AU YEUNG YEE MAN, executrix of the estate of AU YEUNG WING HONG, deceased v. WAN PO JUN MARY PAULINE (a bankrupt)

DCCJ 3315/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3315 OF 2011

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BETWEEN

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REASONS FOR DECISION

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1.  This is the application by the defendant (“Wan”) for leave to appeal against my order made on 5 January 2012 staying the proceedings in the present action. At the end of the hearing, I dismissed the application with costs against Wan summarily assessed at HK$8,000. As indicated, I now give my reasons.

BACKGROUND

2.  The dispute between the parties has quite a bit of history.  The deceased, Au-yeung Wing Hon, passed away on 11 April 2008.  The plaintiff (“the Daughter”) is the daughter of the deceased.  Wan was co-habitee of the deceased.  Since 2003, Wan, with a few other members of the deceased’s family, has been living at the property situate at Flat A, 42^nd Floor of Tower I, Harbourfront Landmark, 11 Wan Hoi Street, Kowloon (“the Property”).

3.  The deceased left a will dated 18 October 2007 appointing the Daughter as the sole executrix and trustee, naming the Daughter and her brother as the beneficiaries of the estate.  Litigation between Wan and the Daughter as the executrix over the deceased’s estate began.

4.  First there was Wan’s challenge against the validity of the will when the Daughter applied for probate (HCAP 19/2008).  As she was not a person entitled to succeed whether by reason of any other will or under the Intestate Estate Ordinance, Cap.73, she had no locus standi in the probate action.  Her case in the probate action was struck out by the Master (see Decision dated 17 June 2009, Master Levy); the decision of the Master was confirmed on appeal (see Decision dated 19 August 2009, Yam J).

5.  Right after the decision of the Master in the probate action, Wan commenced action in the High Court claiming, among other things, half share of interest in the estate including her entitlement to use and to occupy the Property as well entitlement under the Inheritance (Provision for Family and Dependants) Ordinance, Cap.481 (HCA 1478/2009).  The Daughter defends.  Wan’s attempt to strike out the Daughter’s defence was dismissed (see Decision dated 9 March 2010, Deputy High Court Judge L Chan).

6.  After the dismissal of her appeal against the Master’s decision, Wan applied in the probate action for injunction restraining the Daughter from proceeding with administration of the estate.  The application was dismissed (see Decision dated 11 March 2010, Yam J).  Wan took the matter to the Court of Appeal (CACV 208/2009). The appeal was dismissed (see Decision dated 6 October 2010).  Leave to appeal to the Court of Final was also refused (see Decision dated 7 March 2011).

7.  In view of the Daughter’s notice to quit the Property, Wan commenced another action, this time to seek an injunction restraining the Daughter and her solicitors from issuing further notices to quit to her (HCA 10/2010).  The claim was struck out and action dismissed (see Decision dated 9 July 2010, Master Lung); and the decision was confirmed on appeal (see Decision dated 25 October 2010, Deputy High Court Judge L Chan).

8.  Because of the unsatisfied debt arising out of the adverse costs orders in the previous proceedings, bankruptcy proceedings were commenced against Wan (HCB 144/2011) and she was adjudged bankrupt (see Judgment dated 11 April 2011, To J).

9.  With leave, the present action was commenced in this Court against Wan, a bankrupt. By the time of the commencement of the action, the other actions pending include HCA 1478/2009 and HCMP 1919/2010 (originated from DCMP 1268/2010 for maintenance under Cap.481).

THE PRESENT ACTION

10.  In the present action, the Daughter alleges that Wan has occupied part of the Property as a licensee.  The licence has been revoked during the deceased’s lifetime. Alternatively the licence was terminated upon his death in April 2008.  Notice to quit has been served on Wan.  The Daughter claims for vacant possession of the part of the Property being occupied by Wan, mesne profit and injunction restraining her from entering or remaining in the Property.

11.  By her defence, Wan essentially repeats her allegations made in the previous proceedings.  On the basis that she was the “de facto wife” of the deceased, among other things, Wan claims to have interest in the estate of the deceased including equity in the Property and the right to use and to occupy the Property.  Accordingly she put forward a counterclaim for, among other things, declaration of her rights.

12.  By summons filed on 14 October 2011, the Daughter applied for summary judgment against Wan (“the O.14 Summons”).  The O.14 Summons first came before this court on 15 November 2011 when I gave leave to the Daughter to file an affirmation in reply to Wan’s affirmation in opposition.  However, at the same time, I queried whether the Daughter should have put forward her claim herein in HCA 1478/2009 instead of commencing the present action.  I adjourned the matter for argument or, if appropriate, for directions for the further conduct of the case in view of my query.

5 JANUARY 2012

13.  The O.14 Summons was scheduled to resume on 5 January 2012.  But prior to that, by letter dated 29 December 2011, the solicitors for the Daughter informed the court that after taking counsel’s opinion in the light of my query, the Daughter proposed to have the proceedings in the present case stayed so that the Daughter could proceed to amend her case in HCA 1478/2009 in order to incorporate her claim herein as part of her counterclaim there.

14.  At the end of the hearing on 5 January 2012, I did order that all proceedings in the present action be stayed; and these proceedings shall not be restored by any party without leave of the Court.  Costs were reserved.

15.  As explained during the hearing on 5 January 2005, to defend the claim of Wan in HCA 1478/2009, the Daughter will have to address the issue of Wan’s alleged equity in the Property and her alleged entitlement to use and to occupy the same.  Likewise, the defence and counterclaim of Wan in the present action was essentially based on what she alleges in her claim in HCA 1478/2009.  All the issues, including Wan’s entitlement in and to the Property, are still lives issues.

16.  In this regard, I noted the observation of To J about the state of these issues in his judgment in HCB 144/2011 (at §§23-27).  But in HCAP 19/2008 and CACV 208/2009, the decisions of the Courts were based on Wan’s lack of locus standi to obtain probate, irrespective of the merits of her alleged entitlements. Likewise, in HCA 10/2010, the decision was that she could not seek an injunction to stop the Daughter and her solicitors from issuing further notices to quit to her while her claim was yet to succeed in HCA 1478/2009.  Therefore, with respect, I take the view that there has never been actual determination of the merits of Wan’s claim, including her alleged entitlements in and to the Property.

17.  In the circumstances, there are all the goods reasons for the Daughter to put forward her claim herein as part of her defence and counterclaim in HCA 1478/2009.  The question is how I should dispose of the present action.  I could have transferred the present action, which was also suggested by Wan.  Alternatively I could have stayed the proceedings herein so as to avoid duplicity of proceedings if the Daughter is to put forward such claim as a counterclaim in HCA 1478/2009. I opted for the latter.

THE PROPOSED APPEAL

18.  By her summons, Wan asked to lift the stay and for leave to appeal as well as the setting aside or revocation of the order to stay.

19.  On behalf of the Daughter, the solicitors took a preliminary point.  It was submitted that the assets of Wan, being a bankrupt, have been received and now held by the trustee in bankruptcy.  The right of appeal was vested as part of her estate in the hands of the trustees in bankruptcy.  The trustees confirmed in writing that they had not been informed of the present application by Wan; and that they would not take part.  It is wrong in principle for Wan to incur liability for costs in legal proceedings like that.  Such application for appeal, it was submitted, ought to be refused: see section 58 of the Bankruptcy Ordinance, Cap.6; Dr Andrew Kee-Suan Koh v Dr Vincent Kay-Lo Ip, CACV 75/2000 (23 February 2001).  I agree.

20.  Nevertheless, I proceeded to consider the merits of the proposed appeal.  Section 63A(2) of the District Court Ordinance provides that leave shall not be granted unless the appeal has a reasonable prospect of success or for some other reason in the interest of justice the appeal should be heard.

21.  In the grounds of appeal proposed in her affirmation in support, Wan firstly stated that she was the “de facto wife” of the deceased and “de facto mother” of the Daughter.  I did not see how that was relevant.

22.  Secondly, Wan argued that the Daughter has been ill advised to commence the present action.  I too did not see the relevance of that.  As mentioned, taking home the query I raised in previous hearing, the solicitors for the Daughter rightly accepted that it would be better to incorporate the claim herein as part of the counterclaim in HCA 1478/2009; and that all these proceedings should be brought to a halt.

23.  Thirdly, Wan argued that the alleged failure of the Daughter to file a reply and defence to counterclaim or an affirmation in reply to hers in the application for summary judgment reflected that there was no cause of action or merit in the claim in the present action.  Wan has misunderstood the situation.  In the O.14 Summons, the Daughter indeed stated the alternative that in the event that judgment was not given and hence the case proceeded, leave should be given to her to file the reply and defence to counterclaim in 28 days after such determination.  As to the affirmation in reply, the Daughter was given leave to do so.  There is no question of non-compliance with an order, if she chose not to.  I am not surprised that no affirmation was filed, in view of the Daughter’s stance that the proceedings here should be brought to a halt.

24.  Fourthly, Wan argued that I ought to have dismissed the O.14 Summons or transferred the case to be consolidated with HCA 1478/2009 and “HCA 1919/2010” (which I take her to mean HCMP 1919/2010).  However had I proceeded to consider the O.14 Summons, the best outcome that Wan could have expected would be continuation of her right to defend with or without dismissal of the summons.  The dispute would have yet to be tried.  Upon stay of proceedings as ordered, the position of Wan in the dispute yet to be resolved remained the same.

25.  In court, Wan argued that I should have struck out the present action.  The option of striking out, though never applied for by summons, was nevertheless discussed during the last hearing.  But it was not suggested that duplicity of proceedings already existed at the time of the commencement of the present action.  Further even assuming O.18, r.19 of the Rules of the District Court was invoked for the consideration of whether to strike out, the court nevertheless had the discretion to order the action to be stayed instead of dismissal (see rule (1)).  The power of the court to stay any proceedings before it, where it thinks fit to do so, either of its own motion or upon application is in the first place conferred by section 48(5) of the District Court Ordinance.

26.  Indeed it was open to the court to consider transfer of the proceedings herein to the Court of First Instance.  But contrary to what Wan suggested, it would in such event not be for this court to direct now that the proceedings be consolidated with HCA 1478/2009.  More importantly, it will not serve Wan’s present purpose unless it is shown that the order to stay was erroneous whereas an order for transfer of proceedings ought to have been made.  As pointed out on behalf of the Daughter, the order made by this court was basically a case management direction.  Rarely would the appellate disturb such direction on appeal.

27.  Lastly Wan complained about the pressure arising out of the present action still existing.  In view of the litigation history and the prevailing actions in the High Court in which Wan is actually the plaintiff, I would have thought that the pressure of litigation falls on both sides.  The order to stay provides that neither party may restore the proceedings without leave of the court.  Leave will not be given unless on good grounds.

28.  Of course the present action will have to be disposed of at some stage, probably after the determination of the High Court actions.  Costs will have to be decided.  Whether the Daughter ought to have commenced the present action will still be a relevant question, which Wan could still argue.  As ordered, all these have been reserved at this stage.

29.  For the above reasons, the application was dismissed.