HILL CONCEPT LTD v. YUEN TIN YUN

DCCJ 4215/2023

[2024] HKDC 499

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4215 OF 2023

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BETWEEN

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REASONS FOR DECISION

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A. Introduction[1]

1.  Pursuant to the notice of appeal dated 30 January 2024, the Defendant seeks to appeal against (i) the order made by Registrar Soong on 19 January 2024; and (ii) the order made by Master Maurice Lam on 24 January 2024.

2.  It is trite that an appeal from a master’s decision to a judge in chambers is a de novo hearing, and the judge will deal with the matter in question as if it came before him or her for the first time: see Hong Kong Civil Procedure (2024) at para 58/1/2 (p 1233). However, a judge will not lightly intervene a master’s case management decision, unless there are good reasons to do so: see Dr X v Dr Hung Cheung Tsui & Anor (HCPI 67/2014, 23 May 2017) at para 10 (per Chow J (as Chow JA then was); B K Armit v G-Cladds Ltd & Anor [2022] HKCFI 585 at para 138 (per Marlene Ng J); Tin Kun Sin as executor of the estate of Tin Ka Kung (deceased) v Tin Chun Nei Jenny [2023] HKCFI 2975 at para 13 (per DHCJ Herbert Au-Yeung).

3.  Having heard the parties’ submissions at the hearing on 26 March 2024[2], I dismissed the Defendant’s appeal with costs.

4.  These are the reasons for my decision.

B. Background

5.  The Plaintiff is the developer of a residential building known as “Central 8”, which is situated at No 8 Mosque Street (hereinafter the “Residential Building”).

6.  Pursuant to the sale and purchase agreement dated 25 March 2022 (hereinafter the “SPA”), the Plaintiff agreed to sell, and the Defendant agree to purchase, Flat C on the 27^th Floor of the Residential Building (hereinafter the “Property”) at the consideration of HK$10,762,500.00.

7.  According to the terms of the SPA, completion in respect of the sale and purchase of the Property should take place on 13 June 2023, whereupon the Defendant should pay the balance of the purchase price in the amount of HK$9,686,250 to the Plaintiff.

8.  On 3 May 2022, the parties entered into a license agreement (hereinafter the “License Agreement”). In gist, the Plaintiff granted the Defendant a license to occupy the Property until 13 June 2022 (ie the completion date stipulated by the SPA). It was agreed that unless completion took place in accordance with the terms of the SPA, the Defendant should, inter alios, (i) vacate the Property; (ii) ensure that all occupants would vacate the Property; and (iii) deliver up the Property to the Plaintiff (see clauses 10(a) and (c)).

9.  The Defendant failed to pay the balance of the purchase price on 13 June 2022. Despite the time extension granted by the Plaintiff, not a single penny had been paid. As a result, completion did not take place.

10.  By the letter dated 11 September 2023, the Plaintiff accepted the Defendant’s repudiation, and treated the SPA as being terminated.

11.  However, the Defendant continued to occupy the Property. Despite repeated demands, the Defendant refused to vacate the Property.

12.  In these circumstances, the Plaintiff commenced the present action on 27 September 2023. The Plaintiff claims against the Defendant for, inter alios, an order that vacant possession of the Property be delivered, mesne profit in respect of the Defendant’s use and occupation of the Property and damages in respect of the Defendant’s breach of the SPA and the License Agreement.

13.  In the “home-made” Defence and Counterclaim dated 3 November 2023[3], it is alleged that:-

(1) The transaction under the SPA was a “deceitful sale”. Based on sections 6, 6A, 7, 7A, 13E, 13F and 13G of the Trade Descriptions Ordinance (Cap 362) and section 36 of the Estate Agents Ordinance (Cap 511), the Defendant is not liable to pay the balance of the purchase price to the Plaintiff.

(2) Some fraudulent statements were made to the Defendant and the Defendant’s mother (hereinafter “Madame Wong”), and as such the Defendant has no duty to complete the transaction under the SPA.

(3) The Plaintiff is liable for damages in respect of the purchase price and incidental expenses paid for acquiring of the Property, and the total sum claimed is HK$1,696,780.74.

14.  The said “home-made” Defence and Counterclaim is accompanied by a document that is said to be Madame Wong’s witness statement (hereinafter “Madame Wong’s Statement”)[4]. It contains the following allegations:-

(1) The estate agents of Centaline Property persuaded and induced the Defendant and Madame Wong to purchase the Property, though they were not interested at all and might not have the financial abilities. It transpired that the financial companies introduced by the estate agents refused to lend monies to the Defendant and Madame Wong.

(2) It is a nightmare to live in the Property. For instance, there was bad smell emanating from the renovation materials. The refrigerator did not function properly, and the air-conditioners were noisy. Many neighbours came from Mainland China. They were unhygienic, and there were cockroaches around. Whilst the management company unilaterally increased management fees, the management service was bad.

(3) Since the Defendant and her husband could not withstand the conditions, they requested the developer to return the deposit payment, and they would then vacate the Property. However, such request was refused.

15.  On 18 October 2023, the Plaintiff took out a summons seeking summary judgment for (i) vacant possession of the Property; (ii) mense profit; and (iii) contractual damages (to be assessed). In the alternative, the Plaintiff seeks interim payment (hereinafter the “Application for Summary Judgment/Interim Payment”).

16.  The Application for Summary Judgment/Interim Payment came before Registrar Soong at the hearing on 19 January 2024 (which was only attended by the Plaintiff’s solicitors). The learned Registrar :-

(1) ordered the Defendant to deliver vacant possession of the Property to the Plaintiff;

(2) adjourned the Plaintiff’s application for summary judgment/interim payment in respect mense profit and contractual damages (as well as the question for costs) for substantive argument on 23 April 2024; and

(3) gave directions for filing evidence and lodging submissions.

17.  On 24 November 2023, the Plaintiff took out a further summons seeking to strike out the Defendant’s Counterclaim on the grounds that it discloses no reasonable cause of action and that it is scandalous, frivolous, vexatious and/or otherwise an abuse of the Court’s process (the “Strike-out Application”).

18.  The Strike-out Application came before Master Maurice Lam on 24 January 2024 (which was attended by the Plaintiff’s solicitors as well as the Defendant in person). The learned Master:-

(1) adjourned the Strike-out Application for substantive argument at the hearing on 23 April 2024[5], and the same is to be heard together with the aforesaid application for summary judgment/interim payment in respect mense profit and contractual damages;

(2) gave directions for the parties to file evidence in relation to the Strike out Application.

19.  The Defendant is discontent with the aforesaid orders made by Registrar Soong and Master Lam. He took out a notice of appeal dated 30 January 2024.

C. The Order dated 19 January 2024

C1. Summary Judgment for Vacant Possession

20.  Once the plaintiff can show a prima facie case, the defendant is vested with the burden of establishing an arguable defence or triable issue. There shall be no mini-trial on affidavits as genuine factual disputes ought to be resolved at trial. Summary judgment application is only for clear cases: see Hong Kong Civil Procedure (2024) at para 14/4/9.

21.  I am firmly of the view that the Defendant has no answer to the Plaintiff’s claim for vacant possession. Since no arguable defence has been disclosed, summary judgment should be entered in favour of 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 2024.

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.

24.  None of the allegations raised in the Defence and Counterclaim and Madame Wong’s Statement constitute valid defence to the Plaintiff’s claim for vacant possession. Even if the Defendant and/or Madame Wong 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.

25.  At the hearing on 26 March 2024, it was further suggested that it would be necessary to preserve the Property when the dispute with the Plaintiff is pending resolution. In my view, this is a bad excuse. There is plainly no reason why Defendant and/or Madame Wong may not take pictures and videos to record the conditions of the Property.

26.  More fundamentally, in light of the stance taken by the Defendant and/or Madame Wong in these proceedings, the Plaintiff must be entitled to vacant possession of the Property. In the Defence and Counterclaim and Madame Wong’s Statement, 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.

27.  In any event, I am sceptical about the allegations raised in the Defence and Counterclaim and Madame Wong’s Statement. Whilst it is doubtful as to whether the statements allegedly made by the estate agents of Centaline Property constitute misrepresentations at all, it appears to me that the complaints raised by the Defendant and Madame Wong 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. Further, based on the materials available to me, I fail to see how it can be said that the Plaintiff, being the developer of the Residential Building, is necessarily privy to the representations that were allegedly made by the estate agents. I am also puzzled as to how the provisions of the Trade Descriptions Ordinance (Cap 362) (ie sections 6, 6A, 7, 7A, 13E, 13F and 13G) and section 36 of the Estate Agents Ordinance (Cap 511) may avail the Defendant.

28.  For all the above reasons, I am firmly of the view that the Defendant has failed to raise any arguable defence to the Plaintiff’s claim for vacant possession of the Property. Accordingly, the Plaintiff is entitled to summary judgment.

C2. Case Management Decision in relation the Application for Summary Judgment or Interim Payment in respect of Mense Profit and Contractual Damages

29.  I am of the view that the case management directions given by the learned Registrar under the Order dated 19 October 2023 are sound and appropriate, and the same make ample sense to me.

30.  The Defendant’s complaint is that the learned Registrar should have simply adjourned the entire Application for Summary Judgment/Interim Payment as he made an application for legal aid on 12 January 2024.

31.  This complaint has no merit.

32.  As early as 27 November 2023, the Defendant made an application for legal aid. Such application was rejected on 3 January 2024. It was in these circumstances that the Defendant made the aforesaid application on 12 January 2014. This was the Defendant’s second application, and the same was made shortly after his first application was rejected.

33.  Pursuant to section 15(4) of the Legal Aid Ordinance (Cap 91), the Court has discretionary power to lift the stay.

34.  In Bank of China (Hong Kong) Ltd v Fu Ming Kong Michael & Anor (HCA 7769 & 3909/2000, 24 June 2005) at para 27, Recorder Kenneth Kwok SC stated that “[t]he statutory stay is an aid in, not an obstacle to, the administration of justice. It does not mean that a defendant has the right to abort the trial of an action by making a fresh application for legal aid on the eve of every set of dates fixed for the trial of the action”.

35.  In Re Ip Lam On (HCSD 11/2000, 3 November 2000) at para 10, Yuen J (as Yuen JA then was) stated that “[t]he guiding principle should be to do justice between the parties”, and “if the court were satisfied that the application for legal aid was an abuse of process, then the court should exercise its discretion to lift the stay”.

36.  In the present case, there is no evidence showing that there was any material change of circumstances during the 9-day period between 3 January 2024 (ie the day when the Defendant’s first legal aid application was refused) and 12 January 2024 (ie the day when the Defendant made the second application for legal aid). In this connection, I am not impressed by the explanation that the Defendant failed to put forward some documents when the first application was made, and hence the Defendant made the second application after the documents in question were gathered. First of all, in the present proceedings, the Defendant failed to put forward any document that support his case, and as such I am doubtful whether such document existed at all. In any event, had the alleged documents been important, the Defendant would have provided the same to the Director of Legal Aid before the first application was disposed of.

37.  All in all, there is an overwhelming impression that the Defendant sought to utilize the second application on 12 January 2024 to cause delay to the present proceedings. This kind of gamesmanship was abusive and would cause prejudice to the opposing party. It must not be allowed.

38.  In the premises, it was perfectly understandable as to why the Registrar uplifted the stay on 17 January 2024, and proceeded to deal with the Application for Summary Judgment/Interim Payment at the hearing on 19 January 2024.

39.  In my view, the Court’s discretion was exercised properly, and justice between the parties was done. The case management decisions were also sound, proper and appropriate. I see no reason (not to mention good reason) to intervene.

D. The Order dated 24 January 2024

40.  For the same reasons set out in Section C2 hereinabove, there is no room for the Defendant to criticize Master Lam for not adjourning the Strike-out Application while his second legal aid application was pending determination.

41.  I am of the view that it was appropriate for the learned Master to give directions at the hearing on 24 January 2024. I am also of the view that the directions given by the learned Master make ample sense, and are sound, proper and appropriate. I see no reason (not to mention good reason) to intervene.

E. Conclusion

42.  For all the above reasons, I dismiss the Defendant’s appeal.

43.  I also order the Defendant to pay the Plaintiff’s costs in respect of the present appeal forthwith, summarily assessed at HK$35,000.

44.  I thank the Plaintiff’s solicitors for their assistance rendered to the Court.