PANG MAN MING v. PANG WAN LI YAN

HCA 1859/2019

[2020] HKCFI 2353

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1859 OF 2019

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R E A S O N S  F O R  D E C I S I O N

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Introduction

1.  DHCJ Hall-Jones gave an Order on 8 October 2019 pursuant to Section 25A of the High Court Ordinance appointing the Registrar to execute all relevant documents to convey the title of the subject property to the plaintiff, Mr Pang (“the s.25A Order”). 

2.  The Registrar declined to execute documents as the s.25A Order was granted on an ex-parte application made by Mr Pang even before the writ was issued.  After a directions hearing, the Registrar directed Mr Pang to refer this matter to the Listing Judge and to show cause as to why the s.25A Order should not be set aside.

3.  After this hearing for showing cause, I ordered that:

(1)  The s.25A Order be set aside with costs to Madam Wan;

(2)  Within 21 days, Mr Pang should inform the Court by letter if this case should be stayed pending resolution of the Family Court proceedings; and

(3)  Until the Court shall receive Mr Pang’s letter under sub-paragraph (2), the summonses for injunction and disclosure order shall not be restored for hearing.

Here are my reasons.  I shall refer to items (2) and (3) collectively as case management directions.

Background

4.  In 1986, Mr Pang was seriously injured whilst on duty and became a mentally incapacitated person.  He received compensation in a personal injuries action that was settled.  On 27 November 1998, a Committee was formed by order of DHCJ Lugar-Mawson (as he then was), with Madam Wan (Mr Pang’s wife) and a Mr Hon (a solicitor) appointed as members.  Using part of the compensation, the Committee purchased the subject property at Harvest Court, 216 Argyle Street (“the Property”).

5.  In 2015, Mr Pang’s health condition significantly improved. 

6.  On 1 June 2018, Madam Wan commenced divorce proceedings in FCMC 6761/2018.  Her Notice of Intention to Proceed with Application for Ancillary Relief (“the AR Notice”) in that case was registered in the Land Registry against the Property on 21 June 2018. 

7.  On 21 June 2018, Lok J in HCMP 6406/1998 ordered, amongst others, that the Committee do forthwith take all necessary steps and execute all necessary documents as may be reasonably required to transfer and vest the legal estate of the Property to Mr Pang at nil consideration and to transfer all his other assets to him.  Upon completion of these steps, the Committee shall be discharged.  (“Lok J’s Order”).

8.  On 7 December 2018, a decree nisi was issued by the Family Court.

9.  Mr Hon was willing to transfer the Property back to Mr Pang but Madam Wan has failed to comply with Lok J’s Order.  Mr Pang obtained an order from M Ng J on 27 June 2019, which varied Lok J’s Order to the effect that the Committee be discharged forthwith.  Despite M Ng J’s Order, Madam Wan has still failed to comply with Lok J’s Order.

10.  On 8 October 2019, Mr Pang took out an ex parte application in HCZZ 182/2019 for (i) the s.25A Order; (ii) a Mareva Injunction Order to restrain Madam Wan from disposing of assets belonging to Mr Pang up to a value of $1,449,170 (“the Sum”); and (iii) a Disclosure Order for Madam Wan to disclose information in 3 of her bank accounts.  Allegedly notice of the application and the draft writ had been given to Madam Wan before the hearing.  DHCJ Hall-Jones granted those 3 Orders on the same day.  The sealed order did not show that Madam Wan was present or that DHCJ Hall-Jones heard her representation.

11.  On the following day, the writ corresponding to HCZZ 182/2019 was issued in the present action.  The indorsement of claim prayed for, amongst others, (i) damages for Madam Wan’s[1] fraudulent withdrawal of the Sum belonging to Mr Pang and retained in her 3 bank accounts; (ii) the s.25A order; and (iii) an injunction to restrain Madam Wan from parting with the Sum.

12.  On the return day for the Injunction Order and Disclosure Order, ie 11 October 2019, Madam Wan filed an affirmation in Chinese to oppose the injunction.  As DHCJ Hall-Jones, who was the presiding judge, could not read Chinese, he directed that the hearing be adjourned before a bilingual judge, a monolingual judge or himself with translation of any Chinese documents.  He also ordered that one of 3 accounts, ie the Bank of China (Hong Kong) account be removed from his Disclosure Order.

13.  On 6 January 2020, solicitors for Mr Pang requested the Registrar to execute the assignment of the Property pursuant to the s.25A Order.  After some requisitions, the Registrar declined.  After a directions hearing on 14 July 2020 questioning the proprietary of the s.25A Order, and himself not having the power to set aside the s.25A Order, the Registrar directed that the s.25A Order be referred to the Listing Judge for Mr Pang to show cause why it should not be set aside.

14.  Mr Pang’s solicitors have not drafted up the Registrar’s directions until 1 September 2020 and did nothing about the Registrar’s directions until prompted by the Listing Judge. 

15.  Meanwhile, on 11 November 2019, Mr Pang obtained leave to commence committal proceedings against Madam Wan for contempt of court.  He commenced proceedings accordingly in HCMP 2044/2019.  The hearing took place before Lok J on 23 July 2020 but was adjourned.  The parties were encouraged to discuss settlement.

Setting Aside of the s.25A Order

16.  Section 25A of the High Court Ordinance, Cap 4, provides that:

“Where the Court of First Instance has given or made a judgment or order directing a person to execute any conveyance, contract or other document, or to endorse any negotiable instrument, then, if that person –

(a) neglects or refuses to comply with the judgment or order; or

(b) cannot after reasonable inquiry be found,

the Court of First Instance may, on such terms and condition, if any, as may be just, order that the conveyance, contract or other document shall be executed, or that the negotiable instrument shall be endorsed, by such person as the Court may nominate for that purpose.”

17.  There are 2 matters that an applicant must prove to a Judge:

(1)  That there was a pre-existing judgment which directed a person (D) to execute any conveyance or other document; and

(2)  That D neglected to comply or could not be found.  This is usually after efforts have been made to request him to sign within a specified time or to find him.

The Judge with then make an order directing a person (eg the Registrar or the solicitor of the Plaintiff) to sign the document(s).

18.  The pre-existing judgment should usually be a final judgment.  The proceedings under s.25A should, in principle, be inter partes even though D has all along been uncooperative.  If it is a situation where D cannot be found, then a proper application should be made to the court for substituted service or, if appropriate, to dispense with service. There is generally no urgency that would justify handling of a s.25A application by a duty judge or on ex parte basis. 

19.  If the Registrar is the person nominated to execute the document(s), the applicant has to prove to the Registrar that (i) the pre-existing judgment requiring D to execute documents; and (ii) the judge’s order made under s.25A, have been served on D before the request was made to the Registrar to execute the judge’s order.  The applicant also has to inform the Registrar of any response from D.

20.  Lok J’s Order and Madam Wan’s refusal to execute formed the bases for Mr Pang’s s.25A application.  In addition, Mr Pang claimed that he needed the Property as a residence because his previous long-term vegetative state made his residence at a sub-divided flat unsatisfactory for his health.

21.  In her submission to show cause, Ms Mok submitted that the Court had power to issue interim mandatory orders to preserve assets, or to protect and preserve a trust fund.

22.  I have no doubt that the Court had such powers. However, the s.25A Order obtained was not in the nature of an interlocutory order but a final order.  What was more repugnant was that in seeking the s.25A Order, Mr Pang has violated important procedural safeguards designed to balance convenience between the parties, achieve fairness and to ensure that a defendant was given a reasonable chance to oppose the application:

(1)  The application was made ex parte when there was no urgency or secrecy.  Lok J’s Order was made 16 months before the ex parte application and Madam Wan has had notice of that Order for a long time.

(2)  The s.25A Order was sought as a final relief even before the writ was issued, bypassing even a default judgment or an Order 14 application, on the basis of a one-sided story.

(3)  Till this hearing, there had been no inter partes summons issued in respect of the s.25A Order, nor was DHCJ Hall-Jones asked to continue the s.25A Order on an inter partes basis.  That probably explained why Madam Wan’s affirmation filed on the return date only opposed the injunction and referred to the bank accounts.

The submission purporting to show cause completely overlooked all these procedural safeguards.

23.  Further, Madam Wan’s affirmation told a different story:

(1)  The divorce proceedings were commenced before Lok J’s Order.  Madam Wan had told Mr Pang more than once that the Property should be dealt with in the ancillary relief proceedings.

(2)  By a letter dated 3 May 2019, the Official Solicitor made the same comment as (1) to Mr Pang.

(3)  Madam Wan wished to apply under s.17 of the Matrimonial Proceedings and Property Ordinance, Cap 192, for avoidance of transactions (including any High Court orders) to defeat her claim for ancillary relief.

(4)  Madam Wan produced a letter from Mr Pang dated 29 May 2014 showing that he had promised to give all his assets to her to thank her for her love and contribution to the family.

(5)  Mr Pang has had alternative residence and there was no urgency to recover the Property.

24.  Accordingly, had she been given the opportunity, Madam Wan might be able to convince the Court not to make the s.25A Order there and then.  The reasons given in sub-paragraphs 23(4) and (5) above, if established, would go further to cause the s.25A Order to be set aside on the ground of material non-disclosure.

25.  For the reasons set out in paragraphs 22-24 above, the s.25A Order must be set aside.  As the fault in seeking the s.25A Order on ex parte basis was entirely Mr Pang’s, I therefore ordered him to bear Madam Wan’s costs, to be summarily assessed.

Case Management Directions

26.  The subject matter of the writ concerned the Sum and the s.25A Order.  Even on Mr Pang’s own case, the Property was the only major matrimonial asset remaining.  I am sure the Family Court would take into account the Sum (said to be unlawfully transferred away by Madam Wan) and the Property when deciding the proper ancillary relief order to make.

27.  Even if the Property were transferred back to him, Mr Pang would not be able to live in it because Madam Wan and the 3 children have been residing there for the last 20 years; and he would not be able to dispose of it because the AR Notice would have prevented him from doing so.

28.  Further, Mr Pang probably would not need an injunction because Madam Wan had registered her own lis pendens against the Property in the Land Registry 16 months before this writ.  He probably did not need a disclosure order because she would have to make full and frank disclosure in the ancillary relief proceedings anyway.

29.  In the light of paragraphs 26-28 above, one simply wondered what practical advantage could be gained by Mr Pang in compelling Madam Wan to transfer back the Property to him by an ex parte application and going to the extent of seeking an order for committal for contempt. 

30.  What was more, Mr Pang’s conduct of the present action simply lacked conviction:

(1)  No statement of claim has been filed.

(2)  There had been no attempt to restore the summonses for Injunction Order and Disclosure Order for hearing.  The explanation his lawyers gave was that they were waiting for translation of the affirmation from Madam Wan as directed by DHCJ Hall-Jones.  I do not accept this explanation because DHCJ Hall-Jones has not directed Madam Wan to supply the translation.  Mr Pang could have supplied it.  Moreover, if the summonses were fixed before a bilingual judge, there was simply no need to prepare translation.

31.  Although she was not given a chance to contest, Madam Wan had effectively complied with the Disclosure Order and had not disposed of the Property.

32.  I therefore made the case management orders in the hope that the parties would focus their efforts in the ancillary relief proceedings and not waste costs in the present proceedings.  There is no point in engaging in interlocutory skirmishes or proceeding with this action as that would only deplete the matrimonial assets.

33.  The question of costs concerning the case management orders would be reserved until I shall receive the response of Mr Pang to paragraph 3(2) above.

Conclusion

34.  For the reasons given, I agree with Registrar Kwang’s view.  The s.25A Order should be set aside for its violation of procedural safeguards.  I therefore made the orders in paragraph 3 above.