CHANG KING HIM CLARENCE, The Executor of the Estate of the late WONG CHANG KING HIM CLARENCE, The Executor of the Estate of the late WONG SHUEN YUK v. CHANG KING TO

HCA 1535/2023

[2024] HKCFI 2191

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1535 OF 2023

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DECISION

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Introduction

1.  This is an application of Mr Chang King Him Clarence (“Clarence”), the executor of the estate of the late Madam Wong Shuen Yuk (“Madam Wong”) for summary judgment against Mr Chang King To (“KT”) by summons dated 23 January 2024 (“the Summons”).

2.  Madam Wong was the mother of KT and Clarence. She passed away on 3 December 2019. By the grant of probate dated 2 July 2021 (“the Grant”), Clarence was appointed the executor of the estate of Madam Wong.

3.  This action concerns the beneficial ownership of the property known as Unit one, 16^th floor, Block 17, Heng Fa Chuen, 100 Shing Tai Road, Hong Kong (“the Property”). The Property is currently registered in the joint names of Madam Wong and KT.

4.  Clarence brought this action to seek (1) a declaration that Madam Wong is the sole beneficial owner of the Property and that KT is a bare trustee holding the Property on trust for Clarence; (2) a declaration that KT is estopped from enforcing any proprietary interest and/or title in respect of the Property against Madam Wong; (3) an order that KT do execute an assignment to assign/ transfer all his legal title in the Property to Clarence at nil consideration within 21 days from the date of the order failing which the senior partner of solicitors for Clarence may execute all necessary conveyance, contracts or other documents for and on behalf of KT to effect the transfer of his legal title in the Property to Clarence and (4) an order that KT be enjoined from selling, assigning, transferring, mortgaging or otherwise dealing with the Property or any interest therein.

5.  KT has previously commenced some sets of legal proceedings in respect of the beneficial ownership of the Property. In HCA 2518/2015 and HCA 1574/2017 (collectively “the Actions”), KT sought to claim beneficial interest in the Property against Madam Wong and Clarence without success after the trial of the Actions. By the judgment dated 28 October 2019 [2019] HKCFI 2595 (“the CFI Judgment”), DHCJ MK Liu (“the Trial Judge”) dismissed the claim of KT. KT’s subsequent appeal to the Court of Appeal (comprising Cheung, Chu (as she then was), G Lam JJA) from the CFI Judgment was dismissed by the judgment dated 4 April 2022 [2022] HKCA 481 (“the CA Judgment”). KT’s application to the Court of Appeal for leave to appeal to the Court of Final Appeal was likewise dismissed.

Background facts

6.  Mr Chan, counsel for Clarence made a summary of the undisputed background facts in his skeleton submissions. Such background facts can be gleaned from the CFI Judgment and the CA Judgment. I shall adopt the summary:

6.1  KT and Madam Wong were registered owners of the Property as joint tenants, prior to the events in 2011.

6.2  The background leading to the acquisition of the Property began in 1985 when Madam Wong together with her husband signed a sale and purchase agreement for the Property when it was still under development. The husband passed away in mid‑1986 before completion. The Property was then assigned to Madam Wong and KT as joint tenants in 1987 after the completion of the development. KT and Madam Wong were both mortgagors of the mortgage granted by Hang Seng Finance Limited in February 1987.

6.3  In 1987, Madam Wong moved into the Property after its completion. Clarence, Madam Wong’s youngest son and the younger brother of KT, moved into the Property shortly thereafter. KT did not live in the Property.

6.4  In 1990, KT emigrated to Australia.

6.5  In early 2010, KT moved back to Hong Kong after his divorce, and stayed in the Property.

6.6  In September 2010, there was a scuffle between KT, Clarence and Clarence’s then-girlfriend (whom he subsequently married in 2011) in the Property. KT moved out of the Property after the scuffle.

6.7  In August 2014, Madam Wong had a fall and was declared mentally incapacitated. She subsequently passed away in December 2019 after the trial of the Actions.

6.8  Madam Wong had during her life instructed a firm of solicitors Cheung & Choy to issue two Notices of Severance to sever the joint tenancy of the Property.

6.9  In HCA 2518/2015, KT claimed that Madam Wong had never given instructions to the solicitors to issue the two notices of severance on her behalf, and sought a declaration to the effect that the two notices of severance are void, and he himself and Madam Wong remain as joint tenants of the Property.

6.10  In HCA 1574/2017, KT claimed that Clarence had been in occupation of the Property under a gratuitous licence granted by him and Madam Wong, which was terminated either upon the expiration of a Notice to Quit dated 12 June 2014 or by Madam Wong becoming mentally incapacitated by 7 August 2014. He sought an order against Clarence for delivery of vacant possession of the Property to him and also for mesne profits or damages for trespass.

6.11  The position of Clarence is that Madam Wong was at all times the sole beneficial owner of the Property. Although KT is a registered owner of the Property, he is a bare trustee holding the Property for Madam Wong.

6.12  Prior to the Actions, KT had commenced an action (HCA 785 of 2014) against Cheung & Choy in respect of the 2^nd Notice of Severance. He claimed that Cheung & Choy owed him a duty of care and was in breach of that duty by issuing the 2^nd Notice of Severance without the instruction of Madam Wong. He sought, inter alia, a declaration that the 2^nd Notice of Severance was null and void and be vacated from the Land Registry. The action was struck out by Deputy High Court Judge Mayo on the ground that it disclosed no reasonable cause of action. The appeal (CACV 257/2014) was dismissed by this Court. The judgment in CACV 257/2014 set out the circumstances in which the two notices of severance came into being and the response by KT to these two notices. At the hearing below, Clarence and KT agreed that the facts set out in the judgment were not in dispute and the Deputy Judge repeated the relevant parts in §8 of the CFI Judgment.

7.  In the CFI Judgment, the Trial Judge made the following findings germane to this action: (1) KT was a bare trustee holding the Property on trust for Madam Wong and (2) Madam Wong had validly severed the joint tenancy of the Property.

8.  The Court of Appeal confirmed the correctness of these findings of the Trial Judge. Cheung JA opined that the evidenced on behalf of Clarence and Madam Wong clearly showed that the common intention of Madam Wong and KT at the time of the acquisition of the Property was for KT to be a bare trustee only and for Madam Wong to retain the benefit interest in its entirety: §26 of the CA Judgment.

9.  The Court of Appeal also agreed with the Trial Judge that Madam Wong’s intention in serving the 1^st and 2^nd Notices of Severance was to sever the joint tenancy in law only as the first step of clarifying the ownership of the Property so that KT would be prevented from becoming the sole owner in law upon her death: §§29-30 of the CA Judgment.

10.  In addition, the Court of Appeal agreed that the joint tenancy had been severed by reason of the 2^nd Notice of Severance issued pursuant to Madam Wong’s instructions: §32 of the CA Judgment.

Applicable legal principles

11.  The relevant principles for summary judgment have been summarised in Menfond Electronic Art & Computer Design Co Ltd v Wong Wang Tat Victor [2013] 2 HKC 259 at §61 per DHCJ Lisa Wong SC (as she then was):

1.  It is for the defendant to show that there is an arguable defence or triable issue. In doing so, the defendant must condescend to particulars. The mere assertion in an affidavit of a given situation by the defendant does not, ipso facto, ground leave to defend.

2.  The defendant must satisfy the court that his evidence is capable of being believed and there is a fair or reasonable probability of the defendant having a real or bona fide defence.

3.  The court does not isolate each factual issue and consider whether it is possible that the defendant’s story on that issue is credible. Rather, the court must look at the whole situation.

4.  In assessing the credibility of the defendant’s factual case, while the court will not embark on a mini-trial on affidavit evidence, the court is not obliged to suspend its critical faculties and assume that the defendant’s evidence is accurate.

5.  If having regard to inherent plausibility, inconsistency with contemporaneous documents and other compelling evidence, the defence is not credible, the court must say so. If the defendant’s defence is incredible in any material respect, it cannot be said that there is a fair or reasonable probability that the defendant has a real or bona fide defence.

The present action

12.  Clarence relies on the doctrine of res judicata and issue estoppel. Mr Chan submits that the Trial Judge’s factual findings in the CFI Judgment are binding on the parties and since it is beyond dispute that Madam Wong was the sole beneficial owner of the Property and KT merely holds the legal title in the Property as a bare trustee of Madam Wong, the estate of Madam Wong represented by Clarence is entitled to the reliefs claimed in the Statement of Claim.

13.  Mr Chan refers to China North Industries Investment Ltd v Chum [2010] 5 HKLRD 1 for the explanation of Stock JA (as he then was) of the nature of the doctrine of res judicata at §47:

“This doctrine, res judicata, is not a rule of evidence but one of substantive law, for which the underlying public policy is the interest of the community in the termination of disputes and the finality of judicial decisions and, further, the need for individuals to be protected from vexatious multiplicity of suits. It arises where a claim has previously been finally determined between the parties, or their privies, by a court of competent jurisdiction and the same issue falls directly in question in subsequent proceedings (cause of action estoppel) or where the issue has been determined by such a court as a necessary step in reaching judgment in case between those parties or their privies (issue estoppel). It has been held too that the doctrine applies only to fundamental issues determined in earlier proceedings and not to collateral or incidental ones ….”

14.  I see no reason why the doctrine of res judicata and issue estoppel should not be applied to the present case. The beneficial ownership of the Property has been finally determined in the Actions and by reason of the CFI Judgment, against which KT failed to appeal successfully, KT is now estopped from asserting any beneficial interest in the Property or refusing to accept that Madam Wong was the sole beneficial owner of the Property and he is a mere bare trustee of Madam Wong in respect of the Property.

15.  KT has filed a defence, an affirmation to oppose the Summons and two sets of written submissions. I have perused all these documents and many of their contents are incomprehensible or illogical. On the one hand, KT indicates that he is not trying to challenge the judgments in the Actions and previous proceedings. On the other hand, he mounts challenges to the findings in such judgments including the validity of the severance of the joint tenancy. In particular, KT contends that executor cannot be entitled to rely on such judgments. KT alleges that the executor did not execute the will of Madam Wong faithfully.

16.  KT argues that the Trial Judge was not aware of the existence of the will of Madam Wong and the fact that Mr Simon Cheung acted for Madam Wong in her execution of the will. He asserts that Mr Simon Cheung is not a credible person.

17.  KT even argues that the official position of the Trial Judge was District Judge and so he had no jurisdiction to deal with the Actions. This argument is risible and must be rejected.

18.  I do not see any validity and/or relevance of all the allegations made by KT. I am unable to discern any arguable defence or triable issues from his documents and/or oral submissions.

Conclusion and orders

19.  I am satisfied that the claim of Clarence on behalf of the estate of Madam Wong is clearly borne out by evidence. KT has failed to discharge his burden to show any defence or triable issues. The Summons must be allowed.

20.  In the premises, Clarence’s claim is established and I enter judgment against KT accordingly. I make an order in terms of prayers 1 to 4 of the Statement of Claim.

21.  Costs should follow the event. I make an order nisi that costs of the action including the Summons and any costs reserved previously be paid by KT to Clarence, to be taxed if not agreed.

22.  Lastly, I thank Mr Chan for his helpful assistance in this matter.