LEUNG KWAI LING, L v. HK GLORY PROPERTIES LTD

HCA 366/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 366 OF 2012

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HCA 1324/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1324 OF 2012

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DECISION

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1. I have before me 4 appeals against Masters’ decisions in HCA 366/2012, 3 summonses in HCA 366/2012 and 4 summonses in HCA 1324/2012.

Background

2. The subject matter of the dispute relates to the redevelopment of Lai Sing Court at Nos 13-15 Tai Hang Road, Hong Kong (“the Former Building”), built upon Inland Lot No 7903 and the extension thereto (“the Land”), which has now been demolished and turned into a new development known as Serenade at No 11 Tai Hang Road, Hong Kong (“the New Building”).

3. The plaintiff and one Mr Lee Yiu Kei (“Mr Lee”) were the registered owners of one of the residential units in the Former Building (“the Former Unit”).

4. Pursuant to the Development Agreement dated 1 May 2001 (as supplemented by related documents and subsequent agreement) (“the Development Agreement”) signed between the defendant as developer and Hongkong Land Limited (“HK Land”) as guarantor and the majority owners of the Former Building including the plaintiff and Mr Lee (“the Majority Owners”), the parties agreed to demolish the Former Building and redevelop the Land upon the conditions and terms set out therein.

5. Throughout the long negotiation process of over 21 months to the execution of the Development Agreement, the Majority Owners were first acted by Messrs Gallant Y T Ho & Co in or around 1999, which were then replaced by Messrs Fairbairn Catley Low and Kong (“Fairbairn”) in or around 2000, which were again replaced by Messrs Zebra H K Kwan & Partners in 2009.  The defendant and HK Land were acted by Messrs Johnston, Stokes & Masters (“JSM”).

6. By the Development Agreement, it was agreed that if an order for sale in respect of the Land was to be granted by the Lands Tribunal (“the Tribunal”) under the compulsory sale proceedings to be commenced under the Land (Compulsory Sale for Development) Ordinance, Cap 545 (“the Compulsory Sale Proceedings”) and the Land was sold to the defendant pursuant to such order for sale, each of the Majority Owners would be entitled to:

(i)  a cash compensation of $400,000 provided that certain conditions were met (“the Cash Compensation”);

(ii)  a new unit of a certain size in the new development (“the New Unit”); and

(iii)  a share of the profits on the redevelopment provided that certain conditions were met.

7. According to the affidavits filed on behalf of the defendant, the defendant had kept the Majority Owners fully informed of the process during the redevelopment.  The defendant held various meetings with the Majority Owners, and the Majority Owners were given ample opportunities to participate in the decision making process relating to the redevelopment project.  The plaintiff had attended 3 of such general meetings of the Majority Owners.

8. There is also no serious dispute that the defendant had complied with the terms of the Development Agreement in the following manner:

(i)  an application was made to the Tribunal under the Compulsory Sale Proceedings for an order for sale of the Land (“the Order for Sale”) with 2 trustees appointed to conduct the sale (“the Trustees”);

(ii)  the defendant purchased the Land together with the Former Building by auction under the Order for Sale; and

(iii)  the defendant had paid the plaintiff and Mr Lee the Cash Compensation.

9. By the Confirmation by Owner dated 9 May 2005 duly signed by the plaintiff and Mr Lee before their solicitors Fairbairn, they agreed with the Statement of Apportioned Net Sale Proceeds attached thereto and the release of the net amount mentioned in the statement to the defendant together with the legal costs of the assignment and the Trustees’ remuneration.

10. The New Building was completed within time. However, despite the repeated demands by JSM on behalf of the defendant, the plaintiff and Mr Lee have failed to and still fail to take up the assignment of the New Unit with no apparent reason at all.

11. Bonus in the sum of $1,200,000, being the highest amount payable under the Development Agreement, is available for distribution but has only been withheld by reason of the plaintiff’s breach in failing to take up the assignment of the New Unit.

The claims in the subject 2 actions

12. It is not easy to understand the basis of the plaintiff’s claim in HCA 366/2012.  Apparently, the plaintiff’s claim is for, inter alia, compensation and damages for losses relating to the Development Agreement, the market value of the New Unit, the loss of the profit share resulting from the Development Agreement, default penalty for failing to provide her with audited certificate on profit and valuation report of the Former Building and damages for libel in respect of the use of the words “frivolous”, “abuse of court process” and “no reasonable cause of action” in HCA 366/2012.

13. In HCA 1324/2012, the plaintiff’s claim is for damages for libel in respect of the use of the said alleged defamatory words by the defendant in HCA 366/2012.

Related proceedings commenced by the plaintiff on the same subject matter

14. In LDCS 1000/2003 (the Compulsory Sale Proceedings), the plaintiff took out a summons on 13 June 2011 claiming against the defendant for similar relief as those in HCA 366/2012 (excluding the libel claim).  The summons was dismissed by the Tribunal on 9 August 2011.

15. In HCA 1582/2011, the plaintiff claimed against HK Land and other related parties for similar relief.  The Statement of Claim was struck out and the claim was dismissed by Master K Lo on 9 February 2012. The appeal against Master Lo’s order was also dismissed.

16. In HCA 1567/2011, the plaintiff claimed against the Trustees for breach of trustee’s duty and negligence in the conduct of the sale of the Former Building and the Land.  The Statement of Claim was struck out and the claim was dismissed by Master de Souza on 26 March 2012.  The appeal against Master de Souza’s order was dismissed by me on 24 September 2012.

17. In HCA 1568/2011, the plaintiff claimed against Fairbairn, the plaintiff’s former solicitors, on the same subject matter.  The Statement of Claim was struck out and the claim was dismissed by a Master on 19 March 2012.  The appeal against the Master’s order was also dismissed.

The appeals and the summonses in HCA 366/2012

18. In HCA 366/2012, the Statement of Claim was struck out and the claim was dismissed by Master Hui on 23 July 2012.  Master Hui had also dismissed other summonses filed by the plaintiff for, inter alia, discovery of further documents and striking out certain exhibits of the affidavits filed on behalf of the defendant.   By various notices of appeal filed by the plaintiff with some of them out of time, the plaintiff sought to appeal against Master Hui’s order dated 23 July 2012 and the earlier order of Master R Lai dated 13 July 2012 which dealt with the filing of affidavit evidence in respect of the striking out application.

19. In the same proceedings, the plaintiff took out the summons dated 4 December 2012 to strike out the defendant’s 2 affidavits made in support of the striking out application and to strike out the defendant’s defence.

20. On 5 December 2012, the plaintiff took out another summons for leave to file the 2 affidavits dated 4 December 2012, 2 affidavits dated 5 December 2012, revised Statement of Claim and further particulars of claim dated 5 December 2012.

21. On 12 December 2012, the plaintiff took out another summons to strike out the defendant’s 2 affidavits made in support of the striking out application and to strike out the defendant’s defence (ie the same application as the summons dated 4 December 2012).

The summonses in HCA 1324/2012

22. After the claim in HCA 366/2012 was dismissed by Master Hui on 23 July 2012, the plaintiff issued a fresh writ in HCA 1324/2012 on 27 July 2012 claiming for compensation and damages for libel in respect of the use of the alleged defamatory words against her in HCA 366/2012.

23. In the same proceedings, the plaintiff took a summons on 16 October 2012 seeking certain directions by the court.

24. On 18 October 2012, the defendant took out a summons to strike out the Statement of Claim and to dismiss the claim in HCA 1324/2012.

25. In response, the plaintiff took out a further summons dated 29 October 2012 asking the court not to strike out her Statement of Claim.

26. On 31 October 2012, Master Levy ordered the plaintiff’s 2 summonses and the defendant’s striking out application be adjourned to be heard after the hearing of the plaintiff’s appeals in HCA 366/2012.

27. On 17 December 2012, the plaintiff took out another summons returnable before me on 19 December 2012 asking the court to strike out the defendant’s striking out application.

28. It is common ground that I should deal with all these summonses in the hearing on 19 December 2012.

The merits of the appeals and the summonses

29. As I see it, all the appeals and the summonses hinge on the ultimate question as to whether the claims in the 2 subject actions should be struck out.  In my judgment, even taking into account the revised Statement of Claim filed by the plaintiff in HCA 366/2012, there is simply no legal basis to support the plaintiff’s claim in either action.

30. Under the Development Agreement, the plaintiff and Mr Lee agreed to surrender possession of the Former Unit to the defendant and also to direct the Trustees to release the auction sale proceeds of the Former Unit to the defendant for redevelopment of the Former Building and the Land.  In return, the plaintiff and Mr Lee would get the Cash Compensation, the New Unit and the bonus calculated in accordance with the agreed formula stated in the Development Agreement.

31. The deal under the Development Agreement was negotiated at arm’s length, and all the Majority Owners, including the plaintiff and Mr Lee, had separate legal representation.  No majority Owners, apart from the plaintiff, complained about the terms of the deal or the New Units. In fact, the Majority Owners had made a good bargain out of the Development Agreement.

32. The same applies to the plaintiff.  Even upon the plaintiff’s own case, the value of the New Unit has increased considerably, and the plaintiff and Mr Lee can simply take up the assignment of the New Unit and sell it.  What the plaintiff is really trying to get is payment in lieu of the New Unit.  The motive behind such move is unclear.  She may want to save the payment of stamp duty or to avoid the marital problems she is now having with Mr Lee (as she once revealed to the court).  If that is the case, she is in effect asking the court to remake the bargain to solve her own personal problems.  This simply cannot be right.

33. There is also no evidence to suggest impropriety on the part of any parties in the negotiation or the execution of the Development Agreement.

34. Further, any claim for the payment of the auction sale proceeds of the Former Unit, or any allegation challenging the validity of the plaintiff and Mr Lee authorising and directing the Trustees to pay the auction sale proceeds to the defendant as documented in the Confirmation by Owner dated 9 May 2005 duly signed by the plaintiff and Mr Lee in the presence of their own solicitors (ie Fairbairn), is in any event time-barred which happened more than 6 years ago.

35. The plaintiff also seeks for discovery of certain documents against the defendant.  However, I agree that any request for documents from the defendant is no more than a fishing exercise with a hope to find evidence or excuse to justify her refusal to take up the assignment of the New Unit or to support her wholly unfounded claims against the defendant.

36. In fact, all the plaintiff’s similar claims against other related parties to the Development Agreement had all been dismissed.  Despite the dismissal of these actions, the plaintiff persists in lodging these unmeritorious claims against the defendant.

37. Finally, no cause of action will lie for defamatory statements, whether oral or written, made in the course of judicial proceedings before a court of justice (see: Gatley on Libel and Slander, 10 ed, at §13.5), and so the plaintiff’s claims for libel against the defendant are clearly hopeless.

Conclusion

38. Based on the aforesaid, I dismiss the plaintiff’s appeals against the order of Master Hui dated 23 July 2012 striking out the Statement of Claim in HCA 366/2012 and dismissing the other summonses of the plaintiff.  I also allow the defendant’s application to strike out the Statement of Claim and to dismiss the claim in HCA 1324/2012.

39. In view of the dismissal of these claims, it is quite unnecessary for me to consider the other appeals and summonses taken out by the plaintiff.  In fact, they are all without merit.  The filing of additional affidavit evidence and the request for further documents cannot disturb the fact that the plaintiff does not have any legal basis for the claims against the defendant.  I therefore dismiss all the other appeals and summonses filed by the plaintiff.

40. The plaintiff has a tendency of taking out a lot of unnecessary summonses and notices of appeal before the hearings.  For the avoidance of doubt, I dismiss all the plaintiff’s appeals and summonses returnable before me in the hearing on 19 December 2012.

41. I award the costs of all these appeals and summonses to the defendant to be taxed if not agreed.

42. I understand that the defendant is planning to make RAO and RPO applications against the plaintiff.  I leave it the defendant to take out the appropriate summonses for such applications.