孔力麗 (KONG LILI) v. 王華 (WONG WAH) 作為王道亨(WONG TO HANG)的遺產執行人

HCMP 977/2022

[2023] HKCFI 793

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 977 OF 2022

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JUDGMENT

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THIS ACTION

1.  In this action, the plaintiff claims pursuant to section 6 of the Partition Ordinance (Cap.352, Laws of Hong Kong) (“the Ordinance”) for an order for sale of 3 properties situated at Seaview Garden, No.31 Cloud View Road, Hong Kong (“Seaview Garden”). The particulars of the properties are as follows:

(1)  Flat D on the 11^th Floor (“Flat 11D”);

(2)  Car parking space No.25 (“CPS No.25”) on the ground floor of Seaview Garden;

(3)  Car parking space No.53 (“CPS No.53”) on the upper ground floor of Seaview Garden.

(collectively, “the Properties”)

2.  As I will explain further below, the parties have all along been agreeable to an order for sale. What they did not agree entirely were the terms of the order. However, at the hearing, they were sensible enough to reach agreement on all the terms. What remains is a question of costs of the action which I will make a ruling herein.

FACTUAL BACKGROUND

3.  The following factual background is undisputed/indisputable.

4.  On 16 August 2016, the plaintiff and her ex-husband, Mr Wong To Hang (“the Deceased”), purchased the Properties as joint tenants. They were minded to use Flat 11D as their matrimonial home.

5.  On 14 November 2016, the Deceased caused a notice of severance of joint tenancy dated even date to be registered at the Land Registry. Since then, the plaintiff and the Deceased held the Properties as tenants-in-common in equal shares.

6.  In around July 2017, the relationship between the plaintiff and the Deceased turned sour, and the plaintiff was told to leave Flat 11D. Since then, the Properties remained in the possession of the Deceased and his son, Mr Wong Wah (the defendant).

7.  On 2 July 2019, the Deceased filed a Petition to divorce the plaintiff, and their marriage was subsequently dissolved by a decree absolute on 11 November 2020.

8.  The Deceased passed away on 5 December 2020.

9.  The plaintiff then, through her solicitors, proposed to the defendant that the Properties be sold in the open market.

10.  While the defendant initially offered to purchase the plaintiff’s share and/or interest in the Properties, he eventually decided not to do so, but to sell the Properties in the open market instead.

11.  In order to decide on the price at which the Properties should be sold, the parties agreed to engage a surveyor as their single joint expert so as to ascertain the total market value of the Properties. The expert which the parties engaged then advised that the market value of the Properties was in the sum of HK$15.8 million. Upon request, the joint expert clarified that the valuation of Flat 11D and CPS No.25 was in the total sum of HK$14.5 million, whereas the market value of CPS No.53 was HK$1.3 million. At the hearing, parties agreed that these figures should be adjusted in the light of an updated surveyor’s report, in that the current valuation of Flat 11D and CPS No.25 is HK$13.5 million, whereas the market value of CPS No.53 is HK$1.6 million.

12.  The parties therefore agreed that the Properties should be sold on the above basis.

PARTIES’ INITIAL DISAGREEMENT

13.  The matters which the parties could not agree on before the hearing have been helpfully summarised by Mr Sit for the defendant as follows:

Issue of dispute	P’s position	D’s position
Whether the Properties shall be sold separately or in a parcel	Selling Flat D together with CPS No.53 with a reserve price of not less than HK$14.5 million   And/or   Selling CPS No.25 with a reserve price of not less than HK$1.3 million	Selling Flat D, CPS No.53 and CPS No.23 together with a reserve price of not less than HK$15.8 million
Who shall be allowed to engage estate agents in promoting the sale	P	Both P and D can engage their own estate agents in promoting the sale
Whether vacant possession shall be delivered to P	Yes	No

14.  Having had some discussions, parties agreed at the hearing that:

(1)  There should be more flexibility in the sale strategy, and therefore the parties should not be bound to sell the Properties together. In other words, if necessary, CPS No.25 may be sold separately;

(2)  Both parties should be allowed to appoint their own estate agents so as to enhance the chance in locating a willing buyer for the Properties;

(3)  The plaintiff should be given a set of keys to the Properties no later than 20 April 2023 so that the plaintiff’s estate agent can bring potential buyers to view Flat 11D on his own without the need to make prior appointments with the defendant or his estate agent;

(4)  There is no need for the defendant to deliver vacant possession of Flat 11D to the plaintiff, save that both parties shall give vacant possession of the flat for the purpose of the sale of the flat to the purchaser to be located;

(5)  Both parties also agree to give undertakings to the Court such that they shall not park or permit others to park at CPS No.25 and/or CPS No.53 except for the purpose of viewing Flat 11D, for the defendant to clear up the personal chattels of the Deceased in the flat or for general cleaning thereof.

COSTS

15.  Ms Leung argued that the plaintiff should be entitled to the costs of the action for the following reasons:

(1)  The plaintiff has succeeded to obtain the keys to Flat 11D and an order that the Properties may be sold separately rather than in a bundle;

(2)  There has been delay on the part of the defendant in locating potential buyers and therefore it was necessary to commence the present action;

(3)  Despite the plaintiff’s request, the defendant has failed to provide the plaintiff with a statement of account, and as a result the plaintiff has been kept in the dark as to the amount of expenses which she has to bear as a co-owner.

16.  I do not accept that there has been delay on the part of the defendant in locating potential buyers. He has appointed an estate agent within around 2 months after the grant of probate has been granted by the Court. The estate agent has then hosted open day viewing for more than 11 times and invited around 77 prospective buyers to view the Properties. The defendant cannot be blamed for not being able to secure any done deal in the last 12 months or so.

17.  Neither do I think it can be said that this action was justified by the defendant’s failure to provide the plaintiff with a statement of account. As Mr Sit pointed out, the majority of the expenses incurred in relation to the Properties which the plaintiff has to share is the mortgage instalments, which were paid out of the joint account held by the Deceased and the plaintiff, and therefore the plaintiff should have a good idea on how much had been paid in that regard. As for the rest of the expenses, there has never been objection on the part of the defendant that the statement of account would be provided when it is finalised upon the sale of the Properties.

18.  However, it is noted that:

(1)  Having reached an agreement as a matter of principle that the Properties should be sold in the open market, the defendant’s solicitors sent a Memorandum of Agreement for conduct of the sale of the Properties (“the Memorandum”) on 17 March 2022 to the plaintiff’s solicitors for consideration;

(2)  On 18 March 2022, the plaintiff, subject to a few minor amendments, basically accepted the terms of the Memorandum as proposed by the defendant. However, the plaintiff proposed that the followings be added to the Memorandum:

(a)  An undertaking that the parties shall not dispose of their respective interests in the Properties without agreement of the other party;

(b)  CPS No.53 may be sold separately, but not necessarily together with Flat 11D and CPS No.25; and

(c)  The defendant shall deliver keys to Flat 11D to the plaintiff within 7 days solely for the purpose of allowing potential buyers to view the flat.

(3)  However, these proposals were all rejected by way of the letter of the defendant’s solicitors dated 23 March 2022. No counter-proposal was made by the defendant in the said letter;

(4)  The plaintiff’s solicitors replied right away on the same day, and explained the rationale of the plaintiff’s proposals. However, the defendant’s solicitors did not reply to the plaintiff’s solicitors any further.

19.  In these circumstances, I accept Ms Leung’s argument that the plaintiff should in principle be entitled to the costs of the action. The question is whether the plaintiff should be deprived of part of her costs so as to reflect the fact that she has not been entirely successful in this action:

(1)  She has failed to obtain an order that the plaintiff should be given an exclusive right to appoint estate agent;

(2)  She has also failed to obtain an order that the defendant shall deliver vacant possession of Flat 11D to the plaintiff.

20.  Having considered the matters in the round, I am of the view that the defendant should bear 70% of the plaintiff’s costs of the action.

21.  70% of the plaintiff’s costs is assessed on a gross sum basis at $158,083.80, and shall be paid, with the consent of the parties, on or before 30 March 2023.

THE ORDER

22.  I hereby make an order in terms of the draft order which the parties handed up at the hearing with the aforesaid costs order.