LAM FUNG CHING ANNIE v. TSE KWOK WING JACKY AND ANOTHER

HCMP 1865/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 1865 OF 2016

(ON AN INTENDED APPEAL FROM DCMP NO. 1129 OF 2012)

________________________

________________________

________________________

________________________

J U D G M E N T

________________________

Hon Kwan JA (giving the judgment of the Court):

1.  This is the application of the 1^st and 2^nd defendants for leave to appeal to the Court of Appeal against the judgment of Deputy District Judge M Lam given on 24 December 2015 after a seven-day trial (“the Judgment”). The judge found in favour of the plaintiff and ordered the property (registered in the names of the plaintiff, the 1^st and 2^nd defendants as joint tenants) be sold with the net proceeds of sale to be divided among the plaintiff, the 1^st and 2^nd defendants in equal shares. In a decision handed down on 8 July 2016 (“the Decision”), the judge refused leave to appeal.

2.  By a summons issued in the present proceedings on 21 July 2016, the defendants renewed their application for leave to appeal before this court and sought a stay pending appeal.  In the summons, they requested an oral hearing with three hours reserved.

3.  Having considered the papers, and in particular the defendants’ conduct of this litigation since the delivery of the Judgment, we are not minded to hold a hearing for this application.

4.  The defendants’ trial before the judge was conducted by their solicitor, Mr Ching Ming Yu, without the involvement of counsel.  As mentioned before, the Judgment was handed down on 24 December 2015.  The defendants issued a summons on 20 January 2016 seeking leave to appeal and a stay of execution pending appeal.  No grounds of appeal were put forward when the summons was issued, notwithstanding Mr Ching was the defendants’ handling solicitor throughout and their trial advocate.  This was done only immediately before the hearing of the summons before the judge on 18 April 2016, when Mr Ching again appeared for both defendants.  In respect of the 1^st defendant, he was assigned to act by the Director of Legal Aid.  For the 2^nd defendant, he had a private brief. Even then, Mr Ching indicated to the judge that the grounds of appeal he advanced might not be relied on.  He applied for an adjournment of the summons on the ground that legal aid was granted to the 1^st defendant on 12 April 2016 and he needed more time to instruct counsel.  The judge adjourned the summons to 27 June 2016.

5.  At the adjourned hearing, Mr Ching appeared for the defendants, no counsel was instructed.  He relied on five proposed grounds of appeal in his skeleton argument dated 22 June 2016.  The judge refused leave to appeal and stay pending appeal in the Decision on 8 July 2016.

6.  The present summons before us was issued on 21 July 2016.  Five proposed grounds of appeal were stated in the summons.  They are the same grounds considered by the judge in the Decision.  No supporting statement was served with the summons in compliance with the rules.  On 22 July 2016, the court gave the usual directions on the lodging of submissions by the parties and an application bundle by the defendants.

7.  On 12 August 2016, Lam VP made an order that unless the defendants were to comply with the directions of 22 July within 7 days by lodging with the court and serving the application bundle with skeleton submissions or alternatively written confirmation of no submission in addition to the contents of the summons, their application would be dismissed with costs.

8.  The Director of Legal Aid filed a memorandum of notification dated 15 August 2016 that the 1^st defendant has applied for legal aid to prosecute an appeal against the Judgment.  A memorandum of notification dated 17 August 2016 was later filed by the Director that he has refused legal aid.

9.  On 15 August 2016, the defendants’ solicitors wrote to the court requesting an extension of time to comply with the unless order of 12 August, citing the 1^st defendant’s recent application for legal aid, the assignment of counsel if legal aid was granted, and the statutory stay of proceedings as a result of the legal aid application.  On 17 August, Lam VP directed the statutory stay for legal aid be lifted, noting Mr Ching’s involvement in the trial and the application for leave to appeal throughout without engaging counsel, and there appeared no reason why he could not prepare the application bundle and skeleton submissions for the consideration of this court.  Further, there was unexplained delay on the part of the defendants in securing the service of counsel.  Lam VP varied the unless order only to the extent of allowing the lodging and service of the required documents by 24 August.

10.  The defendants lodged their submissions and the application bundle on 24 August.  The plaintiff lodged her submissions by counsel on 7 September.

11.  On 10 September 2016, the defendants’ solicitors wrote to the court requesting that the present application was not to be heard prior to 13 October 2016 as the 1^st defendant has appealed against the refusal of his application for legal aid.  This was scheduled to be heard on 13 October, and, if successful, counsel would be instructed to prepare “perfected” grounds of appeal within 28 days of the determination of the legal aid appeal.

12.  Kwan JA gave directions on 19 September that this court is minded to deal with the defendants’ application on paper and in view of the legal aid appeal this court’s decision would not be handed down earlier than 14 days from 13 October.

13.  This court has since ascertained from the master’s office that the 1^st defendant’s appeal against the refusal of his application for legal aid was dismissed on 19 October 2016.

14.  The defendants have in effect secured a stay of execution of the judgment for ten months.  The belated and repeated applications for legal aid by the 1^st defendant cannot be a valid excuse for the delay on their part in putting forward grounds of appeal in support of the leave application.  The trial was conducted by their handling solicitor who must be familiar with the legal issues and the material evidence.  The transcript of the proceedings had been obtained for some time as it was placed before the judge at the hearing in June.  If there are grounds of substance in the proposed appeal, we do not think the handling solicitor should have any difficulty in identifying them and advancing proper grounds of appeal.  Any “perfection” or fine-tuning by counsel would not have made a material difference to the outcome of this application.  In the end, Mr Ching has not seen fit to make any change to the proposed grounds of appeal he first advanced in June.

15.  Accordingly, we have exercised our discretion under Order 59 rule 2A(5) to determine this application without a hearing on the basis of the written submissions only.

16.  We do not propose to set out the background, the issues in dispute and the findings made by the judge.  The principles for granting leave to appeal to the Court of Appeal are well established and have been set out correctly in the Decision at §§10 and 11.

17.  The five grounds of appeal comprised arguments advanced unsuccessfully by Mr Ching in his closing submissions at trial and arguments he repeated or advanced before the judge in the leave application.  We agree with the judge for the comprehensive reasons given in the Decision at §§12 to 38 that none of the proposed grounds are of merit and they simply do not satisfy the threshold test for leave to appeal to be granted.  It is unnecessary to set out those reasons again.  We would just add the following remarks.

18.  The argument in grounds 1 and 2 that the judge was wrong in law in not finding that the plaintiff bore the primary burden of proof is misconceived.  Mr Ching contended that the judge was wrong in her application of the legal principle that the burden of proof rests on the party seeking to establish that equity should not follow the law to demonstrate the beneficial interests to be different and in what way different from the legal interests.  He submitted that the plaintiff was advancing a case that equity should not follow the law because the property was registered in the names of the plaintiff, the 1^st and 2^nd defendants as joint tenants and it is the plaintiff’s case that the 2^nd defendant was not a beneficial owner but a trustee for the father of the defendants.  He further contended that because the property was registered in the names of the parties as joint tenants and not as tenants in common, the ownership of the property should be looked at as a whole, as opposed to merely the plaintiff’s share in the property.

19.  The above argument has no prospect of success.

20.  The plaintiff’s case was that she, the 1^st defendant and the latter’s father contributed equally to the price of the property when it was acquired in 2004, with the father paying the down payment and the expenses of the purchase of about 30% and she and the 1^st defendant paying the monthly mortgage instalments of the balance of the purchase price.  The plaintiff only ceased payment when her relationship with the 1^st defendant broke up and she moved out of the property in 2010.  Accordingly, each of the three persons who contributed to the purchase price was entitled to the beneficial interest in equal shares.  The property was registered in the names of the plaintiff, the 1^st defendant and the 2^nd defendant as joint tenants.  The latter held her interest in the property on trust for the father, to avoid the trouble and formality of inheriting the interest of the father on his death.

21.  The defendants’ case was that the property, although registered in the names of the plaintiff, the 1^st defendant and the 2^nd defendant as joint tenants, was wholly beneficially owned by the father, with all three parties, not just the 2^nd defendant, holding their interest in the property on trust for the father.

22.  It is therefore common ground that the 2^nd defendant has no beneficial interest in the property and that she held her interest on trust for the father.  The plaintiff’s claim is in respect of her own interest in the property, for which she has served a notice of severance of the joint tenancy of the property on the other co-owners on 8 March 2013.  The issue at trial concerned the plaintiff’s interest in the property, not those of the 1^st defendant and the 2^nd defendant, and whether the beneficial interest of her share follows the legal title, as contended by her, or whether the beneficial interest of her share does not follow the legal title, as contended by the defendants.

23.  The judge is correct in rejecting Mr Ching’s contention that the plaintiff should bear the burden of proof in this instance.  Instead, the burden is on the defendants to establish that the beneficial interest of the plaintiff’s share is different from the legal title and in what way it is different.

24.  Further, the judge has repeatedly emphasised in the Judgment and the Decision that the argument on burden of proof is of no consequence whatsoever, because the judgment proceeded on the basis that the plaintiff was to bear the burden of proof (contrary to the judge’s view on this) and she is satisfied on the evidence that the plaintiff has succeeded in proving her one-third beneficial interest in the property.

25.  Mr Ching also submitted the judge has suddenly changed her mind from holding that the plaintiff should not bear the burden of proof to the contrary position and did not explain her change of mind.  The judge has not changed her mind at all.  She merely adopted an assumption favourable to the defendants, contrary to her view that the burden of proof should be on them, and proceeded to decide the case on the basis of that assumption.

26.  The three remaining grounds sought to challenge the findings of fact made by the judge.  They go to the judge’s assessment of the credibility of the witnesses.  Mr Ching repeated his attack on the plaintiff’s credibility on account of her omission to mention in her two affirmations the incident involving the defendants’ aunt on the day the preliminary agreement for sale and purchase was signed.  He pointed to certain passages in the transcript and submitted that as the plaintiff had agreed with him in cross-examination that if the aunt had said the things as alleged by her, she should have mentioned it in her affirmations and hence the plaintiff’s answers are clear admission by her that she was not telling the truth.

27.  The judge rejected this submission at the trial (§101 of the Judgment) and in the leave application (§§23 to 26 of the Decision).  We have read the relevant parts of the transcript and agree with the judge that the plaintiff’s answers relied on by Mr Ching were taken out of context, and that he has sought to ignore the explanation given by the plaintiff that the incident involving the aunt was only mentioned subsequently in her witness statement because she was able to recall further matters when she related her case in depth to her new solicitors.  The judge was entitled to accept the plaintiff’s explanation.  On no account could it be said that the judge was wrong, let alone plainly wrong.

28.  It is clear from the Judgment that the judge has thoroughly analysed and weighed the evidence on each side and has considered the combined effect of all the evidence before her.  Mr Ching’s complaint that the judge had failed to give adequate reasons for accepting the plaintiff’s evidence is wholly without merit.  Nor is there any substance in the contention that the judge had adopted different standards in assessing the evidence given on each side.  Mr Ching made six major criticisms of the plaintiff’s evidence in paragraphs 7(a) to (f) of his closing submissions.  Each of the criticisms have been considered and dealt with more than adequately in the Judgment.

29.  The application for leave to appeal is dismissed, as the intended appeal does not have any reasonable prospect of success, nor is there any other reason why in the interests of justice the appeal should be heard.  The application for stay of execution of the judgment pending appeal does not arise and is also dismissed.

30.  As this application is wholly without merit, we make a further order pursuant to Order 59 rule 2A(8) that no party may under rule 2A(7) request the determination to be reconsidered at an oral hearing inter partes.

31.  Costs of this application should follow the event.  The plaintiff submitted a statement of costs for summary assessment in the total sum of $78,800.  We have regard to the fact that the grounds of appeal are substantially the same as those argued before the judge.  We therefore reduce the time spent by the solicitor and counsel’s fee for preparation of the skeleton submission.  We make an order nisi that the defendants are to pay the plaintiff the costs of this application, assessed on a gross sum basis at $58,800.  Any party who seeks to vary the costs order nisi shall lodge a written submission within 7 days hereof.