LEUNG KWAI LING,L v. FAIRBAIRN CATLEY LOW & KONG AND ANOTHER

HCA 1568/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1568 OF 2011

____________

BETWEEN

____________

_______________________

D E C I S I O N

_______________________

1.  This is an appeal by the plaintiff against some directions given by Master Ng on 30 November 2011.

The plaintiff’s claim

2.  The plaintiff issued her writ of summons endorsed with a statement of claim on 14 September 2011 against the 1st or alternatively 2nd defendant.  She claims compensation for the lost funds in the distribution of auction sale proceeds for Unit 13B, Block B, Lai Sing Court with interest.  She also claims compensation for too low a share of profit for her from the Lai Sing Court development project.  She further claims damages for the defendants’ failure to negotiate higher compensation, higher profit share and better terms for her in the redevelopment project.

3.  She also claims damages for psychological sufferings in having to face the problems related to the above claims, the long waiting time of the project and because some terms of the redevelopment agreement were unfavourable to her. 

4.  She also alleges that the defendants had delayed in sending her a valuation report and a notice of the auction sale of Lai Sing Court before the auction date and failed to send her a copy of the deed of assignment after the auction.  She wants damages at $2,000 per day for five years because of this delay. 

5.  She also asks for distribution of surplus funds upon the winding up of the Incorporated Owners of Lai Sing Court and compensation for negligence of the defendants.

Extension of time for filing of defence

6.  The defendants filed their acknowledgments of service of writ of summons on 30 September 2011 indicating their intention to contest the action.

7.  On 4 October 2011, the plaintiff issued a summons seeking judgment in default on the ground that the defendants had not responded to her writ of summons within 14 days.  But the filing of the defendants’ acknowledgments of service was permitted by O.12 r.6 of the Rules of High Court.  Hence, no default judgment could be given on the plaintiff’s application.  The solicitor for the defendants also suggested that the writ was served by post.  If that is correct, time for filing of acknowledgement of service had not expired on 30^th September, 2011.

8.  On 28 October 2011, Master J Wong made an order extending the time for the defendants to file their defence to 18 November 2011.

The applications by the parties

9.  On 16 November 2011, the defendants issued a summons to strike out the statement of claim on the ground that:

“it discloses no reasonable cause of action and/or that it is frivolous or vexatious and/or that it is otherwise an abuse of process of the court ….”

The defendants also want to dismiss the action.

10.  In the event that the summons to strike out should fail, the defendants also ask for an extension of time to file their defence within seven days from the disposal of the striking out application.  This application is supported by an affirmation of the 2nd defendant for the defendants.

11.  The 2nd defendant said in his affirmation that the statement of claim comprised a mixture of disorganised allegations for loss and damage but without a single incident or fact to justify the allegations. Without any allegation of fact, the defendants are unable to formulate a proper defence.  The 2nd defendant also said that the accusations of the plaintiff are not substantiated by facts, not capable of reasoned argument and without foundation or bona fides.

12.  He further said that the plaintiff and her husband at the material time were joint owners of the unit in question and the plaintiff, without joining her husband as a co-plaintiff, cannot sue for lack of locus standi. 

13.  The plaintiff on 21 November 2011 also issued a summons for an order that the defendants do provide her on the hearing date of the summons lists of the payments of compensation amounts and auction sale proceeds to each of the owners of Lai Sing Court. 

The directions

14.  The first hearing of the two summonses was before Master Ng on 30 November 2011.  Master Ng gave the following directions:

“1. Leave to the Plaintiff to file and serve an affirmation in opposition to the Defendants’ Summons dated 16^th November 2011 and in support of the Plaintiff’s Summons dated 21^st November 2011 within 21 days from the date hereof;

2. Leave to the Defendants to file and serve an affirmation in reply in respect of the Defendants’ Summons dated 16^th November 2011 and in opposition to the Plaintiff’s Summons dated 21^st November 2011 within 21 days thereafter;

3. Leave to the Plaintiff to file and serve an affirmation in reply to the Defendants’ affidavit in opposition to the Plaintiff’s Summons dated 21^st November 2011 within 21 days thereafter;

4. No further affirmation shall be filed without leave of the Court;

5. Any application for leave to file further affirmation shall be made not less than 14 days before the substantive hearing supported by reasons on affidavit;

6. The Defendants’ Summons dated 16^th November 2011 and the Plaintiff’s summons dated 21^st November 2011 be adjourned to a date to be fixed for argument before Master in Chambers with 2 hours reserved;

7. Solicitors for the Defendants shall fix a date with the Listing Clerk for the substantive hearing for argument within 21 days from today but such substantive hearing shall not be heard before 84 days from the date hereof;

8. Costs of this application be reserved;

9. The Defendants do prepare, lodge and serve a hearing bundle for the substantive hearing for argument; and

10. The Defendants do draft this Order and submit the draft order for approval within 5 days from the date hereof.”

The plaintiff’s appeal

15.  The plaintiff was dissatisfied with the directions.  She thought that Master Ng should have dismissed the defendants’ summons to strike out and allowed her summons for supply of documents there and then.  She thought that her action would be delayed by refixing the summons for argument.  She therefore lodged a notice of appeal on 13 December 2011 and asked for the defendants’ striking out summons to be dismissed and her summons to be allowed immediately.  She also attached to her notice of appeal some explanatory notes of her reasons for applying for default judgment.

16.  She said in her notes that the extended time for the defendants to file their defence had passed.  She objected to the defendants’ application for a further extension in the event that the striking out summons should fail.  The striking out summons seemed to her to be an abuse of the process of the court as the defendants had not mentioned about striking out at the hearing in last October for the first extension of time to file defence.  She was worried that the delay might cause her serious consequence as she was nearly 60 years old.  The adjournment for about three months was also too long and unfair to her as the defendants would have then five or six more months to file their defence.  She was also worried of the time bar for some of her claims.  She wanted immediate dismissal of the summons to strike out because she had shown reasonable causes of action in her statement of claim.  She further said that the mattes mentioned in her statement of claim relate to the Lai Sing Court Development Project and the agreement for the project.

17.  She also claimed that some terms of the development agreement seemed to be very unfavourable to her as they provided for low amounts of compensation and profit.  There was also the problem of the auction proceeds and a unit/flat in the development called Serenade (which is supposed to be given to her and her husband pursuant to the Development Agreement).  Serenade is developed on the site of the former Lai Sing Court.  She thought that these problems might be due to the negligence or unsatisfactory service by the defendants or their not acting in her best interest.  She also thought it unfair to require her to file further documents without requiring the defendants to first provide her with the information about payments to the other owners.

18.  At the hearing of the appeal, she also said that the defendants had no ground to strike out her claim.  There should not be an adjourned hearing which would be a waste of time.  She was also worried that if the summons to strike out should proceed first at the adjourned hearing and succeed, then she would have no chance to learn about the amounts of compensation and auction proceeds that the other owners had received.

19.  She thought that it was impossible for her to be given only $400,000 as compensation in the scheme of development.  She repeated that she did not know if it was negligence or unsatisfactory service by the defendants.  She doubted if the defendants had explained to her the terms of the development agreement and an auction proceeds agreement before asking her to sign them.  She also doubted if all the owners of Lai Sing Court had signed the same development agreement.  She thought the other owners might have signed agreements with better benefits.  She repeated that she had reasonable causes of action and the action was a matter of several million dollars.  If her action should be struck out, she would lose all her claims.  It was also unfair to drag the matter out.

20.  The defendant opposes the appeal.  The defendant submitted that Master Ng gave the directions as a matter of case management. For such matter, the plaintiff has to show that the Master either had no power to give the directions or that she had exercised her power erroneously in giving the directions.  However, the defendants submitted that the directions were properly given.  Hence, the appeal should be dismissed.

Analyses and Decision

21.  The first matter I note is that if the plaintiff’s claims have not yet been barred by limitation, then extending the time for the defendants to file their defence will not result in her claims being barred. 

22.  Without expressing any view on the merits of the respective summonses of the parties or the plaintiff’s statement of claim, I would say that the defendants’ summons to strike out should not be dismissed immediately as the plaintiff’s claim is not easily comprehensible.  I also consider it inappropriate to grant relief on the plaintiff’s summons there and then as the plaintiff has not even filed any affirmation to spell out the facts to support her summons.  It was thus right that Master Ng should have given her the opportunity to file an affidavit to set forth her case in support of her summons and in opposition to the defendants’ striking out summons.

23.  The defendants should also be allowed to put in an affidavit to oppose the plaintiff’s summons and to respond to her case on the defendants’ striking out summons.

24.  I therefore see nothing wrong in the directions given by Master Ng.  I indeed consider that it was right for the master to have given these usual directions which were within her power to give.

25.  Regarding the plaintiff’s complaint of delay, I think it has no merit as the summonses were not ready for disposal at the first hearing before Master Ng.  Time is required for the parties to fully ventilate their respective cases on affidavits before the summonses can be disposed of. If there is any delay, such is inevitable.

26.  Regarding her complaint about the long time given for the defendants to file their defence if they should fail in the striking out summons, I would observe that if the defendants should succeed, then there will be no need for them to file any defence.  Judging from the contents of the statement of claim, one cannot say that the summons to strike out is impossible to succeed.  To require the defendants to file their defence now may therefore result in wastage of costs.

27.  The plaintiff also said that the solicitors for the defendants did not mention that they would be applying to strike out the action in the October hearing for the first extension of time to file defence. But at that stage, the solicitors for the defendants had just come into the picture.  I do not think there was any attempt to deliberately conceal anything from the plaintiff.  I also do not consider that there was any significant delay by the defendants in issuing the summons to strike out.

28.  The plaintiff was worried that if the defendants’ summons to strike out should go first at the adjourned hearing and succeed, then her action would be struck out and she would not be able to learn about the amount of compensation and auction proceeds received by the other owners. I would say that if her action should be struck out on one or more grounds that are relied on by the defendants, that simply means her action has no merits. In that event, her summons would also be of no merits.  She cannot ask for discovery or the provision of documents by the defendants when her action against them has no merits.  She also cannot say that because she is claiming large sums of money, therefore her action should not be struck out.  The size of a claim is not a consideration on a striking out application.

Order

29.  In the premises, I see no merit in this appeal and I dismiss it.  I also order that the time for the defendants to file their defence be extended for seven days from the disposal of the summons to strike out in the event that the striking out application should fail.  I also make an order nisi that the plaintiff do pay the defendants’ costs of this appeal which I summarily assess at $19,000.