TANG KAM CHEUNG v. CHENG TANG KAM YUNG AND ANOTHER

HCA 795/2019

[2019] HKCFI 2967

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 795 OF 2019

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BETWEEN

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DECISION

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A. Introduction

1.  This is the plaintiff’s appeal against the Master’s decision to strike out his claim and dismiss his action.

B. The plaintiff’s claim

2.  The plaintiff, acting in person, commenced this action on 6 May 2019. He drafted the statement of claim in Chinese. He pleaded that:

(a) On 1 December 2004, in HCAG 011792/2003, letters of administration (“the Letters of Administration”) were granted to him and his late mother (“the Mother”) in relation to his late father’s (“the Father”) estate.

(b) As a result of the registration of the Letters of Administration of various lands owed by the Father in the Land Registry on 17 January 2005 and 23 August 2007, he and the Mother had become the lawful owners of the Father’s property.

(c) On 20 (which should be 25) January 2008, the 1^st defendant, represented by the 2^nd defendant, commenced HCMP 147/2008 with the intention to become the administrator of the Father’s estate. This was contrary to the content of the Letters of Administration. They disobeyed the order made under the Letters of Administration in HCAG 011792/2003 because, although they knew that the court had already ordered that he and the Mother should succeed the Father’s property, they still made allegations which had no factual basis and were groundless.

(d) Such allegations led DHCJ Leung to make an amended order on 10 October 2013 in HCMP 147/2008.

(e) On 15 April 2019, the 1^st defendant, represented by the 2^nd defendant, demanded him to pay legal costs in HCMP 147/2008 in the sum of HK$466,296.25; otherwise, they would petition for the plaintiff’s bankruptcy.

(f) The order made by DHCJ Leung had no factual basis and was groundless because it was made in contravention of the Letters of Administration.

(g) Hence, the demand made by the defendants amounts to a blackmail contrary to section 23(1) of the Theft Ordinance (Cap 210).

3.  He asked for the following remedies:

(a) damages if it is ruled that the order made by DHCJ Leung on 10 October 2013 is invalid;

(b) damages due to loss of development opportunities since the commencement of HCMP 147/2008 on 20 (which should be 25) January 2008;

(c) interest; and

(d) costs.

C. HCMP 147/2008

4.  In HCMP 147/2008, the 1^st defendant, who is the plaintiff’s sister, represented by the 2^nd defendant, applied for various orders pursuant to Order 85 of the Rules of the High Court, against the plaintiff and the Mother in their capacity as the joint administrators of the  Father’s estate. She asked for the furnishing of account of the Father’s estate; further or alternatively, administration of the estate.

5.  The Mother passed away in October 2011. The plaintiff was then ordered to represent her estate in HCMP 147/2008.

6.  On 21 November 2012, the 1^st defendant took out a summons for the replacement of the plaintiff and the Mother as the administrators of the Father’s estate.

7.  On 26 August 2013, DHCJ Leung handed down a judgment ordering, inter alia, that the plaintiff (for himself and as representative of the Mother’s estate) be removed as the administrators of the Father’s estate; nomination be submitted for appointment as the administrator of the Father’s estate; and the plaintiff shall personally pay the costs of and occasioned by the 1^st defendant’s application (including any costs reserved) to be taxed if not agreed.

8.  On 9 September 2013, the plaintiff filed a notice of appeal against the order made on 26 August 2013 and a summons seeking stay of execution of the order pending appeal. On 15 September 2013, he filed another summons seeking an order that he and the Mother be allowed to have “interim capacity” as the administrators of the Father’s estate to conduct certain sets of litigation until the final disposal of the appeal, and to be reimbursed for the reasonable costs and disbursements of the litigation by the Father’s estate.

9.  On 10 October 2013, DHCJ Leung made, inter alia, an order that Mr David Yen Ching Wai of Ernst & Young Transactions Limited be appointed as the administrator of the Father’s estate. He also dismissed the two summonses taken by the plaintiff on 9 September 2013 and 15 September 2013, and ordered that the costs of and occasioned by those summonses by paid by the plaintiff personally, to be taxed, if not agreed with certificate for counsel. On 28 November 2013, the order was amended for minor errors.

10.  On 23 December 2015, in CACV 185/2013, the Court of Appeal dismissed the Plaintiff’s appeal against the orders made on 26 August 2013 in HCMP 147/2008.

11.  On 24 August 2015, the 1^st defendant commenced taxation proceedings for costs awarded in her favour by the two orders made by DHCJ Leung on 26 August 2013 and 10 October 2013. The taxation proceedings took place on 17 November 2016. On 28 November 2016, the plaintiff filed an application for review of taxation. The hearing of the review took place before Master Chow on 18 January 2017. She handed down her decision on 8 February 2017 and ordered the plaintiff to pay personally the costs of the review to be summarily assessed if not agreed.  On 9 March 2017, she assessed the costs of the review at HK$10,600.  The total amount of the taxed costs in respect of the two said orders was HK$314,845.67 as stated in Allocatur Bill No 1 dated 8 June 2017.

12.  By letter dated 15 April 2019, the 2^nd defendant on behalf of the 1^st defendant served a statutory demand dated 15 April 2019 pursuant to section 6A(1) of the Bankruptcy Ordinance (Cap 6), demanding the plaintiff to make immediate payment of the taxed costs plus accrued interest in the total sum of HK$466,296.25 pursuant to Allocatur (Bill No 1) and the order made by Master Chow dated 9 March 2017.

D. The striking out summons and the Master’s decision

13.  On 10 May 2019, the defendants took out a summons applying to strike out the Statement of Claim and to dismiss the action.

14.  On 19 July 2019, Master Chow ordered that the Statement of Claim be struck out as disclosing no reasonable cause of action; the action be dismissed; and that the costs of the action and the striking out summons be paid by the plaintiff to be summarily assessed. On 31 July 2019, Master Chow summarily assessed the costs at HK$45,000.

E. Analysis

15.  First, the plaintiff’s allegation of blackmail is a complaint of criminal offence, rather than a civil cause of action. More importantly, in essence, he is seeking to challenge the correctness of the orders made in HCMP 147/2008.

16.  It is trite that it is an abuse of process to litigate matters which have been decided in earlier proceedings under the doctrine of res judicata (Hong Kong Civil Procedure 2020, vol 1, §18/19/10 at p 508).  In China North Industries Investment Ltd v Chum [2010] 5 HKLRD 1, Stock JA (as he then was) explained res judicata as follows in §47, pp 18 – 19:

“ This doctrine, res judicata, is not a rule of evidence but one of substantive law, for which the underlying public policy is the interest of the community in the termination of disputes and the finality of judicial decisions and, further, the need for individuals to be protected from vexatious multiplicity of suits. It arises where a claim has previously been finally determined between the parties, or their privies, by a court of competent jurisdiction and the same issue falls directly in question in subsequent proceedings (cause of action estoppel) or where the issue has been determined by such a court as a necessary step in reaching judgment in case between those parties or their privies (issue estoppel). It has been held too that the doctrine applies only to fundamental issues determined in earlier proceedings and not to collateral or incidental ones ….”

17.  In §48, p 19, he added that:

“ The correctness of the final decision is not relevant. It binds the parties until such time as it is set aside on appeal. ‘This rests on the fact that a competent tribunal has jurisdiction to decide wrongly, as well as correctly and if it makes a mistake its decision is binding unless corrected on appeal’.”

18.  As I understand, the Plaintiff’s case is that the orders made by DHCJ Leung were groundless because he and his Mother had already become the owners of the property owned by the Father. This is exactly the same ground of appeal which he raised in CACV 185/2013. Yuen JA held in §20 of the judgment:

“ The argument relied on by the 1^st defendant [ie the plaintiff] is that since the lots had been transferred into the names of himself and the 2^nd defendant on 17 January 2005 and 23 August 2007, which occurred prior to the commencement of the Originating Summons on 21 January 2008, the proceedings are concerned with the determination of their property, and not with the administration of the Deceased’s estate. The 1^st defendant sought the return of the lots to them.”

19.  In §§21 – 25 of the judgment, Yuen JA explained in detail why his argument that the lots had become the property of him and his Mother was misconceived in law: the transfer of the lots to them was solely in their capacities as administrators of the Father’s estate; the interests vesting in personal representatives such as administrators do not vest in them beneficially; he and the Mother did not acquire any beneficial interest in the lots (or in any other assets of the Father’s estate); until administration is completed, the inchoate right of beneficiaries in an intestacy is only to have the estate properly administered and ultimately to take under the statutory trust for sale and conversion of the assets in the estate; and the memorials and registration particulars which he relied on were not assents.

20.  At the hearing of the appeal, the plaintiff submitted that the commencement of HCMP 147/2008, by itself, infringed the doctrine of res judicata because it was contrary to an order made in HCAP 3/2000. First, if the plaintiff believed that HCMP 147/2008 constituted an abuse of process due to res judicata, he should have raised it as a defence in HCMP 147/2008 but he had not done so. Second and more importantly, the order in HCAP 3/2000 he referred to is in fact a Tomlin order by consent made by Registrar J Wong on 7 November 2003 whereby letters of administration of the Father’s estate were granted to the Mother. Subsequently, as mentioned, letters of administration were granted to both the plaintiff and the Mother. The purpose of HCMP 147/2008 was initially to compel them to discharge their legal duties as administrators, and subsequently, to remove them.  There is no basis to suggest that HCMP 147/2008 infringed the doctrine of res judicata.

21.  Insofar as the plaintiff’s claim against the 1^st defendant is concerned, it is plain and obvious that the doctrine of res judicata applies because he is seeking to re-litigate the same issue which had been rejected by the Court in previous proceedings to which both he and the 1^st defendant were parties. There is no basis to argue that the demand for payment of the legal costs payable pursuant to the said court orders, which the plaintiff is estopped from challenging, is in any way unlawful, let alone amounts to a blackmail. The plaintiff’s claim against the 1^st defendant does not disclose any reasonable cause of action, and is an abuse of process.

22.  Insofar as the plaintiff’s claim against the 2^nd defendant is concerned, the 2^nd defendant were merely acting as the solicitors for the 1^st defendant in those previous proceedings. They were also merely acting as the 1^st defendant’s solicitors in issuing the demand for payment of the legal costs. At the hearing of the appeal, the plaintiff submitted that the 2^nd defendant was acting without authority. There is no evidence to support such allegation. There is plainly no reasonable cause of action against them.

F. Conclusion and order

23.  For the above reasons, the plaintiff’s appeal is dismissed with costs to be summarily assessed. The defendants have submitted a statement of costs, seeking a total sum of HK$76,000, at the end of the hearing of the appeal. I direct that the plaintiff shall file a list of objections within 7 days.  After that, I shall assess the costs summarily on paper.