LAI KING NGOK v. LAI KIN LIM

DCCJ 181/2021

[2021] HKDC 911

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 181 OF 2021

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DECISION

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1.  There are two summonses before me:-

(1)  the plaintiff (“P”)’s summons dated 16/03/2021 (“P’s Summons”) for an order that:

(a)  the order dated 19/02/2021 (“the Injunction Order”) do stand;

(b)  alternatively, a new injunction with the same terms be granted against the Defendant (“D”); and

(2)  D’s summons dated 24/03/2021 (“D’s Summons”) for setting aside the Injunction Order without any re-grant.

2.  The terms of the Injunction Order are as follows:-

“1. Vacant possession of No. 103 Ping Kong, Sheung Shui, New Territories situates in Demarcation District 91 (“the Property”) be to [P];

2.  [D] be prohibited from entering the Property without the permission from [P];

3.  [D] do forthwith deliver to the [P] the keys to the Property;

4.  [D] do forthwith allow [P] uninterrupted access to the Property;

5.  [D] be restrained, whether by itself or its servants or agents or otherwise howsoever, from obstructing, interfering in any manner with or hinder the right of [P] in accessing the Property;

6.  [D] be restrained, whether by itself or its servants or agents or otherwise howsoever, from interfering with in any manner or hindering the right of [P] to use, stay in, reside and reasonably enjoy the Property;

7.  [D] be restrained, whether by itself or its servants or agents or otherwise howsoever, from damaging or destroying the Property or by any other means causing the Property to be uninhabitable;

8.  [D] be restrained, whether by itself or its servants or agents or otherwise howsoever, from handling or disposing of any of the personal belongings of [P] at the Property;

9.  [D] be restrained, whether by itself or its servants or agents or otherwise howsoever, from engaging in or threatening to engage in conduct capable of causing nuisance or annoyance to [P] as a tenant and/or resident of the Property; and

10.  Costs of this application be to [P] summarily assessed at HK$80,000.00 including brief for counsel, i.e. item E of [P]’s statement of costs at HK$50,000.00, to be payable by [D] forthwith.”

3.  The Injunction Order was made as a result of the application made by P by his summons dated 14/01/2021 (“the January Summons”).  As per that summons, the injunction sought by P is an interlocutory injunction.  It is specifically set out in the summons that the injunction would be in force “pending the full and final determination of this action”.  However, the Injunction Order is not an interlocutory injunction but is a final injunction.  That the Injunction Order is a final order is evidenced by the fact that the aforesaid words in quotation are missing in the order.  Further, P has provided no cross-undertaking as to damages in support of the injunction.  All these show that the Injunction Order is a final order.

4.  I would first examine whether the Injunction Order was made in an ex parte hearing or in an inter partes hearing.  If the Injunction Order was made in an ex parte hearing, I would have jurisdiction to set it aside under the Rules of the District Court, Order 32 rule 6.  However, if the Injunction Order (being a final order) was made in an inter partes hearing, D may only seek an order to set it aside by lodging an appeal to the Court of Appeal.

5.  As per D’s Summons, D’s setting aside application is made under Order 13 rule 9, Order 29 rules 1 and 7.  In my view, none of these rules is applicable.  The Injunction Order is not a default judgment entered in pursuance of Order 13, and hence Order 13 rule 9 would not be applicable. Further, the setting aside application cannot be made in pursuance of anything in Order 29 rules 1 and 7. However, notwithstanding all these, if the Injunction Order is an ex parte order, I would have the jurisdiction to set it aside under Order 32 rule 6.  The fact that Order 32 rule 6 has not been mentioned in D’s Summons does not exclude D from recourse to the court’s jurisdiction under Order 32 rule 6.[1]

EX PARTE ORDER

6.  Whether an order is an ex parte order or an inter partes order is decided by seeing whether the opposing party had been afforded a reasonable opportunity to argue it if it so wished.[2]

7.  D did not attend the hearing on 19/02/2021.  D’s case is that he has not been given notice of the January Summons and has not been afforded an opportunity to adduce evidence and to make submissions to oppose the January Summons.  If these contentions are correct, that would mean that D has not been given an opportunity to be heard before the Injunction Order was made, and the Injunction Order would be an ex parte order.

8.  The essential events are as follows:-

(1)  On 14/01/2021, P issued the Writ of Summons (“the Writ”) herein.

(2)  On 20/01/2021, P filed the January Summons.

(3)  On 21/01/2021, P attempted to serve the Writ, the January Summons, and P’s affirmation in support of the summons on D personally at No. 103 Ping Kong, Sheung Shui, New Territories (“No. 103 Ping Kong”) but D was not there.  On the same date, P’s solicitors, Johnnie Yam, Jacky Lee & Co (“JYJL”) wrote to the solicitors previously acting for D, David Y.Y. Fung (“DYYF”), to inquire whether they had instruction to accept service on the behalf of D.

(4)  On 22/01/2021, Ms Au of DYYF informed Mr Leung of JYJL by phone that DYYF was unable to contact D.

(5)  On 23/01/2021, P attempted to serve the Writ, the January Summons and the supporting affirmation on D by inserting the same through the letter box at No. 103 Ping Kong.

(6)  On 17/02/2021, P attempted to serve the aforesaid documents again on D, together with a hearing bundle, by inserting the same through the letter box at No.103 Ping Kong.

(7)  P obtained the Injunction Order in the hearing on 19/02/2021.  D was absent in that hearing.

(8)  On 04/03/2021, JYJL sent a letter enclosing a sealed copy of the Injunction Order to D.  The letter was sent to No.103 Ping Kong by hand.

(9)  On 09/03/2021, DYYF wrote to JYJL, in which DYYF said that D contacted them on 08/03/2021 and informed them the following:

(a)  D left Hong Kong and went to Mainland China on or about 17/01/2021.

(b)  D only returned to Hong Kong from the Mainland on or about 06/03/2021.

(c)  D was not aware that DYYF had tried to contact him on or about 21 or 22/01/2021. He had no knowledge of the legal proceedings commenced by P against him.

9.  D has produced his movement record issued by the Immigration Department (“the Movement Record”).  The Movement Record shows that he left Hong Kong on 17/01/2021, and returned to Hong Kong on 06/03/2021.  Based upon the Movement Record, I accept that D was not in Hong Kong during the aforesaid period.

10.  In 2020, there was correspondence passing between the solicitors then acting for P and DYYF acting for D, in which the disputes concerning No.103 Ping Kong were discussed.  Mr Ray Kwan, counsel for P, submits that it is highly likely that D was aware of the Writ as DYYF has at all material times been the legal representative of D as indicated in a letter issued by DYYF as early as 11/11/2020.  Mr Kwan submits that since P had notified DYYF on 21/01/2021 of these proceedings, D ought to have been aware of these proceedings at about the same time.

11.  With respect, I am of the view that these submissions lack evidential basis.  In view of the Movement Record, it is an indisputable fact that D was not in Hong Kong from 17/01/2021 to 06/03/2021.  DYYF have said that they had tried to contact D in late January but were unable to contact D.  I have no reason to doubt what has been said by DYYF.

12.  Based upon the evidence before the court, I accept that D did not have notice of these proceedings, including the January Summons, before he came back to Hong Kong on 06/03/2021.  As a result, D had not been afforded an opportunity to adduce evidence and to make submissions to oppose P’s application in the hearing on 19/02/2021.  That hearing is therefore an ex parte hearing, and the Injunction Order is an ex parte order.  That being the case, I would have the jurisdiction to set aside the order under Order 32 rule 6. For the reasons set out in the below, I am of the view that the Injunction Order should be set aside.

NO FINAL INJUNCTION

13.  I have said that the Injunction Order in fact is a final order against D.  In my view, no final judgment should be made against D in a summary way, for there are triable issues in this case.

14.  P is now over 90 years old.  His wife has predeceased him.  He has 6 children.  The 4^th child is a daughter.  Save that, all the other children are sons.  D is P’s 3^rd son. 

15.  P’s case is as follows:-

(1)  He was a carpenter and married to his wife in the 1950s.  They have 6 children.

(2)  In the 1960s, P’s family moved to No. 103 Ping Kong and began to reside therein.  In the early 1980s, the Government requested him to enter into a tenancy agreement concerning No. 103 Ping Kong.  Upon that request, P entered into a tenancy agreement with the Government (“the TA”).  The term of the TA is 1 year from 1/10/1980 and would be renewed thereafter quarterly.  The rent per quarter is HK$520.95.

(3)  P has been paying the rentals under the TA and the maintenance and outgoing expenses of No. 103 Ping Kong throughout the years.

(4)  No. 103 Ping Kong was divided into two parts, i.e. (a) the part in which P used to run his carpentry trade (“the Shop-front”); and (b) the part in which P’s family resided in (“the Residence”).

(5)  After the sons and the daughter became adults, they moved out from No. 103 Ping Kong.  By the 1990s, only P and his wife resided in that place.

(6)  P’s wife passed away in 2007.  Thereafter, P lived in No. 103 Ping Kong alone.

(7)  In about 2015, D returned from the United Kingdom to Hong Kong.  Out of love and affection, P allowed D to reside at No. 103 Ping Kong under a bare licence without consideration.  D promised to, and did, help to renovate the structures thereon to improve the living condition.  P has already reimbursed D for all the expenses arising from those renovation works.

(8)  With P’s consent, D also used the Shop-front for his own use.

(9)  In about 2017, D requested to change the registered name under the electricity bills and water bills to his name.  P did not give much thought to this and readily agreed.

(10)  Since around 2017, D has displayed behaviours and actions which had caused significant degree of interference, disturbance and annoyance to P’s enjoyment of No. 103 Ping Kong.  D has said words and done certain acts to claim that D himself, not P, is the true owner of No. 103 Ping Kong.  D has also prevented others from entering the place to visit P.

(11)  In about May 2020, while D was in the Mainland, P’s 2^nd son Lai Kin Chi (“the 2^nd Son”) returned from United Kingdom to visit P and temporarily resided at No. 103 Ping Kong.  In June 2020, after D returning to Hong Kong, there was a dispute between D and the 2^nd Son.  D attempted to evict the 2^nd Son from No. 103 Ping Kong.

(12)  In or about July 2020, P had fallen ill and was hospitalized for a few days.  After being discharged from the hospital, D refused to let P go back to No. 103 Ping Kong.  P sought assistance from the 2^nd Son.

(13)  With the 2^nd Son’s assistance, P has found temporary accommodation. The 2^nd Son made numerous attempts to discuss the matter with D.  However, the dispute could not be resolved amicably.

(14)  On 17/08/2020, the solicitors then acting for P sent a letter to D, requiring D to leave No. 103 Ping Kong within 7 days.

16.  D’s case is as follows:-

(1)  The property as defined in P’s case, i.e. No. 103 Ping Kong, is not the subject matter of the TA.  The property in which P’s family lived therein in the past is a squatter house (“the House”) registered with the Government by registration no. RTP/PK/B/173.  The House was originally owned by D’s maternal grandmother.  In about 1970s, P’s family moved to live together with the grandmother in the House.  The House was for residential use only, and P was and still is a registered occupant of the House in the Government’s record.  No. 103 Ping Kong is the House.

(2)  The subject matter of the TA is a piece of land upon which a carpentry workshop (“the Workshop”) was erected.  The Workshop is for non-residential use.  The House is abutting on the northern boundary of the land specified in the TA.  D has illustrated the locations of the Workshop and the House by pink and blue respectively in a plan exhibited as LKL-6 to his 1^st affirmation.  The House and the Workshop were physically separated and not connected with each other.

(3)  D left Hong Kong and went to the United Kingdom in about 1987.

(4)  In about 2005, P moved to live with his 4^th son Lai Kin Ming (“the 4^th Son”) until about the end of 2014.  After P moved out from the House and the Workshop, the 2^nd Son moved into there and resided therein.

(5)  In late 2014, P decided to move out from the 4^th Son’s residence.  Upon D’s invitation, P went to the United Kingdom together with D. However, P could not adapt to the life in the United Kingdom.  Upon P’s request, in about early 2015, D decided to return to Hong Kong together with P.  Since then, both P and D were living in the House and the Workshop.

(6)  In early 2015, the House and the Workshop were in a dilapidated condition.  Further, there were warnings from the Lands Department that there were structures encroaching on other Government land.  The Lands Department demanded rectification works to be done, otherwise the registration of the House might be cancelled, and the TA might be revoked.

(7)  The 2^nd Son was not willing to do the rectification works and move out.  In order to allow P to have a place to live, D told P that D would do the rectification works and renovated the House and the Workshop. Subsequently, D did carry out the rectification and renovation works.  By these works, D has saved the registration of the House and the TA from being revoked by the Government.  P has not reimbursed D the expenses incurred by D in carrying out these works, and P has not paid D anything for D’s work.

(8)  In about March 2015, it was agreed between P on the one hand, and D and P’s 5^th son Lai Kin Ching (“the 5^th Son”) on the other hand, that P would sell, and D and the 5^th Son would purchase the House and the Workshop from P at the price of HK$200,000 (“the Sale and Purchase Agreement”).  The Sale and Purchase Agreement is evidenced by the following:

(a)  a written application dated 20/04/2015 to the Government and signed by P for approval to transfer the TA to D (“the 2015 Application”);

(b)  a cheque in the sum of HK$200,000 dated 21/03/2016 issued by Sharp Linkage Limited (a company owned by the 5^th Son) to P; and

(c)  a deposit slip showing the deposit of the cheque into P’s integrated account with HSBC (“the A/C”) on 21/03/2016.

(9)  After the Sale and Purchase Agreement was made, all the rentals under the TA and all the outgoings of the House and the Workshop were paid by D.

(10)  Notwithstanding the Sale and Purchase Agreement, out of filial piety, D allowed P to continue to live in the House and the Workshop with D, and there was no conflict between them.

(11)  Since about 2019, the 2^nd Son alleged that he should be entitled to use the House and the Workshop.

(12)  On or about 08/07/2020, the 2^nd Son suddenly visited the House and took away P.  On 09/07/2020, the 2^nd Son together with some other persons tried to evict D from the House and the Workshop.  From that day onwards, the 2^nd Son continuously made threats towards D and disrupted D’s use of the House and Workshop.

(13)  D has never disallowed P to return to the House.  It is all along D’s intention that P would live in the House together with D.  That P was not residing in the House from 09/07/2020 to 04/03/2021 is solely due to the fact that the 2^nd Son was continuously making threats to try to evict D from the House and the Workshop. 

17.  I shall not conduct a mini-trial based upon affidavit evidence. However, having considered the evidence adduced by the parties, I am of the view that the following matters are triable issues, which can only be resolved at the trial and cannot be determined in a summary way.

18.  The first triable issue is whether “No. 103 Ping Kong” is the subject matter of the TA.

(1)  P’s case is based upon the TA, and P says that “No. 103 Ping Kong” is the subject matter of the TA.  In the Statement of Claim, it is pleaded:

“3.  Since 1960, [P] and [P]’s Family have been the occupants of the property known as No. 103 Ping Kong, Sheung Shui, New Territories in Demarcation District 91 (the “Property”).

4.  By [the TA], the Property was let by the Hong Kong Government to [P] ……”

(2)  As set out in the First Schedule to the TA, the land let to P under the TA may be used as a carpentry workshop only.

(3)  On 02/02/2015, the Lands Department issued a letter (“the 2015 Letter”) to the occupiers of some structures, including the occupier of the squatter house registered under the number RTP/PK/B/173.  The Lands Department required the occupiers of those structures to rectify the problems discovered in a recent inspection conducted by the Lands Department.  In that letter, it is said that the squatter house is a house for people living therein (人住屋).

(4)  On 28/07/2016, the Lands Department issued a letter (“the 2016 Letter”) to P.  The Lands Department specifically referred to the TA in the letter.  In this letter, the Lands Department required P to rectify the non-compliances with the terms of the TA as specified in the letter.

(5)  By looking at the TA, it is arguable that the subject matter of the TA is a piece of land on which there is only a carpentry workshop.  No residential house is on that piece of land. 

(6)  Further, by looking at the 2015 Letter and the 2016 Letter, it is arguable that the Lands Department has distinguished the house with the registration number RTP/PK/B/173 and the land under the TA.  RTP/PK/B/173 is not the structure on the land which is the subject matter of the TA.

(7)  In my view, D’s case on this point may well be true.  The subject matter of the TA is the land on which the only structure is the Workshop.  “No. 103 Ping Kong” is not the Workshop but is the House, which is adjacent to the Workshop.  The House is not the subject matter of the TA, but is covered by the squatter house registration number RTP/PK/B/173.

(8)  The basis of P’s case is that “No. 103 Ping Kong” is the subject matter of the TA.  If this basis is false, P’s case would be without any basis. 

19.  The second triable issue is whether the Sale and Purchase Agreement suggested by D is true.

(1)  In view of the documents produced by D and mentioned in [16(8)] in the above, in my view, the Sale and Purchase Agreement suggested by D is believable.

(2)  P denies the existence of the Sale and Purchase Agreement.  P says:

(a)  Due to his old age and poor health, on 18/03/2015, P authorized D to have access to the A/C.

(b)  Shortly thereafter, in or about April 2015, D asked P to change the tenant’s name under the TA to D’s name, so that D could handle the matters relating to the land and liaise with the Lands Department.  D prepared the 2015 Application and asked P to sign the document.  Based upon trust, P signed the application.

(c)  P was not aware of the deposit of HK$200,000 into the A/C on 21/03/2016 until he saw the bank statements shortly before he made his 3^rd Affirmation dated 06/05/2021.  He has never authorized this deposit.

(d)  As shown in the bank statements, within less than two months after the said deposit, HK$210,000 were withdrawn from the A/C.  Details are as follows:

Withdrawal	Date	Amount (HK$)
#1	18/04/2016	60,000
#2	09/05/2016	60,000
#3	21/05/2016	40,000
#4	11/06/2016	50,000

(e)  Withdrawals #1 and #4 are done by D.  P has never authorized D to perform these withdrawals.  However, P admits that withdrawals #2 and #3 are done by him.

(f)  P does not have any knowledge of Sharp Linkage Limited.

(3)  D said that withdrawals #1 and #4 are done by him because P has instructed him to do so.  D pointed out that before the HK$200,000 was deposited into the A/C, the balance in the HKD savings account was HK$71,995.85.  P’s main savings were kept as CNY time deposit in the A/C.  That being the case, without the deposit of the HK$200,000 into the A/C on 21/03/2016, there would not be sufficient fund in the HKD savings account in the A/C to meet the 4 withdrawals.  By performing the 4 withdrawals (two by P himself, and the other two were by D in accordance with P’s instructions), P must have known that HK$200,000 had been deposited into the A/C in late March 2016 before the said withdrawals.

(4)  In my view, there is force in D’s argument.

(5)  Even if we only consider withdrawals #2 and #3 performed by P himself, D’s point would still be valid.  The total amount withdrawn by P himself is HK$100,000.  Without the HK$200,000 deposited into the A/C on 21/03/2016, it would not be possible for P to withdraw the HK$100,000 from the A/C in May 2016.  This shows that P would have known the deposit of HK$200,000 before making the said withdrawals. 

(6)  In my judgment, it is arguable that the HK$200,000 was deposited into the A/C on 21/03/2016 with P’s knowledge and approval, and P agreed to this deposit because this was the consideration paid to him under the Sale and Purchase Agreement.  The Sale and Purchase Agreement suggested by D is believable.

(7)  P said that since the whole family was aware that D had been taking advantage of P financially, the family requested D to pay P a monthly rent of HK$6,000 for residing at No. 103 Ping Kong starting from April 2017, and D agreed.  P has produced a note written by D (“the Note”), and P said that the Note is the evidence showing that D has agreed to pay rent for his occupation of No. 103 Ping Kong.  Mr Kwan heavily relies upon the Note and submits that the Sale and Purchase Agreement as alleged by D is not true.

(8)  It is not disputed that the Note is a document written by D.  However, D’s case is that the Note is a record of the money matters relating to the business run by D and the 5^th Son together.  The Note has nothing to do with No. 103 Ping Kong.

(9)  There is nothing in the Note showing that the matters therein are matters relating to No. 103 Ping Kong.  I have asked Mr Kwan whether he would be able to refer me to any document which can show a connection between the Note and No. 103 Ping Kong.  Mr Kwan is unable to do so.

(10)  In my view, even taking the Note into account, D’s case remains as arguable.

20.  Mr Kwan submits that even if the Sale and Purchase Agreement is true, by the operation of s. 5(1) of the Conveyancing and Property Ordinance (“CPO”), the agreement would not be enforceable for it is not in writing.  In my view, this point is misconceived.

21.  Although D has used the term “Sale and Purchase Agreement” to describe the agreement between P on the one hand, and D and the 5^th Son on the other hand, the agreement in fact is not an agreement transferring any equitable interest in land from P to D and/or the 5^th Son.  The gist of the agreement is that P would nominate D as the new tenant of the land, and in return D and the 5^th Son would pay HK$200,000 to P. To be more precise, the agreement in fact is a nomination agreement. If the nomination is accepted by the Government, the TA would be surrendered by P to the Government and a new tenancy agreement would be granted by the Government to D.  No equitable interest in land would be transferred from P to D under this nomination agreement.  The provisions in the CPO are not applicable.

22.  I agree with Ms Deanna Law, counsel for D, that if the Sale and Purchase Agreement is true, P would not be able to evict D from No. 103 Ping Kong (for the sake of discussion, assuming that No. 103 Ping Kong is the subject matter of the TA) by reason of proprietary estoppel.

(1)  The elements of proprietary estoppel are[3]:

(a)  a representation or assurance made to the claimant;

(b)  reliance thereon by the claimant; and

(c)  detriment to the claimant in the consequence of that reliance.

(2)  While the Sale and Purchase Agreement is true, the agreement itself would include a promise or assurance from P to D that P would let D have possession and control of the land.  Relying upon this assurance, D and the 5^th Son have paid HK$200,000 to P.  In the circumstances, it would not be fair to D if P is now allowed to go back on his promise.

23.  With the presence of the aforesaid triable issues, P would not be entitled to have a final judgment against D in a summary way.  No final injunction should be granted.

NO INTERLOCUTORY INJUNCTION

24.  The terms of the injunction sought in the January Summons would effectively dispose of P’s claim herein finally.  At the time of the January Summons, D was residing in No. 103 Ping Kong.  The injunction would have a mandatory element of evicting D from No. 103 Ping Kong.  In the circumstances, P may only have an interlocutory injunction in those terms if P can demonstrate that he is likely to succeed at the trial.  The relevant principles have been summarized by Mimmie Chan J in Brave Venture Ltd v Xinhua News Media Holdings Ltd[4], in which the learned judge said:-

“20.  It is not disputed that in seeking the injunctive relief sought, the plaintiff has the onus of establishing a serious issue to be tried, and where the nature and extent of the interim relief sought is such that the relief will effectively dispose finally of the claim, the plaintiff has a higher evidential burden in proving the merits of its case, that it is “at least likely to succeed at trial” (Sunlink International Holdings Ltd v Wong Shu Wing  [2010] 5 HKLRD 653 ; Sim Kon Fah v JBPB & Co  [2011] 4 HKLRD 45). Where a mandatory injunction is sought, as in this case, the plaintiff is required to show “a strong prima facie case” and the Court must have “a high degree of assurance” that at trial, it will appear that the injunction was rightly granted (para 29/1/29 Hong Kong Civil Procedure 2017).”

25.  By reason of the triable issues set out in the above, in my judgment, P has failed to demonstrate that he is likely to succeed at the trial.  That being the case, the injunction sought by P cannot be granted on an interlocutory basis.

26.  Further, I agree with Ms Law that there has been material non-disclosure on P’s part in the hearing on 19/02/2021.  I have ruled that the said hearing in fact is an ex parte hearing.  I agree with Ms Law that the triable issues as set out in the above are material issues which should be drawn to the court’s attention in the hearing on 19/02/2021, but P has failed to do so.  I would also discharge the Injunction Order on the ground of material disclosure.  By reasons set out in [24] and [25] above, P would not be entitled to have the Injunction Order as an interlocutory order in any event.  There is no ground upon which my discretion can be exercised to re-grant the injunction to P.

DISPOSITION

27.  In my judgment, P is not entitled to have the Injunction Order as a final order or as an interlocutory order.  The Injunction Order must be set aside.  I set aside the Injunction Order and dismiss P’s Summons.

28.  There is no dispute that costs should follow the event.  I order that costs of P’s Summons and costs of D’s Summons (including costs reserved, if any) be paid by P to D forthwith, with a certificate for counsel.  Those costs be summarily assessed at HK$200,000.

29.  I thank counsel for the assistance provided to the court.