LO LI LI LILY v. LUI FUNG HE

HCAP 3/2010

PROBATE ACTION NO 3 OF 2010

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REASONS FOR DECISION

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Introduction

1.  At the hearing on 8 December 2015, as sought by the plaintiff (“P”), I granted her leave to discontinue her claim against the defendant (“D”) upon the following terms:

(a) P to pay D all costs in and arising out of P’s claim, on party and party basis, to be taxed if not agreed; and

(b) P to undertake not to commence proceedings for the same subject matter.

2.  D had on 24 November 2015 applied for judgment on her counterclaim against P, based on P’s admissions in a letter.  At the end of the hearing on 8 December 2015, I made an order that judgment be entered against P in respect of the counterclaims of D in this action, and an order in terms of a draft order submitted by D, with costs of the entire action, including all costs arising out of P’s claim and D’s counterclaim, and all costs reserved, to be paid by P to D, to be taxed if not agreed, on party and party basis.

3.  I now reduce my reasons into writing.

The present probate action

4.  D is the lawful and natural mother of Madam Ng Wai Jing also known as Regina Ng who died on 30 December 2000 (“Deceased”).  P and the Deceased held equal shares in a total of 11 companies in a real estate agency business which I shall simply call Chartersince Group (“Group”).  D had obtained a Grant of Administration Ad Colligenda Bona on 15 October 2008 to collect the Deceased’s estate, and had instituted a set out of 9 HCMP actions against various companies in the Group (“HCMP Actions”) to recover the shares held by the Deceased and for account and inquiry on dividends and interest on those shares since the death of the Deceased.

5.  P was in charge of the Group after Deceased’s death.  After commencement by D of the HCMP Actions, P commenced the present action on 4 February 2010 claiming that the Deceased had prior to her death made a gift of her shares in the companies in the Group to P and that P is the legal and beneficial owner of Deceased’s shares by way of donatio mortis causa or otherwise.

6.  D denied P’s claims and had counterclaimed against P for injunctive relief from intermeddling and misappropriating the Deceased’s estate, including Deceased’s jewellery, watches, certain diamond ornaments and share certificates of the Deceased’s shares.  D sought delivery up of these assets and damages for misappropriation and conversion, and also an account for dividends, profits and earnings arising out of the Deceased’s shares.

Chronology of Events

7.  On 13 May 2015, the Registrar of the High Court sent a letter to the parties requesting them to attend court on 23 June 2015 for the purpose of fixing dates. The first attempt to fix trial dates failed for reasons I do not need to go into, and eventually, on 14 July 2015, trial dates and also the pre-trial review hearing date were fixed.  The trial was fixed for 10 days to commence from 11 May 2016, notwithstanding D had indicated that her counsel was not available for 2 out of those 10 days. D’s solicitors then wrote to the court to ask for those 2 days to be refixed.

8.  In response to D’s above letter, P had written on 20 July 2015 to inform the court indicating that she had sued D only because of one reason, namely to claim for 50% of the Deceased’s shareholding of the companies in the Group, but as the Group would be liquidated, she would not proceed with her claim against D.  She wrote again on 27 July 2015 to inform the Listing Officer that she would not proceed with the present action, and that as there would be no trial, there was no need to fix any dates for trial.

9.  However, D’s solicitors replied on 29 July 2015 and insisted on refixing the remaining 2 dates, pointing out that D had a very substantial counterclaim against P.  This resulted in P sending a further letter indicating that a one day trial would be required instead of 10 days.

10.  In view of the continuous correspondence sent to this court, I directed a 15 minute directions hearing to clarify the dispute between the parties.  This was fixed on 17 August 2015 (“1^st Direction Hearing”).

11.  P was unrepresented at the 1^st Direction Hearing.  At the 1^st Direction Hearing, D’s solicitor Mr Kwan had pointed out to P that D’s counterclaim not only included claims for the delivery up of the Deceased’s personal items, and also for delivery up of share certificate of  the Deceased’s shares in the Group and an account of profits since Deceased’s death.  At this hearing, P said she abandoned her claim, and indicated she would hand over the share certificates/shares.  This court had explained to P the details of the counterclaim, which would include an account of income and expenses of the Group for 15 years since Deceased’s death on 30 December 2000.  P had said she understood and that the amounts of the personal items were small but as the account was for 15 years, she asked for two months to consult lawyers.

12.  It was under the above circumstances that the court adjourned the matter for two month to another 30 minute direction hearing on 26 October 2015 but allowed D to refix the 2 days.  Notwithstanding the direction hearing being fixed in the presence of P, 3 days later, on 20 August 2015, P wrote and said she had to be out of town at the end of October 2015. 

13.  Eventually, on 1 September 2015, I directed that the direction hearing be refixed to 1 December 2015, and further directed that P to inform the court on or before 16 November 2015 as to the following:

(a) Whether P would withdraw/discontinue any of her claims against D, and if so, to clearly identify the claims that would be withdrawn/discontinued by reference to the reliefs sought in the statement of claim;

(b) Whether P would admit any of the counterclaims and agree to any of the reliefs sought by D, and if so, to identify clearly the counterclaims that would be admitted and the reliefs that P would consent to.

14.  In response, P wrote to the court on 11 November 2015 to confirm that she would discontinue and withdraw this action against D, and she also agreed all the counterclaims of D as stated in the amended defence and counterclaim filed on 30 May 2014, and that there would be no trial, and no issue regarding length of trial at the hearing on 1 December 2015 (“1^st Admission Letter”).

15.  Upon receiving the 1^st Admission Letter, D took out the summons on 24 November 2015 for judgment on the counterclaim.  The summons was fixed for hearing on 1 December 2015.

16.  P sent a further letter on 24 November 2015 to the court to confirm and to seek the court’s direction for the cancellation of the hearing on 1 December 2015.  She reiterated in this letter that she would discontinue and withdraw this action against D, and that she agreed to all the counterclaims of D as as stated in the amended defence and counterclaim filed on 30 May 2014, and asked that the hearing on 1 December 2015 be cancelled (“2^nd Admission Letter”).

17.  D had served the summons for judgment on Messrs Joseph CT Lee & Co, solicitors acting for the various companies in the Group in the HCMP Actions.

18.  However, on 25 November 2015, upon being served with D’s summons, P write a further letter to D’s solicitors indicating that she would need 14 days to inform D as to whether she would oppose D’s summons. D’s solicitors replied the next day that P should let the court know her stance at the hearing on 1 December 2015.

19.  On 27 November 2015, P responded denying that she had sought any legal advice before she sent out her letter of 11 November 2015.

20.  At the hearing on 1 December 2015 (“2^nd Direction Hearing”), Mr CY Li, Senior Counsel, was instructed to appear for D and Mr Li had lodged detailed written skeleton arguments.  Mr Joseph Lee turned up representing the companies in the HCMP Actions, but claimed that he had no particular instructions from P/the companies as to how to deal with the HCMP Actions.  P simply failed to turn up at the 2^nd Directions Hearing.

21.  In light of P’s letters of 25 and 27 November 2015, I decided to allow P further time to take appropriate steps, and adjourned the direction hearing to 8 December 2015 (“3^rd Direction Hearing”).

22.  P’s solicitors came on record the day before the 3^rd Direction Hearing, namely on 7 December 2015, and Counsel Mr Richard Sham turned up at the 3^rd Direction Hearing.  Although Mr Sham confirmed that P sought leave to discontinue her claim against D, he submitted that P should be allowed to defend D’s counterclaim.  His submission was based on :

(i) What P said in the 1^st Admission Letter was unclear as to her true intention;

(ii) The true intention was that P was applying for leave to discontinue the action and to defend D’s counterclaim;

(iii) The 1^st Admission Letter fairly construed should not amount to an admission;

(iv) If the court were to find that the 1^st Admission Letter amounted to an admission, it would be fair to allow P to resile from the admission as there was no evidence that D would suffer any prejudice if P was permitted to resile from the admission.

Reasons

23.  As Mr CY Li was unable to attend the 3^rd Direction Hearing, Counsel Mr But appeared for D. Mr But had lodged further skeleton submissions.

24.  Mr But relied on both the 1^st Admission Letter and the 2^nd Admission Letter.  He had referred the court to Order 27 rule 3 of the Rules of the High Court and paragraph 27/3/3 of the Hong Kong Civil Procedures 2016, Vol 1, and I accept it is clear thereform admissions can be made by a letter in writing signed by a party, whether in person or through his solicitors.

25.  As I had pointed out to P’s Counsel Mr Sham, P had written two letters which were quite clear as to what they said, and she further clearly indicated that there would not be any issue at the next hearing (she was then referring to the 2^nd Direction Hearing) and that the hearing should be cancelled.  In my view, those two letters clearly amounted to admissions on P’s part.

26.  Mr Sham submitted that D would not be prejudiced nor would there be injustice to D as the trial was about six months away.  I was, however, of the view that any delay in obtaining judgment would be prejudice to D.

27.  I had pointed out to Mr Sham that there was no summons issued by P nor any affidavit filed by her to withdraw her admissions, notwithstanding P had been given further time, and that P should have issued a proper summons, and filed an affidavit to explain why she had sent the 1^st Admission Letter and the 2^nd Admission Letter and/or reasons for withdrawing her admissions.  P had had almost 3 months since the 1^st Direction Hearing to seek proper legal advice before sending her 1^st Admission Letter, and by the time of the 3^rd Direction Hearing, almost another month had elapsed since the 1^st Admission Letter and she had further sent the 2^nd Admission Letter reiterating her position.  In light of the history of the matter, I was not prepared to give her any further time.  I was of the view that the 1^st Admission Letter and the 2^nd Admission Letter were made in response to my directions on 1 September 2015 and contained clear admissions and agreement by P to the counterclaims.  P had discontinued her claim that the shares held by the Deceased in the companies in the Group were gifted to P before the Deceased’s death and there was no serious triable issues.   I saw no reason as to why D should not be entitled to judgment on the counterclaim.

28.  For all the above reasons, D was given liberty to enter judgment against P on the counterclaim at the 3^rd Direction Hearing and I made the order I did.