TANG TIM CHUE v. TANG WING HONG AND OTHERS

HCA 1570/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1570 OF 2012

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BETWEEN

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REASONS FOR DECISION

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I. HCA 1570/2012

1.  On 31 August 2012, Tang Tim Chue (“Tang Jr”) commenced HCA 1570/2012 (“Tang Jr Action”) to claim for damages against the 1^st, 2^nd and 3^rd defendants (“D1, D2 and D3” or collectively “Ds”) on the following grounds:

(a)   the Ds conspired with the tenant/buyer to unlawfully sell Lot No 1792 in DD130 in Tuen Mun (“TM Land”) owned by Tang Leuk Tso (“LT”) in breach of section 15 of the New Territories Ordinance Cap 97 by concealing the fact that they were not the registered managers of LT, thereby committing a fraud on the members of the LT;

(b)   the Ds misled the courts in HCA 1944/2007 and CACV 196/2010 by concealing the fact that they were not the registered managers of LT, thereby causing the courts to grant incorrect judgments.

2.  Tang Jr did not formally file any Statement of Claim.  But on 1 September 2012, he filed an affirmation that gave further particulars of his claim.  D1, D2 and D3 filed their Defence on 14 September 2012, 21 September 2012 and 3 December 2012 respectively.  Tang Jr and the Ds were all self-represented litigants.

3.  By a summons dated 3 September 2012 (“Summons”), Tang Jr applied for prohibitory injunction orders to restrain the Ds:

(a)  from managing and/or selling the TM Land in the capacity of registered managers of LT;

(b)  from using the sale proceeds of over HK$5,000,000.00 (“Proceeds”) from the unlawful sale of the TM Land owned by LT as a result of the fraud and conspiracy referred to in paragraph 1 above.

Tang Jr further applied for an order requiring the Ds to pay the Proceeds into court if they had received the Proceeds, or alternatively for an order to schedule trial/hearing dates if they had not received the Proceeds.

4.  Tang Jr filed various affirmations dated 3, 5, 14 and 17 September, 3 October and 11 December 2012 to support the Summons.  D1, D2 and D3 filed affirmations in opposition to the Summons on 15 October, 15 October and 3 December 2012 respectively.

5.  On 9 January 2013, Tang Jr’s son Tang Lut Ming also known as Tang Brandon Timothy (“TLM”) applied by summons to join in the Tang Jr Action as a co-plaintiff.  On 16 January 2013, Master Au-Yeung dismissed the application with no order as to costs.

6.  The substantive hearing of the Summons was returnable before me on 22 January 2013 (“Hearing”).

II.  Attendance at the Hearing

7.  Tang Jr, TLM and D1 were present but D2 and D3 were absent at the Hearing.  D2 and D3 purportedly authorised D1 to act on their behalf by way of a written authorisation dated 21 January 2013.  They had not made any application to the court for leave to have D1 address the court on their behalf.  In the absence of any such application and given that D1, D2 and D3 were sued personally and not as managers of LT, I was not prepared to grant leave for D1 to represent D2 and D3 at the Hearing.  D2 and D3 were treated as absent at the Hearing.

8.  Ms Chan appeared for the Official Receiver at the Hearing.  She informed the court that a bankruptcy order was made against Tang Jr on 7 January 2013 in HCB 6075/2012 (“Bankruptcy Order”).  Tang Jr did not dispute this.

III.  Summons in the Tang Jr Action

9.  Ms Chan submitted that in light of the Bankruptcy Order the Summons should be adjourned sine die since Tang Jr was no longer entitled to prosecute such application.

10.  Tang Jr submitted that he was surprised by the Bankruptcy Order which he claimed was made very suddenly.  He said the bankruptcy proceedings were the result of a conspiracy between the Ds (who had no defence to his claim in the Tang Jr Action and/or in the Summons) and the creditor (who petitioned for his bankruptcy) with a view to ensure avoidance of the substantive hearing of the Summons.  However, since the TLM Summons in the TLM Action (as referred to in paragraphs 15-16 below) also returnable at the Hearing sought reliefs similar to those sought in the Summons in the Tang Jr Action, Tang Jr did not strongly oppose Ms Chan’s stance.

11.  As for D1, he also did not wish to have the Summons adjourned sine die.  He said that as evident from his Defence and his affirmation in opposition in the Tang Jr Action, the matters now raised by Tang Jr in fact had been the subject of litigation since 2007 (see the judgment of Chung J dated 25 June 2010 in HCA 1944/2007) and appeal since 2010 (see the judgment of the Court of Appeal dated 6 July 2011 in CACV 196/2010).  D1 said Tang Jr was the 2^nd defendant in those proceedings in which the courts had ruled against the contentions he repeated in the Tang Jr Action.  D1 wished to achieve finality in respect of these disputes by way of an early court determination in the Tang Jr Action.

12.  However, notwithstanding Tang Jr’s and D1’s respective stance, the following provisions of the Bankruptcy Ordinance Cap 6 are relevant :

Section 12(1)

“On the making of a bankruptcy order, the Official Receiver shall thereby become the provisional trustee of the property of the bankrupt, and thereafter, except as directed by this Ordinance, no creditor to whom the bankrupt is indebted in respect of any debt provable in bankruptcy shall have any remedy against the property or person of the bankrupt in respect of the debt, nor shall proceed with or commence any action or other legal proceedings, unless with the leave of the court and on such terms as the court may impose.”

Section 58(1)

“On the making of a bankruptcy order, the property of the bankrupt shall vest in the Official Receiver.”

13.  The effect of these provisions is that apart from certain causes of action personal to the bankrupt, all other causes of action which were vested in the bankrupt at the commencement of bankruptcy, whether in liquidated sums or unliquidated damages, vest in the trustee, and the bankrupt ceases to have sufficient interest in legal proceedings already commenced to continue them.

14.  Since no leave has been granted by the court for proceeding with the Summons, at the Hearing I adjourned the Summons sine die with no order as to costs.

IV.  HCA 44/2013

15.  On 9 January 2013 (ie 2 days after the making of the Bankruptcy Order), TLM commenced HCA 44/2013 (“TLM Action”) to claim damages and “criminal liability” against the Ds on grounds that were largely similar to those relied on by Tang Jr in the Tang Jr Action.  TLM was also a self-represented litigant.

16.  On the same day, TLM filed his Statement of Claim by way of an affirmation.  By a summons again filed on the same day (“TLM Summons”) and made returnable at the Hearing, TLM applied for similar reliefs as in the Summons in the Tang Jr Action.  Additionally, TLM sought an injunction order to restrain the Ds from intimidating and making threats against the members of LT.  On the same day, TLM filed his affirmation in support of the TLM Summons.

17.  However, TLM did not file any affirmation of service to verify service of the Writ of Summons, his 2 affirmations and the TML Summons (collectively, “Documents”) on the Ds.  At the Hearing, he informed me that the Documents had been served on the Ds by registered post on 11 January 2013.  But without an affirmation of service and in the absence of D2 and D3 at the Hearing, I am not satisfied there was satisfactory evidence of service of the Documents on D2 and D3.

18.  As for D1, he informed the court that he had been overseas and only returned to Hong Kong in the evening of 20 January 2013, so he only had actual knowledge of the Writ of Summons and the TLM Summons then.  If what he said is correct, then service of the Writ of Summons and the TLM Summons was only effected on him on 20 January 2013 (see Hong Kong Civil Procedure 2013 Vol 1 para 10/1/12 at p 111).

19.  Even if what TLM said is correct, as at the Hearing the time for the Ds to file acknowledgment of service has not yet expired (see Order 10 rules 1(2)(a) and 3 and Order 12 rule 5 of the Rules of the High Court).  It is also obvious from the Defence and the affirmations filed by the Ds in the Tang Jr Action that it is likely they would oppose the TLM Summons.  Indeed, D1 informed me at the Hearing that he would do so, and he was prepared to give notice of intention to defend and file/serve his affirmation in opposition as quickly as possible.

20.  In view of (a) the lack of satisfactory evidence of service of the Documents on D2 and D3, (b) the inter partes nature of the TLM Summons, (c) the short time that has elapsed between the filing (let alone service) of the Documents and the Hearing, (d) D1’s intended opposition of the TLM Summons, and (e) the known stance of D2 and D3 against the reliefs sought in the TLM Summons as evident from their Defence and affirmations filed in the Tang Jr Action, I was satisfied that I should not proceed with any substantive hearing of the TLM Summons at the Hearing.

21.  I therefore granted the following order at the Hearing:

(a)  within 7 days of the order, ie on or before 29 January 2013, the plaintiff shall file affirmation of service verifying service of the Documents on D1, D2 and D3;

(b)  within 7 days of the order, ie on or before 29 January 2013, D1 shall file acknowledgment of service;

(c)  leave to D1 to file and serve on TLM his affirmation in opposition to the TLM Summons within 7 days of the order, ie on or before 29 January 2013;

(d)  leave to D2 and D3 to file and serve affirmation in opposition to the TLM Summons within 14 days after service of the Documents or within 14 days after service of this order, whichever is later;

(e)  leave to TLM to file and serve affirmation in reply within 7 days after service of any affirmation in opposition by D1, D2 and D3;

(f)  no further affirmation shall be filed or served without leave of the court;

(g)  any application for leave to file and serve further affirmation shall be made no less than 14 days before the adjourned hearing of the TLM Summons supported by reasons on affirmation;

(h)  the TLM Summons be adjourned for substantive argument to a date to be fixed to be heard before a bilingual judge in chambers with 3 hours reserved;

(i)  TLM shall forthwith serve sealed copy of this order on each of D1, D2 and D3;

(j)  costs of the Hearing today in respect of the TLM Summons be costs in the costs of the TLM Summons.

22.  My clerk will arrange for sufficient sealed copies of the above order to be provided to TLM for him to forthwith serve such sealed copy orders on the Ds.  TLM is reminded to file affirmation of service verifying service of any court order, affirmation, notice of hearing or other document served by him on the Ds prior to the adjourned substantive hearing of the TLM Summons.

23.  My clerk will also inform Tang Jr, TLM and D1 that if any of them so requires a court translator will be arranged to verbally translate these Reasons for Decision into the punti language for him/them at the High Court Building at a mutually convenient date and time.