TANG KA HUNG ROBERT AND ANOTHER v. TANG MEI SZE AND ANOTHER

HCA 3/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3 OF 2006

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REASONS  FOR  DECISION

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Introduction

1.  This is the plaintiffs’ application for an interim injunction in essence enjoining the defendants from trespassing onto the suit property.  Subject to amendments to the wordings of relief sought, and to the plaintiffs’ undertakings, an order was made in terms of the summons.  The following are the reasons for the decision.

2.  The suit property is a piece of agricultural land situated in Yuen Long.  It is undisputed, before the late Mr. Tang Sum On (alias Tang Sam On) (“the deceased”) passed away in November 2005, the suit property was owned by him.

3.  The 1^st-named plaintiff is the deceased’s son.  He and the 2^nd-named plaintiff are the executors named in a will alleged by the plaintiffs to have been made by the deceased on 27 September 1991.  The 1^st-named plaintiff will be referred to as “P1” and the 2^nd-named plaintiff as “P2” below.

4.  The 1^st defendant (“D1”) is P1’s half brother.  The 2^nd defendant (“D2”) is, according to the defence, a tenant of the suit property.  The lease was executed by D1 allegedly on behalf of the deceased during his lifetime.

5.  Further, the will is challenged by D1.  He deposed that:-

“[the will is] against the terms of settlement leading to the … consent order [made on 8 July 1983 in HCA 2125/1978]”.  In brief, there was an agreement in or about 1963 between [the deceased], my mother, my grandmother and other elders of the Tang’s family that … all his land from the Tang Kap Wing Tso should be transferred to only his sons … and that I would also be entitled to more interest to the said land … because I was his eldest [son] …” (para. 4, D1’s affirmation).

D1 claimed during the hearing he was only shown the will after this action had commenced.  However, at least for the purpose of this application, the authenticity of the will is not challenged by the defendants.

6.  According to the defence, D2 became a tenant of the suit property since about 1982.  The last lease was executed on 10 January 2003 (“the Jan 2003 lease”).  The terms of the Jan 2003 lease are, according to the lease book which contains the lease:-

“租期至二０一０年止。如業主需要，則可在三個月期內通知，租客則需無條件交回土地。業主同意[補]償每方呎不多於拾元之金頟。 … ”.

It was signed by both defendants.  The amount of rent for the previous leases was $5,000 per annum.  The affirmations however do not make clear what was the rent for the January 2003 lease.

7.  In short, the Jan 2003 lease was for 10 years subject to early termination by 3 months’ notice.  It would appear that the lessor is liable to pay compensation of not more than $10 per square foot if the lease is terminated earlier.  The suit property is about 26,000 square feet in size.  The maximum amount of compensation payable is thus not more than about $260,000.

Merits of Plaintiffs’ Claim

8.  The parties disputed what is the applicable test.  The plaintiffs contended that the test should be that laid down in American Cyanamid v. Ethicon [1975] AC 396, namely, in relation to merits of their claim, they only need to establish that there is a serious question to be tried.

9.  The defence, on the other hand, argued that the test should be that the court must feel a high degree of assurance that at trial it will appear the injunction was rightly granted before it will do so.  There are two reasons why this test should be applied:-

(a)     although the summons appears to seek a prohibitive injunction, because it is part of the defence case D2 is in actual occupation of the suit property, the effect of the injunction (if granted) is mandatory because D2 would be removed from the suit property;

(b)    the interlocutory order would have the effect of a final order in that, once D2 is evicted, the plaintiffs would have obtained what they seek in this action.

Reliance was placed on authorities such as:-

(1)     Elvin and Karas: Unlawful Interference with Land (2002) para. 4-090;

(2)     Shepherd Homes Ltd. v. Sandham [1971] Ch 340, 351;

(3)     Locabail International Finance Ltd. v. Agroexport [1986] 1 WLR 657, 664.

10.  Without determining the issue, I am prepared to approach this aspect adopting the test propounded by the defence.

(a)     Locus Standi of the Plaintiffs

11.  It is undisputed the plaintiffs, though named as executors under the will, have not yet obtained grant of probate.

12.  The defence submitted, on the strength of Pinney v. Hunt (1877) 6 Ch D 98, that:-

“… the only evidence of a will of personal estate is the probate, and that before you can ask the Court to look at the will and to grant any relief upon it you must prove it” (p. 100, per Jessel, MR).

13.  The plaintiffs disputed the applicability of the above passage to an application for interlocutory injunction.  They referred to Williams on Executors, Administrators and Probate (2000) 18^th Ed., para. 8-02 for the following propositions:-

“Where an executor is appointed by a will, he derives title from the will, and the property of the deceased vests in him from the moment of the testator’s death … the grant is merely operative as the authenticated evidence of the executor’s title.  For this reason a court would be likely to grant interim relief in an urgent case upon a proper undertaking by an executor to take out a grant of probate” (emphasis supplied).

I find that the above statement in Williams correctly reflects the state of the law regarding applications for interim relief.

14.  As stated above, the challenge to the will is (at least up to the time of this application) unrelated to the authenticity of the will.  In fact, upon closer examination, it is highly likely that the challenge is unmeritorious.

15.  In relation to the alleged agreement in 1963:-

(a)     it was not made or evidenced in writing;

(b)    it was not mentioned in the consent order made in July 1983 in HCA 2125/1978 which was a litigation between the deceased and D2.  That litigation also involved the suit property and, as a result of the consent order, the suit property was later assigned to the deceased.  The 1963 agreement was not mentioned in the subsequent assignment either;

(c)     the affirmation was vague as regards the meaning of “[D1] would also be entitled to more interest”.  D1 clarified during the hearing that his entitlement thereunder should be half of the deceased’s estate.  The remaining half should be divided equally among the deceased’s other sons.

In view of the above, I agree with the plaintiffs that there is grave doubt regarding the existence of such an agreement.

16.  But even if the 1963 agreement existed, it still suffers from a number of inadequacies:-

(a)     the suit property was owned by the deceased.  He was quite entitled to change his mind in 1991 and exclude D1 from his will.  There is insufficient evidence to show that the 1963 agreement was (at least arguably) a legally binding agreement which has the effect of preventing the deceased from doing so;

(b)    D1’s entitlement under the 1963 agreement would at most enable him to claim a share in the deceased’s estate.  He has no valid ground to challenge the grant of probate.

17.  The plaintiffs have undertaken to apply for grant of probate as soon as reasonably practicable.  Accordingly, I am satisfied that the plaintiffs have sufficient locus standi to commence this action and to take out this application.

(b)     D2’s Lease

18.  The Jan 2003 agreement was relied upon as showing that there are insufficient merits in the plaintiffs’ claim.

19.  The plaintiffs submitted that the Jan 2003 agreement had failed to comply with the formal requirement of s. 4(1), Conveyancing and Property Ordinance (Cap. 219) which provides:-

“A legal estate in land may be created, extinguished or disposed of only by deed”.

20.  In relation to the defence contention that there has been part performance on D2’s part, the plaintiffs argued that s. 4, Cap. 219, unlike ss. 5 and 6, Cap. 219, does not permit part performance to be relied upon as an exception (see s. 7(d), Cap. 219).  I note that the defence has not said that the Jan 2003 agreement falls within ss. 5 or 6, Cap. 219 (rather than s. 4, Cap. 219).  Insofar as such contention should have been made, I doubt whether the Jan 2003 agreement is a document sufficient for the purpose of ss. 5 or 6, Cap. 219.

21.  The plaintiffs also asked the court to note the total lack of documentary proof of D2’s claim that he has been operating a business of a nursery and the suit property was part of that business; for example, D2’s inability to produce any business registration record or tax documents.  Various other attacks relating to the veracity of the defence affirmations have been advanced by the plaintiffs.  I also note here both sides have filed affirmations which present different accounts as regards whether the suit property was vacant.

22.  I agree with the plaintiffs that the Jan 2003 agreement quite probably lacks the requisite formalities under Cap. 219.  For that reason, there is no need to resolve the dispute relating to the credibility of the deponents.  However, if it were necessary to do so, I am inclined to agree with the plaintiffs regarding this issue.

Balance of Convenience

23.  By virtue of the above matters, it is strictly unnecessary to consider this aspect.  I shall do so for completeness.

24.  Irrespective of the length of occupation of D2, his interest in the suit property is at most that of a lessee.  The early termination clause in the Jan 2003 lease, if exercised by the lessor, would effectively mean D2 would have to vacate the suit property at the expiration of the notice period.  If he has any claim, it would be a claim for compensation of not more than about $260,000.

25.  I do not accept D2’s assertion that granting an injunction order would effectively force him to close down his business.  His own case is that he has been, and would be, using the suit property for agricultural use.  Land in the New Territories for agricultural use should be quite available.  Further, as has been made clear by the affirmations and the exhibited photographs, D2’s work at the suit property was only at a relatively initial stage and should not have involved substantial amount of expenditure.

26.  I therefore find that the balance of convenience is in favour of granting the order sought.

Other Matters

27.  The precise term of the order was disputed.  Having heard the parties, the following order was made:-

“That an injunction be granted restraining the [defendants] until judgment in the action or further order, whether by themselves or by their servants or agents or any of them or otherwise howsoever, from entering into , occupying or otherwise remaining on [the suit property] or any property in it or otherwise committing any nuisance thereon”.

As stated above, the order is subject to the plaintiffs’ undertakings.

28.  The defence argued that there was no urgency in this application.  I disagree.  As executors, the plaintiffs are under a duty to act promptly and diligently to prevent any perceived interference with assets of the estate.

Costs Order

29.  D2 did not dispute that the costs of this application be the plaintiffs’ costs in the cause.  I reject D1’s argument that neither he nor D2 should be ordered to pay those costs; there is no valid reason to depart from that usual costs order.

30.  D2, however, argued that the court should not certify this application was suitable for attendance by 2 counsel.  I agree with the plaintiffs that, at least in relation to the question of locus standi, the attendance of 2 counsel was warranted; there was no direct authority as regards this issue which is essential to the plaintiffs’ application.