IP CHEUNG KWOK AND ANOTHER v. IP SIU BUN AND OTHERS

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2ND  JUDGMENT ON  PRELIMINARY  ISSUES

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Kempster, JA:

1. This is the judgment of the court.

2. On 9 November 1989, at the conclusion of the 31st day of this hearing, we dismissed the appeal of Sin Hua Bank Trustee Ltd (the Bank), set out in Additional Notice of Appeal dated 1 June 1989, from an order made by Godfrey J on 22 May whereby he allowed Mr Ip Cheung Kwok to add to the description of his capacity as plaintiff and to his prayer for relief, respectively, the words "administrator of the estate of Ip Koo Chi pendente lite" and "execution of the trusts affecting Nos 152, 159 and 156, Queen's Road Central, Hong Kong" and, consequentially, that such properties should be sold under the direction of the court. The terms of the order do not follow those of the judgment in which Godfrey J said: -

"For the purposes of the present action, it appears to me to be right that as from the date he assumes that capacity (of administrator pendente lite) he should act in the new capacity instead of the previous capacity in which he has been acting under my order appointing him to represent the same deceased's estate under Order 15 rule 15."

It matters not for present purposes.

3. On the application of the plaintiff and without requiring service of an amended respondent's notice we also removed the stay "until after the disposal of the (Bank's) appeal herein" which the judge had imposed on his order for sale. We said that we would give our reasons prior to further argument on the remaining and fundamental matters of dispute and this we now do.

4. The background both to the litigation generally and to our relevant decisions appears in the "Judgment on Preliminary issue" given by Clough JA on 25 October and we will only repeat the passage on p 11 which reads: -

"... but Mr Chang for the Bank has conceded that order 20 rule 5 is sufficiently wide to have given the judge jurisdiction to grant leave to make the amendment (described above) after the trial".

That concession disposed of the first of the two grounds in the Additional Notice of Appeal while the conclusions in the three judgments given on that occasion themselves disposed of the second; both grounds going to the vires of the court below to make the order impugned at the instance of the plaintiff.

5. Historically the statutory power to direct a sale was conferred on the Court of Chancery by section 55 of the Chancery Procedure Act 1852 which read: -

"If after a suit shall have been instituted in the said Court in relation to any real estate, it shall appear to the Court that it will be necessary or expedient that the said real estate or any part thereof should be sold for the purposes of such suit, it shall be lawful for the said Court to direct the same to be sold at any time after the institution thereof".

That power has been retained in England by the terms of section 21 of the Judicature Act 1873, of section 18 of the Judicature Act 1925 and of section 19 of the Supreme Court Act 1981. In Hong Kong it is preserved by the terms of Ordinance No. 7 of 1856 and of section 12(2) of the Supreme Court Ordinance (Cap 4). It is reflected in the terms of Order 31 rule 1 and, since by virtue of Order 85 rule l the proceedings were constituted an administrative action following the order of 22 May 1899, the conduct of the sale, directed for the better execution of such trusts as the judge had found or any appellate court might thereafter find and therefore "for the purposes of the cause or matter", will be the responsibility of the trustees unless the court otherwise directs (Order 85 rule 6). By necessary implication Godfrey J conferred on them a previously absent power to sell as allowed by section 56(1) of the Trustee Ordinance (Cap 29).

6. The propriety of the judge's exercise of discretion to order a sale was not challenged in the Additional Notice of Appeal but, necessarily, it was questioned by the opposition of the trustees, being the Bank and the first defendant, Mr Ip Siu Bun, to the plaintiff's application for the removal of the stay. They contend that the time was not ripe for such an order on 22 May and is still not ripe.

7. The only expert reports available to the judge on the hearing of the Notice of Motion dated 26 April 1988 were those exhibited to the plaintiff's affirmation of even date and to that of Mr Siu King Yin made on 13 September 1988. The former was dated 25 September 1986 and had been prepared for the Bank while the latter had been prepared by J Wilburn & Associates Ltd and was dated 8 September 1988. Since the question falling for our determination was whether the stay should be lifted and the arrangements for sale put in train on or about 9 November last, we admitted further affirmations made on behalf of the plaintiff and of the Bank giving further expert evidence (Order 59 rule 10(2)).

8. From all of this material and from the testimony given at trial it was apparent that the possibility of selling the properties for development, the sites being suitable, had been canvassed since about 1976 and that, partly by reason of the insolvency of the tenants, no income has been received by any member of the Ip clan since April 1985. Reletting had proved difficult due to disagreement between the trustees and to the proceedings commenced by Gainer Ltd in July 1981 in relation to which, though dormant, no application had been made to dismiss for want of prosecution. It was common ground that the buildings were in a state of disrepair amounting to dereliction. Outgoings are presently some HK$133,000 per annum.

9. The future of property values in Hong Kong is a matter of perennial uncertainty but particularly so as 1997 approaches. It is neither for trustees nor for the court to hazard the realisation of capital gains achieved in the hope of further appreciation which can only be a matter of speculation. Potential beneficiaries as represented by the plaintiff and by the Attorney General sought the removal of the stay. Gainer Ltd have been served with the judge's direction and will be bound as if parties to this action (Order 44 rule 2).

10. In the light of these considerations, of the further adjournment of these proceedings and of the likelihood of an eventual appeal to Her Majesty in Council we concluded that it was indeed in the interest of whomsoever, in due course, is determined beneficially to be entitled to the properties that arrangements for sale should proceed without further inhibition.