CHEUNG DAVID YOKE MING v. CHEUNG YAT KEE AND ANOTHER

HCA 391/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 391 OF 2011

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REASONS FOR JUDGMENT
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Introduction

1.  This is a case involving an incredible waste of costs and time.

The plaintiff’s claim

2.  The plaintiff was born and raised in the UK.  He claims to be an indigenous villager in Sai Kung.

3.  He commenced this action in 2011 against the 1^st defendant, his father, and the 2^nd defendant, his mother.

4.  By his statement of claim dated 21 February 2011, he sued on two agreements, pleaded in paras 9 and 17 as follows:

“9. Pursuant to the 1^st and/or 2^nd Defendants’ suggestion, it was orally agreed between the Plaintiff and the 1^st and/or 2^nd Defendants that the Plaintiff would not sell his ‘ting’ right and would continue supporting the 1^st and 2^nd Defendants, and in return, the 1^st and/or 2^nd Defendants would give a piece of land to the Plaintiff and build a Ting House for the Plaintiff later (‘1^st Agreement’).

…

17. Pursuant to the 1^st and/or 2^nd Defendants’ suggestion, it was orally agreed between the Plaintiff and the 1^st and/or 2^nd Defendants as follow (‘2^nd Agreement’):-

(i) The Plaintiff would apply, in his capacity as a male indigenous villager, for permission to build a Ting House on the Lot;

(ii) The 1^st and/or 2^nd Defendants would pay the Building Costs for the Ting House; and

(iii) The Ting House would be a gift to the Plaintiff.”

5.  The case was set down for trial for seven days, commencing on 17 November 2015.

6.  In the course of his opening, Mr Alan Lo, counsel instructed by Edmund WH Chow & Co for the plaintiff, told me that the plaintiff’s cause of action was breach of contract.  He confirmed that the agreement pleaded in para 9 of the statement of claim was oral, not in writing and not evidenced in writing.  He also confirmed that the agreement pleaded in par 17 was also oral, not in writing and not evidenced in writing.  He had no answer to my question on the enforceability of the two alleged contracts.

7.  Ms Bonnie Cheng, counsel instructed by Gallant YT Ho & Co for the defendants, helpfully read out section 3(1) of the Conveyancing and Property Ordinance, Cap 219 which provided as follows:

“Subject to section 6(2), no action shall be brought upon any contract for the sale or other disposition of land unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged or by some other person lawfully authorized by him for that purpose.”

8.  Mr Lo sought and obtained time to consider with and advise the plaintiff.  When the hearing resumed, he told me that he had instructions not to proceed with the claim.

9.  I dismissed the claim and said costs would be dealt with later.

The defendants’ counterclaim

10.  Ms Cheng told me that the defendants would proceed with their counterclaim and that the plaintiff had not filed or served any defence to counterclaim.

11.  The defendants’ original defence was filed on 16 May 2011.  The plaintiff’s reply was filed on 3 June 2011.  The defendants then amended their defence on 4 February 2013 to include a counterclaim and re‑amended their defence and counterclaim on 10 December 2014.  Amazingly, the plaintiff has not amended his reply, whether to include a defence to counterclaim or at all.

12.  Mr Lo told me that he would not be applying to file defence to counterclaim.

13.  The defendants gave sworn evidence confirming the truth of their witness statements.

14.  The trial was adjourned to 19 November 2015 for Ms Cheng to put in a detailed written closing.

15.  In her helpful detailed closing, Ms Cheng cited authorities including the following cases:

(1) Vandervell v Commissioners of Inland Revenue [1967] 2 AC 291, at p 312;

(2) Au Yuk Lin v Wong Wang Hin Eddy [2013] 4 HKLRD 373, at para 26;

(3) Lewin on Trusts, 19^th edn, at para 9‑006;

(4) Yip Yuk Kwong v Yip Chun Yin [2015] 3 HKLRD 703, at para 10;

(5) Suen Shu Tai v Tam Fung Tai [2014] 4 HKLRD 436;

(6) Pecore v Pecore [2007] 1 SCR 795;

(7) Li Pui Wan v Wong Mei Yin [1998] 1 HKLRD 84, at pp 89G‑90E;

(8) Best Star Holdings Limited v Lam Chun Hing & Others, HCA 409/2008, unreported, 22 February 2012, at paras 6‑8;

(9) Lau Kwai Kiu v Bian Xintian [2012] 2 HKLRD 954;

(10) Chan Yau v Chan Calvin [2014] 5 HKLRD 304;

(11) Igal Dafni v CMA CGM SA [2013] 2 HKLRD 73, at paras 31‑35;

(12) Davies v O’Kelly [2015] 1 WLR 2725; and

(13) Tinsley v Milligan [1994] 1 AC 340, at p 375.

16.  After considering Ms Cheng’s closing, I made the following orders on 19 November 2015:

(l)  A declaration that the defendants are and have been the only beneficial owners of the small village exempted house (“Ting House”) erected on Section C of Lot No 1285 in Demarcation District No 221 (“the Lot”) and the Lot and that the plaintiff has been holding the Ting House and the Lot on trust for the defendants.

(2) An order that the plaintiff do transfer the legal title to the Ting House and the Lot to the defendants by executing an assignment and all necessary documents to assign all the right and interest of the plaintiff in the Ting House and the Lot to the defendants absolutely by 4 pm on 21 December 2015.

(3) In default of complying with (2) above, the registrar of the High Court or such person(s) as may be appointed by him do have the power to execute an assignment and all necessary documents required for the transfer or assignment of the Ting House and the Lot to the defendants stipulated in (2) above.

(4) The plaintiff do pay the defendants the costs of this action and of the counterclaim, including all costs reserved, if any, to be taxed on indemnity basis.

(5) Liberty to apply.

Reasons for costs on indemnity basis

17.  On the claim, the plaintiff has no argument against the Conveyancing and Property Ordinance, section 3 point.

18.  On the counterclaim, the plaintiff has filed or served no defence to counterclaim.

19.  What makes matters unarguably bad for the plaintiff is the open letter dated 16 February 2012 written by Gallant YT Ho & Co to Edmund WH Chow & Co.  It was stated in the letter that:

“We refer to …the hearing …in respect of our clients’ application for security for costs on 8 February 2012.

At the hearing Master … made some comments on the Plaintiff’s case. The Master said that the Plaintiff relied on two alleged oral agreements that the Defendants would convey the Lot and the Ting House as gifts to him. Master … pointed out that … they would not be enforceable.

…

In light of the above, we respectfully … request that your client forthwith discontinue the proceedings and pay our clients’ costs. We reserve our right to bring this letter to the attention of the trial judge should your client proceed any further and also reserve our right to seek an appropriate cost order against your client.”

20.  The plaintiff did not comment on the enforceability point and continued to prosecute the obviously unsustainable claim for more than 3½ years cumulating in a trial set down for seven days.  This is clear abuse of process of the court.

21.  The plaintiff also rejected all the defendants’ offers to settle.  The last offer was contained in the letter dated 24 September 2015 to sell and split the net proceeds of sale.

22.  In the exercise of my discretion, I ordered the plaintiff to pay costs on indemnity basis.