YUEN KWOK LEUNG ERIC AND ANOTHER v. THE PERSONAL REPRESENTATIVE OF MING CHOR PAO, DECEASED

HCMP 262/2022

[2024] HKCFI 174

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 262 OF 2022

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BETWEEN

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REASONS FOR JUDGMENT

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1.  These proceedings were commenced by Originating Summons to enforce by an order of sale a purchaser’s lien given in a judgment in 2019 (“the OS”).

2.  This is the substantive hearing of the OS. At its conclusion, I gave judgement to the Plaintiffs and made an order of sale in terms set out in the penultimate paragraph below, with reasons to be provided. These are my reasons.

Background and the relevant procedural history

3.  The Plaintiffs (“Ps”) and the register owner Madam Ming Chor Pao (“Madam Ming”) entered into a preliminary and then a formal sale and purchase agreement respectively dated 14 March 2015 and 27 March 2015 for the purchase and sale of the property known as Flat C, 6^th Floor, No 14 Broadway, Mei Foo Sun Chuen, Kowloon (“the Property”) at the price of HK$9,800,000. Ps then paid a total deposit of HK$980,000.

4.  Madam Ming was 94 years old in March 2015. Both the preliminary and the formal agreements were executed on behalf of Madam Ming by Mr Chu Kwok Bing (“KB Chu”), one of the 3 children of Madam Ming, pursuant to an Enduring Power of Attorney in KB Chu’s favour dated 15 January 2014 (“the EPA”). However, the mental capacity of Madam Ming had since 2013 been a subject of intense dispute between KB Chu and his brother Mr Chu Kwok Kee Kookie (“KKK Chu”) resulted in proceedings under Mental Health Ordinance (HCMH 83/2013 and CACV 162/2015), which called into question Madam Ming’s mental capacity in the execution of the EPA, and therefore the validity of the EPA, which later became the subject matter of HCMP 3083/2015 in which the revocation of the EPA was sought (“the EPA Dispute”).

5.  In the conveyancing process the EPA Dispute surfaced and a dispute arose between Ps and Madam Ming as to whether Madam Ming had satisfactorily answered certain requisitions as to title and had shown a good title, which dispute led to the commencement of HCA 1637/2015 by Ps against Madam Ming (“the Action”).

6.  On 21 November 2016, Madam Ming passed away. On 2 November 2017, KKK Chu was appointed by an Order of a Master to represent the estate of Madam Ming in the Action (respectively “the Estate” and “the Representation Order”). On 20 March 2018, KB Chu’s appeal against the Representation Order was dismissed by Madam Justice B Chu ([2018] HKCFI 583). KB Chu, acting in person and on his own application, was joined as an additional defendant in the Action.

7.  Sometime in 2018, KKK Chu commenced HCAP 8/2018 concerning the force and validity of 2 purported wills made by Madam Ming in 2013. HCAP 8/2018 is still on-going.

8.  By his written judgment in the Action given after trial and dated 30 December 2019 (“the Judgment”), Deputy High Court Judge Ambrose Ho SC, among others, held that the requisitions had not been satisfactorily answered, that a good title had not been shown by Madam Ming, and that KB Chu had no locus standi in the Action. The learned Deputy Judge then dismissed KB Chu’s counterclaim and granted a judgment by consent of Ps and KKK Chu (a) declaring that the agreement for the sale and purchase of the Property dated 27 March 2015 has been effectively rescinded by Ps, (b) ordering the Estate to return to Ps the deposit in the sum of HK$980,000, to reimburse Ps their conveyancing expenses and costs in the agreed sum of HK$19,903.60, to reimburse/indemnify Ps the commission payable by Ps to the estate agent Centaline Property Agency Limited (“Centaline”), to pay interest agreed at HK$50,000, and to pay the costs of the Action, and (c) holding that Ps were entitled to a purchaser’s lien on the Property over all the sums and costs payable by the Estate as above mentioned (“the Lien”).

9.  KB Chu appealed against the Judgment. His appeal (CACV 36/2020) was struck out and dismissed by the judgment of the Court of Appeal dated 19 April 2021 ([2021] HKCA 476) as being frivolous and vexatious and an abuse of process. The Court of Appeal also noted that there was inordinate delay on KB Chu’s part to prosecute the appeal. It was almost 2 years later on 7 March 2023 that KB Chu applied to the Court of Appeal for leave out of time to appeal to the Court of Final Appeal. It was dismissed on 17 May 2023 ([2023] HKCA 654). According to the documents provided by KB Chu to this court enclosed with his letter dated 27 December 2023, he had sought leave to appeal from the Appeal Committee of the Court of Final Appeal (FAMV 229/2023) and the Registrar of the Court of Final Appeal has by summons dated 23 June 2023 called upon him to show cause to why his application should not be dismissed as disclosing no reasonable grounds for leave to appeal. KB Chu lodged his submissions dated 20 July 2023 and the decision of the Appeal Committee is pending.

10.  In the meantime, on 25 February 2022, Ps issued the OS to enforce the Lien.

11.  As there was no person formally appointed to represent the Estate, Ps obtained an Order on 25 October 2022 that the Official Solicitor be appointed to represent the Estate for the limited purpose of accepting service of the OS, pursuant to which the Official Solicitor has been so served and since has become functus.

12.  On 25 May 2023, Master Kot made an Order that these proceedings may be proceeded in the absence of a person representing the Estate and any order or judgment subsequently given or made would bind the Estate.

13.  On dated 23 August 2023, the same Master made an Order that all court documents be served to occupants of the Property, the 3 children of Madam Ming, and the solicitors of Centaline, which Ps duly did. Centaline is potentially interested in this OS as it obtained in December 2021 a Charging Order Absolute against the Property in respect of the estate agency fee the Estate owed it concerning the failed sale and purchase between Madam Ming and Ps and registered it in the Land Registry (Memorial No 21123101270078).

14.  At the hearing before this court on 20 September 2023 of Ps’ summons dated 31 August 2023 for directions and leave to file an updated valuation report, KB Chu attended and repeated his various contentions made at the trial in the Action that the EPA was valid and good title shown and argued that the Judgment was wrong and said that the Judgment was under appeal. He asked these proceedings be stayed pending his intended appeal to the Court of Final Appeal. As he was not formally appointed to represent the Estate, this court disregarded his such request but granted the indulgence of giving the Estate more time by directing that the substantive hearing of this OS be fixed no earlier than 3 months from then. It was also explained to KB Chu on that occasion, among other things, that unless there was an order staying the execution of the Judgment pending appeal, the fact that the Judgment was under appeal was not a valid defence to the enforcement of the Lien.

15.  One day before this hearing on 8 January 2024, KKK Chu and KB Chu obtained an Order from Master Hui in HCAP 8/2018 appointing them to be joint personal representatives of the Estate for the limited purpose of defending these proceedings.

16.  Both KKK Chu and KB Chu appeared at this hearing, as did Centaline. No one claiming to be an occupant of the Property appeared.

Ps prima facie entitled to enforce the Lien by an order of sale

17.  Having considered the papers, the written submissions of Mr Cheung, Ps’ counsel, and particularly in view of the fact that (a) Ps was held in the Judgment to have the Lien, (b) the undisputed fact that the Estate has not paid Ps the sums and costs ordered in the Judgment, and (c) as a matter of trite and well-established law, Ps are entitled to enforce the Lien by a judicial order of sale, I was satisfied that prima facie Ps were entitled to enforce the Lien by the order of sale now sought.

18.  The various sums due by the Estate to Ps pursuant to the Judgment, and the interest thereon and the interest calculations have all been clearly set out in the affirmation of Yuen Kwok Leung Eric filed on 25 February 2022 and such figures were updated in §21 of Mr Cheung’s written submissions and Appendix I and Appendix II thereto. KKK Chu and KB Chu, after explanations given, did not dispute them. I also accepted the updated valuation report of RHL Appraisal Limited dated 20 November 2023 as to the valuation of the Property.

The stance of KKK Chu

19.  Though KKK Chu and KB Chu were appointed by the Master as joint representatives of the Estate for the purpose of these proceedings, they held completely opposite stances.

20.  It will be recalled that KKK Chu consented to the Judgment. At this hearing, he asked whether the sale could be conducted by the Estate rather than by Ps. Having been explained that the potential beneficiaries of the Estate, namely himself and KB Chu, were engaging in intense litigious disputes over the probate and there was no person formally appointed with the proper authority to execute the conveyance, a sale by the Estate would meet with difficulties, quite apart from the fact that it was only proper that Ps’ interest under the Lien be protected by having the conduct of the sale, KKK Chu no longer pursued the point. KKK Chu further raised queries over the amounts, particularly certain legal fees, and was satisfied with Ps’ answers. He further asked a time longer than 28 days be given for the Estate to try to repay Ps before the judicial sale would take effect. His request was accommodated by Ps who, very fairly, were prepared to extend it to 56 days. He did not oppose to the order of sale.

The stance of KB Chu, no arguable defence shown, and reasons for refusing to stay or adjourn these proceedings

21.  KB Chu opposed the order of sale. He has all along insisted that the EPA was valid, that good title had been shown to Ps, that the agreement for sale and purchase should not have been adjudicated to have been rescinded, that the Judgment was wrong and that the Court of Appeal was also wrong in striking out and dismissing his appeal.

22.  He again rehashed the same stance and arguments at the hearing. He insisted that as the Judgment was under appeal, this court should stay or adjourn these proceedings. He raised no other matter by way of defence or triable issues.

23.  Order 59 rule 13 of the Rules of High Court expressly stipulates :

“ 13. (1) Except so far as the court below or the Court of Appeal or a single judge may otherwise direct –

(a) An appeal shall not operate as a stay of execution or of proceedings under the decision of the court below;”

24.  Paragraph 59/13/1 of Hong Kong Civil Practice 2024 noted that

“ An appeal does not operate as a stay on the order appealed against, except to the extent that the court below, or the Court of Appeal (or a single judge of the Court of Appeal) otherwise directs (O.59 r.13(1)(a): see also World Trade Centre Group Ltd v Resourceful River Ltd (CACV 70/1993, [1993] HKLY 847); Re Schindler Lifts (Hong Kong) Ltd v Dickson Construction Co Ltd [1993] 1 HKLR 45; Asparouh Ianev Dimitrov v Dominic Tak Min Lau [2021] HKCA 1196; and Tsui Wai Yip v Lam Mo Chiu [2022] HKDC 385; and Capital Century Textile Co Ltd v Li Dianxiao [2023] HKCFI 320, [30] – [31]).

It follows that service of notice of appeal and setting down the appeal does not, by itself, have any effect on the right of the successful party to act on the decision in his favour and to enforce the order of the court below. … If an appellant wishes to have a stay of execution, he must make an express application for one. … The court does not “make a practice of depriving a successful litigant of the fruits of his litigation, and locking up funds to which prima facie he is entitled”. …”.

25.  KB Chu informed the court at the hearing that he had indeed applied to the Court of Appeal for a stay of execution and his application was refused by the Court of Appeal.

26.  The same principle applies in respect of an intended appeal to the Court of Final Appeal. Under section 26 of the Hong Kong Court of Final Appeal Ordinance Cap 484, the Court of Final Appeal has power to suspend the execution of the judgment pending appeal. KB Chu did not mention that he has made an application for stay to the Court of Final Appeal.

27.  In any event and indisputably, there was no order staying the execution of the Judgment given by any court.

28.  Absent such an order for stay of the Judgment, I found that KB Chu had not raised any arguable defence to, or triable issue in respect of, the OS. The OS therefore could be, and in my view should be, disposed of summarily at this hearing under O28 r4 (see §28/4/2 Hong Kong Civil Practice 2024).

29.  KB Chu complained that this court was not performing its function to uphold justice if this court refused to stay these proceedings or to adjourn this hearing.

30.  His such complaint was mis-informed and misconceived.

31.  The primary aim of the court is to secure the just resolution of disputes in accordance with the substantive rights of the parties (O1A r2), and not to dispense “justice” to one party only in complete disregard of the entitlement or interest of the other party. This court must also take into account the following. Firstly and as said, Ps’ right to enforce the Lien was clearly established and there was no arguable defence or triable issue. Secondly, Ps indeed have been deprived of the deposit of HK$980,000 since March 2015, some 9 years already, while the Estate (or the recipient of the deposit) has had the use the deposit and at the same time has had the use of (or income from) the Property in these 9 years. Thirdly, the Plaintiffs were further out of pocket in respect of the various expenses, conveyance costs and legal costs for a long period of time. Fourthly, any further delay clearly would cause further prejudice to Ps but would give undue advantage to the Estate (or the recipient of the deposit), which would be unjust to Ps.

32.  Moreover, by granting the indulgence on 20 September 2023, this court had already given the Estate extra time to resolve the matter.

33.  Having heard KB Chu, I ruled against his oral request to stay or adjourn these proceedings. At the time, I did not give my reasons orally, as insisted by KB Chu, and said that reasons would be provided, as this hearing had already over-run by an hour, thus delaying by then for an hour the scheduled trial listed to be heard by this court at 10 am. My reasons for so ruling are given in paragraphs 23 to 32 above.

Centaline

34.  At the hearing, Centaline agreed to an order of sale being made in the following terms providing, among others, payment to it and the discharge of the Charging Order thereafter.

Disposal

35.  For the above reasons, at the conclusion of the hearing I gave judgment to Ps and made the following order :

(1) Unless the amount of HK$2,165,017.38 together with (a) interest of HK$380.64 per day accruing from 10 January 2024 until the date of payment, and (b) the commission owed by the Plaintiffs to Centaline to be reimbursed by the Defendant pursuant to paragraph 4 of the Consent Judgment of DHCJ A Ho SC dated 30 December 2019 are paid to the Plaintiffs by the Defendant within 56 days from today, there be an order that the Lien be enforced by a sale of the property known as Flat C, 6th Floor, No 14 Broadway, Mei Foo Sun Chuen, Kowloon (“the Property”);

(2) The said sale shall be by public auction or private treaty in open market at the price not less than HK$8,320,000 (value for sale under repossession) and shall be conducted by the Plaintiffs’ solicitors Messrs Fred Kan & Co;

(3) Unless the Defendant do make the payment to the Plaintiffs within time of the sums under paragraph 1 above, the Defendant shall deliver to the Plaintiffs vacant possession of and all the title deeds to the Property;

(4) If by the time of such sale there shall be a person legally entitled to represent the Estate of Ming Chor Pao, deceased, the said person shall do all acts and things necessary for the transfer of the legal and beneficial interest in the Property to the purchaser. If there shall be no such person at that time, the partner of Messrs Fred Kan & Co [*full name to be filled in by the Plaintiffs in the engrossed copy of this order] shall be authorized under section 25A of the High Court Ordinance to execute all the necessary documents to carry the sale into effect and to convey the title to the Property to the purchaser;

(5) Within 7 days, Centaline Property Agency Limited (“Centaline”) shall serve to the Plaintiffs and the Defendant an account specifying the commission (and interest there on, if any) respectively owed by the Plaintiffs and the Defendant as on the date of this order;

(6) Notwithstanding the registration of the Charging Order Absolute in the Land Registry against the Property by Memorial No 21123101270078, the sale of the Property pursuant to this order shall have valid effect overriding it; and the said Charging Order shall be deemed to have been discharged by the payment to Centaline as provided in paragraph 7(c) below;

(7) The proceeds of sale of the Property shall be applied in the following manner :

(a) In payment of the due and proper expenses, including legal costs, properly incurred in the said sale of the Property;

(b) In discharge of all the sums due to the Plaintiffs as set out in paragraph (1) of this order;

(c) In payment of the commission owed by the Plaintiffs and the Defendant to Centaline per the account mentioned in paragraph (5) above;

(d) In payment of the Plaintiffs’ costs of these proceedings pursuant to paragraph 8 below;

(e) The balance thereof shall, within 7 days after the payment of all of the above, be paid into court as part of the assets of the Estate of Madam Ming Chor Pao, deceased, to be at the disposal of the court in HCAP 8/2018;

(8) The Defendant do pay the Plaintiffs the costs of these proceedings, including all costs reserved, to be taxed if not agreed; and

(9) There be liberty to apply.

36.  This court thanks Mr Cheung and Ms Yeung for their assistance.