LAM DOROTHY LAI WAH v. THE OCCUPIERS (WHOSE NAME ARE UNKNOWN) AND OTHERS

DCMP 3168/2013

[2020] HKDC 582

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 3168 OF 2013

________________________

________________________

________________________

________________________

J U D G M E N T

________________________

1.  This trial concerns the property known as Flat D, 1/F and Flat Roof, No 5 Tak Ku Ling Road, Kowloon (“the Property”).

The 3^rd and 4^th defendants absent, and action discontinued as against the 2^nd defendant

2.  Set out below are the circumstances and reasons as to why the 3^rd and 4^th defendants are absent at this trial, and also those as to my allowing at the beginning of this trial the plaintiff’s application by summons to discontinue this action as against the 2^nd defendant with his costs of this action (incurred by him as defendant in his personal capacity) to be paid by the plaintiff  – a matter the 2^nd defendant has repeatedly expressed that he is aggrieved by.

3.  These proceedings were commenced in December 2013 by originating summons by the plaintiff as the registered owner to recover possession of the Property from unknown occupiers.

4.  On 17 March 2014, the Master allowed Chan Sik Chung Lhamshirman, who was the younger brother of the plaintiff’s ex-husband Chan Sik Lung (“the Ex-husband”), to be joined as the 2^nd defendant and ordered these proceedings to proceed as a writ action.  In the 2^nd defendant’s affirmation filed on 3 March 2014 in support of the joinder (“the Joinder Affirmation”), he deposed to circumstances supporting the claim that his late father Chan Tsing Yun (“Chan Senior”) was the true beneficial owner of the Property.  There, he also deposed that he had moved out of the Property since 1978.  Thus, there is no doubt that the 2^nd defendant was making a claim on behalf of the estate of Chan Senior (“the Estate”).  However, the order allowing the joinder had not made clear his capacity.

5.  Since then and all along, the 2^nd defendant has been acting in person.

6.  On 6 June 2014, Letters of Administration of the Estate was granted to the 2^nd defendant appointing him the Administrator.

7.  On 15 September 2014, the Statement of Claim was filed with Chan Sik Chung Lhamshirman personally named as the 2^nd defendant.  It is undisputed by the plaintiff that there is no allegation of wrongful occupation or other allegation contained in that Statement of Claim, or its subsequent amended versions, against the 2^nd defendant personally.

8.  On 15 July 2015, the Statement of Claim was amended by, among others, adding Chan Mei Lan, the elder sister of the 2^nd defendant and as a person occupying the Property, as the 3^rd defendant and “The Administrator of the Estate of Chan Tsing Yun Deceased” as the 4^th defendant. Despite there being no claim against the 2^nd defendant personally, the amendment was not effected by correcting the capacity the 2^nd defendant was being sued on, or, after amending by adding the 4^th defendant, the claim as against the 2^nd defendant in his personal capacity was not discontinued.

9.  On 16 June 2017 and upon appeal by the 2^nd defendant, the Court of Appeal set aside the joinder of the 3^rd defendant and ordered that she instead be joined as the 3^rd defendant with the Official Solicitors as her guardian ad litem as the 3^rd defendant was a person under disability.

10.  Along the progress of these proceedings, the 2^nd defendant has been filing many applications and taking many steps in his dual capacity as the 2^nd and 4^th defendants, without specifying in which capacity he acted in relation to the particular application or step.

11.  On 3 February 2017, a bankruptcy order was made against the 2^nd defendant.

12.  By letter dated 12 July 2018, the Official Receiver as trustee in bankruptcy (“the OR”) indicated that insofar as the 2^nd defendant was sued as occupier or licensee of the Property, it was a matter personal to the 2^nd defendant and such right has not vested in the OR.  This is not quite accepted by the plaintiff’s solicitors.  On this subject, there were continuous correspondence between the OR and the plaintiff’s solicitors even up to 13 July 2020, despite the OR having said in his letter dated 6 November 2019 that “if [the 2^nd defendant] was not an occupier, it was up to [the plaintiff] to take appropriate actions to dispose of the matter”.

13.  Regarding Chan Sik Chung Lhamshirman’s participation as the 4^th defendant, by letter dated 4 June 2019, the OR informed the plaintiff’s solicitors that “the Bankrupt’s right as D4 to proceed with the Proceedings has vested in me, and I would not re-assign such right to the Bankrupt or allow the Bankrupt himself to exercise such right in the Proceedings”.

14.  When these proceedings first came before this court on 21 November 2019 in relation to the plaintiff’s application to file a supplemental witness statement, this court queried why the action as against the 2^nd defendant had not been discontinued or otherwise disposed of.  On that occasion, the OR informed the court that the 2^nd defendant had made an application to the Court of First Instance under section 83 of the Bankruptcy Ordinance to reverse the OR’s decision which was only heard the day before and the decision was reserved.  This matter about discontinuing as against the 2^nd defendant was therefore left to be dealt with in the PTR scheduled to be heard on 3 February 2020.

15.  By a decision handed down on 29 November 2019 in HCB 8969/2016, DHCJ Leung dismissed the challenge to the decision of the OR.

16.  Then, by a letter from the solicitors acting for the 3^rd defendant dated 14 January 2020, this court was informed that the 3^rd defendant has passed away and the Official Solicitors have ceased to act and her Legal Aid certificate was discharged on 30 December 2019.

17.  The PTR was adjourned due to the General Adjournment announced as a result of the COVID-19 pandemic.

18.  By letter dated 5 March 2020 in answer to this court’s query, the plaintiff confirmed that she would abandon the claim of mesne profits and interest against the 3^rd defendant.  In the plaintiff’s opening at trial, Mr Yu, counsel for the plaintiff, further confirms that the plaintiff would not seek costs against the 3^rd defendant in case the plaintiff wins.  The 3^rd defendant therefore is treated as absent without making any arrangement for any person to appear to represent the interest of her estate.

19.  On 9 March 2020, this court issued PTR directions on paper.

20.  By summons dated 8 June 2020 (Chan’s summons”), the 2^nd defendant, in his dual capacity as the 2^nd defendant and the 4^th defendant, applied to adjourn this trial and “for permission for a relative in Thailand to pay for his legal fees” and also, among others, for the production of the cover and first page of a bank passbook of a saving account held in the name of “ 陳興安裝飾傢俬 “ said to be Chan Senior’s.  As explained, by the OR’s decision which was confirmed by the Court of First Instance, he was not allowed to act as the 4^th defendant.

21.  Chan’s summons was heard on 18 June 2020.  I refused the adjournment.  I queried the plaintiff’s stance regarding her claim, or rather her lack of a claim, as against the 2^nd defendant personally.  The plaintiff then made an oral application to discontinue as against the 2^nd defendant.  The 2^nd defendant objected to it and particularly objected that it was made orally without proper procedure.  Upon the plaintiff’s undertaking to file a summons to formally apply for leave to discontinue, I adjourned the remaining paragraphs of Chan’s summons to be dealt with after the application to discontinue, which was scheduled to be heard on the first day of trial.

22.  In the premises, I allow the plaintiff’s application to discontinue as against the 2^nd defendant and made no order regarding the remaining parts of Chan’s summons.  The 2^nd defendant expresses that he feels this court is “helping” the plaintiff.  My distinct impression is that he is disappointed that he could now no longer try to pursue the claim of the 4^th defendant under the guise of the 2^nd defendant, a conduct which in my view is improper and an abuse.

Background and the parties’ respective case

23.  The plaintiff was married to the Ex-husband in May 1974.  They then moved into the Property to live with the 2^nd defendant who had already been living there.  In September 1975, their son Alan Chan was born. Chan Senior and his wife Wong Hong Jee (“Madam Wong”) and their other children lived nearby in Nga Tsin Wai Road.  Senior Chan and Madam Wong helped take care of baby Alan Chan when Ex-husband and the plaintiff were working during daytime.

24.  It is not disputed that, as evidenced by a note in English dated July 1966, Chan Senior agreed to purchase the Property at the price of HK25,500 of which HK$20,500 was acknowledged to have been paid with HK$5,000 remained outstanding.  Apparently, Chan Senior was given possession of the Property in 1966.  Completion of the purchase however did not take place because, according to the defence case, Chan Senior was cheated by the agent who absconded with the balance sum of HK$5,000 paid to him.  However, the above note was only registered in the Land Office some years later on 28 April 1970.

25.  In late 1975, Banque Nationale De Paris (“BNP”) as mortgagee issued a letter threatening re-possession and exercising its right as mortgagor to sell the Property.  It turned out that there was in fact a mortgage dated 18 July 1967 and registered in the Land Office on 24 July 1967 to secure facilities to the extent of HK$400,000 made by BNP to the mortgagor (“the 1967 Mortgage”). According to BNP, the mortgage had been defaulted and the mortgagor absconded.

26.  It is the plaintiff’s case that she and Chan Senior attended a meeting with the manager of BNP in which it was explained to Chan Senior that BNP had a clear title that would extinguish any claim of interest by Chan Senior over the Property.  BNP there also named the price of HK$38,000 for the sale of the Property.

27.  It is not disputed in the Amended Defence of the 3^rd defendant or the Defence and Counterclaim filed by the 2^nd/4^th defendant that the 1967 Mortgage had priority over the interest of Chan Senior; nor is it disputed that BNP had a right to sell the Property as mortgagee under the 1967 Mortgage and its subsequent assignment of the Property to the plaintiff in the exercise of that right was valid.

28.  It is the plaintiff’s case that after discussion with Chan Senior and Madam Wong, she agreed to and did acquire the Property by paying BNP the price asked.  An assignment of the Property to her dated 10 January 1976 was therefore executed by BNP as mortgagee.

29.  The defence case was that the plaintiff agreed to make a loan of HK$38,000 to Chan Senior (“the Alleged Loan”).

30.  About two and a half years later on 25 August 1978, the plaintiff and the Ex-husband in their names purchased and then moved to Flat C-4, 2^nd Floor, Fa Po Villa, Fa Po Street (“the Fa Po Property”).  The purchase of the Fa Po Property was financed by mortgaging that property to Hang Seng Bank for a loan of HK$160,000 and mortgaging the Property also to Hang Seng Bank to secure a loan of HK$50,000 (the latter mortgage - “the HS Mortgage”).

31.  The plaintiff’s case is that she paid all the mortgage repayments of the Fa Po Property and that she agreed to let the 2^nd defendant and other family members of his to stay on in the Property.

32.  It is the defence case that upon being pressed by the plaintiff in 1980, Chan Senior had fully repaid the Alleged Loan by paying on behalf of the plaintiff 8 monthly repayments of the HS Mortgage in the sum of HK$1,062.35 each totalling HK$8,498.80 (“the Monthly Instalments”), and paying one lump-sum repayment of the HS Mortgage made on 15 December 1980 in the sum of HK$35,353.71 (“the Last Instalment”); the total sum thus repaid was HK$43,852.51, which was over the amount of the Alleged Loan of HK$38,000.

33.  The defence case emphasizes that they have kept in their possession the payment slips of the above said sums[1] as proof.

34.  The 2^nd to 4^th defendants therefore claim that having made the repayment, Chan Senior (later the Estate) was the true 100% beneficial owner of the Property.

35.  The plaintiff case is that she had not agreed to nor had made the alleged loan of HK$38,000, and that the Monthly Instalments were paid with money she had given to the Ex-husband to bank in and the Last Instalment was paid with her money in the manner that I will refer to later.

36.  It is the plaintiff’s case that later in about 1981 or 1982 and upon request, she let Chan Senior and Madam Wong moved in to live in the Property rent free until they passed away with the condition that they would pay for management fees, government rents and rates and repairs of the Property.

37.  At some point in time, the 3^rd defendant also lived in the Property.

38.  The plaintiff and the Ex-husband divorced in 1994.

39.  Chan Senior passed away in 2004 and Madam Wong passed away in July 2013.

40.  As have mentioned, in December 2013 the plaintiff commenced these proceedings.

The 2^nd defendant unwilling to be a witness even if called on the court’s initiative

41.  The 2^nd defendant produced in these proceedings a document in English entitled “Witness Statement”, of 4 pages and properly typed-out, signed by the 2^nd defendant on 24 June 1995 (“the 1995 Statement”)[2]. Apparently, it had been interpreted to the 2^nd defendant by a solicitor who had signed there to confirm it.  The 1995 Statement apparent related to the granting of Legal Aid to Chan Senior in November 1994 “to claim a share in respect of the property at Flat D, 1/F, No5 Ta Ku Ling Rd., Kowloon”[3].

42.  Unlike the present witness statement of the 2^nd defendant prepared by him in person[4], the 1995 Statement set out the account of the events and various discussions chronologically and clearly.  It was also made some 25 years’ ago, which was much closer in time to the relevant events than parties’ present witness statements.

43.  There is in it though no mention of the Alleged Loan but of a promise allegedly made by the plaintiff to Madam Wong to give Chan Senior half of the interest in the Property.

44.  Considering that the relief of declaration now sought by the plaintiff is discretionary, and there are disputes of facts over events happened some 45 years ago and over which disputes the 2^nd defendant is so insistent but is hindered by the circumstances set out above to pursue as the Administrator, this court is minded to take advantage of the practice as set out in paragraph 38/1/12 of Hong Kong Civil Procedure 2020, to call the 2^nd defendant as a witness to formally admit the 1995 Statement together with his witness statement herein.  That paragraph reads :-

“Witness called by judge – The judge may call a witness whom neither party proposes to call unless either party opposes the calling of that witness … (Re Enoch and Zaretzky, Bock & Co’s Arbitration [1910] 1 K.B. 327, CA …)”.

45.  Re Enoch and Zaretzky, Bock & Co’s Arbitration decided quite clearly that no such witness can be so called unless all parties consent.

46.  After having dealt with the summonses as above mentioned, I therefore draw Mr Yu’s attention to the above-quoted passage and ask if the plaintiff would consent.  Upon the request of the 2^nd defendant (who remains present in the courtroom), I explain in detail and in punti the above and add that with the 1995 Statement (among others) properly placed before the court, the adjudication of the merits of the parties’ cases can be better facilitated. It is also explained that as part and parcel of giving evidence as a witness, the plaintiff would be entitled to cross-examine him on, among others, the 1995 Statement.

47.  After an adjournment giving adequate time to Mr Yu to discuss with the plaintiff, Mr Yu informs the court that the plaintiff as the only party present would consent to the calling of the 2^nd defendant as a witness. However, the 2^nd defendant informs the court that he does not want to be cross-examined.  After further discussion with him and his due consideration, the 2^nd defendant confirms that he would not want to be a witness.

48.  I therefore remind myself that the 1995 Statement is not part of the evidence or I should not attach any weight to it.

Discussion

49.  In the circumstances, the evidence of the plaintiff is uncontested.

50.  The plaintiff gave a detailed witness statement of 11 pages and a supplemental witness statement of 6 pages alluding to and explaining quite clearly and fully the relevant events.

51.  She has produced documents showing

(a)  She completed a course of study in accounting (higher stage) from the Hong Kong School of Commerce in September 1969.

(b)  She was promoted to Manageress of the Accounts Department of one Roosevelt Trading (Hong Kong) Limited after one year of employment and worked as such for another year and a half until November 1972.

(c)  By a letter dated 22 March 1973 from one Mr Hans Buchsenmann, it showed that she had worked for a period in Amsterdam;

(d)  By a Notice of Refund of Tax for the year 1997/1998, it showed that her net chargeable income was HK$1,044,920 for that tax year.

52.  So essentially substantiated by the above documents, I accept her evidence as said in her witness statement that she earned HK$4,000 a month since 1971, which was increased to HK$7,000 when she joined Hermes Textile Industry (HK) Ltd in 1974, which was increased to HK$16,000 a month in 1977 with a share of 2% of the profit of the company as bonus.  I accept she had the financial means in early 1976 to purchase the Property.

53.  She says in evidence, which I accept, that the Property was the first she purchased, and she therefore has clear recollection of the events.

54.  This court has put to the plaintiff, when she is giving evidence, a number of questions regarding the events she sets out in paragraphs 13 to 15 of her witness statement concerning what happened when she visited BNP with Senior Chan, the conversation she had with Senior Chan and Madam Wong regarding the arrangement that she would acquired the Property to become its owner, how she had come to accept the named price of HK$38,000 and such.

55.  She answers directly, spontaneously and clearly.  This court finds her a reliable and honest witness and I accept her evidence.

56.  In relation to the monthly repayment of the HS Mortgage in 1980.  She said in her witness statement that money was given by her to the Ex-husband to bank in as he then worked as a taxi driver with flexible hours while she was busy with her work and had many business trips.  She was surprised to learn that monthly repayments had been in arrears and decided to pay off the HS Mortgage by paying the Last Instalment.  In paragraphs 19 to 21 of her witness statement, she spoke in detail about it, particularly that the money was banked in by a messenger in the employ of the company she worked in by the deposit of a cheque of HK$30,000 drawn on Liu Chong Hing Bank and the deposit of the remaining HK$5,353.71 in cash.  She said she put the payment slips in a drawer at home which were lost.  As mentioned, they are now produced and strongly relied on by the defence.

57.  In contrast,

(a)  The alleged re-payments, including the Last Instalment, were pleaded in the Amended Defence of the 3^rd defendant thus:

“Chan Tsing Yun therefore agreed to repay the plaintiff and paid cash in the total sum of HK$43,852.51 into the Plaintiff’s Hang Seng Bank account no. 272-638362-070 …” (paragraph 2(k))[5] (my emphasis); and

(b)  it was deposed by the 2^nd defendant in paragraph 2 of the Joinder Affirmation[6] that

“第10點 事實上我父已分期用現金存入林麗華恒生銀行戶口還清所有林麗華不能交之按揭欠款 …” (my emphasis)

58.  The payment slip of the Last Instalment[7] clearly states thereon that HK$30,000 was paid by a cheque drawn on Liu Chong Hing Bank and the remainder in cash.  It verifies what the plaintiff said while directly contradicts the defence case that the Last Payment was made by paying in cash.

59.  Moreover, it is the defence case that Chan Senior was a decoration worker and was illiterate.  His signature in the Legal Aid Certificate mentioned in paragraph 41 above was made by the impression of a red cinnabar name chop and not by signing – a practice used to be adopted by people who could not sign their names.  I find it inherently improbable that Chan Senior, as an illiterate, would make payment of the Last Instalment by cheque, quite apart from the fact that there is no explanation anywhere as to why he would pay part only (HK$30,000) by cheque.

60.  Furthermore, if Chan Senior, the Ex-husband or the 2^nd defendant were so minded to keep the payment slips as proof evidencing the alleged repayments of the Alleged Loan (the total amount of which was a very substantial sum in 1980), there is no reason why they or either of them has not at the same time also kept the bank statement(s) or the bank passbook or cheque stub and such to complete the proof.

61.  On the other hand, the plaintiff said in paragraph 22 of her witness statement that she received a bonus by the end of 1980 and she decided to pay off the two mortgages obtained for the purchase of the Fa Po Property.  Such complete repayments are evidenced by not only the Re-assignment of the Property by Hang Seng Bank to her dated 4 March 1981, but importantly also by the Re-assignment of the Fa Po Property by the same bank dated 1 April 1981. It can be recalled that the loan secured by the mortgage of the Fa Po Property was the larger amount (as compared to loan under the HS Mortgage) of HK$160,000, which she apparently had completely paid off by early 1981.

62.  Thus, I find the plaintiff’s version inherently probable and credible. I reject the defence’s allegation that the plaintiff had had difficulty to make the monthly repayment of HK$1,062.35 to the HS Mortgage and therefore pressed Chan Senior for the alleged repayments.  I find as a fact that the repayments of the HS Mortgage in 1980 in the total sum of HK$43,825.51 were made by the plaintiff and not by Chan Senior.

63.  It is evident that the defence case of such repayments of the Alleged Loan by Chan Senior is tied together with whether there was such an agreement to make the Alleged Loan and whether the Alleged Loan was actually made.

64.  By reason of all my above findings, I reject the defence case of the Alleged Loan having been agreed to between the plaintiff and Chan Senior and made.  I find instead for the plaintiff’s case, as she said in paragraph 15 of her witness statement, that she had discussed with and made clear to Chan Senior and Madam Wong that she would purchase the Property and its ownership would belong to her.

65.  I also accept the plaintiff’s evidence and find that she had agreed to let Chan Senior and Madam Wong to live in the Property rent free until they passed away, an agreement that she has kept for about 33 years, on the condition that they made all the payments of management fees, government rents and rates and repair costs of the Property.

Disposal

66.  In the premises, I give judgment for the plaintiff and dismiss the 4^th defendant’s counterclaim.

67.  I order:-

(1)  There be a declaration that the plaintiff has since 10 January 1976 been and is the sole beneficial owner of the property known as Flat D, 1/F and Flat Roof, No 5 Tak Ku Ling Road, Kowloon;

(2)  All defendants shall forthwith deliver vacant possession of the afore-mentioned property to the plaintiff; and

(3)  Upon the plaintiff’s express waiver, there be no order regarding the plaintiff’s claim for mesne profits as against the 3^rd defendant.

68.  Also upon the plaintiff’s express waiver, I make no order as to the costs of this action against the 3^rd defendant.  In case it is necessary, I make an order that the 3^rd defendant’s own costs be taxed in accordance with Legal Aid Regulations.

69.  I make a costs order nisi that the 4^th defendant do pay to the plaintiff the costs of this action (including all costs reserved) up to 4 June 2019 with certificate for counsel to be taxed if not agreed.

70.  Mr Chan Sik Chung Lhamshirman may liaise with my clerk to arrange for the interpretation of this Judgment to him orally into Punti, if he has such need.

71.  Lastly, I thank Mr Yu for his assistance.