HUANG HUIMEI v. CHAN KIU

DCCJ 1422/2018

[2018] HKDC 1446

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1422 OF 2018

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DECISION

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Introduction

1.  There are two summonses before me.  One is the summons filed by the plaintiff (“Huang”) on 3 May 2018 seeking summary judgment against the defendant (“Chan”) (“the Order 14 summons”).  The other is the summons filed by Chan on 23 May 2018 (“the striking-out summons”) seeking an order striking out Huang’s claim herein on the ground that Huang’s claim in these proceedings is an abuse of the process of the court and/or frivolous or vexatious, namely, the subject matter in these proceedings is duplicitous and overlapping with those in HCA 2343 of 2015 (“the HC proceedings”), which is a set of proceedings ongoing in the Court of First Instance.  As an alternative to the striking-out order, Chan also seeks an order to transfer these proceedings to the Court of First Instance and consolidating these proceedings with the HC proceedings.

2.  I would first set out the facts which are undisputed or indisputable.

The facts

3.  These proceedings concerning the 2/F (“the 2/F”) of 220 Fung Yuen, Tai Po, New Territories (“the Land”).

4.  Chan is now 85 years old.  The Land was her matrimonial home, in which she lived with her deceased ex-husband, Mak Wah (“Mak”) for many years. Mak passed away in 2015.

5.  Huang claims that by a Deed of Gift dated 14 March 2012 and registered in the Land Registry with the Memorial No 12041302990058 (“the Deed of Gift”), Mak had transferred the Land (Mak was the sole legal and beneficial owner of the same before the transfer) to Huang as a gift, and Huang became the owner of the Land.  Huang is now seeking an order requiring Chan to deliver vacant possession of the 2/F to Huang, with damages and mesne profits to be assessed.  The Deed of Gift is the basis of Huang’s claim.

6.  Huang also claims that by a Declaration of Trust signed by her and dated 14 March 2012, registered in the Land Registry with the Memorial No 12041302990061 (“the Declaration of Trust”), she declared herself to hold the Land on trust for her daughter Mai Yanyin (“YY”).  According to Huang, YY’s natural father is Mak.  At the time of the Declaration of Trust, YY was 10 years old.

7.  In March 2012, Chan commenced divorce proceedings in the Family Court, ie FCMC 4232/2012 (“the matrimonial proceedings”).  Chan claimed for, inter alia, an order for setting aside the Deed of Gift and the Declaration of Trust.  Huang representing YY joined in the divorce proceedings as an intervener for determination of the beneficial ownership of the Land in the said proceedings. 

8.  Later, the matrimonial proceedings abated due to the death of Mak in 2015.  On 9 October 2015, Chan commenced the HC proceedings against the following persons:-

(1)   Ip Wai Choi and Huang, as co-executor and co-executrix of the estate of Mak (the 1^st defendant in the HC proceedings)

(2)   Huang (the 2^nd defendant in the HC proceedings)

(3)   YY, a minor, represented by Huang as the guardian ad litem of the minor (the 3^rd defendant in the HC proceedings)

9.  In both the matrimonial proceedings (which has been abated) and the HC proceedings, the core issue is the ownership of the Land.

10.  On 6 April 2018, Chan served the statement of claim in the HC Proceedings (“the HCSOC”) on all the defendants in that case, including Huang.  In the HCSOC, Chan claims that Mak and her were lawfully married on 27 November 1951.  The Land was purchased by Mak in 1957. At the time of the purchase, it was the common intention of Mak and Chan that Chan should be the sole beneficial owner of the Land.  This common intention is evidenced by the fact that Mak has given all the title deeds to Chan, and Chan has all the title deeds in her possession at all times.  Chan also claims that in reliance of the promise made by Mak that Chan should be the sole beneficial owner of the Land, Chan acted to her detriments by shouldering the heavy and onerous responsibilities of taking care the daughters in the family and other miscellaneous matters for managing Mak’s household.  Chan also worked hard to earn money to repay the loan borrowed by Mak to finance the purchase of the Land at the time of the purchase.  The entire loan was repaid by Chan and not by Mak.  Chan also spent much time and expenses to maintain and improve the Land.  Chan claims that since she is the sole beneficial owner of the Land at all times, the Deed of Gift is invalid and must be set aside. 

11.  On 10 April 2018, Huang commenced these proceedings in the District Court.  In the statement of claim annexed to the writ of summons, Huang claims that she is the registered owner of the 2/F.  On or about 13 March 2018, Chan has unlawfully taken possession of the 2/F.  Huang seeks an order to evict Chan from the 2/F.  Huang also claims damages and/or mesne profits.

12.  On 3 May 2018, Huang issued the Order 14 summons.

13.  On 23 May 2018, Chan issued the striking-out summons.

14.  On 14 August 2018, Huang filed her defence and counterclaim in the HC proceedings, in which Huang counterclaims for, inter alia, an order requiring Chan to deliver vacant possession of the Land to her.

15.  On 2 November 2018, Chan filed her reply and defence to counterclaim in the HC proceedings.

The Order 14 summons

16.  I would deal with the Order 14 summons first.

17.  A succinct summary of the principles concerning Order 14 applications can be found in Li Chuen Kwai v Po Lam Construction Development Limited^[1], in which DHCJ Wilson Chan (as he then was) said:-

“12. As far as the defendant’s defence is concerned:

(1) The defendant shoulders the burden to satisfy the court that he has a real or bona fide defence (ie that there are triable issues), or that there ought for some reason to be a trial of the plaintiff’s claim.

(2) However, a complete defence need not be shown. The defence set up need only show that there is a triable issue or question or that for some other reason there ought to be a trial; and leave to defend ought to be given unless there is clearly no defence in law and no possibility of a real defence on the question of fact.

(3) Although the mere assertion in an affidavit does not, ipso facto, provide leave to defend, the court will not embark upon a mini‑trial of the action on paper and leave to defend will be granted unless the defence raised is so incredible or so contradicted by contemporaneous documents or circumstances that it becomes clear that the defence is a sham.

(4) The test is not whether the defendant’s assertions are to be believed, rather it is whether those assertions are believable, ie capable of being believed. If so, the defendant must have leave to defend.

(5) Whether the defendant’s assertions are believable is a question that should be answered not by taking those assertions in isolation bur rather by taking them in the context of so much of the background as either undisputed or beyond reasonable dispute.”

18.  Chan has filed an affirmation in opposition to the Order 14 summons, in which Chan has verified the matters pleaded in the HCSOC.  Chan relies upon those matters to show an arguable defence to Huang’s claim in these proceedings.

19.  Chan claims that she is the sole beneficial owner of the Land by reason of constructive trust.  The principles concerning constructive trust have been summarized by G Lam J in Liu Wai Keung v Liu Wai Man^[2], in which the learned judge said:-

“44. …… The Property being registered in the defendant’s name, the plaintiff bears the burden of showing, on the balance of probabilities, that the defendant held the Property on trust for him absolutely.

45. The plaintiff seeks to achieve that by pleading both a resulting trust and a constructive trust. However, given that both parties allege there was express discussion and actual intention as to where the beneficial interest in the Property should lie, there is little scope for the operation of resulting trust: Re Superyield Holdings Ltd [2000] 2 HKC 90, 111. At the commencement of the trial, indeed, counsel agreed that constructive trust is the real issue, and that resulting trust is not relevant except perhaps if I should decide to reject both parties’ evidence on intention.

46. The focus of the inquiry is therefore on the elements that the plaintiff has to prove in order to establish a constructive trust in his favour. In the context of this case, this means that the plaintiff must prove (i) there was a common intention between him and the defendant that the plaintiff was to be the beneficial owner of the Property despite that it was acquired in the defendant’s name; (ii) the plaintiff altered his position in detrimental reliance upon such common intention; and (iii) it is unconscionable for the defendant to assert ownership in reliance on her legal title to the Property.

47. In ascertaining whether there was a common intention, it is the objective intention of each party “which was reasonably understood by the other party to be manifested by that party’s words and conduct” that one must examine: Gissing v Gissing [1971] AC 886, 906; Jones v Kernott [2012] 1 AC 776, 794 at para. 51.

48. In the present case it is the parties’ common intention at the time of the acquisition of the Property that is relevant, there being no suggestion from anyone that the intention had changed.

49. Such intention is to be found, first and foremost, from any agreement, arrangement or understanding reached between the parties with respect to the beneficial ownership of the property concerned based on evidence of express discussions. It is only where there is no evidence to support a finding of such an agreement or arrangement that the court seeks to infer from the conduct of the parties the relevant common intention: Lloyds Bank v Rosset [1991] 1 AC 107, 132-133.

50. Even where, as in this case, reliance is placed on an express agreement, arrangement or understanding between the parties, their other conduct remains relevant as a matter by reference to which their assertions about the agreement or understanding must be gauged and tested.”

20.  Mr Ng for Huang submits that Chan has not condescended upon particulars and has not shown any triable issue. With respect, I disagree.  I am of the view that Chan has pleaded a clear case with sufficient particulars in the HCSOC.  Chan has verified the matters pleaded in the HCSOC in her affirmation in opposition filed herein.  Further, Chan is able to produce the following in her affirmation to support her case:-

(1)   copies of the originals of the title deeds which are in Chan’s possession;

(2)   a letter dated 18 September 2013 issued by the solicitors representing Mak at that time, in which the solicitors on behalf of Mak stated that the Land formed part of the matrimonial assets of Mak and Chan and should be taken into account in the financial distributions in the ancillary relief claim in the matrimonial proceedings;

(3)   a letter dated 18 February 2014 issued by the same firm of solicitors, in which the solicitors on behalf of Mak stated that Mak did not oppose Chan’s application to set aside the Deed of Gift and the Declaration of Trust in the matrimonial proceedings.

21.  Taking all the evidence produced by Chan into account, I am of the view that her case is believable and she may have interest in the Land.  Accordingly, Huang’s application for a summary judgment must be refused. 

22.  Further, even put aside Chan’s case, I would still refuse to give Huang a summary judgment, for I am of the view that there ought to be a trial for the following reason^[3], ie in their letter dated 18 September 2013, the solicitors for Mak said that Mak had the authority to request the Land to be transferred back to him.  That being the case, it is a legitimate question that Mak may still retain some interest and Huang may not have all interest in the Land after Mak executing the Deed of Gift.  The basis of Huang’s claim herein is that she is the sole owner of the Land by virtue of the Deed of Gift.  The aforesaid question clearly casts doubt on Huang’s case. The question has to be investigated at trial.

23.  RDC, Order 14 rule 7(1) provides:-

“If the plaintiff makes an application under rule 1 where the case is not within this Order or if it appears to the Court that the plaintiff knew that the defendant relied on a contention which would entitle him to unconditional leave to defend, then …… the Court may dismiss the application with costs and may require the costs to be paid by him forthwith.”

24.  Before issuing the Order 14 summons, Huang had been served with the HCSOC and Huang knew Chan’s case. Chan’s case is an arguable defence to Huang’s claim herein.  Notwithstanding having full knowledge of Chan’s case, Huang chose to issue the Order 14 summons.  In these circumstances, I am of the view that Order 14 rule 7(1) applies.  I would dismiss the Order 14 summons with costs to Chan forthwith.

The striking-out summons

25.  Mr Chow (together with Mr Chan) for Chan submits that Huang’s claim herein is duplicitous and overlapping with the HC proceedings, and is an abuse of process.  For this reason, Huang’s claim herein should be struck out.  Mr Chow refers me to Weng Chi Cheong v Barclays Capital Asia Ltd^[4], in which DHCJ Marlene Ng said:-

“59.   …… In my view, it would be an abuse of process for P to maintain 2 legal actions on the same subject matter and the same claim. Halsbury’s Laws of Hong Kong at paragraph [90.0948] states that “[an] action may also be struck out where it is duplicitous in the sense that an action claiming materially the same relief has already been filed”.  Recently, HHJ Ko in Yuen Oi Yee Lisa v Charoen Sirivadhanabhakdi & ors also stated it is an abuse of process to commence multiple proceedings for the same claim. Plainly, in view of the existence of LBTC3668/2016, P’s claim in the present action was unnecessary and duplicitous. In my view, it would be an abuse of process to allow P to proceed with the present claim. There was no reason to disturb the Set Aside Order.”

26.  Mr Ng for Huang submits that the scope of these proceedings is different from the scope of the HC proceedings. Here, the subject matter is the ownership of the 2/F.  In the HC proceedings, the subject matter is the Land.  With respect, there is no merit in Mr Ng’s submission.  It is beyond doubt that the 2/F is part and parcel of the Land. Clearly, the HC proceedings also cover the ownership of the 2/F.

27.  It is plain and obvious that in view of the existence of the HC proceedings, there is no need for Huang to commence these proceedings at all.  Huang can certainly raise, and indeed Huang has raised her alleged ownership of the Land as a defence and a counterclaim in the HC proceedings.  The proceedings in this court are duplicitous and amount to an abuse of process.  I would allow the striking-out application with costs to Chan.

Indemnity costs

28.  Mr Chow seeks indemnity costs.  Mr Ng submits that costs should be awarded on the normal party and party basis.

29.  The principles concerning indemnity costs have been set out by the Court of Final Appeal in Town Planning Board v Society for Protection of the Habour Ltd (No 2)^[5].

30.  In my view, given that the HC proceedings are in place, Huang should never commence another set of proceedings concerning the same subject matter, ie the ownership of the Land or any part thereof.  Further, Huang should not attempt to get a summary judgment with full knowledge of Chan’s case as pleaded in the HCSOC.  With respect, the commencement of these proceedings and the Order 14 application are merely exercises wasting time and costs.  I am of the view that in these circumstances, an award of indemnity costs is justified.

Disposition

31.  I dismiss the Order 14 summons.

32.  I allow Chan’s application made in the striking-out summons and make an order striking out Huang’s claim herein and dismiss this action.

33.  Costs of this action, including costs of both summonses, be to Chan forthwith on indemnity basis, with a certificate for one counsel.  Those costs are summarily assessed at HK$120,000.

34.  I thank counsel for the assistance rendered to the court.