court’s case management power to strike out the whole pleadings and let the plaintiff prepare and apply to file a fresh set of statement of claim if there are viable claims: Wallbanck Brothers Securities (Hong Kong) Ltd v Emily Tse & Ors (unreported, CACV222/2015, 19.10.2015) at §13 per Lam VP.

29. The four essential elements of the tort of malicious prosecution are set out in the following passage in Clerk & Lindsell On Torts, 21^st edition, §16-09:

“In an action for malicious prosecution the claimant must show first that he was prosecuted by the defendant, that is to say, that the law was set in motion against him by the defendant on a criminal charge, secondly, that the prosecution was determined in his favour; thirdly, that it was without reasonable and probable cause; fourthly, that it was malicious. The onus of proving every one of these is on the claimant. Evidence of malice of whatever degree cannot be invoked to dispense with or diminish the need to establish separately each of the first three elements of the tort.”

30. As fairly pointed out by Mr Fung SC, the subject matter of the tort is not confined to criminal proceedings. An action also may lie for the abuse of civil process. Winding-up proceedings can amount to prosecution in this tort: Gregory v Portsmouth City Council [2000] 1 AC 419 at p.427C-D per Lord Steyn and Quartz Hill Gold Mining Co v Eyre (1883) 11 QBD 674.

31. With these principles in mind, I turn to assess the merit of the striking out application.

Discussion

32. I first examine the validity of NIS’s challenge under O.18 r.19(1)(a) to see whether the statement of claim together with the proposed amendments discloses no reasonable cause of action.

33. Being the petitioner for Winding-up Proceedings, NIS prosecuted the petition against GNR. Mr Fung accepts the first element of the tort is satisfied.

34. Mr Fung submits that the Winding-up Proceedings were not judicially determined and hence it cannot be said that they were determined in the favour of GNR. The second element is missing and the claim should be struck out.

35. I cannot agree. It suffices if the proceedings were brought to an end by consent of the claimant and on terms: Craig v Hasell (1843) 4 QB 481 at 492. Here, it is pleaded that the petition was discontinued by consent with costs be in the cause of this action. The outcome is arguably in the favour of GNR and it is nowhere near being wound up. The second element is present in my judgment.

36. But I should add that it is inappropriate to plead that the Winding-up Proceedings, lacking reasonable and probable cause, were capable of terminating in the favour of GNR. This alone can hardly constitute the second element. This plea should have no place in the pleading and should be struck out.

37. Mr Fung submits that NIS could not be said to have commenced the Winding-up Proceedings without reasonable and proper cause by reason of the incontrovertible fact that GNR did not comply with the Statutory Demand. Therefore, NIS merely exercised its statutory right to commence the Winding-up Proceedings pursuant to section 117(1)(d) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap. 32 (“the Ordinance”).

38. Mr Fung further highlights to this court that the Varied Payment Schedule cannot assist GNR because it allegedly came into existence only after the Statutory Demand had been duly served.

39. I cannot accept his submission.  The Statutory Demand was served pursuant to section 178 of the Ordinance, which provides that a company shall be deemed to be unable to pay its debts if it has failed to comply with a statutory demand duly served on it.

40. It is a deeming provision only. It is merely a means of proof of insolvency but is not a sine qua non for the success of a petition on the grounds of insolvency: Bozell Asia (Hong Kong) Ltd v CAL International Ltd [1997] HKLRD 1 at §39 per Rogers J (as he then was). The court will not make a winding up order unless it is satisfied that GNR is insolvent and hence is unable to pay its debt. If the parties actually agreed on the Varied Payment Schedule, I am unable to be convinced that NIS could nevertheless about a week later reasonably and properly present the petition on the ground of insolvency pursuant to section 117(1)(d) of the Ordinance.

41. I find that the third element is at least arguably satisfied on the present state of the pleading.

42. Next, Mr Fung complains about the inadequacy of the particulars supplied to establish malice.

43. GNR relies heavily on the Arbitration Clause and the Varied Payment Schedule in its proposed amendments. I accept that with its purported agreement to the Varied Payment Schedule, NIS could not have a genuine belief of the insolvency of GNR and should not petition for winding up GNR on this ground. Arguably, the particulars supplied in the proposed amendments can be sufficient to establish malice for the purpose of its plea of malicious prosecution.

44. Lastly, Mr Fung tries to persuade this court that the Varied Payment Schedule is unsustainable in law. He submits that it is not supported by valid consideration.

45. Mr Chung stands by his pleaded consideration, namely, a good commercial and operational relationship between the parties. He submits that this has been held to be valid consideration in some authorities. Not long after the hearing, he supplied to this court two Court of Appeal decisions, namely, Swiss Singapore Overseas Enterprises Pte Ltd v China Citic Bank Corporation Limited, Xiamen Branch (unreported, CACV 197/2013, 15 May 2014) and Chong Cheng Lin Courtney v Cathay Pacific Airways Ltd [2011] 1 HKLRD 10. He does not make any submissions on these authorities.

46. In the former decision, the appellant contended that there was consideration in that continuing performance of existing obligations providing some practical benefit would amount to consideration, citing a few authorities in support including the latter (§110). On the other hand, the respondent argued that part performance of an existing obligation to pay under the credit could not form the necessary consideration to support the variation (§111). Kwan JA (with whom Lam VP and Barma JA agreed) did not find it necessary to consider the opposing arguments of the parties in light of her conclusion in relation to another issue. The learned judge only observed that in that case the liability for the amount claimed was not undisputed. This does not really assist GNR.

47. In the latter decision, A Cheung J (as the Chief Judge then was) accepted that it is trite law that past consideration is no consideration and some fresh consideration other than any promise of actual performance of a pre-existing contractual obligation is required for a contracting party to feed a new promise in his favour by his opposite contracting party (§49).

48. However, the learned judge observed the judicial criticism of this rigid rule and went on to point out that the law must not depart from the reality of everyday life for no good reason. Then, the learned judge upheld the validity of certain provisions in a document (a handbook issued by the employer) which had long been regarded by the parties as having contractual force in the absence of very compelling reasons (at §51).

49. Again, this decision does not assist GNR. The facts and the issues there are very different.

50. I do not think it is appropriate for me to decide summarily on the validity of the pleaded consideration. In my view, even if the purported agreement underlying the Varied Payment Schedule could not stand in law for want of consideration, it is at least arguable that NIS could not reasonably and properly rely on the non-compliance of the Statutory Demand to present the petition when the Varied Payment Schedule had been purported made before the deadline. In other words, if the purported agreement relating to the Varied Payment Schedule is established, I am of the view that GNR should have a reasonable complaint about the presentation of the petition shortly afterwards. 

Frivolous and vexatious/ an abuse of process

51. Mr Fung makes an able submission on the incredibility of the Varied Payment Schedule with reference to the documentary and affidavit evidence.

52. In particular, Mr Fung underscores certain part of the affirmation of Hung Yu Pang filed on behalf of GNR and points out that even on its own evidence, GNR merely urged NIS to accept its proposed the Varied Payment Schedule by Eric Yu to Yang Wei of NIS on 26 March 2015 by way of an email of the same date at about 3:16 pm. Eric Yu averred that he had heard nothing from Yang Wei regarding the email. Thus, in the absence of the acceptance by Yang Wei, Mr Fung submits that the allegation of the Varied Payment Schedule could not be borne out by GNR’s own evidence.

53. However, it is also the evidence of Hung Yu Pang that on 25 March 2015, Eric Xu and Yang Wei already agreed over the phone to the Varied Payment Schedule at about 6:00 p.m..

54. I am aware of the inconsistencies between the pleaded case and the affirmation evidence relating to the allegation of the Varied Payment Schedule. However, I am unable to say that it is plain and obvious that the Varied Payment Schedule cannot be established. I should not at this early stage debar GNR from making good its allegation altogether.

55. Mr Fung also raises legal arguments about the sufficiency of the consideration of the alleged Varied Payment Schedule for the purpose of establishing these two grounds in his striking out application. I have dealt with his arguments and I am not convinced that it is plain and obvious that GNR must fail to prove the validity of the Varied Payment Schedule. In any event, I am not persuaded that the Varied Payment Schedule, even if not enforceable in law, could not be relied on to prove its plea of malicious prosecution.

56. In the premises, I conclude that these two grounds cannot be made out.

57. Finally, Mr Fung complains about the loss and damage allegedly suffered by GNR in the sum of US$100,000,000 pleaded as a liquidated sum. He submits that it looks fanciful.

58. I agree with him. The tort of malicious prosecution is actionable per se without proof of special damage. It is unnecessary for GNR to plead a specific figure at all. It can simply claim general damages to be assessed. The claim of US$100,000,000 seems illusory and arbitrary. With respect, the present state of the pleading regarding its claim for damages looks unprofessional and badly calls for amendments.   

Conclusion

59. For the reasons given, I am of the view that NIS has failed to

discharge the onus that the entire statement of claim even incorporating the proposed amendments should be struck out. I cannot accede to its application. I dismiss the Striking out Summons.

60. On the other hand, though I am minded to grant leave to GNR to amend its statement of claim, the Draft is still unsatisfactory for the reasons given. It still requires amendments including deletion of objectionable parts indicated above. In the circumstances, on the Amendment Summons, I grant NIS leave to file and serve its Amended Statement of Claim (which should take care of all the foregoing observations in this Decision) within 28 days from the date hereof and the parties do have leave to file corresponding pleadings thereafter within the respective usual time frame.

61. Now I come to the issue of costs. On the Striking out Summons, though apparently NIS is unsuccessful, the original pleading is indeed problematic and does require amendments. Taking all the circumstances into account, including the lack of meritorious submissions advanced in opposition, no order as to costs is a fair order to my mind and I make it an order nisi.

62. On the Amendment Summons, GNR asks for costs of its application be to NIS in any event. In light of the costs order nisi I have just made in respect of the Striking out Summons, I make an order nisi that costs of and occasioned by the Amendment Summons excluding the hearing of the Amendment Summons be to GNR in any event, to be taxed if not agreed.