YAM MAN WAH AND ANOTHER v. YAM WAI CHI SHIRLEY AND ANOTHER

HCA 1668/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1668 OF 2013

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D E C I S I O N

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THE APPLICATION

1.  This is an application by the 2^nd Defendant (“D2”) by summons dated 3 February 2016 for leave to file and serve a Re-amended Defence and Counterclaim.

2.  This application is opposed by the Plaintiffs and the respective parties are legally represented.[1]

THE FACTUAL BACKGROUND

3.  The Plaintiffs are the parents of the Defendants. The dispute between the parties is over the ownership of a property in Shatin originally registered jointly in the Plaintiffs’ names.  By an assignment executed by the Plaintiffs in August 2010, it was assigned to the 1^st Defendant (“D1”).  The Plaintiffs now say that they had executed the assignment on the understanding that it was an assignment of the management right of the property only.  They executed it because P2 asked for a loan of HK$30,000 from D2, who said that the money would be from D1 and only if the Plaintiffs executed the assignment of the management right of the property, D1 would lend the money to P2.  The Plaintiffs agreed and executed the assignment.  They therefore say that the assignment was executed under misrepresentation, undue influence and the act amounted to non est factum.

4.  The Plaintiffs therefore ask the court to make a declaration that they remain the legal and beneficial owners of the property; set aside the assignment that they had executed in favour of D1; order the assignment of the property to them by D1 or by the Registrar.[2]

5.  D2 says that the Plaintiffs executed the assignment and other documents with the intention of assigning the property to D1 for her to hold it on trust for his benefit because he had paid most of the mortgage loan.  To have D1 to be the assignee was to avoid paying the premium only.[3]

THE PROPOSED AMENDMENTS

6.  The proposed amendments to the Amended Defence and Counterclaim are:

(a)  The Plaintiffs had transferred the total beneficial ownership of the property to D2 as gift; and

(b)  Alternatively, D2 has 69% beneficial interest in the property because of his contribution to the purchase of the property.[4]

DISCUSSION

7.  The grounds of objection as raised by the Plaintiffs are:

(a)  D2 has not pleaded his primary plea. He only denies paragraph 7 of the Statement of Claim.

(b)  The proposed amendments is an act of resiling from D2’s original position that the Plaintiffs have some beneficial ownership of the property to that he has 100% beneficial ownership of the property.

8.  The Plaintiffs rely upon the authorities of West Coast International Trading Ltd t/a Dandelion Fine Arts v Chelsea Art Company Ltd (unreported, HCA 1636/2010, 10 January 2014) and Hua Tyan Development Ltd v Zurich Insurance Co Ltd & Another (unreported, HCA 480/2009, 17 July 2012).  Both cases held that if a party wished to withdraw an admission in a pleading, he had to obtain leave, such leave would not be granted without credible explanation of the circumstances in which the admission was in fact made.  This was also held by the Court of Appeal: ‘…an applicant who seeks to withdraw an admission is required to place before the court “a convincing credible explanation of the circumstances in which the admission was in fact made, which is sought to be said to have been made under a mistake”, per Hunter J.A. in TSE Yuk-tin v. Chee Cheung-hing & Co. Ltd. [1984] HKLR 391 at 395.’ as held in Leung Kin Fook & Others v Easter Worldwide Co Ltd & Another (unreported, CACV 184/1990, 8 February 1991, per Power JA at page 3).

9.  The question, however, is whether the proposed amendments to the Amended Defence and Counterclaim amount to withdrawal of prior admissions.

10.  Under Order 18, rule 10, a party is allowed to plead the alternative allegations or claim:

“10. Departure (O. 18, r. 10)

(1)  A party shall not in any pleading make any allegation of fact, or raise any new ground of claim, inconsistent with a previous pleading of his.

(2)  Paragraph (1) shall not be taken as prejudicing the right of a party to amend, or apply for leave to amend, his previous pleading so as to plead the allegations or claims in the alternative.”

11.  Paragraph 4 of the proposed amendments to the Amended Defence and Counterclaim says that after the assignment of the property was executed, D2 became the only beneficial owner of the property.

12.  Paragraph 30 is an allegation of gift by the Plaintiffs in favour of D2.

13.  Paragraph 31 is an alternative claim.  D2 says that if he does not hold 100% beneficial interest in the property, he should hold 69% of it because of the payments that he had made for the acquisition of the property.  The remaining 31% belonged to the Plaintiffs.

14.  It seems that D2 has not withdrawn any of his admissions in the pleadings before the proposed amendments.  He has only made alternative claim, which he is entitled to do so under O.18, r.10 RHC.

15.  The court held: ‘Under the existing rules of pleading, an alternative claim inconsistent with what is pleaded in the Statement of Claim must be included in the Statement of Claim by way of amendment and not be pleaded only in the Reply: see RHC Order 18, rule 10; Hong Kong Civil Procedure 2002 at paragraphs 18/10/1 and 18/10/2.  The word “inconsistent” here (which is found in Order 18, rule 10(1)) means “new” or “different” and not just “mutually exclusive”: see Herbert v. Vaughan [1972] 1 WLR 1128, at 1131H.’  Goldon Investment Ltd v NPH International Holdings Ltd, (unrep, HCA 5457/1999, Ma J. (as he then was), 7 June 2002, §6).

16.  The Plaintiffs have raised no other objection to the application.  It is trite law that a party is entitled to make amendments to the pleadings in accordance with O.20 RHC.  I have set out the relevant authorities in my previous Decision Ma Chee Woon v Cheng Zhen Shu & Another (unreported, HCA 1870/2013, 23 December 2014).  Those legal principles apply to this application.

17.  I allow D2’s application.

COSTS AND ORDER

18.  As to the costs of this application, including the costs reserved and for today’s hearing, relying on the authority of Lessy S.A.R.L. v Pacific Star Development Ltd [1996] 2 HKLRD 1, the costs of and occasioned by the amendments should be to the Plaintiffs, but the costs of the application, including the costs reserved and the hearing today (with counsel’s certificate) should be given to D2.  Since the Plaintiffs and the D2 are legally aided, the costs should be taxed if not agreed in any event.  The respective parties’ own costs shall be taxed in accordance with the Legal Aid Regulations.

19.  I shall now make an order in terms as follows:

(a)  As per paragraphs 1 & 2 of the summons, save that in paragraph 4 of the proposed Re-Amended Defence and Counterclaim, the word “30” should read “31”;

(b)  Costs be as per paragraph18 above.