HILL CONCEPT LTD v. YUEN YUN or formerly known as YUEN TIN YUN

CAMP 176/2024, [2025] HKCA 464

On an intended appeal from [2024] HKDC 499 & 1282

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 176 OF 2024

(ON AN INTENDED APPEAL FROM DCCJ NO 4215 OF 2023)

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J U D G M E N T

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Hon Poon CJHC (giving the Judgment of the Court):

1.  By a decision given on 26 March 2024 (“Decision”),[1] with the Reasons for Decision handed down later on 2 April 2024,[2] Deputy District Court Judge Alan Kwong (as he then was) (“the Judge”) dismissed the defendant’s appeal against:

(i)  an order by Registrar Soong on 19 January 2024 for delivery of vacant possession of the Property referred to at [5] below by the defendant to the plaintiff, and for case management of outstanding issues; and

(ii)  another case management order by Master Maurice Lam on 24 January 2024.

2.  The defendant’s application for leave to appeal against the Decision was refused by the Judge on 9 August 2024 (“Leave Refusal”).[3]

3.  By a summons dated 10 September 2024, the defendant applies for leave to appeal against the Leave Refusal of 9 August 2024. However, procedurally, the appropriate course to take is to renew the application for leave against the Decision of 26 March 2024.[4] The defendant’s summons will accordingly be treated as such. Although the defendant stated in his summons that this application is out of time, the plaintiff accepted that it is not so because of the summer vacation in the month of August.

4.  Having considered that parties’ submissions, we consider it appropriate to determine the defendant’s application on paper without an oral hearing.[5]

Background

5.  The case concerned premises at Flat C, 27^th Floor, No 8 Mosque Street (“Property”). The Property is part of a residential building of which the plaintiff is the developer. The plaintiff and the defendant entered into a sale and purchase agreement dated 25 March 2022 (“SPA”), whereby the plaintiff agreed to sell and the defendant agreed to purchase the Property. Completion was to take place on 13 June 2023, and the defendant was to pay the plaintiff the balance of the purchase price in the amount of HK$9,686,250.00.

6.  On 3 May 2022, the parties entered into a licence agreement whereby the plaintiff granted the defendant a licence to occupy the Property until 13 June 2023, which was the date of completion under the SPA. Unless completion take place in accordance with the SPA, it was agreed that the defendant should deliver vacant possession of the Property to the plaintiff.

7.  On 13 June 2023, the defendant failed to pay the balance of the purchase price. Completion under the SPA never took place, as payment had not been made despite the time extension by the plaintiff. By a letter dated 11 September 2023, the plaintiff accepted the defendant’s repudiation and treated the SPA as terminated. The defendant however continued to occupy the Property and refused to vacate despite repeated demands.

8.  On 27 September 2023, the plaintiff commenced action claiming delivery of vacant possession, mesne profit for the defendant’s use and occupation of the Property, and damages for the defendant’s breach of the SPA and the licence agreement.

9.  The defendant acted in person. In his Defence and Counterclaim dated 3 November 2023, he alleged that (1) the transaction under the SPA was deceitful; and that under provisions of the Trade Descriptions Ordinance (Cap 362) and the Estate Agents Ordinance (Cap 511), the defendant was not liable to pay the balance of the purchase price; (2) fraudulent statements were made to the defendant and his mother, so that the defendant was not under any duty to complete under the SPA; and (3) the plaintiff was liable for damages totaling HK$1,696,780.74 in respect of the purchase price paid and incidental expenses for acquiring the Property.

10.  The defendant filed and relied on a witness statement by his mother, stating in effect (1) the defendant and his mother were induced to purchase the Property by estate agents, and it transpired that the finance companies introduced by the estate agents refused to provide them with loans; (2) living conditions in the Property were unsatisfactory, including bad smell from renovation materials, noisy air-conditioners, refrigerator not functioning properly, unhygienic neighbours from the Mainland, presence of cockroaches, and bad management service; (3) the defendant and his mother’s husband could not withstand the conditions, but request for return of the deposit payment was refused.

11.  On 18 October 2023, the plaintiff applied for summary judgment for vacant possession, mesne profit and damages. On 24 November 2023, the plaintiff further applied to strike out the defendant’s counterclaim.

12.  On 17 January 2024, Registrar Soong uplifted the stay under the Legal Aid Ordinance (Cap 91), the defendant having earlier applied for legal aid for a second time on 12 January 2024.[6] After a hearing on 19 January 2024, the Registrar ordered the defendant to deliver vacant possession to the plaintiff, and the rest of the plaintiff’s summary judgment application was adjourned to 23 April 2024 with directions for filing of evidence and submissions. As for the strike out application, it came before Master Maurice Lam on 24 January 2024. The master adjourned the application to 23 April 2024 with filing directions, to be heard together with the plaintiff’s outstanding application for mesne profit and damages.

The Decision

13.  In his Reasons for Decision, the Judge firmly took the view that the defendant has no answer to the plaintiff’s claim for delivery of vacant possession, and that summary judgment on this claim should be entered for the plaintiff:

“22. There is no dispute that completion did not take place at all, and the license granted in favour of the Defendant pursuant to the License Agreement expired on 13 June [2023].

23. Since the license has expired, the Defendant has no legal basis to use and occupy the Property. The Defendant has been committing the tort of trespass on a continuous basis. He also continuously breached clause 10 of the License Agreement, in that he has continuously failed to (i) vacate the Property; (ii) ensure that all occupants should vacate the Property; and (iii) deliver up the Property to the Plaintiff.”

14.  The Judge did not accept the defendant’s case as a valid answer to the plaintiff’s claim for possession:

“24. … Even if the Defendant and/or [his mother] received some misrepresentations and the conditions of the Property were unsatisfactory as alleged, these are not reasons why the Defendant may continuously occupy and use the Property.

…

26. More fundamentally, in light of the stance taken by the Defendant and/or [his mother] in these proceedings, the Plaintiff must be entitled to vacant possession of the Property. In the Defence and Counterclaim and [the witness statement of the defendant’s mother], it is repeatedly mentioned that Defendant would not pay the balance of the purchase price and has no duty to complete the transaction pursuant to the SPA. The Defendant even seeks refund of the 10% deposit paid to the Plaintiff for acquiring the Property and claims damages in respect of the incidental expenses incurred in the acquisition. The Defendant has plainly treated the SPA as being rescinded and/or terminated. It follows that he has no basis to retain the Property and to continue occupying the same.”

15.  The Judge further said of the credibility of the defence case:

“27. … I am sceptical about the allegations raised in the Defence and Counterclaim and [the witness statement of the defendant’s mother]. Whilst it is doubtful as to whether the statements allegedly made by the estate agents … constitute misrepresentations at all, it appears to me that the complaints raised by the Defendant and [his mother] are bare assertions that are not supported and corroborated by the objective circumstances and/or the contemporaneous documents. I am not of the view that these bare assertions are credible. … ”

16.  The Judge did not see how the provisions of the Trade Descriptions Ordinance (Cap 362) and the Estate Agents Ordinance (Cap 511) referred to by the defendant could assist him. The Judge also did not accept the suggestion that the Property needs to be preserve pending the resolution of the dispute with the plaintiff, as there was no reason why the defendant or his mother could not take pictures and videos to record the conditions of the Property.

17.  As for the case management aspect of the Registrar’s order on 19 January 2024, the Judge first noted that the Court has discretionary power to lift the stay under the Legal Aid Ordinance (Cap 91), and held that the Registrar had properly exercised the discretion to do so and to proceed with the plaintiff’s application for summary judgment (Bank of China (Hong Kong) Ltd v Fu Ming Kong Michael & Anor, HCA 7769/2000 & HCMP 3909/2000, 24 June 2005, at [27]; and Re Ip Lam On, HCSD 11/2000, 3 November 2000 at [10]. He held that the adjournment of the plaintiff’s application in respect of mesne profit and damages, and the related filing directions, were sound and proper. Similarly, he held that it was proper for Master Lam not to adjourn the plaintiff’s strike out application when his legal aid application was still pending determination, and that the directions given by the master on 24 January 2024 were sound and proper.

18.  In dismissing the defendant’s appeal, the Judge ordered costs against him, summarily assessed at HK$35,000.

The Leave Refusal

19.  In refusing leave to appeal, the Judge noted the defendant simply repeated his stance that the SPA was a deceitful transaction, and that he has arguable defences in respect of delivering vacant possession, without identifying any error in the analysis and reasoning of the Reasons for Decision. In relation to the defendant’s allegations that there was collusion between the plaintiff, its holding company and the estate agent, the Judge held that the defendant should not be allowed to adduce new evidence:[7]

“18. … The Defendant fails to show that the requirements under the rules in Ladd v Marshall [1954] 3 All ER 745 are satisfied. I cannot see any reason why the Defendant did not raise the allegations in question in the affirmation filed to oppose the Plaintiff’s application for summary judgment. I also cannot see how these allegations (which are serious but unsubstantiated and unsupported by documents) may avail the Defendant’s contention that no vacant possession should be delivered.”

20.  As for the case management orders, the Judge held that the leave application before him was out of time, as the defendant himself accepted. Although the Judge took the view that the delay was minimal, he did not grant time extension as he held that no errors in his analysis and reasoning had been identified, the proposed appeal against those orders were utterly unarguable as they were sound and appropriate, and that the defendant must not be allowed to thwart or obstruct the proceedings by repeatedly making legal aid applications.

21.  The Judge also noted that the defendant’s proposed appeal is academic, as the substantive hearing on the plaintiff’s applications for summary judgment on mesne profit and damages, and for striking out the defendant’s counterclaim, took place on 23 April 2024 before Master Vincent Kee, who entered interlocutory judgment against the defendant (interlocutory because he had still not delivered vacant possession) and struck out his counterclaim.

22.  In relation to the costs of the appeal, the defendant complained that the Judge should not have ordered costs against him. The Judge held that this aspect of his leave application was also out of time and refused to extend time, as the defendant failed to identify any error in applying the general rule that costs should follow the event, and in disposal by summary assessment.

23.  A costs order nisi was made against the defendant for the leave application.

Draft grounds of appeal

24.  In his Draft Grounds of Appeal before us, and in his written submission, both lodged on 10 September 2024, the defendant in effect repeated that there was collusion between the estate agent, finance companies and / or the plaintiff, which he could show by new evidence; and that the SPA was a fraud, and so his loan agreement in connection with it was illegal and unenforceable. He relied on a passage in Ju Yan Di Emperory Genesisy v Yau Wai Han [2015] 1 HKLRD 822 at [14] that the starting point in a summary judgment application is that it should only be invoked when there is no defence to the claim. He complained that the Decision was unfair to him, with the Judge accepting the plaintiff’s case but not his. He also repeated that he should be allowed to keep possession of the Property in order to preserve it as an exhibit. He did not seek to rely on provision of the Trade Descriptions Ordinance (Cap 362) and the Estate Agents Ordinance (Cap 511) again.

Discussion

25.  We agree that with the Judge the defendant’s appeal is unarguable. In view of the expiry of his licence to occupy the Property, his failing to pay the balance of the purchase price and denying the validity of the SPA, the defendant has no entitlement to the Property and no right to possession. The allegations of fraud did not assist him, and as the Judge pointed out, in any event he did not satisfy the rules for adducing new evidence (Ladd v Marshall [1954] 3 All ER 745). The alleged unsatisfactory conditions of the Property also did not assist him, nor are we impressed by the argument that he needs to be in possession of the Property in order to preserve it as an exhibit. The Judge’s reasoning was entirely correct. There was no fairness against the defendant. The same applies to the reasoning on the case management orders and on costs, against which the defendant did not advance any arguments before us.

26.  We accordingly refuse leave to appeal and dismiss the defendant’s summons. We order the defendant to pay the plaintiff’s costs of this summons, summarily assessed at HK$33,511. As the defendant’s application is totally without merit, we also order under with Rules of the High Court, Order 59, rule 2A(7) that no party may request reconsideration of the matter at an oral hearing.