LAM FUNG CHING ANNIE v. TSE KWOK WING JACKY AND ANOTHER

DCMP 1129/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 2954 OF 2012

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JUDGMENT

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Introduction

1.  There are two applications. First, by a summons dated 14 March 2013 (“the striking-out summons”), the plaintiff applies for an order that the 3^rd Affirmation of the 1^st defendant dated 11 January 2013 (“the Affirmation”) be struck out on the ground that it does not disclose any reasonable cause of action against the plaintiff. Second, by a summons dated 18 March 2013 (“the time summons”), the defendants apply for an extension of time to file an affirmation pursuant to paragraph 5 of the Order of His Honour Judge Chow (“the judge”) dated 14 November 2012 (“the Order”).

Background Facts

2.  By way of background, for the purposes of these two applications, the following facts are relevant. The plaintiff commenced these proceedings by way of an originating summons dated 11 May 2012 for, among other things, an order for sale of a property known as Flat B, 41^st Floor, Block 6, Liberte, No.833 Lai Chi Kok Road, Kowloon (“the Property”) pursuant to section 6 of the Partition Ordinance, Cap. 352. The Property has since 20 October 2004 been registered in the names of the plaintiff and the defendants as joint tenants.

2. The plaintiff filed her affirmation dated 11 May 2012 to support her application. There, she explained that the 1^st defendant and she were lovers and the 2^nd defendant is the elder sister of the 1^st defendant. The relationship between the plaintiff and the 1^st defendant broke down in or about April 2010. Prior to that, the plaintiff resided at the Property with the defendants and their father Mr Tse Tin Sing (“the Father”) after the Property was acquired by the parties.

3.  To oppose the plaintiff’s application, the 1^st defendant filed his 1^st affirmation dated 24 September 2012 and alleged that the plaintiff was a mere trustee with no beneficial interest in the Property and that the Father provided all the purchase monies for the Property. The 1^st defendant further filed his 2^nd affirmation dated 5 October 2012 to exhibit documentary evidence to support his contentions in his 1^st affirmation.

4.  The plaintiff filed her reply affirmation dated 31 October 2012. She accepted that it was the Father who provided the down payment for the purchase of the Property but it was the 1^st defendant and she contributed to the repayment of the mortgage in respect of the Property. She contended that the 2^nd defendant holds the Property on trust of the Father and hence all of the 1^st defendant, the Father and she are the beneficial owners of the Property.

5.  The matter came before the judge on 14 November 2012. The judge made the Order for the purpose of turning these proceedings into an action begun by writ due to the obvious factual disputes arising from the affidavit evidence. Under the Order, the respective affirmations already filed are treated as pleadings. The defendants are ordered to file and serve a further affirmation to be used as their counterclaim, if any, within 60 days from the date of the Order and the plaintiff do have leave to file her reply affirmation to respond to the counterclaim if applicable.

6.  On 11 January 2013, the defendants filed the Affirmation. The Affirmation only consists of three short paragraphs. In the first paragraph the 1^st defendant explained that the purpose of the Affirmation is to supplement his 1^st affirmation. The remaining two paragraphs were to exhibit further documentary evidence pertaining to his 1^st affirmation.

7.  By a letter dated 6 March 2013, the plaintiff’s solicitors indicated to the defendants’ solicitors that the plaintiff intended to apply for an order to strike out the Affirmation, which shall stand as counterclaim pursuant to the Order.

8.  The defendants’ solicitors replied by way of a letter dated 7 March 2013 (“the Letter”). In the Letter, it was stated in clear terms that the Affirmation was not intended to be the counterclaim and that there would be another affirmation to be filed by the defendants containing the intended counterclaim.

9.  The striking-out summons was taken out on 14 March 2013 notwithstanding the Letter. The defendants issued the time summons on 18 March 2013. They further filed an affirmation of the 1^st defendant known to be the 4^th Affirmation of the 1^st defendant on 5 April 2013 (“the 4^th Affirmation”). On the same day, the defendants’ solicitors filed an affirmation to explain that the 4^th Affirmation setting out the counterclaim was to be filed and leave would be sought for that purpose.

10.  In the 4^th Affirmation, the 1^st defendant averred that the counterclaim of the defendants is for declarations to the effect that the Father is the sole beneficial owner of the Property.

Discussion

11.  Ms So, counsel for the plaintiff, argued that the Affirmation must be the affirmation standing as the defendants’ counterclaim pursuant to the Order and thus it was liable to be struck out. Ms So accepted that if the Affirmation was not to be treated as the defendants’ counterclaim, the striking out application had no basis at all.

12.  Ms So further submitted that the Affirmation must stand as the defendants’ counterclaim because it was filed within the 60 days’ period prescribed by the judge under the Order. There being no leave granted to the defendants to file the Affirmation for other purposes, she argued that the Affirmation had no place in these proceedings and it could only be the defendants’ counterclaim filed pursuant to the Order.

13.  I cannot agree to this submission. The contents of the Affirmation are clear enough and self-explanatory. The Affirmation could not be turned into a counterclaim when it is stated to be for another purpose and its contents serve the specified purpose and none others. The Affirmation merely lends documentary evidential support to the 1^st affirmation of the 1^st defendant and can be treated as an addition to the same. In a way, since the 1^st affirmation of the 1^st defendant is to be treated as the defence of the defendants, the Affirmation can be treated as an amendment to the defence by way of an addition to its contents. Parties may make amendments of pleadings before close of pleadings without leave.

14.  Alternatively, the Affirmation can be viewed as a step taken by the defendants to make voluntary discovery of such documents relevant to these proceedings. Admittedly, after the Order, the parties should make discovery by way of their respective lists of documents and not by further supplemental affirmations after close of pleadings. However, I cannot see why the defendants should be barred from making premature discovery prior to the filing of their list of documents.

15.  In any event, even accepting the contention the Affirmation was filed without leave when leave was required, the Affirmation still could not be a pleading that is liable to be struck out pursuant to Order 18 r.19, Rules of the District Court. The striking-out summons falls to be dismissed.

16.  As regards the time summons, the plaintiff found the 4^th Affirmation to be objectionable. Ms So submitted that the proposed counterclaim contained therein was defective in that the declaratory relief could not have been granted without the Father being joined a party to these proceedings. She relied on the dicta of Neill L.J. in Meadows Indemnity Co. Ltd. v Insurance Corporation of Ireland plc [1989] 2 Lloyd’s Law Rep. 298 at p. 304 for the proposition that there can be declarations of contested legal rights of the parties represented in the litigation and not those of anyone else. I agree with Ms So.

17.  Mr Ching, appearing for the defendants, argued that there could be a counterclaim for declaratory relief involving the Father without the Father being made a party. He submitted that the Father would be most likely a witness in these proceedings and there would be factual findings concerning the Father’s beneficial interests in the Property. However, to avoid controversy at this stage, Mr Ching agreed to file a new affirmation to mount a counterclaim if an extension of time was granted.  

18.  In the absence of any objection to the extension of time apart from the contents of the 4^th Affirmation, I accede to the defendants’ application and give them leave to file their counterclaim (by way of pleading and not an affirmation) within 30 days from the date hereof. The plaintiff should file her defence to the counterclaim within 28 days thereafter.

Costs

19.  For the striking-out summons, despite the able submission of Ms So, I believe that costs should follow the event. I order that the plaintiff should pay costs of the striking-out summons to the defendants. For the time summons, Mr Ching agreed that costs should be borne by the defendants. Nevertheless, Mr Ching argued that only standard costs should be payable. I disagree. The time summons was complicated by the 4^th Affirmation and Mr Ching gave up filing the same only in the light of the objection raised by Ms So. I therefore make a costs order against the defendants with certificate for counsel on the time summons.

20.  Both parties agreed that costs should be summarily assessed. After a short adjournment, the parties agreed that the summary assessment of the defendants costs payable by the plaintiff in respect of the striking-out summons should be HK$20,800 whilst that of the plaintiff’s costs payable by the defendant in respect of the time summons should be HK$20,400. I accept their agreed assessments.