DCCJ 3791/2016
[2018] HKDC 1498
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
CIVIL ACTION NO 3791 OF 2016
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BETWEEN
TSANG WOON MING（曾煥明）
Plaintiff
and
TSAN HING TAT HEIDI（曾慶達）
1st Defendant
TSANG HING KWONG THOMAS（曾慶光）
2nd Defendant
YAP HENRY FAT SUAN（葉發旋）
3rd Defendant
YAP HENRIETTA CHUN WAH（葉俊華）
4th Defendant
YAP JASON CHUN YING（葉俊英）
5th Defendant
YAP CHUN HUNG ALEXANDER（葉俊雄）
6th Defendant
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Before: Her Honour Judge Winnie Tsui in Chambers (Open to Public)
Date of Hearing: 30 November 2018
Date of Decision: 30 November 2018
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DECISION
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1. I handed down a decision on 19 July 2018 refusing the 1st to 6th defendants’ striking out application. The defendants now apply for leave to appeal against that decision. The draft notice of appeal contains five proposed grounds. In the course of his submissions this morning, Mr Frederick Chan, appearing for the defendants, confirms that the defendants would abandon the third ground.
Legal principles
2. The principles governing the threshold for granting leave to appeal are not in dispute. The applicant needs to show 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: section 63A(2) of the District Court Ordinance, Cap 336.
3. A “reasonable prospect of success” means an appeal with prospects that are more than “fanciful”, without having to be “probable”: Wing Tat Haberdashery Co Ltd v Elegance Development & Industrial Co Ltd [2011] 5 HKC 474 at para 6.
The first ground
4. In gist, the complaint under the first ground is that I erred in holding that constructive knowledge would suffice for establishing an estoppel by acquiescence or standing by (see para 53 of the decision) and that in any event the five “pointers” relied on by the plaintiff are not capable of giving rise to constructive knowledge (see paras 61 to 68).
5. Mr Chan submits that I was wrong in relying on what Floyd LJ said at para 37 in Hoyl Group Ltd v Cromer Town Council [2016] P&CR 45 in support of the proposition that constructive knowledge would be sufficient. In Smyth-Terrell v Bowden [2018] L&TR 23, His Honour Judge Paul Matthews (sitting as a High Court Judge) came to the opposite view. The learned judge said, at para 78:-
“But I decline to hold that an equity by way of proprietary estoppel can arise where a landowner ought to have realised, but did not realise, that the tenant believed that the landowner was promising an interest, and the landowner did nothing to encourage the tenant to act in the way that he did.” (original emphasis)
6. Mr Chan concludes that, as a matter of law, constructive knowledge cannot give rise to an estoppel arising by acquiescence. However, he accepts that there is no direct authority on this point.
7. All that Mr Chan is able to show is that there is a difference in judicial opinions on this point. It is certainly a moot issue. And it is not an easy point of law. As such, it should be left for resolution at trial so that the issue can be considered and determined by reference to actual facts as found, instead of by reference to assumed facts: see, eg, W v Essex County Council [2001] 2 AC 592, 598A-C, per Lord Slynn.
8. Mr Chan argues that this is the right time for the court to deal with the issue as it is properly engaged on the pleaded facts and that there is no need to wait until trial. I do not accept this argument. It can be foreseen that there will be a certain amount of factual disputes between the parties, eg the extent of dealings between the plaintiff, Madam Luk and some of the defendants. That would no doubt have a bearing on the issue of knowledge, whether actual or constructive. I simply do not consider that I would have been in as good a position as the trial judge to determine the legal issue in question.
9. Also, as highlighted in the decision, the question of knowledge, like all other components in proprietary estoppel, should not be considered in isolation and must be approached as part of a broad and overall enquiry as to whether it is unconscionable to allow the defendants to assert their strict legal rights. The issue relating to the nature and content of knowledge (whether actual or constructive) required to be established by the plaintiff in this case is not an issue that can be suitably determined at this interlocutory stage as the surrounding circumstances must be taken into account as part of the overall enquiry.
10. The first ground has no reasonable prospect of success.
The second ground
11. Under the second ground, the defendants contend that I was wrong in holding that constructive knowledge of Madam Luk is arguably capable of binding on the defendants, ie her children and beneficiaries.
12. In the decision, I stated that it was unnecessary for me to resolve this issue because even if Mr Chan’s submission was correct and as a matter of law Madam Luk’s knowledge is not binding on, and cannot be “imputed” to, the defendants, the plaintiff’s case against the defendants on knowledge has been expressly pleaded and there are matters which can potentially be relied on to show the existence of such knowledge. See paras 74 and 75 of the decision. Therefore, the plaintiff’s case, as pleaded, is arguable.
13. The second ground has no reasonable prospect of success.
The fourth ground
14. Under the fourth ground, the contention is that even if constructive knowledge was sufficiently pleaded in the statement of claim, given that the estoppel relied on is by acquiescence and is based on the plaintiff’s detrimental reliance, rather than based on a promise, the remedy sought by the plaintiff, namely that the property be vested in and conveyed to the plaintiff, is bad in law.
15. Mr Chan relies on the discussion of remedies in Culliford v Thorpe [2018] EWHC 426 (Ch) at paras 74 and 75.
16. Mr Chan effectively asks the court to simply strike out para (4) in the prayer while allowing para 32 to stay.
17. I do not accept the submission. I do not consider that at this interlocutory stage, before the facts are found, the court is in a position to definitively rule out a particular remedy from the wide range of possible remedies which may be awarded by the court to satisfy the equity raised by proprietary estoppel. The nature and scope of the relief must depend on the particular circumstances of the case: see, eg, Gillett v Holt [2001] Ch 210 at 235E, 237A.
18. This ground has no reasonable prospect of success.
The fifth ground
19. Lastly, the defendants argue that even if the first to fourth grounds all fail, the court should have struck out the words “have had or” in para 32(b), which denote actual (as opposed to constructive) knowledge on the part of the defendants, because in para 64 of the decision, I have ruled that the plaintiff failed to plead sufficiently on actual knowledge.
20. There is no merit in this contention. I did not make the ruling as alleged. What I said in para 64 is that it is unclear to me how actual knowledge can be proved, whether directly or by inference. This is an issue of evidence, not pleading. As such, it is a matter for trial, unless one can say definitively at this stage that the evidential difficulties are insurmountable. If that is the case, it would be a matter for striking out. But that is not the case here. This ground has no reasonable prospect of success.
Conclusion
21. None of the grounds proposed by the defendants has any reasonable prospect of success. There being no other reason why the appeal ought to be heard, I dismiss the defendants’ application seeking leave to appeal.
( Discussion re costs )
22. I make an order that the plaintiff do have costs of the application, to be taxed if not agreed, with certificate for counsel. There be legal aid taxation of the plaintiff’s own costs.
(Winnie Tsui)
District Judge
Mr Ross MY Yuen, instructed by Zebra H Y Kwan & Partners, assigned by the Director of Legal Aid, for the plaintiff
Mr Frederick HF Chan, instructed by Keith Lam Lau & Chan, for the 1st to 6th defendants