TANG WAI KEUNG v. WONG SHUI FONG AND ANOTHER

HCA 1301/2021

[2021] HKCFI 3627

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1301 OF 2021

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REASONS FOR DECISION

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INTRODUCTION

1.  This matter first came before this Court on 24 August 2021 when the Plaintiff applied for an ex parte injunction against the 1^st Defendant, his mother, to restrain her, her agents or servants from directly or indirectly transferring a property situated at and known as the Ground Floor and the Garden, No. 9A, Wang Toi Shan, Wing Ning Lei, Yuen Long, New Territories (“the Property”) to any third parties without his consent until further order or the trial of this action.

2.  At the ex parte hearing, the Court was told by Ms Lau for the Plaintiff that although the 1^st Defendant is the legal owner of the Property, the Plaintiff is the beneficial owner of the same. The 1^st Defendant merely holds the Property on trust for the Plaintiff. The Plaintiff paid all the mortgage payments of the Property. There was an allegation that there was a risk of dissipation as his daughters who failed to sue him in another High Court Action for the Property was then seeking to persuade or influence their grandmother, namely, the 1^st Defendant, to transfer the Property to them, including the 2^nd Defendant.

3.  This Court did not grant any injunction orders on 24 August 2021 as there was no evidence on the degree of urgency that would necessitate the dispensation of notice to the Defendants. The Court directed the Plaintiff to take out a proper inter partes summons. Accordingly, the Plaintiff took out a summons dated 24 August 2021 for the matter to be heard on 27 August 2021.

4.  On 27 August 2021, this Court was informed that in fact the sale and purchase agreement and the assignment were already signed and executed. However, strangely, completion has not yet taken place as the balance of the purchase price was only to be paid by the end of the year. This Court made an interim injunction order pending the disposal of the summons.

5.  On 3 September 2021, the interim injunction order was substituted by the 1^st Defendant’s undertaking not to take any further steps to deal with the Property until the resolution of this action or further order of the Court.

6.  This Court also gave a set of directions for the filing of evidence and for the substantive hearing to be held on 26 November 2021.

7.  At the conclusion of the substantive hearing, I dismissed the Plaintiff’s summonses dated 30 August 2021 and 8 September 2021. I now give my reasons.

MATERIAL FACTS

8.  The 1^st Defendant (aged 82) is the biological mother of the Plaintiff (aged 61), and the biological paternal grandmother of the 2^nd Defendant (aged 33).  The Plaintiff is the biological father of the 2^nd Defendant. 

9.  As set out above, the Plaintiff asserts in this action that he is the beneficial owner of the Property. As the 1^st Defendant entered into a sale and purchase agreement in relation to the Property with the 2^nd Defendant and assigned the Property to the 2^nd Defendant, the Plaintiff claimed (i) against the 1^st Defendant for breach of her trustee duties and fiduciary duties and (ii) against the 1^st and 2^nd Defendants for conspiracy to defraud and with intent to injure by unlawful means. 

10.  In their Defence filed, both the 1^st Defendant and the 2^nd Defendant denied the Plaintiff’s Claims.  The Defendants basically say that the 1^st Defendant was the sole legal and beneficial owner of the Property until she assigned her interest to the 2^nd Defendant.

11.  It is also important to note that the 1^st Defendant further submitted that in any event, the Plaintiff was estopped from asserting his purported rights by reason of his own assertions in the previous High Court proceedings, namely, HCA1015 of 2018 (“the 2018 Proceedings”).

12.  It is the 1^st Defendant’s case that in fact the Plaintiff as the sole legal and beneficial owner of the Property assigned all interest (both legal and beneficial) to the 1^st Defendant on 4 March 2011. 

13.  As the Plaintiff resided at a different floor of the building where the Property is located and given the 1^st Defendant’s old age, the 1^st Defendant entrusted the Plaintiff to manage the Property, arrange tenancy and collect rent for the Property’s mortgage repayment.

14.  As the Plaintiff defaulted in the mortgage repayment for 3 months in July 2021 and given the threatening notices posted around their neighbourhood demanding loan repayment by the Plaintiff around that time, the 1^st Defendant considered the Plaintiff no longer suitable to manage the Property and gave serious thought as to the way to handle her properties.  She therefore asked his grandchildren to see if anyone is interested in acquiring the Property.  Eventually, the 2^nd Defendant showed interest and the 1^st Defendant subsequently sold and assigned the Property to the 2^nd Defendant on 5 August 2021.

15.  The stance taken by the Plaintiff in the 2018 Proceedings is highly material and relevant for an application of this nature.

16.  It is pertinent to note that in the 2018 Proceedings, a proceedings commenced by another daughter of the Plaintiff who is also another granddaughter of the 1^st Defendant (“the Other Daughter”)against the Plaintiff, the 1^st Defendant and her late husband for, inter alia, the Property, the Plaintiff, by affirmation and statement of truth, expressly stated that he no longer retained any interest in the Property.

17.  This material fact was not drawn to the attention of the Court at any stage until pointed out by the 1^st Defendant. This is highly relevant as if the Plaintiff retains no beneficial interest in the Property, he has no locus standi to commence the present action let alone to apply for an injunctive relief.

18.  In his defence filed on 13 November 2018 in the 2018 Proceedings,

(a)  The Plaintiff “avers that, at all material times until 4 March 2011 where [the Property] and Property 2 were transferred to [the 1^st Defendant] and [the 1^st Defendant’s late husband], [the Plaintiff] was the sole legal and beneficial owner of [the Property] and Property 2 …” (§7);

(b)  The Plaintiff further avers that “[the Property] were transferred to [the 1^st Defendant and [the 1^st Defendant’s late husband] respectively on 4 March 2011 by way of assignments; and [the 1^st Defendant and the 1^st Defendant’s late husband “gave consideration on the said date for the transfers, inter alia, two mortgages respectively of Memorial No. 11032802740098 for [the Property] and of Memorial No. 1103280740077 for Property 2 in favor of Dah Sing Bank Limited for a loan to repay the mortgage and rental assignment in favour of Mevas Bank Limited taken out by [the Plaintiff] on or about 3 August 2010.” (§9(2);

(c)  The Plaintiff categorically pleaded that he “no longer retained any interest in [the Property] upon the execution of the said assignment”. (§11)

19.  One would have thought that this is a matter which the Plaintiff must address when he made the ex parte application before this Court. Not only did the Plaintiff fail to do so, when asked by the Court as to why there was no explanation of such inconsistent stance, Ms Lau for the Plaintiff only submitted that the stance taken by the Plaintiff in the 2018 Proceedings is irrelevant. I disagree. It is highly relevant and material. It cannot be right that the Plaintiff could in one proceedings say one version of facts and in another proceedings aver the opposite version of facts. This is clearly an abuse of process.

20.  I also note that when being asked by this Court, Ms Lau for the Plaintiff took instructions and informed this Court from the Bar table that the Plaintiff was misled by his former solicitors in the 2018 Proceedings and he did not understand what he had signed. I find this unacceptable. First, if that is the case, the burden rests with the Plaintiff to set that out in his affirmations. In fact, contrary to the directions given by this Court, the Plaintiff only filed his reply affirmation two days before this hearing when the issue of inconsistent stances has been squarely raised by the 1^st Defendant. The Plaintiff chose not to address the same.

21.  Secondly, in his affirmation dated 18 October 2021, the Plaintiff affirmed:

“25. I did not emphasize that the Property was mine in the 2018 Action because I did not think it was necessary because I fully entrust the 1^st Defendant as my Mother.”

However, in the 2018 Proceedings, it is not that the Plaintiff did not emphasize that the Property was his. He actually took the diametrically opposite stance and by statement of truth, on oath, stated that he retains no beneficial interest in the Property. I find it difficult to fathom the position taken by the Plaintiff that his factual assertions in the 2018 Proceedings are irrelevant.

22.  Thirdly, Ms Ma for the 1^st Defendant correctly pointed out that not only the quoted passages in paragraph 18 above remained pleaded when the Plaintiff’s Defence was amended on 15 July 2020 (“P’s 2020 Amended Defence”), the Plaintiff also made reference to the quoted paragraphs in his affirmation dated 16 March 2021 (i.e. about 5 months before the ex parte application) which was filed on 9 April 2021 (i.e. about 4 months before the 24 Aug Summons) to strike out the 2018 Proceedings (“P’s 2021 Strike Out Affirmation”).

ANALYSIS

23.  I am of the view that the Plaintiff’s application for interlocutory injunction against the 1^st and 2^nd Defendants must be dismissed.

24.  First, given the inconsistent stance taken by the Plaintiff and the absence of any credible explanation for such inconsistence, I am of the view that the Plaintiff does not have a credible cause of action.

25.  On the issue of cause of action, I also note that the Plaintiff relied on a common intention of some family arrangement. However, there are no pleaded details as to when, where and how the common intention was formed. There is also no plea as to what is the family arrangement.

26.  In Chan Chun Chuen v Kao, Lee & Yip, unrep., HCA 597/2015, 12 October 2017, Deputy High Court Judge Anson Wong SC analysed the abuse of process ground by reference to Mystar Holdings Ltd v 247037 Alberta Ltd [2009] ABQB 480 and summarised as follows:

“(1) A party who seeks to strike out a claim based on an abuse of process bears a heavy burden. The court will only do so in a plain and obvious case.

(2) The doctrine of abuse of process is essentially a ‘fairness doctrine’.

(3) It may be an abuse of process for a party, with full knowledge of the facts, to advance a claim that is diametrically opposed to its position taken in an earlier set of proceedings. What constitutes an abuse of process may vary with the circumstances of each case.

(4) In this type of case, the abuse lies in its effect on the ‘integrity of the administration of justice’. Where a party with full knowledge of the facts advances a claim which is diametrically inconsistent with his allegations in previous proceedings, the integrity of the justice system would be no less compromised simply because his previous allegations were not followed through to judgment.”

27.  I agree with Ms Ma for the 1^st Defendant that it is plain and obvious that the Plaintiff, with full knowledge of the facts, advanced a claim that is diametrically opposed to his position taken in the 2018 Proceedings.  The Plaintiff’s 2020 Amended Defence and 2021 Strike Out Affirmation where the diametric inconsistence is also shown were only filed about 9 months and 4 months respectively before the commencement of the present action.  I am of the view that absence any credible explanation, the Plaintiff’s present claim constitutes an abuse of process of the court and is liable to be struck out and has no serious issue to be tried. 

28.  I also note Ms Ma’s submission that the Plaintiff’s bank statements also support the 1^st Defendant’s case as other than the cash deposits which were clearly deposited shortly before each mortgage repayments for payment purpose, the balance of the Plaintiff’s bank account was always minimal. 

29.  Secondly, even if there is a serious issue to be tried on whether the Plaintiff is the beneficial owner of the Property, I am of the view no injunctive order should be granted in the present case because there is serious and deliberate material non-disclosure on the part of the Plaintiff. The failure to disclose his inconsistent stance in the 2018 Proceedings is inexcusable.

30.  This Court made an ex parte injunctive order to hold the ring largely because this Court took the view that there is a serious issue to be tried on whether the Plaintiff is the beneficial owner of the Property. Had the Court been informed of the diametrically opposite stance taken by the Plaintiff in the 2018 Proceedings, the Court’s discretion is likely to be exercised very differently. I agree with Ms Ma for the 1^st Defendant that the Plaintiff only selectively disclosed part of the evidence in the 2018 Proceedings which he thought would assist him in his application. 

31.  It is plain that the Plaintiff is well aware of the 2018 Proceedings when he made the application as he had referred to the 2018 Proceedings in his 1^st Affirmation and his ex parte skeleton.  I am of the view that the failure to make full disclosure is deliberate. As such, any injunctive order granted should be discharged forthwith.

32.  Thirdly, I also note that the Plaintiff has not provided any evidence on his ability to make good his undertaking as to damages. It is elementary that when making an ex parte application, an applicant should in his supporting affirmation set out his financial position so as to satisfy the Court that he or she is able to make good his undertaking as to damages. In the present case, the Plaintiff has produced no such evidence. Indeed, the 1^st Defendant has produced evidence that the Plaintiff is in financial difficulties.

33.  Although the Plaintiff offered to pay HK$100,000 into court as fortification. The Defendants have rejected the same. I also consider that the sum of HK$100,000 is not sufficient to protect the position of the Defendants.

34.  Finally and importantly, there is no urgency at all. As it turns out, the Plaintiff has registered the writ of summons in the present action against the Property in the Lands Registry. Ms Ma for the 1^st Defendant submitted that in the circumstances, pending the vacation of the said registration, there is no risk that the Property will be further transferred out. Ms Lau for the Plaintiff also agreed that the urgency is now gone by reason of the registration.

35.  Given that the Plaintiff has secured appropriate relief through self-help procedures, I am of the view that balance of convenience tips against the grant of any interlocutory injunction against the Defendants.

DISPOSITION

36.  For all the reasons stated above, the Plaintiff’s summons dated 30 August 2021 and 8 September 2021 are hereby dismissed.

37.  As far as costs is concerned, as this case involves material non-disclosure on the part of the Plaintiff, I agree that costs should be assessed on an indemnity basis.

38.  I will assess the relevant costs on summary basis upon receiving the parties’ submissions on the Defendants’ schedules of costs.