CHAN SHU CHUN AND ANOTHER v. DR KUNG YAN SUM AND OTHERS

CHAN SHU CHUN AND ANOTHER v. DR KUNG YAN SUM AND OTHERS

The court held it was plain and obvious that OSCO (ss25/25A) was enacted to protect the public at large and does not, by its terms or legislative history, create a private civil cause of action for mere breach of its reporting provisions; further, on the pleaded facts there was no sufficient proximity or assumption of responsibility to impose a common law duty of care by the 4th defendant to these non-clients. Accordingly the ASoC against the 4th defendant disclosed no reasonable cause of action and was struck out; the Order 14A question was answered in the negative. However leave to re-amend to add a particularised conspiracy to defraud claim (based on the bank discovery and alleged...

Citation
CHAN SHU CHUN AND ANOTHER v. DR KUNG YAN SUM AND OTHERS
Parties
1st Plaintiff: Chan Shu Chun; 2nd Plaintiff: King Base Engineering Limited; 1st Defendant: Dr Kung Yan Sum; 2nd Defendant: Hero Fortune Limited; 3rd Defendant: Chinachem Charitable Foundation Limited; 4th Defendant (solicitor Firm): Messrs Philip KH Wong, Kennedy YH Wong & Co
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
18 May 2017
Case Number
HCA832/2014
Procedural Posture
Civil (tort: Negligence, Conversion, Conspiracy to Defraud; Statutory Duty Under Osco) / Interim Applications Hearing (striking Out Under Order 18 R19; Determination Under Order 14 A; Application to Amend Pleadings)
Outcome
ASoC/FBP against the 4th defendant struck out and causes of action and reliefs against the 4th defendant dismissed; plaintiffs granted leave to re-amend pleadings to add conspiracy to defraud claim (with specified deletions/changes re 4th defendant); costs orders nisi made
Legal Topics
Striking Out, Order 14 a Determination, Duty of Care, Statutory Duty (osco Ss25/25 A), Conspiracy to Defraud, Conversion, Pleading Particularity, Abuse of Process, Limitation
Source Language
EN
Civil Procedure Tort Fraud and Conspiracy Criminal Law (anti Money Laundering) Company/trusts Law Striking Out Order 14 a Determination Duty of Care +6 more

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Parties

Chan Shu Chun

1st Plaintiff

King Base Engineering Limited

2nd Plaintiff

Dr Kung Yan Sum

1st Defendant

Hero Fortune Limited

2nd Defendant

Chinachem Charitable Foundation Limited

3rd Defendant

Messrs Philip KH Wong, Kennedy YH Wong & Co

4th Defendant (solicitor Firm)

Procedural Posture

Civil (tort: Negligence, Conversion, Conspiracy to Defraud; Statutory Duty Under Osco) / Interim Applications Hearing (striking Out Under Order 18 R19; Determination Under Order 14 A; Application to Amend Pleadings)

Legal Issues

  1. 1 Whether breach of ss25/25A Organised and Serious Crimes Ordinance (Cap 455) gives rise to a private civil cause of action
  2. 2 Whether the 4th defendant (solicitors) owed a common law duty of care to non-clients (the plaintiffs) to report suspected proceeds of crime
  3. 3 Whether the ASoC discloses a reasonable cause of action against the 4th defendant and is frivolous, vexatious or an abuse of process

Ratio Decidendi

The court held it was plain and obvious that OSCO (ss25/25A) was enacted to protect the public at large and does not, by its terms or legislative history, create a private civil cause of action for mere breach of its reporting provisions; further, on the pleaded facts there was no sufficient proximity or assumption of responsibility to impose a common law duty of care by the 4th defendant to these non-clients. Accordingly the ASoC against the 4th defendant disclosed no reasonable cause of action and was struck out; the Order 14A question was answered in the negative. However leave to re-amend to add a particularised conspiracy to defraud claim (based on the bank discovery and alleged...

Court Disposition

ASoC/FBP against the 4th defendant struck out and causes of action and reliefs against the 4th defendant dismissed; plaintiffs granted leave to re-amend pleadings to add conspiracy to defraud claim (with specified deletions/changes re 4th defendant); costs orders nisi made

Orders

  • Paragraph 26 of the ASoC against the 4th defendant struck out
  • Items 1-2 in the prayer of reliefs in the ASoC against the 4th defendant struck out