由此
A A
B B
HCA 2114/2007
C IN THE HIGH COURT OF THE C
HONG KONG SPECIAL ADMINISTRATIVE REGION
D D
COURT OF FIRST INSTANCE
E ACTION NO. 2114 OF 2007 E
____________
F BETWEEN F
G SHENZHEN FUTAIHONG PRECISION 1st Plaintiff G
INDUSTRY CO., LTD
H (深圳富泰宏精密工業有限公司) H
HONG FU JIN PRECISION INDUSTRY 2nd Plaintiff
I I
(SHEN ZHEN) CO. LTD
(鴻富錦精密工業 (深圳) 有限公司)
J J
FOXCONN PRECISION COMPONENT 3rd Plaintiff
K (BEIJING) CO., LTD K
(富士康精密組件 (北京) 有限公司)
L L
M and M
BYD COMPANY LIMITED 1st Defendant
N N
BYD (H.K.) CO., LIMITED 2nd Defendant
O O
GOLDEN LINK WORLDWIDE LIMITED 3rd Defendant
P BYD ELECTRONIC COMPANY LIMITED 4th Defendant P
LEAD WEALTH INTERNATIONAL LIMITED 5th Defendant
Q Q
TIANJIN BYD ELECTRONICS
R
COMPANY LIMITED 6th Defendant R
(天津比亞迪電子有限公司)
S BYD PRECISION MANUFACTURE CO. LTD 7th Defendant S
(比亞迪精密制造有限公司)
T T
____________
U (By Original Action) U
V V
由此
A
-2- A
B
AND B
BETWEEN
C C
BYD COMPANY LIMITED 1st Plaintiff
D D
BYD (H.K.) CO., LIMITED 2nd Plaintiff
E
GOLDEN LINK WORLDWIDE LIMITED 3rd Plaintiff E
BYD ELECTRONIC COMPANY LIMITED 4th Plaintiff
F F
LEAD WEALTH INTERNATIONAL LIMITED 5th Plaintiff
G TIANJIN BYD ELECTRONICS G
COMPANY LIMITED 6th Plaintiff
H (天津比亞迪電子有限公司) H
BYD PRECISION MANUFACTURE CO. LTD 7th Plaintiff
I I
(比亞迪精密制造有限公司)
J and J
K
HON HAI PRECISION INDUSTRY 1st Defendant K
CO., LTD (鴻海精密工業股份有限公司)
L L
FOXCONN INTERNATIONAL 2nd Defendant
HOLDINGS LIMITED
M (富士康國際控股有限公司) M
N SHENZHEN FUTAIHONG PRECISION 3rd Defendant N
INDUSTRY CO., LTD
O
(深圳富泰宏精密工業有限公司) O
HONG FU JIN PECISION INDUSTRY 4th Defendant
P (SHEN ZHEN) CO LTD P
(鴻富錦精密工業 (深圳) 有限公司)
Q Q
____________
R (By Counterclaim) R
S S
Before: Deputy High Court Judge L. Chan in Chambers
Date of Hearing: 13 July 2010 T
T
Date of Decision: 24 August 2010
U U
V V
由此
A
-3- A
B
_____________ B
DECISION
C C
_____________
D D
1. This is an application by the plaintiffs and the defendants by
E E
counterclaim to strike out parts of the counterclaim.
F F
G The plaintiffs’ claim G
2. The action was brought on 5 October 2007. The Re-Amended H
H
Statement of Claim was filed on 2 September 2009. The plaintiffs claim
I I
that they have, by experience and extensive investments in research and
J
development, developed a set of confidential information for the smooth, J
efficient and effective running of the group’s business. The confidential
K K
information includes operation manuals that contain operation procedure,
L
various types of production and procedural flow charts, forms and quality L
control manuals. The confidential information also includes records of
M M
suppliers and customers. There are pleaded a series of 14 schedules of
N documents which are included as the confidential information. The N
plaintiffs further plead that the confidential information constitutes trade
O O
secrets which have been treated by them in a confidential manner. The
P staff of the plaintiffs are obliged not to disclose them to any 3rd party even P
after termination of employment with the plaintiffs
Q Q
R 3. However, the 1st defendant has since May 2005 started to R
entice and recruit senior staff of the plaintiffs and procured such people to
S S
disclose the confidential information to the defendants without the
T knowledge or consent of the plaintiffs. As a result, the plaintiffs claim that T
U U
V V
由此
A
-4- A
B
the 1st, 2nd, 6th and 7th defendants are liable to them for breach of the law B
of the Mainland against unfair competition.
C C
D
4. The defendants’ group then became a market leader and was in D
direct competition with the plaintiffs in the sale and production of mobile
E E
handsets and components. The plaintiffs complain that they as a result
F suffered loss and damage in the costs for producing the confidential F
information, the compensation paid to others to whom the plaintiffs owed a
G G
duty to keep the information confidential and loss of business opportunities
H to be assessed. They also seek an account of profits from the defendants. H
There are also a claim that the defendants had wrongfully induced the
I I
plaintiffs’ former employees to breach their duties not to disclose the
J confidential information without the consent of the plaintiffs and a claim of J
conspiracy by the defendants to unlawfully obtain and use the confidential
K K
information.
L L
M
The defendants’ counterclaim M
5. The defendants were granted leave on 2 October 2009 to re-
N N
amend their defence and to bring in a counterclaim. They were further
O granted leave to effect some minor re-re-amendments on 28 December O
2009. The defendants’ counterclaim is directed to the 1st and 2nd plaintiffs
P P
and two other companies in the plaintiffs’ group. They are hereinafter
Q referred to as the defendants by counterclaim. Q
R R
6. The defendants plead in the counterclaim that the defendants
S by counterclaim have since 2006 been unlawfully interfering with the S
business of the defendants by unlawful means with the object and effect of
T T
causing loss and damage to the defendants business. They say that the
U U
V V
由此
A
-5- A
B
defendants by counterclaim have embarked upon a course of conduct of B
procuring and using false and fabricated evidence or evidence unlawfully
C C
obtained to launch proceedings and persecution against the plaintiffs and/or
D
their employees. The defendants by counterclaim then made and issued D
false statements of and concerning the defendants to the effect that the
E E
defendants and/or their staff had allegedly stolen or misused the
F confidential information or trade secrets of the defendants by counterclaim. F
G G
7. The defendants then plead that the 4th defendant by
H counterclaim had in about May 2006 unlawfully detained a former H
employee in an attempt to obtain from this person false evidence of
I I
misappropriation and disclosure of confidential information to the
J defendants (para. 62). There is a further allegation that the defendants by J
counterclaim had in about June/July 2006 planted soft copies of documents
K K
in a computer and hard copies of documents at the apartment of this person
L without his knowledge or consent (paras. 63 to 65). There is another L
allegation that the 4th defendant by counterclaim had in around October
M M
2006 unlawfully intimidated another former employee to obtain a false
N confession from her to the effect that she had been procured to divulge N
confidential information to someone working for the defendants (para. 66).
O O
P 8. There is then an allegation that the defendants by counterclaim P
had in about September 2006 paid RMB10 million bribe to the then
Q Q
director of a Judicature Appraisal Centre for Intellectual Properties in
R Beijing to gain access to and/or tamper with the evidence under R
examination of the centre (para. 67). There is then an allegation that the 1st,
S S
3rd and/or 4th defendant by counterclaim had in May/June 2008 paid
T T
brides to a then employee of the 7th defendant to induce him to breach his
duty of confidence to the 7th defendant by fabricating evidence that certain U
U
V V
由此
A
-6- A
B
of the plaintiffs’ documents had been passed amongst or used by some B
employees of the defendants (para. 68).
C C
D
9. The counterclaim contains some particulars of these D
allegations under paras. 62 to 68. The defendants also provided some
E E
further and better particulars of these allegations on 26 February 2010.
F F
10. The defendants then plead that the defendants by counterclaim
G G
did the acts alleged in paras. 62 to 68 to fabricate false evidence to support
H the various legal proceedings and criminal complaints commenced by the H
3rd and 4th defendants by counterclaim (the 1st and 2nd plaintiffs) against
I I
the defendants or their employees and to make and publish defamatory
J statements against the 1st defendant. All these were done with intent to J
cause loss to the defendants and to damage their reputation, credibility and
K K
relationship with investors and customers and reduce their market share.
L L
11. The defendants then refer to some legal proceedings brought
M M
by the defendants by counterclaim against them and a number of public
N announcements made about them. They plead in the counterclaim that N
these announcements were untrue and defamatory of the defendants and
O O
had caused loss and damage to the defendants.
P P
12. Finally, they plead that the defendants by counterclaim have
Q Q
from 2006 onwards conspired with each other to injure the defendants.
R They had in pursuance of the conspiracy carried out certain acts including R
those pleaded in paras. 62 to 68 of the counterclaim.
S S
T T
Summons to strike out parts of the counterclaim
U U
V V
由此
A
-7- A
B
13. The plaintiffs and the defendants by counterclaim issued a B
summons on 21 January 2010 to strike out paras. 62 to 68 on the grounds
C C
that they disclose no reasonable cause of action and/or the claims they
D
made are scandalous, frivolous and/or vexatious, may embarrass the fair D
trial of the action and is otherwise an abuse of process of the court.
E E
F 14. Regarding the allegation in para. 67, they seek in the F
alternative to strike out of all references to alleged “tampering” with
G G
evidence on the grounds of no reasonable cause of action and/or the claim
H is scandalous, frivolous and/or vexatious, may embarrass the fair trial of the H
action or is an abuse of the process of the court.
I I
J 15. Regarding the allegation in para. 68, they also seek in the J
alternative to strike out all references to the alleged “fabrication” of
K K
evidence on the ground that such claim is scandalous, frivolous and/or
L vexatious, may embarrass the fair trial of the action or is otherwise an L
abuse of process of the court.
M M
N 16. In the Re-Amended Summons to strike out, they also seek the N
consequential striking out of references to these allegations as contained in
O O
other paragraphs.
P P
Q The parts of the counterclaim under attack Q
17. I set out below paras. 61 to 68 of the counterclaim to give a
R R
comprehensive view of the paragraphs under attack:
S S
“6.1 From about 2006 onwards, the 1st, 2nd, 3rd and/or 4th
Defendants wrongfully and unlawfully interfered with the
T business and economic interests of the Plaintiff by using T
unlawful means with the object and effect of causing loss
and damage to the business of the Plaintiffs. The matters
U U
V V
由此
A
-8- A
complained of are set out in paragraphs 62 to 121 below.
B B
During the said period, the 1st, 2nd, 3rd and/or
4th Defendants embarked upon a course of conduct of
C procuring and using false or fabricated evidence and/or C
evidence unlawfully obtained to launch proceedings and
prosecution against the Plaintiffs and/or their staff and
D employees and then made and issued false statements of D
and concerning the Plaintiffs to the effect that the
E
Plaintiffs and/or their staff had allegedly stolen or misused E
Defendants’ confidential information or trade secrets. The
unlawful means included unlawful detention, illegal
F planting of documents, intimidation, uttering and using F
false, evidence in proceedings, bribery, including bribing
the 7th Plaintiff’s employee to act an breach of confidence G
G
and steal documents and defamation.
H Unlawful detention of Ping H
6.2 Song Xufeng (‘Song’) who was an employee and 课长
I (supervisor), the person in charge of the security I
department of the 4th Defendant and was at all material
J
times (acting on behalf of the 4th Defendant), and Wu J
Guizhou (‘Wu’), who was an employee and the 副 理
(assistant manager) of the security department of the
K 4th Defendant and was at all material times acting on K
behalf of the 4th Defendant, arranged for Ping to be
unlawfully detained in an attempt to obtain false evidence L
L
from him that he had wrongfully misappropriated the
4th Defendants’ business secrets and disclosed the same to
M Jun/the Plaintiffs and/or that Jun/the Plaintiffs had M
wrongfully misappropriated the 4th Defendants’ business
secrets:
N N
PARTICULARS
O O
(1) Ping was an employee of the 4th Defendant from around
June 2001 to around May 2006, and an employee of the
P 1st Plaintiff from around October 2006 to date. P
(2) On or about 18 May 2006, the 4th Defendant filed a
Q criminal complaint against Ping that he had wrongfully Q
disclosed and/or misappropriated the 4th Defendant’s
R business secrets. R
(3) Song and Wu (acting on behalf of the 4th Defendant)
S arranged for Ping to be unlawfully detained at the S
Foxconn Group’s premises at Shenzhen Baoan District
Longhua Eastern Ring Second Road No. 2 深圳宝安区龙
T T
华镇东环二路二号 from 18 May 2006 to 22 May 2006.
U U
V V
由此
A
-9- A
(4) During the aforesaid period of unlawful detention, Song
B B
and Wu acting on behalf of the 4th Defendant attempted to
intimidate and/or coerce Ping to confess, inter alia, that he
C had e-mailed or disclosed the 4th Defendant’s confidential C
documents to Jun (who was Ping’s brother-in-law).
D (5) On or about 26 May 2006, the Shenzhen Public Security D
Bureau Baoan Branch (‘Baoan PSB’) commenced
criminal investigations against Ping for infringement of E
E
commercial secrets.
F (6) On 31 May 2006, Ping was placed under residential F
surveillance by the Baoan PSB at 警务处, a sub-station of
Yousong Police Station (油松派出所) (which was in the
G G
premises of the Foxconn Group) and was released on
1 September 2006 without charge.
H H
Illegal planting of documents in Ping’s Apartment and on
Ping’s computer
I I
6.3. In or around June/July 2006, the 1st, 2nd, 3rd and/or 4th
Defendants planted the soft copies of the following J
J
documents (which have been identified at Schedule 1 of
the Re-Amended Statement of Claim on Ping’s computer
K (‘Ping’s Computer’) located in Ping’s apartment situated K
at Building 6, No. 701B Meili Jiayuan Bei Qu, Longhua,
Zhenzhen (深圳龙华美丽家园北区 6 栋 B 单元 701 号)
L L
(‘Ping’s Apartment’), without the knowledge or consent of
Ping:
M M
（1） ES-MOTOROLA-01R85025D01
N （2） ES-MOTOROLA-11R88985N01 N
（3） ES-MOTOROLA-12G13933A20
O （4） ES-MOTOROLA-12M05048A79 O
（5） ES-MOTOROLA-12M05060A88
P （6） QS-06 P
（7） QS-08
Q （8） QS-14 Q
（9） QS-18
R R
（10）QS-22
64. Also in or around June/July 2006, the 1st, 2nd, 3rd and/or
S S
4th Defendants planted hard copies of the following
documents (being documents belonging to the Plaintiffs)
T at Ping’s Apartment (the ‘Planted Documents’), without T
the knowledge or consent of Ping:
U U
V V
由此
A
- 10 - A
(1) MSP08-1-007
B B
(2) MSP08-3-012
C (3) MSP08-2-015 C
(4) MSP08-2-005
D (5) MSP08-2-016 D
65. On or about 6 July 2006, the Baoan PSB conducted a
E search of Ping’s Apartment. After such search, Ping’s E
Computer and the Planted Documents were seized by the
Baoan PSB. Shortly thereafter, Ping’s Computer was
F F
taken away in a vehicle belonging to the 1st, 2nd, 3rd
and/or 4th Defendants.
G G
Unlawful intimidation of Zhang
H 66. In or around October 2006, Wu (acting at all material H
times on behalf of the 4th Defendant) unlawfully intimated
Zhang in order to obtain a false confession from her that
I I
Jun had procured and/or induced her to divulge
confidential documents of the 4th Defendant to him.
J J
PARTICULARS
K (1) Zhang was an employee of the 4th Defendant from around K
October 2003 to around September 2005, and an employee
of the 1st Plaintiff from around April 2006 to around July
L L
2006.
M (2) Jun was an employee of the 1st Plaintiff from around April M
2005 to date.
N (3) On 22 May 2007, Baoan People’s Procuratorate filed a N
criminal complaint against Zhang that Zhang had
wrongfully disclosed and/or infringed the 4th Defendants’
O O
business secrets.
P (4) On or around 14 October 2006, Zhang was arrested and P
detained in Weinan Prefecture, Shaanxi Province by
officers of the local Weinan, Shaanxi Public Security
Q Bureau (‘Weinan PSB’), accompanied by officers of the Q
Baoan PSB commanded by one Yang Xiucheng (‘Yang’).
At the time of her arrest, Zhang was beaten by the R
R
arresting officers.
S (5) On or around 17 October 2006, Zhang was taken on a train S
journey, which lasted approximately 20 hours, from
Weinan to Shenzhen.
T T
(6) During the aforesaid train journey, Zhang was at all times
accompanied by Wu and was guarded by 3 other male U
U
V V
由此
A
- 11 - A
officers of Baoan PSB and 1 female officer of Weinan
B B
PSB.
C (7) During the course of the aforesaid train journey, Wu and C
Yang intimidated Zhang to admit and/or confirm that Jun
had procured and/or induced her to divulge confidential
D documents that the 4th Defendant to him and/or the D
Plaintiffs.
E E
(8) After the train arrived in Shenzhen on or about mid-day on
18 October 2006, Wu arranged for a car marked with the
F logo of the Foxconn Group and driven by an individual F
wearing a uniform of the Foxconn Group to take Zhang
and the officers of Baoan PSB and Weinan PSB to the
G Baoan PSB station. G
(9) As a result of the intimidation by Wu and Yang, Zhang H
H
gave a statement to the Baoan PSB on 23 October 2006 in
which she falsely admitted that Jun had procured and/or
I induced her to obtain/divulge confidential documents of I
the 4th Defendant to him.
J (10) On or about 29 November 2006, Zhang informed the J
Baoan PSB that her previous admission that Jun had
K
procured and/or induced her to obtain/divulge confidential K
documents of the 4th Defendant to him was false.
L Bribery of Zhao Jun L
67. The 1st, 2nd, 3rd and/or 4th Defendants paid bribes to
M Zhao Jun in order to obtain access and/or to tamper with to M
evidence being examined by the Beijing JZSC Judicature
N Appraisal Center for Intellectual Property (北京九州世初 N
知识产权司法鉴定中心)(the ‘Appraisal centre’).
O PARTICULARS O
(1) In or around September 2007, bribes in the total sum P
P
of RMB 10 million were paid by the 1st, 2nd, 3rd
and/or 4th Defendants to Zhao Jun (who was at the
Q material time the director of the Appraisal Centre) in Q
order to obtain access to and to tamper with the
computer hard disks of Jun and Si which the
R R
Appraisal Centre was entrusted by the Supreme
People’s Court of PRC to appraise for the purpose of
S the 2006 PRC Action (referred to in paragraph 73 S
below).
T (2) The aforesaid bribery was arranged to various T
employees of the 1st, 2nd, 3rd and/or 4th Defendants
the identities of whom are not known to the
U U
V V
由此
A
- 12 - A
Plaintiffs save that Wang Pengyu, who was at all
B B
material times the In-house Legal Counsel of the 3rd
and 4th Defendants, the Quality Control and Legal
C Manager of the 3rd Defendant, the Legal Manager of C
the 1st Defendant and the Senior Director of the IP
Legal Department (Global Legal Division) of the
D 1st Defendant and the Foxconn Group, as well as D
Gan Kejian (who was at all material times an
E
employee of the 1st, 2nd, 3rd and/or 4th Defendants), E
Dong Jianwei and Shen Liangquan (who were both
at all material times employees of the 3rd Defendant)
F were partly involved in arranging the payment of the F
bribes to Zhao Jun.
G G
Bribery to Zhang Chaozheng
H
68. In or around May/June 2008, Wang Pengyu (acting for an H
on behalf of the 1st, 3rd and/or 4th Defendants) paid
bribes to Zhang Chaozheng (who was at the time an
I employee of 7th Plaintiff) in order to induce him, in I
breach of his duty of confidence to the 7th Plaintiff, to
assist in locating documents from the 1st Plaintiff and the
J J
7th Plaintiff and to fabricate evidence that certain
documents belonging to the Plaintiffs (but which the 3rd
K and 4th Defendants allege belong to them) (the ‘Alleged K
Plagiarised Documents;) were passed amongst and/or used
by certain of the Plaintiffs’ employees:
L L
PARTICULARS
M M
(1) In or around April 2008, Zhang Chaozheng met
Wang Pengyu at an internet chat room and Wang
N Pengyu asked Zhang Chaozheng to make use of his N
employment position with the 7th Plaintiff to locate
documents within the 1st and 7th Plaintiffs for him
O O
and to fabricate evidence that the Alleged
Plagiarised Documents were passed amongst and/or
P used by certain of the Plaintiffs’ employees. P
(2) In or around late April/early May 2008, Wang
Q Pengyu met with Zhang Chaozheng at Nandu Q
Western Restaurant in Shenzhen, PRC. During the
meeting, Wang Pengyu provided a written request to
R R
Zhang Chaozhen asking him to, inter alia, locate
various documents within the 1st Plaintiff and the
S 7th Plaintiff for him. S
(3) Wang Pengyu further asked Zhang Chaozheng to e-
T mail the Alleged Plagiarised Documents to the work T
e-mail address of Sun (who was an employee of the
U U
V V
由此
A
- 13 - A
7th Plaintiff at the time) from another BYD email
B B
account.
C (4) In return for Zhang Chaozheng’s assistance as C
pleaded in (2) and (3) above, Wang Pengyu offered
monetary rewards to Zhang Chaozheng and also
D promised him a registered permanent residency D
(戶口), job opportunities and risk compensation.
E E
（5）Since May 2008, in breach of his duty of confidence
to the 7th Plaintiff, Zhang Chaozheng sent to Wang
F Pengyu copies of various documents and obtained F
bribes in the total sum of RMB 40,000 from
Wang Pengyu in return.” G
G
H H
Legal principles for striking out
I 18. I remind myself the legal principles governing striking out I
applications (Hong Kong Civil Procedure 2010, paragraphs 18/19/4, J
J
18/19/8 and 18/19/10). It is only in plain and obvious cases that the court
K K
should exercise the power to strike out. Disputed facts are taken in favour
of the respondent to the application. Difficult points of law should not be L
L
decided in such applications and only claims that are obviously
M M
unsustainable and pleadings unarguably bad that they should be struck out.
N N
19. I am also reminded by leading counsel for the plaintiffs and the
O O
defendants by counterclaim of the statement of Barker J in Cheung Chui
P
Sou Ying v the Personal Representatives of Cheung Yuk Luen alias Wilson P
Cheung deceased and Ors [1981] HKLR 585 at 588:
Q Q
“But plain is not the same as simple and obvious is not the same
as short. Moreover if a careful reading of the Statement of Claim
R R
does not indicate clearly what the nature of the Claim is, then a
Court can, and probably will order it to be struck out as being
S embarrassing and vexatious, unless it be capable of amendment.” S
T T
U U
V V
由此
A
- 14 - A
B
The arguments for striking out B
20. The plaintiffs and the defendants by counterclaim submit that
C C
the matters pleaded in paras. 62 to 68 of the counterclaim do not give rise
D to any known cause of action against them. These allegations are therefore D
irrelevant to any other cause of action currently at issue between the parties.
E E
They are also unsustainable and unarguable. They further say that the
F allegations are put in to cause annoyance, abuse, prejudice and unnecessary F
anxiety, trouble and expense to them. The allegations are also scandalous,
G G
frivolous, vexatious and embarrassing and are abuses of the process of the
H court. They should therefore be struck out (Jacob and Goldrein, Pleadings H
Principles and Practice (1990) at pp. 221 to 224 and 227).
I I
J J
21. Regarding para. 62, they say that the thrust of this paragraph is
the unlawful detention of Ping and an attempt to intimidate or coerce Ping K
K
to give false evidence. They submit that even if the allegations are true and
L L
amount to some unlawful acts under Hong Kong law and/or the law of the
M
Mainland, they were only acts against Ping personally or torts of trespass M
against Ping. They thus say that the defendants have no cause of action
N N
based on these alleged acts.
O O
22. On the tort of unlawful interference as pleaded in para. 61,
P P
they say that this plea is also not supported by these allegations. The
Q essential ingredients of the tort of unlawful interference as set out by Lord Q
Hoffman for the majority view in OBG Ltd & Anor v Allan & Ors [2008] 1
R R
AC 1 at paras. 45 to 47 and summarised in Bullen & Leake & Jacob’s
S Precedents of Pleadings, 16th edn., para. 52-08 are: S
“52―08 Following the OBG case referred to above, the
T T
essential elements of this tort may be identified as
follows:
U U
V V
由此
A
- 15 - A
(1) Use by the defendant of unlawful means, thereby
B B
(2) Interfering with the actions of a third party in
relation to the claimant.
C C
(3) Intention to cause loss to the claimant.
(4) Damage.
D D
per Lord Hoffman in the OBG case at paras 45-47.”
E E
23. Leading counsel for the plaintiffs and the defendants by
F F
counterclaim relies on the speech of Lord Hoffman in the OBG Ltd case
G and submits that the unlawful means must be actionable by the third party G
or would have been actionable if the third party had suffered loss.
H H
Lord Hoffman said in para. 49:
I “49. In my opinion, and subject to one qualification, I
acts against a third party count as unlawful means only
if they are actionable by that third party. The J
J
qualification is that they will also be unlawful means if
the only reason why they are not actionable is because
K the third party has suffered no loss. In the case of K
intimidation, for example, the threat will usually give
rise to no cause of action by the third party because he
L L
will have suffered no loss. If he submits to the threat,
then, as the defendant intended, the claimant will have
M suffered loss instead. It is nevertheless unlawful means. M
But the threat must be to do something which would
have been actionable if the third party had suffered loss.
N Likewise, in National Phonograph Co Ltd v Edison- N
Bell Consolidated Phonograph Co Ltd [1908] 1 Ch 335
O
the defendant intentionally caused loss to the plaintiff O
by fraudulently inducing a third party to act to the
plaintiff’s detriment. The fraud was unlawful means
P because it would have been actionable if the third party P
had suffered any loss, even though in the event it was
the plaintiff who suffered. In this respect, procuring the
Q Q
actions of a third party by fraud (dolus) is obviously
very similar to procuring them by intimidation
R (metus).” R
S S
24. Leading counsel for the defendants however asks me not to
T overlook the minority speech of Lord Nicholls in this case. Lord Nicholls T
said in paras. 149 to 155:
U U
V V
由此
A
- 16 - A
“149. Although the need for ‘unlawful means’ is well
B B
established, the same cannot be said about the content of this
expression. There is some controversy about the scope of this
C expression in this context. C
D 150. One view is that this concept comprises, quite simply, all D
acts which a person is not permitted to do. The distinction is
between ‘doing what you have a legal right to do and doing what
E E
you have no legal right to do’: Lord Reid in Rookes v Barnard
[1964] AC 1129, 1168-1169. So understood, the concept of
F ‘unlawful means’ stretches far and wide. It covers common law F
torts, statutory torts, crimes, breaches of contract, breaches of
trust and equitable obligations, breaches of confidence, and so on.
G G
151. Another view is that in this context ‘unlawful means’
H H
comprise only civil wrongs. Thus in Allen v Flood itself Lord
Watson described illegal means as ‘means which in themselves
I are in the nature of civil wrongs’: [1898] AC I, 97-98. A variant I
on this view is even more restricted in its scope: ‘unlawful means’
are limited to torts and breaches of contract.
J J
152. The principal criticism of the first, wider view is that it
K K
‘tortifies’ criminal conduct. The principal criticism of the second,
narrower view is that it would be surprising if criminal conduct
L were excluded from the category of ‘unlawful’ means in this L
context. In the classical ‘three-party’ form of this tort the
defendant seeks to injure the claimant’s business through the
M instrumentality of a third party. By this means, as Lord Lindley M
said, the claimant is ‘wrongfully and intentionally struck at
N
through others, and is thereby damnified’: Quinn v Leathem [1901] N
AC 495, 535. It would be very odd if in such a case the law were
to afford the claimant a remedy where the defendant committed or
O threatened to commit a tort or breach of contract against the third O
party but not if he committed or threatened to commit a crime
against him. In seeking to distinguish between acceptable and
P P
unacceptable conduct it would be passing strange that a breach of
contract should be proscribed but not a crime. In Rookes v
Q Barnard [1964] AC 1129, 1206-1207, Lord Devlin noted it was Q
‘of course’ accepted that a threat to commit a crime was an
unlawful threat and continued:
R R
‘It cannot be said that every form of coercion is wrong. A
S S
dividing line must be drawn and the natural line runs
between what is lawful and unlawful as against the party
T threatened.’ T
U U
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153. These different views are founded on different perceptions
B B
of the rationale underlying the unlawful interference tort. On the
wider interpretation of ‘unlawful means’ the rationale is that by
C this tort the law seeks to curb clearly excessive conduct. The law C
seeks to provide a remedy for intentional economic harm caused
by unacceptable means. The law regards all unlawful means as
D unacceptable in this context. D
E E
154. On the narrower interpretation this tort has a much more
limited role. On this interpretation the function of the tort of
F unlawful interference is a modest one. Its function is to provide a F
claimant with a remedy where intentional harm is inflicted
indirectly a distinct from directly. If a defendant intentionally
G harms a claimant directly by committing an actionable wrong G
against him, the usual remedies are available to the claimant. The
H
unlawful interference tort affords a claimant a like remedy if the H
defendant intentionally damages him by committing an actionable
wrong against a third party. The defendant’s civil liability is
I expanded thus far, but no further, in respect of damage I
intentionally caused by his conduct.
J J
155. In my view the former is the true rationale of this tort.
K
The second interpretation represents a radical departure from the K
purpose for which this tort has been developed. If adopted, this
interpretation would bring about an unjustified and unfortunate
L curtailment of the scope of this tort.” L
M M
25. Leading counsel for the defendants further refers to the speech
of Lord Walker in the same case. Lord Walker suggested that neither of N
N
the views of Lord Hoffman and Lord Nicholls would be the last word on
O O
this difficult and important area of the law (para. 269).
P P
26. Leading counsel also refers to Revenue and Customers
Q Q
Commissioners v Total Network SL [2008] 1 AC 1174 at para. 43 where
R Lord Hope expressed his reservation on Lord Hoffman’s view in OBG Ltd R
on unlawful means.
S S
T 27. Leading counsel submits that the law of unlawful interference T
is developing and unlawful means should not be limited to actionable
U U
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B
wrongs, but should include other wrongful acts like criminal conduct. B
Counsel asks me to at least leave this issue for the trial judge who will have
C C
the advantage of hearing all the evidence.
D D
28. Apart from the nature of the unlawful means, the plaintiffs and
E E
the defendants by counterclaim also submit that para. 62 of the
F counterclaim does not allege any loss or damage to the defendants and F
nothing is pleaded to flow from the detention of Ping. Para. 62 and its
G G
further and better particular also do not suggest that any evidence has in
H fact been fabricated or obtained. What is alleged in para. 62 is only an H
attempt to persuade Ping to give false evidence.
I I
J 29. Regarding paras. 63 to 65, para. 63 pleads the planting of soft J
copies of documents on Ping’s computer, para. 64 pleads the planting of
K K
hard copies at his apartment and para. 65 pleads the seizure of the
L documents by the Baoan PSB. Counsel however points out the absence of L
any particulars on how, when and by whom the hard and soft copies were
M M
planted. Counsel refers to Caswell v Powell Duffryn Associated Collieries
N Ltd [1940] AC 152 at 169-170 where Lord Wright said that inference from N
objective facts had to be distinguished from conjecture or speculation and
O O
the method of inference would fail in the absence of positively proved facts.
P P
30. Counsel also submits that the inferences suggested by the
Q Q
defendants are obviously unsustainable. Furthermore, the serious nature of
R the allegation which amount to perverting the course of justice must be R
supported by particulars from which inference can be drawn. Since the
S S
defendants have failed to supply the particulars, the allegation should be
T T
struck out.
U U
V V
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B
31. Counsel further argues that the planting of hard and soft copies B
of document on Ping does not give rise to a wrong actionable by Ping. On
C C
the majority view in OBG Ltd, these allegations do not support the
D
defendants’ claim of unlawful interference. D
E E
32. Regarding para. 66 of the counterclaim which alleges the
F unlawful intimidation of Zhang by Wu in October 2006 to obtain a false F
confession from Zhang that Jun had procured/induced her to divulge
G G
confidential information, counsel submits that the allegation contained
H nothing unlawful and there is no suggestion that Wu and Yang were H
seeking a knowingly false confession from Zhang. There is also no
I I
allegation that any confession had indeed been obtained from Zhang during
J the train journey on 17 October 2006. The alleged confession was only J
made some six days later to the public security officers. The defendants
K K
could not plead to any link between the alleged intimidation and the false
L statement given six days later. L
M M
33. Regarding the allegation of bribery in para. 67, counsel says
N that the defendants want to invite the court to infer that the hard drive had N
been tampered with. The defendants’ case as supplemented by the further
O O
and better particulars is that there were 17 more documents in the hard
P drive on 25 February 2008 than on 28 August 2006. But the defendants P
have to plead and prove that these documents were added by an employee
Q Q
of the defendants by counterclaim to a USB drive on 29 September 2007
R and they were added from the USB drive to the hard drive by employee of R
the Appraisal Centre. The defendants also have to plead what documents
S S
were in fact added. Para. 67 therefore failed to plead the necessary facts to
T T
make out a case of tampering with evidence. No inference of actual
U U
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B
tampering with evidence by the defendants by counterclaim can be drawn B
from the allegation.
C C
D
34. Counsel also submits that the alleged bribery of Zhao Jun is D
irrelevant as that did not lead to any consequence that could support a case
E E
of unlawful interference by the defendants by counterclaim.
F F
35. Counsel further submits that in any case, all references to
G G
“tampering” should be struck out as being scandalous, frivolous, vexatious
H and embarrassing and an abuse of the process of the court because H
necessary facts have not been pleaded.
I I
J 36. Finally, regarding the allegation of Wang Pengyu paying J
bribes to Zhang Chaozheng, the defendants admit that no document was
K K
ever sent out by Zhang Chaozheng and no evidence fabricated. Hence,
L counsel submits that even if brides had indeed been paid, nothing resulted L
from them and no consequence was caused to the defendants. The
M M
defendants therefore suffered no detriment or loss. Without loss or damage
N to the defendants, there could not be any claim of unlawful interference. N
O O
37. Alternatively, counsel says all references to “fabrication”
P should be struck out as being scandalous, frivolous and vexatious and P
embarrassing and an abuse of the process of the court because the
Q Q
defendants have admitted that no fabrication had occurred.
R R
S The defendants’ arguments in opposition S
38. The defendants first explain the structure of the counterclaim
T T
of unlawful interference which has been explained above in the
U U
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B
introduction of the counterclaim. Para. 61 is the general allegation that the B
defendants by counterclaim had since around 2006 embarked upon a course
C C
of conduct by unlawful means to cause loss or harm to the business of the
D
defendants. Paras. 62-68 then provide the material facts of the alleged D
course of conduct.
E E
F 39. Para. 69 repeats the purpose of the course of conduct. Para. 70 F
says that the ultimate objective of the course of conduct is to injure and
G G
cause loss to the defendants. Paras. 71 to 84 provide the particulars of the
H proceedings and prosecutions. Para. 85 pleads the general particulars of the H
public statements and announcements. Para. 86 pleads the loss and damage
I I
suffered by the defendants as a result of the course of conduct.
J J
40. All these paragraphs form part of the counterclaim against the
K K
defendants by counterclaim for unlawful interference with the defendants’
L business and economic interests. Paras. 62 to 68 contain the material facts L
of the alleged course of conduct for procuring false or fabricated evidence.
M M
N 41. Regarding para. 62, the defendants further submit that it pleads N
the attempt of the defendants by counterclaim to obtain false evidence from
O O
Ping by unlawfully detaining him, coercing and intimating him to falsely
P confess that he had disclosed the confidential document of the P
4th defendant by counterclaim to Jun.
Q Q
R 42. The matters pleaded form part of the course of conduct of the R
defendants by counterclaim as pleaded in para. 61. This attempt is
S S
followed by the allegation of planting of soft and hard copies of documents
T in Ping’s computer and apartment during the wrongful detention as pleaded T
in paras. 63 to 65. The planting of documents resulted in fabrication of U
U
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由此
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B
evidence against Ping. It is therefore wrong for the plaintiffs and the B
defendants by counterclaim to have considered para. 62 in isolation of the
C C
other paragraphs and ignored that this paragraph is just part of the course of
D
conduct. D
E E
43. The loss and damage resulting from the course of conduct to
F the defendants is also pleaded in para. 82. The quantum is for assessment F
at the trial. Therefore, the fact that para. 62 alone does not constitute a
G G
cause of action is not a reason for striking it out. Its allegations are
H material to the issues between the parties. The defendants also disagree H
that the plea in para. 62 is frivolous, vexatious, embarrassing or otherwise
I I
an abuse of the process of the court. They say that the defendants by
J counterclaim would not be prejudiced by this plea as they can refute the J
allegations.
K K
L 44. Regarding paras. 63 to 65, the allegations are the planting of L
soft copy documents in Ping’s computer and hard copy documents in his
M M
apartment during the period of alleged unlawful detention. The defendants
N further plead in the further and better particulars for para. 63 that Ping’s N
computer had been tampered by an employee of the defendants by
O O
counterclaim and documents unrelated to Ping’s work were then found in a
P drive of Ping’s computer where Ping did not save his documents. P
Q Q
45. The defendants also plead in the further and better particulars
R for para. 64 that an employee of the defendants by counterclaim had R
remained in Ping’s apartment after Ping and other people had left. A
S S
search of a bookshelf at the apartment was conducted later and this
T T
employee went straight to the bookshelf and took out a stack of documents.
U U
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B
This person knew exactly where the documents were. Ping had not seen B
such documents before. There was no then further search of the apartment.
C C
D
46. The defendants submit that there is no basis to strike out paras. D
63 to 65 when they are read with the further and better particulars. There is
E E
no alternative explanation on why the documents should have appeared in
F Ping’s computer and his apartment. The defendants’ contention of planting F
cannot be said to be unarguable and, if Ping can give credible evidence on
G G
this, the court may draw the inference of planting.
H H
47. The defendants further point out that the authorities relied on
I I
by the other side on drawing of inferences do not relate to striking out.
J They are on drawing of inference at the trial. J
K K
48. The documents alleged to have been planted are those alleged
L to be confidential information by the plaintiffs and are amongst those in L
Schedules 1 to 14 of the Re-Amended Statement of Claim. Hence, the lack
M M
of full particulars before discovery and exchange of witness statement
N should not prejudice the defendants by counterclaim and they cannot be N
said to have difficulty in pleading their defence. The particulars of the
O O
planted soft copies will also be available once the hard drive of Ping’s
P computer is released by the Baoan PSB for examination. P
Q Q
49. Regarding the argument that planting of documents is not an
R actionable civil wrong at the instance of Ping and hence no claim of R
unlawful interference can be made by the defendants, the defendants argue
S S
that planting of evidence certainly constitutes criminal acts. Furthermore,
T other former employees of the defendants by counterclaim can maintain T
civil actions of malicious prosecutions against the defendants by U
U
V V
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B
counterclaim as they have used the planted false evidence to prosecute B
these former employees.
C C
D
50. Para. 66 pleads unlawful intimidation of Zhang to obtain a D
false confession from her that Jun had procured or induced her to divulge
E E
confidential information of the 4th defendant by counterclaim. The
F defendants submit that Zhang had been beaten up by the public security F
officers, taken on a 20-hour train journey from Weinan to Shenzhen in the
G G
company of the public security officials and an employee of the
H 4th defendant by counterclaim. She was interrogated by a public security H
official aggressively and with threats to her father too. As a result of the
I I
threats, she yielded and gave a false confession that Jun had asked her to
J disclose the confidential information of the defendants by counterclaim. J
The false admission had also been used to support legal proceedings
K K
against Jun and thus caused damage to Jun. Zhang therefore has a cause of
L action of intimation against the defendants by counterclaim. The act of the L
employee of the 4th defendant by counterclaim also constitutes criminal
M M
offences under the laws of Hong Kong.
N N
51. Regarding the argument of lack of dispute of causal link raised
O O
by the defendants by counterclaim, namely that Zhang only made a
P confession to the public security officers six days later, the defendants P
submit that this is a matter for the trial.
Q Q
R 52. Para. 67 pleads the alleged bribery of Zhao Jun by the R
defendants by counterclaim for access to the computer which was being
S S
examined by the Appraisal Centre. The defendants raised four questions.
T T
They asked why the defendants by counterclaim had bribed Zhao and why
they were given access to a USB drive containing documents. These U
U
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由此
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B
documents were relevant to the 2006 PRC Action brought by the B
defendants by counterclaim and they were copied to the hard drive of a
C C
computer under examination by the Appraisal Centre by an Employee of
D
the Centre pursuant to Zhao Jun’s instruction. They also queried why there D
were 17 additional documents in the folders of Jun and Xi which were not
E E
there in August 2006 when the hard drives were first seized. They further
F challenged the defendants by counterclaim to explain their withdrawal of F
the 2006 PRC Action after the defendants had challenged the credibility of
G G
the report and suggested that the hard drives had been tampered. They
H submit that if there are no plausible explanations to these questions, then H
the inference argued by the defendants that there was tampering of the hard
I I
drive cannot be said to be unsustainable. In any case, the issue of
J tampering is a matter for the trial judge. J
K K
53. They also say that the defendants by counterclaim can plead to
L this allegation and no prejudice is caused to them by the lack of full L
particulars before discovery and exchange of witness statement. The full
M M
particulars of the additional documents will be known after the hard drive
N is a released by the Shenzhen Intermediate People’s Court for forensic N
examination.
O O
P 54. In answer to whether the bribery of Zhao Jun would amount to P
unlawful means, the defendants argue that the use of the tampered evidence
Q Q
constitute unlawful means as it would support a claim of malicious
R prosecution and is a criminal act. R
S S
55. Finally, there is the allegation in para. 68 of bribery of Zhang
T T
Chaozheng, an employee of the defendants, by the defendants by
counterclaim. The bribes are alleged to induce Zhang to fabricate evidence U
U
V V
由此
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B
that certain of the defendants’ documents, which were alleged to belong to B
the defendants by counterclaim, had been passed amongst and/or used by
C C
the employees of the defendants. Though the defendants say that Zhang
D
had refused to assist the defendants by counterclaim, they say that the D
matter pleaded is still relevant as it forms an integral part of the course of
E E
conduct engaged in by the defendants by counterclaim with the intention of
F creating false evidence to interfere with the business of the defendants. F
G G
Analysis and decision
H H
56. The approach of the plaintiffs and the defendants by
I counterclaim is to consider each of paras. 62 to 68 of the counterclaim I
individually and in isolation of the others. However, para. 61 of the
J J
counterclaim refers to a course of conduct of the defendants by
K counterclaim. The course of conduct was of procuring and using false or K
fabricated evidence and/or evidence unlawfully obtained to launch
L L
proceedings/prosecutions against the plaintiffs and/or their staff and to
M make false public announcements that the defendants and/or their staff had M
stolen/misused the defendants’ confidential information. The particulars of
N N
the course of conduct is then pleaded in paras. 62 to 68 and the further and
O better particulars given for them. Any individual allegation in these O
paragraphs is a part of the alleged course of conduct and not a self-
P P
contained allegation constituting a claim in its own right.
Q Q
57. The defendants plead and seek to prove a course of conduct
R R
which would support the claims pleaded in para. 61. It is not necessary for
S each and every of the pleaded acts to have accomplished its desired result S
before the course of conduct can be established. It is therefore
T T
inappropriate to consider each individual allegation in isolation from the
U U
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B
others. All allegations in paras. 62 to 68 should be considered together and B
see if they together can constitute the alleged course of conduct to support
C C
the claims pleaded in para. 61.
D D
58. For the claim of unlawful interference, the majority view in
E E
OBG Ltd no doubt requires a wrong actionable by the 3rd party. However,
F I cannot overlook the fact that this cause of action is still developing and F
the reasons of Lord Nicholls in his dissent are indeed powerful. Lord Hope
G G
in Revenue and Customs Commissioners has also expressed his reservation
H about the majority view of OBG Ltd. In the light of these, I think it is H
premature to strike out this claim at this stage just on the ground of absence
I I
of an actionable wrong to the 3rd party. I think this plea should be allowed
J to develop and be decided by the trial judge who would be able to hear all J
the evidence of the parties. Furthermore, the summary of the defendants’
K K
submissions above shows that there are the claims of intimidation and
L malicious prosecution that are open to some of the former employees of the L
defendants by counterclaim. For these reasons, I do not think I should
M M
strike out paras. 62 to 68.
N N
59. Furthermore, regarding para. 62, though no evidence was
O O
fabricated or obtained by detaining Ping, it is part and parcel of the
P defendants’ allegation that the defendants by counterclaim have tried to P
procure false evidence which included the planting of soft and hard copy
Q Q
documents as pleaded in paras. 63 to 65. Although para. 62 alone does not
R constitute a course of action, I do not think it should be strike out. R
S S
60. Regarding paras. 63 to 65, the argument of absence of
T T
particulars have been answered by the defendants. They say that the
defendants by counterclaim can plead to the these paragraphs and no U
U
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B
prejudice has arisen to them. Furthermore, the cases relied on by the B
plaintiffs and the defendants to counterclaim on when inference can be
C C
drawn are relevant to the drawing inference at the trial. I agree with the
D
defendants that their allegations are not so weak that no inference can be D
drawn even if they can all be proved with credible evidence.
E E
F 61. Regarding para. 66, the plaintiffs and the defendants by F
counterclaim argue that there was no suggestion that Wu and Yang were
G G
seeking a knowingly false confession from Zhang. However, given the
H circumstances of the alleged detention, intimidation and aggressive H
interrogation, it was plain to Zhang on what was expected from her. This
I I
issue should be for the trial judge. The causal link of the confession given
J by Zhang six days later should likewise be reserved for the trial judge. J
K K
62. Regarding para. 67, the attack on the lack of particulars of the
L 17 additional documents has been answered by the defendants. There is L
also no prejudice to the defendants by counterclaim as they can plead to
M M
this allegation. If the four questions raised by the defendants cannot
N receive plausible explanations, then there would be the issue of whether N
any inference, and if so, what inference should be drawn.
O O
P 63. If para. 67 can survive the attack, I also do not see why the P
references to “tampering” with evidence should be struck out.
Q Q
R 64. Finally, for the alleged bribery of Zhang Chaozheng in R
para. 68, I also think that this is part of the alleged course of conduct
S S
alleged by the defendants and should not be struck out.
T T
U U
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由此
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B
65. I also do not think I should strike out the references to B
“fabrication” if I should allow para. 68 to remain.
C C
D
66. In the premises, I do not think any part of paras. 62 to 68 D
should be struck out. It follows that there is no consequential striking out
E E
either.
F F
67. I therefore dismiss the Re-Amended Summons to strike out
G G
issued by the plaintiffs and the defendants by counterclaim. I also make a
H costs order nisi that the plaintiffs and the defendants by counterclaim do H
pay the defendants’ costs of this application.
I I
J J
K K
L (L. Chan) L
Deputy High Court Judge
M M
Mr Winston Poon, SC, Mr Godfrey Lam, SC and Mr Elizabeth Cheung,
N N
instructed by Messrs Mayer Brown JSM, for the Plaintiffs by Original
Action and the Defendants by Counterclaim
O O
Mr Benjamin Yu, SC and Ms Sara Tong, instructed by Messrs Orrick,
P Herrington & Sutcliffe, for the Defendants by Original Action and the P
Plaintiffs by Counterclaim
Q Q
R R
S S
T T
U U
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