YU WING CHEONG alias YU JOSEPH WING CHEONG, Executor substituted named in the Will of YAU SIN WAH alias YAU KAM LAN (“Deceased”) AND ANOTHER v. YU WING YIN

CACV 270/2019

[2020] HKCA 629

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 270 OF 2019

(ON APPEAL FROM HCMP 2089/2017)

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J U D G M E N T

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Hon Lam VP (giving the Judgment of the Court):

Introduction

1.  On 9 March 2020, the Defendant filed a summons to apply for leave to adduce new evidence in the present appeal.  The appeal is brought in respect of the decision of Deputy High Court Judge Le Pichon (“the Judge”) dated 22 May 2019, [2019] HKCFI 1304. By that decision the Judge granted summary judgment in favour of the Plaintiffs as follows:

(1)  The Defendant do forthwith leave, vacate and deliver vacant possession of the property at 1^st Floor, No 24 Green Lane, The Sanitarian Apartments, Nos 20 – 30 Green Lane, Hong Kong (“the Property”) to the Plaintiffs within 12 weeks from the date of the order.

(2)  The Property be sold with vacant possession at market price.

(3)  The Property be put up for sale by the Plaintiffs within three months after obtaining vacant possession of the Property, such sale to be conducted by the 2^nd Plaintiff.

(4)  There be an order nisi that the Plaintiff’s costs be borne and paid out of the estate of the Deceased on a trustee basis, to be taxed if not agreed, and there be no order as to costs in respect of the Defendant. 

2.  The Defendant issued his Notice of Appeal on 19 June 2019.  The summary judgment of 22 May 2019 was stayed by a consent order dated 9 September 2019 pending the Defendant’s appeal.

Background

3.  The factual background of this case was set out at [2] to [11] of the Judge’s decision of 22 May 2019.

4.  At the court below, the Defendant opposed the Plaintiffs’ application for summary judgment by contending that the following were triable issues, namely whether:

(a)   the Defendant had an equitable interest in the Property as a tenant in common, such that the Property cannot be sold without his consent;

(b)  the statutory power in section 54 of the Probate and Administration Ordinance, Cap 10 is exercisable;

(c)   the plaintiffs were estopped from demanding vacant possession of the Property; and

(d)  there was an imminent collective sale for redevelopment of the Sanitarian Apartments, of which the Property is part of, pursuant to the Land (Compulsory Sale for Redevelopment) Ordinance, Cap 545 and the Land (Compulsory Sale for Redevelopment) (Specification of Lower Percentage) Notice, Cap 545A.

5.  The Judge found that none of the issues raised by the Defendant was triable and granted judgment accordingly.

New evidence sought to be adduced on appeal

6.  The Defendant seeks to adduce on appeal his affidavit sworn on 9 March 2020.  In this affidavit, the Defendant exhibited copies of the land registry search records of all 24 flats at the Sanitarian Apartments as at 28 January 2020, and made the observation that within the past 6 years no sale has been recorded.

7.  In the same affidavit the Defendant deposed as to the content of his conversation on 31 January 2020 with a Mrs Constance Ames (“Ames”), who according to the Defendant is the joint owner of one of the other flats in the Sanitarian Apartments as well as the Chairman of the Incorporated Owners of Sanitarian Apartments and of the Collective Sale Committee.  The conversation was about the progress of efforts toward a collective sale of all the flats in the Sanitarian Apartments.

8.  In addition, the Defendant deposed in that affidavit as to what he characterized as the hypocrisy (involving the 2^nd Plaintiff’s state of knowledge of the status of the proposed collective sale), false accusation (involving an allegation of tire slashing), hostility, and litigiousness of the 2^nd Plaintiff.

9.  The content of the Defendant’s affidavit of 9 March 2020 is not relevant to the first three issues identified by the Defendant as being triable issues before the Judge.  The affidavit is only potentially relevant to the fourth issue raised by the Defendant, i.e. whether there was an imminent collective sale for redevelopment of the Sanitarian Apartments.  The references to other matters in the affidavit as an attack on the character and good faith of the 2^nd Plaintiff are, in our judgment, wholly irrelevant for the purpose of the appeal as the proceedings were brought after Beddoe approval had been obtained.  

Test for adducing new evidence on appeal in respect of a summary judgment

10.  Applications to adduce new evidence on appeal are governed by Order 59, rule 10(2) of the Rules of the High Court, Cap 4A:

“ The Court of Appeal shall have power to receive further evidence on questions of fact, either by oral examination in court, by affidavit, or by deposition taken before an examiner, but no such further evidence (other than evidence as to matters which have occurred after the date of the trial or hearing) shall be admitted except on special grounds.”

11.  As held in Ladd v Marshall, [1954] 1 WLR 1489, further evidence is admissible on appeal only where such evidence:

(i)  could not have been obtained at the trial with reasonable diligence;

(ii)  would or might, if believed, have a very important influence on the result of the case, though it need not be decisive; and

(iii)  is apparently credible though it need not be incontrovertible.

12.  Since the judgment was granted in the context of an application for summary judgment, the following observations of Lord Bridge in Langdale v Danby [1982] 1 WLR 1123 at 1133B to F are relevant,

“ The classic statement of what amounts to ‘special grounds’ within the meaning of Ord. 59, r 10(2) comes from the judgment of Denning L.J. (as he then was) in Ladd v. Marshall [1954] 1 WLR 1489 …

In the situation arising on an appeal to the Court of Appeal from a summary judgment, the application of these conditions and perhaps the conditions themselves will require some modification. It may well be that the standard of diligence required of a defendant preparing his case in opposition to a summons for summary judgment, especially if under pressure of time, will not be so high as that required in preparing for trial. The second and third conditions will no doubt be satisfied if the further evidence tendered is sufficient, according to the ordinary principles applied on applications for summary judgment, to raise a triable issue. But I can see no injustice at all in requiring a defendant to use such diligence as is reasonable in the circumstances to put before the judge on the hearing of the summons, albeit in summary form, all the evidence he relies on in defence, whereas it would be a great injustice to the plaintiff to allow the defendant to introduce for the first time on appeal evidence which was readily available at the hearing of the summons but was not produced.”

13.  This approach is applicable in Hong Kong: Fortis Insurance Co v Lam Hau Wah Inneo CACV 86/2010, 28 October 2010; Johnson Electric International Ltd v Bel Global Resources [2014] 5 HKC 504.

Application of the principles to the present application

14.  In our judgment, the Defendant’s application fails to meet the test in Ladd v Marshall as modified in accordance with Langdale v Danby, supra.

15.  First, even in the context of summary judgment, the Defendant failed to show that the new evidence could not have been obtained for the purpose of the hearing before the Judge.

16.  It should be noted that the summary judgment application was heard by the Judge in May 2019, more than 1.5 years after the present set of proceedings had been commenced.  The Order 14 summons was taken out on 14 November 2018.  If the Defendant were serious about his defence based on the collective sale for redevelopment of the Sanitarian Apartments (assuming for the time being that this could be an arguable defence), he had ample time to prepare his evidence to support this respect of his defence.  There is no question that the Defendant did not have adequate opportunity to marshal his evidence due to pressure of time.

17.  The Defendant submitted that while the evidence as to the land records could have been obtained in November 2018 (before the hearing of the summary judgment application), the import would not be the same as if, as he has in fact done, he produced records of land sales up to 28 January 2020.  He also argued that the land registry record evidence is effective only when corroborated with Ames’ evidence.

18.  Further, the Defendant argues that Ames’ evidence could not be adduced earlier because “it took time to develop the connection” with Ames.

19.  In our judgment, these arguments by the Defendant are without merit.  If, as the Defendant deposed in his affidavit of 9 March 2020, the point of the land registry records is to show that it would take a long time to find a buyer interested in the Property and there is no need for vacant possession to be given, acting with reasonable due diligence the Defendant could have searched and adduced land registry records before or during the summary judgment proceedings to prove the point at that time. 

20.  If the Defendant had acted with reasonable due diligence, he also could have reached out to Ames earlier.  According to the Defendant’s reply submissions, Ames has been an owner at the Sanitarian Apartments since 2004.  Since the Defendant was living at the same building and Ames was the Chairman of the Incorporated Owners, it should not have been difficult for the Defendant to approach her (or the other owners) to discuss the progress of the proposed collective sale. 

21.  The Defendant had raised the issue of potential collective sale at para 26 of his Defence of 9 February 2018.  He could and should have prepared his evidence in that regard since that time.  We do not accept that he could not have obtained similar evidence on the progress of the collective sale for the hearing before the Judge had he exercised reasonable diligence in resistance to the summary judgment application.

22.  There is nothing to suggest that there has been substantial progress in regard to the collective sale efforts since the hearing before the Judge.  Based on what is set out in the Defendant’s affidavit of 9 March 2020, the collective sale effort is still at a relatively early stage.  There are outstanding objections from some owners and proceedings may have to be brought in the Lands Tribunal.  There is also no suggestion that there is any offer from any interested purchaser which is acceptable to many owners. 

23.  Therefore, evidence similar to that included in the affidavit of 9 March 2020 could have been obtained before the hearing of the summary judgment proceedings if the Defendant had acted with reasonable due diligence.  The first condition in Ladd v Marshall (as applied in the context of summary judgment in accordance with Langdale v Danby) is not met.

24.  Second, even if the affidavit of 9 March 2020 were admissible and the contents were believed, we are not satisfied that it would have an important influence on the outcome.  Even if such evidence on the progress of the collective sale were adduced, it does not show that a collective sale was imminent for reasons set out at [22] above.  There is still great uncertainty as to the fate of such collective sale and it may not materialize in the foreseeable future. 

25.  The prospect of the collective sale has to be balanced against the other factors alluded to by the Judge at [17] of the Decision of 22 May 2019.

26.  Hence, the second condition in Ladd v Marshall is also not met.  

27.  For all of the above reasons, we reject the Defendant’s application to adduce new evidence on appeal.  The summons of 9 March 2020 is dismissed.

Costs

28.  We also order the Defendant to pay the Plaintiffs’ costs in the summons.  We have considered the Plaintiffs’ statement of costs.  Counsel, who did most of the drafting of the court documents charged only HK$8,480. We find the time engaged by the solicitor[1] (who was assisted by a trainee solicitor and a litigation clerk, who also billed separately for their time[2] in the statement of costs) involved in the matter to be excessive.  Even taking account of the seniority of the solicitor involved (as compared with that of counsel), we find the total costs charged by the solicitor and his staff to be excessive.  We shall fix the costs of the Plaintiffs summarily at HK$50,000.  We order that the Defendant pay the Plaintiff’s costs accordingly.