High bar for when claims can be struck out: Judge

The High Court has sent one of its clearest signals yet that applications to strike out claims need to overcome a high hurdle to succeed.

Justice Choo Han Teck, in dismissing such an application, said no claim should be struck out without a trial "as long as there are issues of fact and law that need to be proven".

"The principle here is simple - if Newcastle United can beat Manchester City in the English Premier League, anything can happen," he added in judgment grounds last week. Newcastle upset reigning champions Manchester City 2-1 in a match last month.

The judgment is unusual in that while the threshold for striking out is high, this is the first time it has been put in the way it was - that "anything can happen" at trial and, therefore, the claim is not to be struck out.

Justice Choo made the point in the case in which Hong Kong-based Qroi company, which provides technical services to mobile operators in the region, sued managing partner Ian Pascoe and Grant Thornton Advisory Services for alleged non-payment for services delivered.

The claim against Mr Pascoe was based on breach of warranty of authority, and Qroi alleged that Mr Pascoe was acting for a Grant Thornton entity in Thailand when he inked the agreement.

Subsequently, when Qroi demanded payment from Grant Thornton Thailand, Mr Pascoe demurred, saying he was acting for Grant Thornton Advisory Services, which is the second defendant and is the proper party to the agreement and not Grant Thornton Thailand.

Mr Pascoe applied last November to strike out the suit but Assistant Registrar Norine Tan rejected it.

HAVING ONE'S DAY IN COURT

So long as the court may still disagree with current judicial thinking, the plaintiff is entitled to have his action proceeded.

JUSTICE CHOO HAN TECK

Mr Pascoe appealed to the High Court, where his lawyer Jordan Tan argued that Qroi's claim showed no reasonable cause of action or was frivolous and vexatious. Qroi's lawyer Kenneth Lim countered that the plaintiff's claim presented the necessary elements for an action for breach of warranty.

Mr Tan cited many cases to show the law supported his case, but the judge pointed out that "the issues in those cases were determined only after trial".

Justice Choo said: "In any event, even if the law is presently on his side so far as the proper parties' issue is concerned, the plaintiff is entitled to challenge that law or the application of it.

"So long as the court may still disagree with current judicial thinking, the plaintiff is entitled to have his action proceeded."

Striking out should be allowed only in a "plain and obvious case or if it was clearly unsustainable", he said, noting that Mr Pascoe was relying on the fact that he was acting as agent for the second defendant which Qroi challenged.

"This is a serious and reasonable challenge that ought to be fully ventilated in the open trial," said Justice Choo. "In my view, the plaintiff's claim here is a reasonable one, and if proved, it should be granted the relief it seeks. That is what the trial is for."

K. C. Vijayan

A version of this article appeared in the print edition of The Straits Times on February 26, 2019, with the headline 'High bar for when claims can be struck out: Judge'. Print Edition | Subscribe