CHU TIK KWONG v. CHOW CHUNG HEI AND OTHERS

HCMP 1736/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1736 of 2015

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REASONS FOR DECISION

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Introduction

1.  On 1 August 2016, I ordered that:

(1)  the 2^nd Affirmation of Chu Tik Kwong (the plaintiff) filed on 30 March 2016 be expunged from the Court file and costs be reserved.

(2)	(a) Proceedings be continued as if the cause or matter had been begun by writ;
	(b) The plaintiff do serve Statement of Claim on the defendants within 28 days;
	(c) The 2nd and 3rd defendants do serve their respective Defences within 28 days thereafter;
	(d) The 2nd and 3rd defendants’ costs of proceedings up to date be taxed and paid by the plaintiff to the 2nd and 3rd defendant forthwith.

2.  I now give my reasons for my decision.

Expunging affirmation

3.  Order 41, rule 5 of the Rules of the High Court, Cap 4A provides that:

“(1) Subject to Order 14, rules 2(2) and 4(2), to Order 86, rule 2(1), to paragraph (2) of this rule and to any order made under Order 38, rule 3, an affidavit may contain only such facts as the deponent is able of his own knowledge to prove.

(2)   An affidavit sworn for the purpose of being used in interlocutory proceedings may contain statements of information or belief with the sources and grounds thereof.”

4.  The 2^nd Affirmation of Chu Tik Kwong (the plaintiff) filed on 30 March 2016 runs to 11 pages.  Essentially, it is a document setting out the plaintiff’s arguments and contains some hearsay evidence.  Plainly, it contravenes Order 41, rule 5(1) that an affidavit may contain only such facts as are within the deponent’s personal knowledge.  It should never have been prepared and filed.  It has no place in the court record.  I ordered that it be expunged.  Order 41, rule 5(1) is to be observed, not flouted.

Genuine or substantial issues of fact

5.  The 1^st defendant (husband) and 2^nd defendant (wife) are a married couple.  The 3^rd defendant is their son.

6.  The 1^st and 2^nd defendants were the owners of the Property, a flat under the Home Ownership Scheme.

7.  By an assignment dated 15 May 2012, the 1^st and 2^nd defendant assigned the Property to the 2^nd and 3^rd defendants, with nil consideration.

8.  By an Order dated 20 February 2013, Poon J (as he then was) ordered in HCCW 557/2004 that the 1^st defendant in this Action who was the 1^st respondent in the winding up proceedings do pay $617,621.20 within seven days to acquire the petitioner’s shares in a named company.

9.  The plaintiff deposed to his belief that:

“[The 1^st defendant] was conspiring with the 2^nd defendant and the 3^rd defendant to transfer his interest and title of and in the Property to them with the assistance of [Messrs Tam & Partners, solicitors] knowingly for the purpose of defeating my claim against him for the said judgement debt in the sum of HK$617,621.20 as well as to enable him to evade enforcement action with respect thereto.”

10.  I note that the Assignment dated 15 May 2012 preceded the Order of Poon J dated 20 February 2013 by more than nine months.

11.  The plaintiff seeks to invoke section 60 of the Conveyancing and Property Ordinance, Cap 219, which provides that:

“ (1) Subject to subsections (2) and (3), every disposition of property made, whether before or after the commencement of this section, with intent to defraud creditors, shall be voidable, at the instance of any person thereby prejudiced.”

12.  The 2^nd and 3^rd defendants deposed that the 1^st defendant had been working in the Mainland since 2000 and was seldom in Hong Kong.  Since the 1^st defendant was no longer living in Hong Kong, he decided to transfer the Property to the 2^nd and 3^rd defendants who were residing in the Property.  The transfer was made with the permission of Director of Housing.

13.  It is clear beyond peradventure that the dispute whether the disposition of the Property by the Assignment was made “with intent to defraud creditors” within the meaning of section 60 involves a genuine or substantial dispute of fact.  Plainly, the plaintiff should have anticipated the dispute to be raised by the defendants.

14.  With such a dispute of fact, proceeding by the originating summons procedure is plainly inappropriate.

15.  I therefore ordered the proceedings to continue as if the cause or matter had been begun by writ.  I also directed the service of pleadings.  By wrongly resorting to the originating summons procedure, costs up to date had been wasted and I ordered the plaintiff to bear and pay costs up to date.