YEUNG KWOK KIN v. YEUNG KWOK KEUNG also known as YEUNG KWOK KEUNG ROGER

HCMP 2247/2005

[2020] HKCFI 2421

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2247 OF 2005

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J U D G M E N T

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1.  The Plaintiff and the Defendant are brothers, but they do not get along with each other. Their father passed away on 16 March 1985 leaving some land to them. The father’s will was to be administered by the Plaintiff, the Defendant and 2 other brothers, one of whom has now also passed away. The administration of the will, in the hands of the Plaintiff and the Defendant, has been difficult because the Plaintiff and the Defendant are unable to work together.

2.  In this action, which was originally commenced in 2005, the Plaintiff sought an order for partition of the land which had been demised by the father.  In response the Defendant sought an order for sale of the land.  By the time the matter came on for trial in 2020, the Plaintiff asked for “no order”.   The Defendant was asking for the originating summons to be dismissed.  There is little, if any, substantive difference between those orders and consequently the real thrust of the argument concerned the question of who should pay the costs of the action from 2005 to 2020.  In order to address that question properly I must consider the history, albeit fairly briefly, because at its heart, the question is one of discretion not one of strict application of law.

3.  There are two plots of land, known as NKIL3565 and NKIL3650.  The plots are adjacent, and parallel, to each other and each plot runs perpendicularly between Grampian Road and Junction Road in Kowloon.  Those plots originally were jointly owned by the father and his brother (the Uncle) of the Plaintiff and Defendant. However in 1953 the Father and the Uncle obtained a partition of those plots and then assigned their interests respectively such that the Father became the sole owner of the plot known as NKIL3650 and the Uncle became the sole owner of the plot known as NKIL3565. 

4.  Notwithstanding that partition, the Father and the Uncle jointly developed the plots by constructing two buildings, Junction House and Grampian Court, both of which straddled both NKIL 3650 and NKIL 3565.  The Buildings were designed and constructed such that Grampian Court (also known as 6 and 6A Grampian Road) straddled the plots of land, and had its frontage across both plots facing Grampian Road, and Junction House (also known as 5 and 5A Junction Road) did the same, but facing Junction Road.   They were built such that on the dividing line between the plots each building had two common stair cases, which would facilitate separation into the respective plots if necessary.  The parts of the two buildings which are on plot NKIL 3650 are known as No 6 Grampian Road and No 5 Junction Road.

5.  When the Father passed away, by a will dated 17 January 1985, he demised:

5.1.  to the Plaintiff:

“All That one equal undivided half part or share of and in All That the said piece or parcel of ground registered in the Land Office as New Kowloon Inland Lot No 3650 And of and in the buildings thereon known as No 5 Junction Road (Front and Rear Parts) and No 6 Grampian Road TOGETHER with the sole and exclusive right and privilege to hold use occupy and enjoy the said No 5 Junction Road (Front and Rear Parts).”

5.2.  And to the Defendant:

“All That one equal undivided half part or share of and in All That piece or parcel of ground registered in the Land Office as New Kowloon Inland Lot No 3650 And of and in the buildings thereon known as No 5 Junction Road (Front and Rear Parts) and No 6 Grampian Road TOGETHER with the sole and exclusive right and privilege to hold use occupy and enjoy the said No 6 Grampian Road.”

6.  In the action, the Plaintiff originally sought the partition of plot NKIL3650 as between the two independent buildings known as 6 Grampian Road and 5 Junction Road, with No 5 Junction Road being demised to him and No 6 Grampian Road going to the Defendant.  That proposition was presumably said to be consistent with the exclusive right to use and occupy the respective portions as set out in the will of the Father.  The evidence suggests that No 5 Junction Road is the more valuable of the two properties.

7.  In response to the Originating Summons, by affidavit sworn on 15 March 2006 the Defendant opposed the partition, and applied for an order for sale of the land which, he said, would enable the land to be put to its best redevelopment potential.  He maintained that because he was an equal owner of the entirety of the plot, albeit with a right of exclusive possession of half only (being the less valuable half) he would be denied his entitlement by partition, and hence the land should be sold as a whole for redevelopment, with the sale proceeds being distributed equally.  He also contended that such a course would overcome certain practical difficulties which he said would be caused by the partition due to, amongst other things, the lack of space that it would leave between the dividing line and the boundary wall of No 6 Grampian Road.

8.  There is some evidence of the way in which the relationship between the Plaintiff and Defendant has degenerated over the management and ownership of the property, but I do not go into that evidence, and it has not affected my assessment of the matters in dispute.  Given that the parties are effectively agreed as to the outcome of these proceedings (save as to the precise terms of the order and the costs) I do not think that it is necessary for me to become embroiled in these aspects.   

9.  In response to the Defendant’s position as set out in his affidavit in 2006, on 1 December 2006 the Plaintiff resisted an order for sale by way of his second affirmation, and he maintained his claim for partition. 

10.  By Re Amendment of the Originating Summons made on 28 March 2019 the Plaintiff sought:

10.1.  various declarations as to the rights and entitlements of each of the Plaintiff and the Defendant over each part of the plot in respect of which they have exclusive possession;

10.2.  a declaration that in the light of the other declarations sought, that no order should be made on the Originating Summons; and

10.3.  alternatively, an order for partition.

11.  In his skeleton argument the Plaintiff now maintains that his primary stance is that no order should be made (or as he puts it, “The court should refuse to make an order”).  He says that this is an order that he can apply for, and the court can make, under s6(3)(a) of the Partition Ordinance.   The Plaintiff has not really addressed the declarations that have been identified in the Originating Summons, but it would appear that he is no longer seeking those declarations, because the only order he asks for is “No Order”, and it is his contention that the declarations are only as to his rights at law in any event, and hence are unnecessary.  I make no comment on whether those declarations represent his rights at law.

12.  In the alternative, he seeks an order for partition. 

13.  Mr Jeremy Chan, counsel for the Plaintiff, argued that this stance was adopted because of the stance adopted by the Defendant, in which the Defendant sought an order for sale.  The Plaintiff contends that this was an independent and separate counterclaim by the Defendant, maintained throughout the proceedings up to the most recent skeleton argument, and has of itself justified the change of position of the Plaintiff (notwithstanding that the Defendant’s position was made clear in 2006 and the Plaintiff did not amend his originating summons until 2019). 

14.  The Plaintiff says that the Defendant was always entitled to deal with his own property as he wished, and that he does not need an order for sale to proceed to sell his own property.  He says that the Defendant is inappropriately seeking to use the Partition Ordinance to force a sale of the entire plot in circumstances where the Land (Compulsory Sale for Redevelopment) Ordinance cannot be used, because the Defendant only owns 50%, which is not sufficient to trigger a sale under that latter Ordinance.  Consequently, the Plaintiff says that he was correct to resist the application, and contends that No Order is the correct approach for the court to take.

15.  The Defendant says that he has not always been insisting on a sale, and that his position was entirely in response to the request for partition made by the Plaintiff.  He says that the correct approach is for me to dismiss the application made, and that I should not simply make “No Order”.  He says that under the scheme of the Ordinance one cannot “apply” for “No Order” under s6(3).  Rather what that section does is provide expressly for the court to make no order when it considers that to be the appropriate order on the circumstances of any particular case.  He says that the request for a sale has no independent life of its own, and if the Plaintiff had withdrawn his application for partition, the application for a sale would have fallen away.

16.  The Defendant contends that the Plaintiff need only withdraw the application, and no order on his originating Summons, including on the application for a sale would be the inevitable result.  Hence, he says, no justification for maintaining these proceedings can be found, and the fact that the Plaintiff is now contending for no order is demonstrative of the proposition that the costs should be ordered to the Defendant on an indemnity basis.  He says that the problem with making “No Order” is that it may be misconstrued as endorsing the declarations which the Plaintiff has sought, because in the Originating Summons the claim for “No Order” is expressly made on the basis of the declarations. It would not be appropriate to make those declarations, so says the Defendant, as it would involve making assessments of the rights and liabilities of the parties which need not be made if no order for partition or sale was made.

17.  Ms Yvonne Cheng SC, for the Defendant, took me through some of the expert evidence which demonstrates why partitioning would be inappropriate, and she contends that this underlines that the order for sale was just as an alternative to the inappropriate application for an order for partition.  I do not find it necessary to go through that evidence in any detail for analysis in this judgment.

18.  I agree with the Defendant that the appropriate course is for me to dismiss the Originating Summons.  I do not agree with Mr Chan that s6(3) of the Partition Ordinance justifies an application for “No Order” in the manner contended for. What that section does is to recognise that in some cases in which a party has requested an order for partition, it may be appropriate not to make any order. Hence there is express statutory power to make no order on an application.  But that is a very different thing to a party making an application for no order. In my view it is either not permitted under the partition Ordinance, or if I am wrong about that, it is in any event not an appropriate course for a party to take, to make an application for no order simpliciter. 

19.  I also agree with Ms Cheng that the application for No Order, as contained in the Originating Summons is predicated upon the Plaintiff’s entitlement to the various declarations sought.  It is expressly stated to be “in the premises [of the declarations sought]”.  Mr Chan did not press for those declarations, and tried to persuade me that they were only sought, and were only relevant, in the context of the Defendant’s application for a sale.  I do not agree.  In my view the declarations were an integral part of his application for No Order, even if (which is probably the case) the re amendments were only made in response to the application for a sale.

20.  As a result, I do not think that the “No Order” which he has sought in the originating summons should be granted.  It is more appropriate to dismiss the originating summons.  I so order.

21.  That does not necessarily decide where the costs should lie, as costs remain in the discretion of the court.  However, having regard to the history of the matter, I am satisfied that the Defendant should recover his costs from the Plaintiff. I do not think that it is right that a Plaintiff should be entitled to bring a Defendant to court to face an application for partition, and then after 15 years of litigation, find himself faced with a Plaintiff who is pushing for no order to be made.  It is, frankly, a complete waste of effort to have spent that long in litigation and to end up asking the court to do nothing.  I am satisfied that the Plaintiff should pay the costs.

22.  I do not accept that the “No Order” was justified simply in response to the application by the Defendant for a sale.  The Plaintiff could, or should, have realised that the Defendant might seek a sale of the property as an alternative to partition, and if the Plaintiff had not thought that through at the time when he launched his application for partition, that is his own fault, and he cannot shift the consequences of it to anybody else.  He must take entire responsibility for his reactions to what was, in one sense, an obvious defence to the claim for partition.  If his reaction to that defence was to withdraw his claim, which is effectively what he has done, then he must take responsibility for that, and must pay the consequences of it.

23.  As to the basis on which those costs should be paid, I am also satisfied that they should be paid on an indemnity basis.  In my view this entire litigation has been an astonishing waste of time, effort, money, and court resources.  I cannot understand how the Plaintiff can have maintained the action since 2005, and it was not resolved at all within the 15 years from then until 2020.  The Plaintiff knew of the stance of the Defendant from as early as March 2006 when the Defendant first served his first affidavit.  He should have either pressed ahead with the application for partition, or withdrawn his application at that stage.  I do not know why that did not happen, but I cannot see why the Defendant should be made to suffer any greater loss in respect of his costs over that extraordinarily long period of time than is justified by costs on an indemnity basis.

24.  In addition to the costs of the Defendant, the Plaintiff’s choices have absorbed court time and resources over the prolonged period of 15 years.  That, too, is inappropriate, and the court is entitled to mark its displeasure at the inappropriate demands made on those resources by the Plaintiff’s choices. 

25.  In all the circumstances, I order that the Plaintiff is to pay the Defendants costs on an indemnity basis.

26.  At the hearing, I suggested to counsel that it was not appropriate for any further court resources to be taken up with taxation, and that as a result I would order costs to be summarily assessed.  They confirmed my jurisdiction to do so, and also confirmed that in the light of the submissions made, any order for costs should be a final order rather than an order made on a nisi basis.  Consequently the parties have put in schedules of costs.

27.  The Plaintiff put in a costs schedule showing that his costs were cumulatively HK$1,214,745.68.  The Defendant put in two schedules, one showing costs on a standard basis at HK$1,307,016.00 and one on an indemnity basis showing costs at HK$1,395,716.  The difference on an indemnity basis is HK$180,970.32.

28.  The Plaintiff also served a list of objections to the Defendants costs, which mainly suggested that the fee rates were too high, and the time taken was too high, and seeking a reduction of HK$368,896.  Having considered the costs with a broad brush, and recognising that I have ordered costs to be paid on an indemnity basis, I do not think that the objections raised by the Plaintiff can be sustained.  I note for example, that of the HK$180,970 difference between the Plaintiff’s and Defendant’s costs, HK$140,000 of it comprises the difference in counsel’s brief fee, which the Plaintiff has not challenged in his objection.  As a result, I summarily assess the costs to be paid by the Plaintiff to the Defendant in the sum of HK$1,395,716.

29.  The Parties are to draw up an order reflecting this judgment.