WONG YUK FUNG v. WOO CHOR WAH AND ANOTHER

cacv 242/2004

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 242 of 2004

(on appeal from HCA no. 7091 OF 2000)

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REASONS  FOR  JUDGMENT

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Hon Tang JA (giving the reasons for judgment of the court):

1.  In HCA 7091/2000, which was commenced on 15 July 2000, Wong Yuk Fung (“Wong”), the appellant in this appeal, claimed against Woo Chor Wah (“Woo”), his former co-habitee:

“	(1)	A declaration that the Property being registered in the name of the Defendant, a half share of which was held by the Defendant on trust for the Plaintiff as tenants in common;
…
	(4)	Further or alternatively; an order that the Property be sold and the a half of the proceeds therefrom be distributed to the Plaintiff;”

2.  Woo has since 12 June 1986 been the registered owner of Flat F, 1/F, Block 17, Beacon Heights, Phase II, No. 17 Lung Ping Road, Kowloon, Hong Kong (“the property”). 

3.  Lehin Securities Limited (“Lehin”), the respondent in this appeal, obtained judgment against Woo in HCA 12480/97 and 12481/97 in the sums of $205,316.98 and $729,937.67 respectively, and costs. 

4.  On 9 December 1999, Lehin obtained two charging orders absolute in respect of the property. 

5.  On 17 December 1999, Lehin in HCMP 7779/99 applied for sale and possession of the property.  In her defence in HCMP 7779/99, Woo claimed that she held 25% of the property in trust for her two children.

6.  On 16 March 2000, the two children were added as parties to HCMP 7779/99.

7.  Wong was the father of the two children and had cohabited with Woo between 1982 and 1988.

8.  On 14 March 2000, Wong applied to be joined as a party to HCMP 7779/99 claiming that he had at least 35% interest in the property.  He was duly and rightly joined as the 3^rd defendant.

9.  Wong commenced the present action (HCA 7091 of 2000) on 15 July 2000 (“this action”).

10.  On 31 August 2000, Wong applied for consolidation of HCMP 7779/99 and this action.  However on 23 November 2000, he applied to withdraw his application.  On 29 November 2000, leave was granted to him to withdraw his application for consolidation.  On 26 March 2001, Master C B Chan ordered HCMP 7779/99 to be heard at the conclusion of the trial in this action. 

11.  On 18 June 2001, Lehin applied to be joined as a party in this action.  Wong opposed Lehin’s application.  On 15 October 2001, Registrar C Chan granted leave to Lehin to be joined as the 2^nd defendant to this action.  Wong did not appeal against that order.  On 2 November 2001, the defence of the 2^nd defendant was filed.

12.  This action had been contested by Woo until 10 January 2003.  But, by a consent summons dated 10 January 2003, she acknowledged that she held 50% of the property in trust for Wong.  That consent summons was listed for hearing before Pang J on 17 February 2003 which would have been the first day of trial.

13.  On 17 February, Woo was absent.  Wong appeared in person.  The 2^nd defendant appeared by counsel.  Pang J refused to make any order by consent.

14.  On 26 February 2003, Pang J dismissed Wong’s claim.

15.  A notice of appeal was filed on 11 March 2003.  That was CACV 63/2003.  However that was dismissed in January this year because Wong failed to provide security for costs which had been ordered by Yuen JA on 16 December 2004.

16.  On 13 September 2003, Wong applied for leave to appeal against the order of Registrar C Chan out of time.  The application was dismissed by Deputy Judge To on 31 March 2004.

17.  This is Wong’s appeal from the decision of Deputy Judge To, who had also ordered costs on an indemnity basis against Wong. 

18.  The appeal must fail on every consideration relevant to such an application. 

19.  First, the period of delay is one year and six months.  Secondly, there was no acceptable reason for the delay.  Thirdly, Lehin has been prejudiced by the delay because Lehin has taken part in this action.  Fourthly, the appeal lacks merit. 

20.  We should also mention that on 2 January 2004, Wong applied for an order that Lehin “be ceased as a defendant in the action” which was to be heard by Yuen JA.  That application had been withdrawn.  But in the reasons for decision on costs dated 27 September 2004, Yuen JA ordered costs against Wong on an indemnity basis because the application was misconceived. 

21.  Deputy Judge To dealt with Wong’s explanation for delay at paragraph 14 of his judgment.  The explanation is startling.  First, he explained that because he was a layman, he was under the wrong impression that Registrar C Chan would not have made a mistake in granting the joinder.  As for the delay in applying for extension of time he said it was the fault of his solicitors.  Mr Yau of his solicitors explained that it was not until he came across Sanders Lead Co Inc v Entores Metal Brokers Ltd [1984] 1 All ER 857 and he became aware of the existence of a cause of action based on resulting trust, that he realised Wong could appeal.  This is a bizarre explanation.  We would not waste time by dealing with it further.

22.  As for prejudice to Lehin, We have said enough. 

23.  The appeal is totally devoid of merit.  By reason of the charging orders absolute, Lehin is the equitable chargee of Woo’s beneficial interest in the property.  Thus, Lehin was vitally concerned with the quantum of such interest.  Moreover, Wong was seeking the sale of the property which Lehin had on any account a partial beneficial interest.

24.  Miss Hui, who appeared on behalf of Wong, submitted that it appeared from the judgment of Kwan J given on 3 December 2001, in Bankruptcy Proceedings No. 4583 of 2001, where on the petition of Lehin, Woo was made bankrupt, that Lehin’s petition was presented on the basis that Woo’s beneficial interest in the property was only one quarter. 

25.  We have 4 comments to make about this.  First, the judgment was dated 3 December 2001 hence after the order of Registrar C Chan. 

26.  Secondly, even with a quarter interest in the property Lehin was entitled to be joined since the claim was for the sale of the property.

27.  Thirdly, we do not know enough about the situation in relation to the petition. 

28.  Lastly, in all the circumstances we are not persuaded that this makes any difference to the merit of the appeal.

29.  We repeat that since the decision of Deputy Judge To, Wong’s appeal from Pang J’s judgment has been dismissed.  Even if leave to appeal out of time is given and even if the appeal succeeds, it does not follow that the judgment given by Pang J would be set aside.  Indeed since the appeal has been dismissed the judgment would stand. 

30.  Miss Hui argued that Registrar C Chan had no jurisdiction to make the order of joinder.  That cannot possibly be right.  She said that the joinder was a nullity.  This is a bold and bad argument. 

31.  For these reasons, at the conclusion of the hearing, we dismissed the appeal. 

Ruling on costs

32.  We turn to deal with the question of costs.  Ms Chiu, who appeared for Lehin, asked for costs on an indemnity basis.  The discretion to order costs on an indemnity basis is not fettered or circumscribed beyond the requirement that taxation on the indemnity basis must be appropriate: Hong Kong Civil Procedure 2004, 62/App/12.  This appeal is completely devoid of merit.  We are of the view that it should be dismissed with costs on an indemnity basis and we so order.