RE NG TSUN WEI

HCMP 1428/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1428 OF 2016

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D E C I S I O N

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The application

1.  In these proceedings, commenced by way of an ex parteOriginating Summons issued on 7 June 2016, Mr Ng Tsun Wei (“Applicant”) applies for an order vesting in him all the legal and other estate in Lots Nos 2056 and 2057 in Demarcation District No 449 (also known as 14 and 16 Yi Pei Square, Tsuen Wan, New Territories) (“Lands”), insofar as such interest is still vested in his trustee who was his mother, the late Ng Hau Wai Fong Betty (“Mrs Ng”), or her estate.

2.  The Applicant so applies pursuant to section 45(e) of the Trustee Ordinance(Cap 29) which provides as follows:

“45. Vesting orders of land

In any of the following cases, namely –

...

(e) where there is no personal representative of a deceased trustee who was entitled to or possessed of any interest in land, or where it is uncertain who is the personal representative of a deceased trustee who was entitled to or possessed of any interest in land;

...

the court may make an order (in this Ordinance called a vesting order) vesting the land or interest therein in any such person as the court may direct ....”

Principles governing ex parte application for vesting order

3.  It is permissible for the court to make a vesting order under section 45(e) of the Trustee Ordinance in an ex parte application.  See Re Pacific Good Investment Limited, HCMP 366/2014, unreported (5 March 2014), per Deputy High Court Judge Wilson Chan at [14], referring to Re Li Kow Tsai alias Li Ming, HCMP 73/2001, unreported, 12 September 2001 (Yuen J as she then was) and Re Wu Kwok Keung, HCMP 1383/2011, unreported, 10 August 2011 (Suffiad J).

4.  However, an ex parte application under section 45(e) of the Trustee Ordinance is not a short cut for obtaining title to real properties.  The court should accede to the application only if there is clear evidence justifying the making of such order.  And the court should proceed cautiously, examining the evidence presented by the applicant critically and, where there are gaps in the applicant’s evidence, requiring the applicant to fill such gaps by satisfactory evidence, or provide proper explanations as to why, despite the exercise of reasonable diligence, the applicant cannot adduce further evidence to deal with the evidential deficiencies.  As in all ex parte applications, the applicant owes the duty of full and frank disclosure.  See Re Man Kin as administrator of the estate of Man Pak Chun, HCMP 2565/2014, unreported, 18 April 2016, per Chow J at [10]–[12].

5.  On these notes, I turn to the facts and evidence placed by the Applicant before me.

Case presented by the Applicant

6.  The records kept by the Land Registry in respect of the Lands show, inter alia, the following:

(1)  By a Conveyance on Sale dated 22 June 1970 (“Conveyance”), one Ng Ying Lok as executor of the will of one Leung Kit Pong, deceased (as vendor) assigned to Mrs Ng (as purchaser) the Lands for a consideration of HK$200,000.

(2)  By a Declaration of Trust of the same date (“Trust Declaration”), Mrs Ng stated that she made the said purchase as trustee for the Applicant and that the said purchase price of HK$200,000 was in fact provided by her out of moneys belonging to the Applicant and declared that she had as from the date of the Conveyance held and would continue to hold the Lands and any rents and profits thereof upon trust for the Applicant.

(3)  The Trust Declaration was stamped on the following day on 23 June 1970.

(4)  The Conveyance and the Trust Declaration were then registered at the Land Registry by sequential memorials Nos.TW85135 and TW85136 respectively 4 days after their execution on 26 June 1970.

(5)  The Lands remain to this date registered in Mrs Ng’s name.

7.  According to the Applicant’s Affirmation made on 25 April 2016 (“Applicant’s Affirmation”):

(1)  He was 17 years old at the time of the Conveyance and the Trust Declaration.

(2)  Mrs Ng had passed away on 20 November 2009 in San Francisco, USA, which fact is supported by what appears to be a death certificate in respect of Mrs Ng.

(3)  No probate has been obtained and no personal representative has been appointed in respect of Mrs Ng’s estate.  The Applicant also seeks to prove this fact by conducting a search of the records kept by the Probate Registry of the High Court of Hong Kong in the morning on 3 September 2016, which yielded no record of any application having been made in respect of Mrs Ng’s estate.

I am prepared to accept such evidence.

8.  The Applicant’s case is that he is the sole beneficial owner of the Lands by virtue of the Trust Declaration; that he is of full age and capacity; that he is entitled at his own wish to terminate the trust and to demand Mrs Ng (and, after her death, her personal representative), the trustee under the Trust Declaration, to transfer to him or vest in him the legal estate in the Lands; and that since Mrs Ng has passed away with no probate or letters of administration having been granted in respect of her estate, the Applicant is entitled to a vesting order under section 45(e) of the Trustees Ordinance.

Problems

9.  However, the land search records exhibited by the Applicant also show that there are registered against the Lands various court documents relating to 3 actions subsequent to the Conveyance and the Trust Declaration between the following members of the Ng family:

(1)  Mrs Ng;

(2)  Ng Shue Chiu (“Mr Ng”), Mrs Ng’s husband and the Applicant’s father;

(3)  the said Ng Ying Lok (“Mr Ng Sr”), Mr Ng’s father and the executor of the estate of the said Leung Kit Pong (“Madam Leung”), Mr Ng Sr’s wife and Mr Ng’s mother;

(4)  Ng Shue Sun (“Mr SS Ng”), Mr Ng’s brother;

(5)  Ng Pui Lan, Mr Ng’s half sister (“Ms Ng”); and

(6)  the Applicant.

10.  These court documents reveal that Mr Ng had claimed the Lands and, at one stage, secured an agreement by the Applicant to have the Lands to be transferred to him.  The Applicant has to prove that such claims by, and agreement with Mr Ng, regarding the Lands does not affect the Applicant’s beneficial interests therein.

11.  The first such action was HCA 235/1977 (“1^st Action”), in which Mrs Ng and Ms Ng were the plaintiffs and Mr Ng was the 1^st defendant by original action.  By a defence and counterclaim filed on 26 April 1976 (and registered against the Lands by Memorial No TW133267 on 5 July 1976), to which counterclaim Mrs Ng and Ms Ng were made the 1^st defendants and Mr Ng Sr was joined as the 2^nd defendant, Mr Ng:

(1)  alleged that he and Mr SS Ng were the beneficiaries of Madam Leung’s estate which included the Lands; that the Conveyance was effected by Mr Ng Sr at a gross undervalue in breach of his duties as executor of Madam Leung’s estate; that it was not a genuine transaction but was a mere device by Nr Ng Sr and Mrs Ng to deprive Mr Ng of the Lands; and

(2)  counterclaimed for a declaration that the Conveyance was null and void and of no effect and an order that it be set aside.

12.  According to the Applicant, Mr Ng did not pursue his action by counterclaim in the 1^st Action.  Although the Applicant (who was not a party to the 1^st Action) has not identified his source for this piece of information, the fact that no judgment or order made in the 1^st Action has been registered against the Lands tends to support this.

13.  More importantly, it appears that Mr Ng’s counterclaim in the 1^st Action for the setting aside of the Conveyance had been over taken by the consent order by which HCA 784 of 1978 (“the 2^nd Action”) was disposed of (see paragraph 17 below).

14.  Then, to take the proceedings out of the sequence in which they were commenced, in HCA 5265/1979 (“3^rd Action”) (which was commenced after, but concluded before, the 2^nd Action), Mr Ng SS was the plaintiff while Mr Ng was the 1^st defendant. By an order made by consent on 12 June 1985 (and registered against the Lands by memorial No.TW349803 on 8 July 1985), all further proceedings in the 3^rd Action were stayed upon certain terms (“HCA 5265/1979 Order”).  One such term was that Mr Ng SS admitted that Mr Ng was entitled to the Lands then registered in the name of Mrs Ng, provided that Mr Ng SS was not required to incur any expense or give any warranty as to Mr Ng’s title or interest thereof and Mr Ng should be deemed to have inherited the same from Madam Leung’s estate and should not have any claim whatsoever against the administrator[1] and the estate of Madam Leung (paragraph 3 of the order).  This consent order is the only document concerning the 3^rd Action that has been registered against the Lands.

15.  I am not particularly concerned about the impact of the HCA 5265/1979 Order on the Applicant’s beneficial interests in the Lands.  Neither Mrs Ng nor the Applicant was party to the 3^rd Action. They could not be bound by what Mr Ng and Mr Ng SS agreed between themselves as regards Mr Ng’s entitlement to the Lands.

16.  Also, it appears that the Applicant had, prior to the commencement of the 3^rd Action by Mr Ng SS against Mr Ng, already issued proceedings in the 2^nd Action against Mr Ng.  It further appears from the terms of the order by which the 2^nd Action was concluded that Mr Ng’s claim of entitlement to the Lands had already been made an issue of, and would be resolved directly between the Applicant and Mr Ng in, the 2^nd Action.

17.  In this connection, the 2^nd Action was concluded by an order made by consent on 9 June 1987 (and registered against the Lands by memorial No.TW450560 on 25 June 1987) (“HCA 784/1978 Order”).  It provided, inter alia, as follows:

(1)  paragraph 1: that Mr Ng should pay to the Applicant HK$35,000,000 in a lump sum within 3 months in full and final satisfaction of the Applicant’s claim therein;

(2)  paragraph 2: that within 7 days after such payment, the Applicant should

(a)  execute a formal release in respect of another piece of land namely, Lot No 1978 in Demarcation District 449 (“Lot 1978”);

(b)  execute and procure all necessary parties to execute an assignment of the Lands to Mr Ng.

18.  The HCA 784/1978 Order is dealt with in paragraphs 20 to 22 of the Applicant’s Affirmation as follows:

“20.   On 13 October 1988, I executed a Release to transfer my interests in [Lot 1978] to [Mr Ng], in consideration for his payment of HK$46,212,839.20 to me.  There is now produced and shown to me marked “NTW‒7”, a copy of the Release.

21.   I have not executed any assignment, and [Mr Ng] never requested me to assign [the Lands] to him pursuant to Clause 2 of the [HCA 784/1978 Order].

22.   I believe that the [HCA 784/1978 Order] does not affect my beneficial interest in [the Lands] for the following reasons:

(a)   The [HCA 784/1978 Order] was handed down on 9 June 1987.  I am advised by my legal advisers and believe that as over 12 years have lapsed, [Mr Ng] is time‑barred by Section 4(4) of the Limitation Ordinance (Cap 347) from taking any action to enforce the [HCA 784/1978 Order].

(b)   The [HCA 784/1978 Order] has not been re‑registered.  I am advised by my legal advisers and verily believe that pursuant to Section 17 of the Land Registration Ordinance, the registration of the [HCA 784/1978 Order] has expired.”

19.  Section 17 of the Land Registration Ordinance (Cap 128) provides:

“The registration of a judgment, order or lis pendens shall cease to have effect at the end of 5 years from the date of registration, but the judgment, order or lis pendens may be re‑registered from time to time and, if so re‑registered, shall have effect for 5 years from the date of re‑registration.”

20.  Section 4(4) of the Limitation Ordinance (Cap347) prevents an action from being brought upon any judgment after the expiration of 12 years from the date on which the judgment became enforceable.

21.  I read paragraphs 20 to 22 of the Applicant’s Affirmation as saying that although Mr Ng had made payment as agreed in paragraph 1 of the HCA 784/1978 Order (albeit in a different larger amount), he had not called upon the Applicant to perform his obligation under paragraph 2(b) of the HCA 784/1978 Order to cause the Lands to be assigned to Mr Ng and that Mr Ng can no longer do so because of the lapse of more than 12 years from the date on which the HCA 784/1978 Order became enforceable and because of his failure to re‑register the HCA 784/1978 Order against the Lands.

22.  The impression conveyed is that the HCA 784/1978 Order was the last dealing concerning the Lands between the Applicant and Mr Ng.  In fact, this was not the case and paragraphs 20 to 22 of the Applicant’s Affirmation can be viewed as misleading.

23.  That this is so is clear from the terms of the Release of Lot 1978 dated 13 October 1988 (“Lot 1978 Release”).  Insofar as it is material, after recounting the history leading up to the making of the HCA 784/1978 Order, the recitals of the Lot 1978 Release continue to read as follows:

“(7)  The [Applicant] subsequently brought an action in High Court Action No.A4949 of 1987 to set aside the [HCA 784/1978 Order] which proceedings were contested by [Mr Ng].

...

(12)  It has been agreed between the [Applicant] and [Mr Ng], inter alia, that [Mr Ng] shall pay to the [Applicant] the sum of HK$46,212,839.20 in full and final settlement of his claim in the above actions and that against such payment the [Applicant] shall execute this Release disclaiming his share and interest in [Lot 1978].”

24.  In short, according to recitals (7) and (12) of the Lot 1978 Release, the Applicant had instituted another action (“4^th Action”) against Mr Ng to set aside the HCA 784/1978 Order and the 4^th Action ended in the Applicant and Mr Ng making an agreement in terms that were different from those contained in the HCA 784/1978 Order.

25.  Although the Applicant has exhibited a copy of the Lot 1978 Release to his affirmation, no attempt has been made by him or on his behalf to draw the court’s attention to these recitals which, in my view, put into question the accuracy of paragraphs 20 to 22 of the Applicant’s Affirmation.  The duty of full and frank disclosure imposed upon a party making an ex parte application such as the Applicant would require the Applicant to specifically direct the court to these recitals, and not to just include a copy of the Lot 1978 Release among his exhibits.

26.  At the hearing on 7 September 2016, upon the court raising recitals (7) and (12) of the Lot 1978 Release and questioning whether, and if so how, the agreement mentioned in recital (12) affected the HCA 784/1978 Order insofar as the Lands are concerned, the Applicant applied for, and was granted, an adjournment to look into the matter.

27.  Thereafter, the Applicant’s solicitors wrote to the court for permission to search and inspect the files kept by the court in respect of the 3^rd and 4^th Actions but to no avail as those files have already been destroyed.  This seems to be the only action that has been taken by or on behalf of the Applicant.

28.  At the adjourned hearing on 30 September 2016, Miss Sabrina Ho, Counsel for the Applicant, urges the court to proceed on the evidence that is before it.  Counsel submits that the words “his claim in the above actions” in recital (12) of the Lot 1978 Release refer to the Applicant’s claims in both the 3^rd Action and the 4^th Action and invites the court to infer therefrom that recital (12) sets out the entire agreement between the Applicant and Mr Ng for the full and final settlement of the 3^rd Action (including the HCA 784/1978 Order) and the 4^th Action.  I understand such submission to lead to the further inference that the Applicant had been released of his obligation under the HCA 784/1978 Order to have the Lands transferred to Mr Ng.

29.  I have difficulty with such submission.

30.  First, it seems pretty clear to me from the expression “inter alia” in recital (12) of the Lot 1978 Release that such recital does not contain the full agreement between the Applicant and Mr Ng but only such part thereof as affecting Lot 1978, the subject‑matter of the Lot 1978 Release.

31.  Second, I am puzzled as to why the court should resort to the drawing of an inference.  Although the relevant court files have been destroyed, there is no attempt to find out whether the solicitors acting for the Applicant in the 3^rd and 4^th Actions have retained their case files.  More importantly, the Applicant was himself a party to both actions and, as such, should have personal knowledge of the final agreement that he had reached with Mr Ng regarding the Lands.  The absence of a clarifying affirmation from the Applicant is conspicuous.

32.  In summary, the net effect of the evidence before the court is that the HCA 784/1978 Order had most probably been superseded by the 4^th Action and by the agreement made between the Applicant and Mr Ng under the 4^th Action but it is not known whether, and if so how, that part of the HCA 784/1978 Order that concerned the Lands was affected by such agreement.

33.  And for the reasons set out in paragraph 31 above, I am not satisfied that the Applicant has satisfactorily filled this gap in the evidence or explained why he is unable to do so despite the exercise of reasonable diligence.

34.  Ms Ho’s further submission based on s 4(4) of the Limitation Ordinance and s 17 of the Land Registration Ordinance does not assist the Applicant.  Reliance on these statutory provisions, even if otherwise applicable, is essentially premised upon the HCA 784/1978 Order remaining the effectiveorder governing the Applicant’s and Mr Ng’s respective rights and obligations in respect of the Lands.  This has been shown by recitals (7) and (12) of the Lot 1978 Release to be not the case.  In short, the problem that the court sees is that it does not know on the evidence what new agreement the Applicant had made with Mr Ng under the 4^th Action with respect to the Lands and hence it cannot properly examine and assess the Applicant’s assertion that he is the sole beneficial owner of the Lands.

Conclusion

35.                I have reviewed the totality of the evidence before the court with care but I am not convinced that it is right to make the order sought on such evidence.  Accordingly, I dismiss the Applicant’s ex parte originating summons dated 7 June 2016, but without prejudice to the Applicant applying again as and when he is in a position to adduce further or additional evidence.