Case Details

Citation

林永恒是 STANLEY LOT 456RP 業主 v. WIN TALENT LTD, HCA 889/2019

Case Number

HCA 889/2019

Court

Court of First Instance

(CFI)

Decision Date

21 November 2019

Parties

Applicant(s):

林永恒是 STANLEY LOT 456RP 業主

Respondent(s):

雋暉有限公司 WIN TALENT LIMITED

For Respondent(s):

Mr Mak Chi Biu, instructed by Yeung Law & Co

林永恒是 STANLEY LOT 456RP 業主 v. WIN TALENT LTD

[2019] HKCFI 2941

Court of First Instance21 November 2019

HCA889/2019 林永恒是 STANLEY LOT 456RP 業主 v. WIN TALENT LTD

HCA 889/2019

[2019] HKCFI 2941

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 889 OF 2019

________________________

BETWEEN

	林永恒是 STANLEY LOT 456RP 業主	Plaintiff
	And
	雋暉有限公司 WIN TALENT LIMITED	Defendant

________________________

Before:

Hon Marlene Ng J in Chambers

Date of Hearing:	21 November 2019
Date of Handing Down Judgment:	4 December 2019

________________________

J U D G M E N T

________________________

I. INTRODUCTION

1. The plaintiff (“P”) claimed he was/is a ⅓ owner of a piece or parcel of land known as the Remaining Portion of Stanley Lot No 456 (“Lot 456RP”). The defendant (“D”) was a Hong Kong company and its sole director was a French national André Simon Chouraqui. D was/is the registered owner of a piece or parcel of land known as Stanley Inland Lot No 95 (“Lot 95”) at No 120 Stanley Main Street, Hong Kong (“120 Address”).

2. On 22 May 2019, P issued the Writ of Summons (“WoS”) against D in the present action. P’s Statement of Claim (“SoC”) endorsed on the WoS claimed as follows:

(a) P was an indigenous villager who grew up at Stanley (a small area with few indigenous villagers). Yung Jim Mei (who was the great-grandson of “翁家太公” and of similar age as P) told P about “所有翁家太公關係”.

(b) The Land Registry records showed the Yung family had engaged a professional surveyor to partition and divide Stanley Lot No 456 (“Lot 456”) into 3 portions. Lot 456RP was 1 of these 3 portions, and Yung Kwai Shang was 1 of the 3 tenants-in-common who owned Lot 456RP.

(c) The administrator of the estate of Yung Kwai Shang, deceased was Yung Ming Kwong. After Yung Ming Kwong passed away, Yung Jim Mei “接手業權” (presumably as administrator of the estate of Yung Ming Kwong, deceased).

(d) In September 1997, Yung Jim Mei sold the ⅓ share of Lot 456RP held by him to P who since held such share/interest to date.

(e) In HCA2513/2017, Mr Yeung of D’s solicitors Yeung Law & Co (“YLC”) informed Master J Wong that D VIA “ 不公開拍賣” purchased the 120 Address and Lot 456RP from The Hongkong and Shanghai Banking Corporation Limited (“HSBC”), and Master J Wong said “(一)銀行不公開拍賣(二)業權物業有釘契CHARGING ORDER該公司是具差裝”, so P claimed “將來有機會本人會給法庭看”.

(f) P claimed against D for damages to “賠償多年的損失及STANLEY LOT NO 456RP有可能請一間建築公司評估, 有可以要50.000.000”.

3. P annexed the following documents to the WoS:[1]

(a) business registration and company registration documents that showed (i) in 2001 P was a director and Ting Ming Kwok (“Ting”) was the secretary of Good Ascent Investment Limited (“Good Ascent”) which had its registered office at the 120 Address, (ii) according to the Return of Allotments dated 5 June 2001 (“Return of Allotments”) 5,099 and 4,899 shares were allotted to P and Ting respectively, and (iii) Ting ceased to be secretary of Good Ascent on 1 June 2004;

(b) printout of land search of Lot 456RP made on 12 February 2019;

(c) Deed of Partition dated 18 November 1941 (“Partition Deed”) that concerned Section A of Stanley Lot No 456 (“Lot 456A”) and Lot 456RP;

(d) sections 1A and 2 of the Partition Ordinance Cap 352;

(e) Letters of Administration dated 6 May 1976 in respect of the estate of Yung Kwai Shang, deceased (“Yung Kwai Shang LA”);

(f) Deed of Assignment dated 8 July 1997 in respect of Lot 456RP;

(g) 2 newspaper articles;

(h) a plan dated 2 September 2004 (ie the Surrender Plan in paragraph 39 below) with Lot 456RP shown thereon coloured blue;

(i) a plan dated 20 October 2004 (ie the Exchange Plan in paragraph 40 below) with Lot 95 and Green Area (referred to in paragraph 40 below) shown thereon coloured pink and green respectively, and countersigned by Good Ascent and the District Lands Officer.

4. In a nutshell, P alleged in the WoS/SoC that in September 1997 he purchased from Yung Jim Mei Jimmy ⅓ share of and in Lot 456RP, and to date he remained the owner of such ⅓ share of and in Lot 456RP, so D wrongfully acquired Lot 456RP and as a result he suffered loss for which D was liable.

5. On 31 May 2019, D by YLC filed acknowledgement of service that gave notice of intention to defend (“AS”). The AS expressly stated YLC were the solicitors who acted for D in the present action, and gave YLC’s business address at “Flat 1609, 16^th Floor, Tuen Mun Parklane Square, No 2 Tuen Hi Road, Tuen Mun, New Territories, Hong Kong” as D’s address for service (“Service Address”).

6. Order 12 rule 1(1) of the Rules of the High Court Cap 4A (“RHC”) provides that a defendant to an action begun by writ may acknowledge service of the writ and defend the action by a solicitor. Order 12 rule 3(2)(b) of the RHC provides that where the defendant acknowledges service by a solicitor, it must specify the business address of such solicitor, and such solicitor’s business address shall be the defendant’s address for service. Thus, the AS filed by YLC on behalf of D gave the Service Address as D’s address for service. The AS was sufficient evidence of YLC’s authority to act for D in the present action, and I am of the view that YLC was not required to produce for P’s inspection any letter of authorisation from D.

7. As explained above, P had to serve documents in the present action on D at the Service Address and not at D’s registered office. If P chose not to do so and instead purported to serve documents in the present action on D at its registered office, then such purported service of documents would be irregular and ineffective service.

8. On 31 May 2019, D also filed a summons (“Summons”) under Order 18 rule 19 and Order 3 rule 5 of the Rules of the High Court (“RHC”) and also the inherent jurisdiction of the court for the following reliefs:

(a) the SoC be struck out on the ground that it disclosed no reasonable cause of action or was scandalous, frivolous or vexatious, or was otherwise an abuse of the process of the court;

(b) P’s action herein be dismissed;

(c) P be prohibited from commencing any fresh proceedings by whatever originating process in the High Court or District Court concerning any matter involving or relating to or touching upon or leading to P’s action herein without leave of the Court of First Instance;

(d) the time for filing and serving the Defence (if necessary) be extended to a date being 28 days after the disposal of the Summons;

(e) P was to pay D’s costs of the present action and of such application on indemnity basis to be taxed if not agreed.

9. On the same day, D filed the affirmation of its solicitor Yeung Yun Por (“Yeung”) in support of the Summons (“Yeung Aff”).

10. On 5 June 2019, D filed an affirmation of service by YLC’s clerk Chow Wai Ming (“Chow”) that verified service on P of copy AS, Summons (with Chinese translation), Yeung Aff (with Chinese translation) and YLC’s covering letter dated 3 June 2019 (“Chow 1^st Aff”). P countersigned YLC’s letter dated 3 June 2019 to acknowledge receipt of the aforesaid documents. On 14 June 2019, D filed a further affirmation of service by Chow (“Chow 2^nd Aff”) that verified service on P of inter alia (a) copy Summons (to replace the copy served on 3 June 2019 which contained a typographical error in that P’s name was erroneously stated as “恆” instead of “恒”)[2] and (b) YLC’s covering letter dated 13 June 2019 by insertion into the letterbox at P’s address for service.

11. At the 1^st hearing of the Summons on 18 June 2019 (“1^st Hearing”), DHCJ K Wong granted the following order (“Wong Order”):

(a) leave for P to file/serve affirmation in opposition within 28 days from the date thereof;

(b) leave for D to file/serve affirmation in reply within 14 days thereafter;

(c) the Summons be adjourned for argument to be heard before a judge in chambers on a date to be fixed with 3 hours reserved;

(d) costs of the 1^st Hearing be reserved.

12. On 21 June 2019, YLC served copies of Chinese translation of the Summons and Yeung Aff and also YLC’s Chinese covering letter dated 21 June 2019 that set out the terms of the Wong Order, and P countersigned such covering letter to acknowledge receipt of the aforesaid documents.

13. On 27 June 2019, YLC wrote to P stating that:

(a) at the 1^st Hearing Yeung tried to serve on P copies of the Chow 2^nd Aff and the skeleton submissions, related documents and draft order that D’s counsel lodged with the court on 17 June 2019 for the 1^st Hearing, but P refused to accept service of such documents allegedly because he had not been shown D’s letter of authorisation appointing YLC as its solicitors in the present action;

(b) when P attended YLC’s offices on 21 June 2019, YLC’s clerk tried to serve the aforesaid documents on P who refused to accept service of the same;

(c) so on 27 June 2019, YLC sent the aforesaid documents to P by post under the covering letter dated 21 June 2019.

14. As explained in paragraphs 6-7 above, I am of the view that P was not entitled to demand sight of any letter of authorisation by D to YLC, and instead P was obliged to recognise YLC as D’s solicitors as set out in the AS. Thus, the documents referred to in paragraph 13(a) above were deemed to have been served on P.

15. In the meantime, on 19, 20 and 24 June and 3 July 2019, P submitted various documents to the court ostensibly with a view to place them before DHCJ K Wong (“Documents”), but they were not formally exhibited to any affirmation and/or filed via the court registry. Thus, the Documents did not amount to any affirmation in opposition prescribed by the Wong Order (see paragraph 11(a) above).

16. On 3 July 2019 (ie prior to the prescribed deadline in paragraph 11(a) above), P filed his affirmation to oppose the Summons (“P 1^st Aff”) pursuant to the Wong Order. On 15 July 2019, the court’s listing office fixed the adjourned hearing for argument in respect of the Summons to be heard on 21 November 2019 (“2^nd Hearing”).

17. On 30 July 2019, I gave written directions in relation to the Documents inter alia as follows:

“5. 由於是次訴訟及該傳票是關涉與訟雙方的訴訟程序, 任何與訟方也不應單方面呈交文件給法庭, 因此法庭不會參閱原告人呈交的該文件, 而原告人亦不可在該聆訊使用該文件, 或在該聆訊時才呈交使用其他文件, 原告人亦不應再單方面將文件交來法庭。”

18. Subsequently, on 28 October and 8 November 2019, P filed 2 further affirmations presumably to oppose the Summons (“P 2^nd and 3^rd Affs”), but they were filed after the prescribed deadline in the Wong Order (see paragraph 11(a) above) and without leave of the court:

(a) The P 2^nd Aff stated “原告人[P]親手將[WoS], [SoC]送到地址觀塘偉業街142號[D]註冊地址及證物共70頁, 有證明”. But as explained in paragraphs 6-7 above, the AS clearly showed YLC to be D’s solicitors in the present action, and the Service Address (being YLC’s business address) and not D’s registered office was D’s address for service. In my view, P was consciously obtuse as the P 3^rd Aff clearly showed he was aware the Service Address was D’s address for service (see (b) below), so P’s purported service of the P 2^nd Aff to D’s registered office was irregular and ineffective.

(b) The P 3^rd Aff stated “本人[P]在2019年11月6日再將[WoS]和修改申索陳述書及證物[YLC] 1 頁至70 頁交到地址新界屯門屯喜路2號柏麗廣場16樓1609室” (my emphasis), which was the Service Address, ie YLC’s business address.

(c) I note the exhibits to the P 2^nd and 3^rd Affs were not exactly the same although some documents were duplicated. The so-called or purported Amended Statement of Claim (“1^st ASoC”) referred to in (b) above and paragraph 19(a) below was not found among the exhibits to the P 2^nd and 3^rd Affs.

19. D did not file/serve any affirmation in reply. Shortly before the 2^nd Hearing, YLC lodged with the court the hearing bundle for use at the 2^nd Hearing (“Hearing Bundle”). It transpired inter alia that (a) P had served the purported or so-called 1^st ASoC on D/YLC, (b) the Documents were included in section E of the Hearing Bundle, and (c) the P 2^nd and 3^rd Affs were not found in the Hearing Bundle.

20. The amendments marked in red in the purported or so-called 1^st ASoC were as follows:

(a) P averred that the original title deeds for Lot 456RP were still with him, and he could show them to the court at any time (ie “所有正本契約仍然在原告人手裹, 隨時可以向法庭出示”);

(b) P further averred that “不公開拍賣的私相授受交易” in respect of HSBC’s sale of Lot 456RP and 120 Address to D was a “不合法交易。[D]在STANLEY LOT 456RP (1/3) 的業權有嚴重瑕疵, 應被宣報為無效”;

(c) P corrected the typographical error of “具差裝” (see paragraph 2(e) above) by replacing it with “賊贓”;

(d) P included a signed statement of truth.

21. On 15 November 2019, I gave written directions to both parties as follows:

(a) notwithstanding the inclusion of the purported or so-called 1^st ASoC in the Hearing Bundle, P had not independently and/or formally filed any Amended Statement of Claim with the court via the court registry;

(b) the Documents in section E of the Hearing Bundle were not part of the evidence for the purpose of the Summons at the 2^nd Hearing (see also my written directions dated 30 July 2019 at paragraph 17 above);

(c) the court noted the P 2^nd and 3^rd Affs had not been included in the Hearing Bundle.

22. On 19 November 2019, P filed his 4^th affirmation that stated “本人再深入研究後，發覺需要第二次修改證物1至4頁”, and attached revised draft Amended Statement of Claim, which took into account the purported amendments in paragraph 20 above, and which added the following in red and not in green:

“2001年7月13日 [Good Ascent] 以300萬從 [P] 購入 [Lot 456RP] 是一份有瑕疵的轉讓契約，因為本人 [P] 當時的意願只是以300萬賣出本人從 [Litmond] 購入有關土地的一半權益 (日期31/5/2000，代價之200萬) 見土地註冊處登記UB8109953。

本人從 [Yung Jim Mei Jimmy] 購入土地的一半權益是在1997年7月8日，購入價25萬 (註冊編號UB8109953)。若本人預備售出此一半權益本人最少要收300萬，即整個物業當時在2001年7月13日起碼值600萬。本人沒有理由300萬賣出整個物業。

再者，本人亦沒有收取300萬元的出售一半權益的代價。

本人未能展開民事訴訟要求推翻此份2001年7月13日樓契的合法性，因為本人仍是破產人 (第一次是2007年至2012年；第二次是2015年至現在)。本人亦會在推翻 [Good Ascent] 的所謂100% 土地擁有權後，進一步推翻2004年10月20日與政府換地契據 (因為政府應該與本人 [P] 及 [Good Ascent] 共3方進行換地。本人 [P] 完全沒有參與，故此換地沒有法律效力。這一連串的法律挑戰，包括2008年3月31日 [HSBC] 成為銀主的按揭契 (編號08042300710627) 及 [HSBC] 在2012年4月16日以2,750萬把整個物業賣予 [D] 這個銀主盤似乎沒有公開在有估值下進行，本人深信2,750萬不是2012年4月的巿價，因為土地上已有6層高的建築物。” (my emphasis)

23. On 18 November 2019, P lodged with court a purported summons that was undated and not filed with the court registry but marked “給高等法院聆案官J NG”. The purported summons was allegedly marked returnable at the 2^nd Hearing for an order “批准原告人第二次修改他的傳訊令狀連申索陳述書如附件綠色部份所顯示”. The attachment was a draft Re-Amended Statement of Claim with (a) the proposed amendments in the 1^st ASoC marked in red, (b) the further proposed amendments in the attachment to the P 4^th Aff (see above paragraph) marked in green, and (c) the following underlined amendments also marked in green:

“損失的細節

(一) 原告人申索要被告人雋暉有限公司 (WIN TALENT LIMITED) 公司，賠償本人自2012年4月16日 (即銀主賣出當日) 的損失及STANLEY LOTNO456RP及上蓋的使用權，損失由專業估價師負責，可以高達5,000萬元。”

The draft revised Amended Statement of Claim exhibited to the P 4^th Aff and the draft Re-Amended Statement of Claim attached to the above purported summons are collectively referred to as the purported and so-called “2^nd ASoC”.

24. The Summons came before me for argument at the 2^nd Hearing on 21 November 2019, but the purported summons in the above paragraph could not have been and was not before me at the 2^nd Hearing. P was self-represented. Mr Mak, counsel for D, had no objection for (a) the court to consider the purported or so-called 1^st ASoC and/or 2^nd ASoC on de bene esse basis, and (b) P to rely on the P 2^nd, 3^rd and 4^th Affs for the purpose of opposing the Summons.

II. LOT 456RP AND LOT 95

25. Records of the land searches in respect of Lot 456RP made on 12 February 2019 (annexed to the WoS), 27 May 2019 (exhibited to the Yeung Aff) and 5 August 2019 (exhibited to the P 2^nd Aff) (“456RP Records”), various documents annexed to the WoS and those exhibited to the Yeung Aff and the P 2^nd and 3^rd Affs set out the chain of title in respect of Lot456RP.

26. According to the recitals of the Partition Deed, (a) by a Block Lease dated 31 May 1934 (“Block Lease”) the government demised Lot 456 to Yung Shau Nin, Yung Hok Ming and Yung Kwai Shang, and (b) by an Assignment dated 21 January 1941, Yung Shau Nin assigned unto Kwok Mui his ⅓ share of and in Lot 456 “and of and in the messuages and buildings thereon then known as House No.120 Stanley aforesaid” (ie the 120 Address which was then a stone house) for the residue of the Block Lease.

27. According to the Partition Deed dated 18 November 1941, Yung Hok Ming and Yung Kwai Shang of the one part and Kwok Mui of the other part agreed to partition and divide Lot 456 into 2 portions, ie Lot 456A and Lot 456RP, in the following manner:

(a) Yung Hok Ming and Yung Kwai Shang assigned and released unto Kwok Mui Lot 456A “[together] with the messuage erection and building thereon then known as House No.120A, Stanley aforesaid” for the residue of the Block Lease;

(b) Kwok Mui assigned and released unto Yung Hok Ming and Yung Kwai Shang as tenants-in-common Lot 456RP “together with the messuages erections and buildings thereon (then known as House No.120, Stanley aforesaid)” (ie 120 Address) for the residue of the Block Lease.

28. Thus, as reflected in the 456RP Records, (a) Lot 456 (which comprised the subsequent subdivided Lot 456A and Lot 456RP) was initially owned by Yung Shau Nin, Yung Hok Ming and Yung Kwai Shang as tenants-in-common in equal shares, (b) Kwok Mui acquired Yung Shau Nin’s ⅓ share of and in Lot 456 (which comprised the subsequent subdivided Lot 456A and Lot 456RP), (c) Lot 456RP came into existence pursuant to the Partition Deed, and (d) pursuant to the Partition Deed Kwok Mui ceased to have any share/interest in Lot 456RP which became owned by Yung Hok Ming and Yung Kwai Shang as tenants-in-common in equal shares.

29. According to the Yung Kwai Shang LA registered at the Land Registry, Yung Kwai Shang passed away on 2 April 1942, but Yung Ming Kwong was only appointed as administrator of the estate of Yung Kwai Shang, deceased more than 30 years later on 6 May 1976. The schedule of property in the Yung Kwai Shang LA comprised “1/2^nd part or share of and in The Remaining Portion of Stanley Lot No.456 (120, Main Street, Stanley)” (ie ½ share of and in Lot 456RP and 120 Address).

30. As seen in the 456RP Records, by an Assent dated 18 March 1980, Yung Ming Kwong became the owner of ½ share of and in Lot 456RP as tenant-in-common with Yung Hok Ming.

31. According to the 456RP Records, by an Assignment dated 22 September 1990, Yung Hok Ming assigned his ½ share of and in Lot 456RP to Litmond Development Limited (“Litmond”). So Litmond and Yung Ming Kwong owned Lot 456RP as tenants-in-common in equal shares.

32. The 456RP Records showed Yung Ming Kwong subsequently passed away, and by Letters of Administration granted on 8 November 1994 Yung Jim Mei Jimmy became the administrator of the estate of Yung Ming Kwong, deceased, which estate included ½ share of and in Lot 456RP.

33. By an Assignment dated 8 July 1995 and registered at the Land Registry on 26 January 1996, Yung Jim Mei Jimmy assigned to P his ½ share of and in Lot 456RP and 120 Address for a consideration of $250,000. According to the 456RP Records, by an agreement for sale and purchase dated 16 September 1996 and registered at the Land Registry on 14 October 1996 and by an Assignment dated 7 November 1996 and registered at the Land Registry on 27 March 1997, P re-assigned to Yung Jim Mei Jimmy his ½ share of and in Lot 456RP and 120 Address for a consideration of $250,000. By this stage, Lot 456RP and 120 Address were co-owned by Litmond and Yung Jim Mei Jimmy as tenants-in-common in equal shares.

34. By an agreement for sale and purchase and an Assignment both dated 8 July 1997 and registered at the Land Registry on 13 September 1997, Yung Jim Mei Jimmy re-assigned to P his ½ share of and in Lot 456RP “[together] with the messuages erections and buildings thereon now known as HOUSE NO.120 STANLEY” (ie 120 Address) for a consideration of $250,000. P admitted this in the chronology of events found at pages 69-70 of the exhibit to the P 3^rd Aff (“Chronology”) (save that P alleged such sale and purchase was on 31 instead of 8 July 1997).

35. According to the 456RP Records, P made statutory declaration of lost title deeds and documents “RE HOUSE NO.120 STANLEY OF ½ SHARE” on 5 January 1999, and such statutory declaration was registered at the Land Registry on 29 January 1999.

36. By an agreement for sale and purchase and an Assignment both dated 31 May 2000 and registered at the Land Registry on 22 June 2000, Litmond assigned to P its ½ share of and in Lot 456RP for a consideration of $2,000,000. P admitted this in the Chronology. By this stage, P became the sole owner of Lot 456RP “[together] with the messuages erections and buildings thereon now known as HOUSE NO.120 STANLEY” (ie 120 Address).

37. By an agreement for sale and purchase and an Assignment (“P / Good Ascent 2001 Assignment”) both dated 13 July 2001 and registered at the Land Registry on 3 August 2001 by memorials nos UB8451825 (agreement for sale and purchase) and UB8451832 (P / Good Ascent 2001 Assignment) respectively, Good Ascent acquired from P (and hence became the owner) of Lot 456RP “[and] of and in the messuages erections and buildings thereon now known as HOUSE NO.120, STANLEY” (ie 120 Address) for a consideration of $3,000,000. P referred to this in the Chronology. Indeed, by a letter dated 21 June 2019 to P (page 52 of the exhibit to the P 2^nd Aff), the District Lands Office confirmed that on 13 July 2001 P as then owner assigned Lot 456RP to Good Ascent. Further, in a letter dated 5 July 2019 to P (pages 49-50 of the exhibit to the P 2^nd Aff), the Land Registry confirmed that Lot 456RP (Property Reference Number (“PRN”) no C4741439) was assigned to Good Ascent on 13 July 2001, and K M Lai & Li submitted such Assignment (memorial no UB8451832) to the Land Registry for registration.

38. According to the Companies Registry records, P was a director and shareholder of Good Ascent at the time when he assigned Lot 456RP and 120 Address to Good Ascent (see above paragraph). Indeed, P was a first director of Good Ascent, and a subscriber to its memorandum and articles of association. The other director, shareholder and subscriber was Ting who was also the company secretary. It was only on 22 April 2002 that P ceased to be a director of Good Ascent and was replaced by So Pui Ching (“So”). According to the 1^st annual return of Good Ascent filed on 28 June 2002, P became a shareholder of 5,100 shares (5,099 shares allotted on 5 June 2001 and 1 subscriber share) and Ting became a shareholder of 4,900 shares (4,899 shares allotted on 5 June 2001 and 1 subscriber share) since 5 June 2001, but P ceased to be a shareholder of Good Ascent on 22 April 2002 (when P also ceased to be a director of Good Ascent) by transferring 5,099 shares to Ting and 1 share to So. Thus, P left Good Ascent (whether as director or shareholder) on 22 April 2002.

39. By Deed of Surrender dated 20 October 2004 and registered in the Land Registry on 26 October 2004 (“Surrender Deed”), Good Ascent surrendered to the government Lot 456RP (delineated and described on the plan annexed thereto (“Surrender Plan”) and thereon shown coloured blue) “together with all messuages erections structures and buildings (if any) on the said piece or parcel of ground” for the residue of the term and interest created by the Block Lease under which such premises were held in exchange for the grant to Good Ascent of “a piece or parcel of ground to be known and registered in the Land Registry as Stanley Inland Lot No 95” (ie Lot 95).

40. By Conditions of Exchange No 12665 in respect of “STIL No 95” dated 20 October 2004 and registered at the Land Registry on 26 October 2004 (“Exchange Conditions”), the government for premium paid in the sum of $630,000 granted to Good Ascent Lot 95 located at Stanley Main Street, Stanley, Hong Kong as delineated and shown coloured pink on the plan annexed thereto (“Exchange Plan”) for a term of 50 years in exchange for the surrender to the government of Lot 456RP located at 120 Stanley Main Street, Stanley, Hong Kong described in the Surrender Plan coloured blue. The grant/demise of Lot 95 under the Exchange Conditions were subject to the General and Special Conditions therein, and the Special Conditions prescribed the formation of the Green Area which was coloured green in the Exchange Plan.

41. By reason of Good Ascent’s surrender of Lot 456RP to the government under the Surrender Deed in exchange for the grant of Lot 95 by the government to Good Ascent under the Exchange Conditions, Lot 456RP’s legal existence came to an end, and the Block Lease insofar as concerned Lot 456RP was discharged, so any interest Good Ascent had (or P previously might allegedly have had) over Lot 456RP was extinguished upon such surrender and exchange. This was borne out by:

(a) the 456RP Records with the remark “LOT SURRENDERED IN EXCHANGE FOR ST. I.L.95, SEE C/E NO.12665”;

(b) a printout from the website of the Land Registry which showed that the file with PRN C4741439 for Lot 456RP had been closed;

(c) the District Lands Office by its letter dated 21 June 2019 to P (page 52 of the exhibit to the P 2^nd Aff) confirmed that Good Ascent applied to the District Lands Office for surrender and exchange in respect of Lot 456RP, and on 20 October 2004 executed the Surrender Deed and Exchange Conditions;

(d) the Land Registry by its letter dated 5 July 2019 to P (pages 49-50 of the exhibit to the P 2^nd Aff) confirmed that (i) on 20 October 2004 Good Ascent entered into the Surrender Deed (memorial no UB9360606) to surrender Lot 456RP to the government, (ii) on the same day the government issued the Exchange Conditions 12665 to grant/demise Lot 95 to Good Ascent, (iii) the District Lands Office submitted the Surrender Deed and Exchange Conditions to the Land Registry for registration, (iv) the Land Registry completed the registration procedure, and (v) the Land Registry had no record of any surrender and exchange on 2 September 2004 (in contra-distinction to 20 October 2004) that P mentioned in his letter dated 31 May 2019.

42. By reason of the aforesaid surrender of Lot 456RP such that the last owner of Lot 456RP was the government (see the 456RP Records) in exchange for the grant of Lot 95 (see copy printout of the land search made on 24 May 2019 for Lot 95 exhibited to the Yeung Aff, “95 Records”), Lot 456RP ceased to have any legal existence, so although Lot 95 retained the same street number of 120 Stanley Main Street, Stanley, Hong Kong (see the 95 Records) as that for Lot 456RP, there was no overlap and at any particular point of time the 120 Address was either the location address of Lot 456RP or the location address of Lot 95 but not both. According to the 95 Records, Good Ascent was the 1^st owner and D was the 2^nd and current owner of Lot 95, and P’s name never appeared in the 95 Records. P’s pleadings and/or affirmation evidence did not reveal any written instrument that evidenced any ownership/title over Lot 95 by P. Bearing in mind Lot 456RP was different and separate from Lot 95, and Good Ascent was different and separate from P, it was plain P had no title, share or interest in Lot 95 or any part thereof.

43. The 95 Records showed Good Ascent as borrower/mortgagor entered into the 1^st building legal charge dated 7 December 2004 (for $3,500,000) (“1^st Building Legal Charge”) and the 2^nd and 3^rd all-moneys building legal charges both dated 28 December 2005 (“2^nd and 3^rd Building Legal Charges”) with Wing Hang Bank Limited (“WHBL”), which building legal charges were registered with the Land Registry on 5 February 2005, 13 January 2006 and 13 January 2005 respectively.

44. The 95 Records also showed Good Ascent gave a Letter of Undertaking to the Buildings Department (“BD”) on 13 October 2006, and such Letter of Undertaking (exhibited to the P 3^rd Aff)[3] was registered with the Land Registry on 24 July 2007. The 95 Records revealed another Letter of Undertaking dated 13 July 2007 to the BD that was registered with the Land Registry on 24 July 2007.

45. In my view, P knew of the above developments because P confirmed and admitted the following in a bilingual document titled “Statement of Claim” at pages 16-19 of the exhibit to the P 2^nd Aff (“Claim Document”):

(a) In 2004 Good Ascent owned the stone house at the 120 Address. To rebuild such stone house, Good Ascent engaged architect/engineer, secured building permit from the BD, and mortgaged “the premises” to secure a building loan of $5,000,000 from WHBL to construct the new building foundation.

(b) From late 2005 until January 2006, Good Ascent borrowed a total sum of $5,331,174 on 3 occasions from WHBL between 2005 and January 2006 (presumably by the 1^st, 2^nd and 3^rd Building Legal Charges).

(c) When the building foundation was completed in/about November 2005, WHBL demanded repayment of the building loans.

46. By an all-moneys Mortgage dated 31 March 2008 and registered at the Land Registry on 23 April 2008 (“Mortgage”), in consideration of HSBC granting general banking facilities to Good Ascent (pursuant to a facility letter dated 31 March 2008 signed by Good Ascent – see the Chronology), Good Ascent as beneficial owner charged and assigned Lot 95 “And of and in the messuages erections and buildings thereon now known as No 120 Stanley Main Street, Stanley, Hong Kong” (ie 120 Address) to HSBC subject to the proviso for redemption.

47. Clause 5 of the Mortgage provides inter alia that the following would be events of default:

(a) Good Ascent defaulted in the payment of the secured indebtedness or any part thereof following demand duly made;

(b) Good Accent defaulted in the payment on the due date and in accordance with the terms and conditions relating thereto of any principal or interest or other moneys outstanding and payable by Good Ascent under any term loan account (whether demanded or not);

(c) a petition is presented or any order was made for the winding up of Good Ascent save for the purpose of an amalgamation, merger or reconstruction the terms whereof had previously been approved by HSBC.

48. Clause 6 of the Mortgage provides inter alia that if any event of default shall have occurred, then HSBC as lender and mortgagee could without any consent on the part of Good Ascent or of any person enter into and take possession of the mortgaged property and/or sell the same “free from the Charge and any other estates, interests and rights to which this Charge has priority, with full power to sell the Property or any interest therein …… either by public auction or tender or private contract and partly by one of such methods of sale and partly by any other one or more of such methods of sale ……” (my emphasis).

49. The 95 Records showed the 1^st, 2^nd and 3^rd Building Legal Charges in favour of WHBL were discharged on the same day as the Mortgage (ie 31 March 2008), and the receipts on discharge of the 1^st, 2^nd and 3^rd Building Legal Charges were registered with the Land Registry on the same day as the date when the Mortgage was registered (ie 23 April 2008). It therefore appeared that the banking facilities HSBC granted to Good Ascent pursuant to the Mortgage were at least partly used to settle the outstanding amount of the building loans under the 1^st, 2^nd and 3^rd Building legal Charges.

50. By the Claim Document, P went on to claim as follows:

(a) The architect helped Good Ascent obtain a loan from HKBC, so “the shareholders of Good Ascent [P] and [Ting]” went to the offices of HSBC’s solicitors Allen & Overy where a solicitor Mr Li explained the terms of the loan from HSBC in the sum of $11,000,000 with interest at 2.25% pa for a period of 15 years repayable by monthly instalments of $72,104 each against charge of “the premises” to HSBC as security for the loan. Good Ascent then opened a loan account with HSBC. “After signing the contract”, HSBC utilised part of the loan from HSBC to repay the indebtedness due to WHBL under the 1^st, 2^nd and 3^rd Building Legal Charges.

(b) On 12 March 2006, WHBL’s solicitors asked “the Shareholders of Good Ascent, [P] & [Ting]” to sign a document which stated HSBC had repaid the building loans in the total sum of $5,331,174.

(c) “A week passed. Mr Li requested [P] to bring along the title deeds of no. 120, Stanley Main Street to the solicitor office. Upon arrival, [P] produced the deeds (no.8451823) in which the name of [P] & [Ting] existed. At then, [P] asked where the balance [of the loan from HSBC] of the $5,000,000 was. [P] was replied that it was in the account of Good Ascent.”

(d) “Upon signing the contract, a Memorial (8451823) caused by [P] was registered at the Land Registry. [P] sold the premises to Good Ascent. In the Memorial, there were the signatures of [P] and [Ting]. After a month, [Ting] and [P] visited the Solicitor office with a view to collecting the Memorial. Mr Li [solicitor] provided [them] a provisional agreement (to view only) as he needed to prepare some document for the Land Registry before he could release the document to [them]. [P] lost the provisional agreement then. About one year later, [P] visited Allen Overy [HSBC’s solicitors] and was replied that Mr Li departed. In these years, [P] complained to Banking Commission, Securities & Futures Commission and HSBC (Loans Department – Manager, Wendy SHUM) but to no avails”.

51. But P gave a somewhat different account of the above events in 2006 in the Chronology against the date of “31 March 2008” (my emphasis):

“[Good Ascent] 向[HSBC] 做按揭, 過程2006 年1月或2月期間, [Good Ascent] 需要工程費用起赤柱地段456RP上層, 要向銀行借工程費用, 得到陳則師的幫助可以向銀行借, [HSBC] 向[Good Ascent] 董事[P] 和[Ting] 說要將赤柱大街120號都叫地段95號說[Good Ascent] 在銀行開公司戶口: 400-xxxxxx-xx4, 貸款利息2.2500%,每月還款72104, 分十五還, 條件講完, 當年銀行放款部經理WENGY SHUM請[P] 和[Ting] 明天帶同赤柱地段95號的屋契到代表銀行的律師行見一位李律師地址在中環交易廣場第三期九樓, ALLEN OVERY律師行, 當時是沒有簽貸款合約, 當時放下[Good Ascent] 地段95號的屋契, 契上有[P] 和[Ting] 兩人董事名, 之後[P] 和代表[Good Ascent] 的關炳基律師多次去收回貸款合約都失敗, 直到現在都沒有消息和銀行賣出的金錢都沒有收到金錢。”

52. P’s above account showed Good Ascent borrowed 3 building loans from WHBL pursuant to the 1^st, 2^nd and 3^rd Building Legal Charges for building a new house at Lot 95 (at 120 Address), which building loans were eventually repaid from banking facilities granted by HSBC and secured by the Mortgage over Lot 95 (and 120 Address).

53. But P’s other assertions in paragraphs 50 and 51 above could not be supported and were in fact contradicted by the documents registered at the Land Registry and Companies Registry:

(a) P was not a shareholder of Good Ascent in 2006 and/or 2008 (see paragraph 38 above), and his assertion otherwise in paragraphs 50(a)-(b) and 51 above was wrong. In fact, P ceased to be a shareholder and/or director of Good Ascent on 22 April 2002 (see paragraph 38 above). P’s claim in the Chronology that the Companies Registry records showed he was a shareholder of Good Ascent since 5 June 2001 to date was wrong as such assertion ignored the Companies Registry records referred to in paragraph 38 above.

(b) Page 15 of the exhibit to P 2^nd Aff was a bank statement of Good Ascent’s account no 400-xxxxxx-xx4 with HSBC dated 30 June 2006, which supported P’s allegation in paragraph 50(a)-(b) above that in March 2006 HSBC granted a term loan of $11,000,000 with interest at 2.2500% pa repayable by monthly instalments of $72,104 each. But 3 matters were of note in respect of such bank statement: (i) the bank statement stated the final monthly instalment date was 30 March 2023, so the term loan was for 17 and not 15 years, (ii) Good Ascent had made full drawdown of the loan in 2006 as the bank statement showed the outstanding principal was $10,454,781.00 as at 30 June 2006 (so if, as P alleged in the Claim Document (see paragraph 50(b) above), $5,331,174 were used to repay WHBL, the balance of the loan was not kept in Good Ascent’s account no 400-xxxxxx-xx4), and (iii) Good Ascent had not paid the monthly instalment of $72,104 on 30 May 2006 when due.

(c) More importantly, the aforesaid HSBC term loan granted to Good Ascent in 2006 could not have been secured by any mortgage in favour of HSBC over Lot 95 because (i) the Chronology admitted Good Ascent signed a new facility letter by HSBC on 31 March 2008, (ii) the Mortgage was executed on 31 March 2008 as security for such banking facilities granted by HSBC and such Mortgage was registered at the Land Registry on 23 April 2008 (see paragraph 46 above), (iii) no other mortgage or legal charge over Lot 95 was registered at the Land Registry, and (iv) in any event Good Ascent could not have given HSBC any first mortgage or first legal charge over Lot 95 in 2006 as the 95 Records showed the 1^st, 2^nd and 3^rd Building Legal Charges in favour of WHBL were not discharged until the same day as the Mortgage (31 March 2008) and the receipts on discharge were registered on the same day as the Mortgage (23 April 2008) (see paragraph 49 above).

(d) Moreover, the fact that a facility letter and the Mortgage were made/executed in 2008 and that the 1^st, 2^nd and 3^rd Building Legal Charges were discharged in 2008 suggested the buildings loans were repaid in March 2008 rather than in March 2006. Indeed, the Chronology suggested the loan from HSBC in 2006 was to pay for erection of the superstructure of the new house at Lot 95 rather than for repayment of WHBL’s building loans. P did not clarify or give explanation for this difference.

(e) There was also contradiction between P’s assertion in the Claim Document that Good Ascent signed “the contract” with HSBC in 2006 (which could only have been the loan facility letter since it could not have been the Mortgage) (see paragraph 50(a) above) and P’s allegation in the Chronology that Good Ascent did not sign facility letter in 2006 (see paragraph 51 above).

(f) As regards the meeting with Mr Li in March 2006, P claimed he was told the remaining balance of the loan of $11,000,000 was deposited into the account of Good Ascent (see paragraph 49(c) above). But as explained in (b)(ii) above, the entire loan had been drawndown by Good Ascent, so P’s query about the loan monies should have been directed to Good Ascent rather than to HSBC or its solicitor.

(g) P also claimed that when he met Mr Li in March 2006 he “produced the deeds (no.8451832) in which the name of [P] & [Ting] existed”. Memorial no.8451832 was the P / Good Ascent 2001 Assignment (see paragraph 37 above). It was inexplicable why in 2006 Mr Li would have asked P to produce the P / Good Ascent 2001 Assignment in respect of P’s sale of the entire Lot 456RP to Good Ascent (signed by P as vendor and P and Ting on behalf of Good Ascent as purchaser) when by 2006 Lot 456RP had ceased to legally exist after it was surrendered to the government in exchange for grant of Lot 95 to Good Ascent in 2004 (see paragraphs 39-42 above), and such surrender and exchange were evidenced by public records at the Land Registry and hence must have been known to Mr Li as HSBC’s solicitor. Indeed, in the Chronology, it was said P/Ting were asked to bring the title deeds of Lot 95 (not those of Lot 456RP) to see Mr Li, which suggested P must have known about the aforesaid surrender and exchange. Actually, as against the date “21 October 2004” in the Chronology, it was said “[Good Ascent] 向地政總署申請換地的原因, 赤柱發展時因面積細, 需要向地政署買多60平方尺, 630,000, 條件要赤柱大街改叫赤柱地段95號, 有關地段同日完成換地程序”.

(h) P alleged in paragraph 50(d) above that upon “signing the contract” (presumably the loan facility letter in 2006 by HSBC as referred to in paragraph 50(a) above although there was some contradiction in P’s case - see (e) above), P caused the P / Good Ascent 2001 Assignment (ie “a Memorial (8451823)”) to be registered at the Land Registry. This must be wrong because the P / Good Ascent 2001 Assignment was already registered at the Land Registry several years ago on 3 August 2001 (see paragraph 37 above).

(i) P was pains to emphasise that he and Ting as directors signed the P / Good Ascent 2001 Assignment on behalf of Gold Ascent, but it must not be forgotten that P ceased to be director/shareholder of Good Ascent shortly thereafter by 22 April 2002.

(j) At the very least, P by the Claim Document acknowledged he sold Lot 456RP to Good Ascent (see paragraph 50(d) above), so P must have known he no longer had any title, share or interest in Lot 456RP, let alone in Lot 95. This did not sit well with P’s subsequent allegations in the so-called or purported 2^nd ASoC that sought suggest to impugn the P / Good Ascent 2001 Assignment (see paragraphs 22-23 above).

(k) P did not explain the significance of the provisional agreement that Mr Li allegedly shown him (see paragraph 50(d) above). But, the only references to provisional agreement for sale and purchase in the 95 Records were (i) in 2009 between Max Express (HK) Limited (“Max Express”) and Techian (Asia) Investment Limited (“Techian”) (see paragraph 112 below) and (ii) in 2012 between HSBC and D (see paragraph 61 below). In any event, there was no sale and purchase in respect of Lot 95 in 2006 as seen at the 95 Records.

(l) P claimed in the Chronology that when he went to see Mr Li in March 2006, “當時放下[Good Ascent] 地段95號的屋契, 契上有[P] 和[Ting] 兩人董事名”. This is wrong. Good Ascent came into existence upon surrender and exchange in 2004, but by that time P was no longer any director or shareholder of Good Ascent, so P would not have signed as director of Good Ascent (see paragraphs 37-38 above). In 2006, the only title deed for Lot 95 was the Exchange Conditions which were signed by Ting as chairman of the board of directors of Good Ascent. P’s name was not found in the Exchange Conditions.

54. In light of the above analysis, I find it unsurprising that HSBC and the regulatory authorities did not entertain P’s complaints which I find to have no merit, at least insofar as might concern D.

55. According to the 95 Records, D acquired Lot 95 pursuant to mortgagee sale by HSBC as mortgagee under the Mortgage by way of private treaty for a consideration of $27,500,000. As seen in paragraph 102 below, Good Ascent was wound up by the court on 11 January 2010. This amounted to an event of default under the Mortgage (see paragraph 47(c) above), which therefore triggered HSBC’s exercise of its powers under the Mortgage (see paragraph 48 above).

56. Section 186 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance Cap 32 (“CO”) provides that “[when] a winding-up order has been made, or a provisional liquidator has been appointed, no action or proceeding shall be proceeded with or commenced against the company except by leave of the court, and subject to such terms as the court may impose”.

57. On 10 November 2010, Master Hui granted an order by consent between HSBC and the solicitors for the joint and several liquidators of Good Ascent that notwithstanding the winding up order against Good Ascent (pages 1-6 of the exhibit to the P 2^nd Aff) (see paragraph 102 below), leave was granted for HSBC to commence mortgage action against Good Ascent (ie the Intended Mortgage Action) “for possession of the mortgaged property known as No.120 Stanley Main Street, Hong Kong (“the Mortgaged Property”) and for payment of all sums due to and secured by [the Mortgage] in respect of the Mortgaged Property subject to the following conditions:- (a) No judgment or order obtained by [HSBC] as plaintiff in the Intended Mortgage Action (other than judgment or order for possession of the Mortgaged Property) shall be enforced against [Good Ascent] without the leave of the court; and (b) [HSBC] shall not apply for any order for costs personally against the Official Receiver or the Joint and Several Liquidators of [Good Ascent] in the Intended Mortgage Action”. A copy of such order was exhibited as pages 13-14 of the exhibit of the P 2^nd Aff.

58. HSBC subsequently commenced mortgage action HCMP2376/2010 against Good Ascent (in liquidation) under Order 88 of the RHC. On 4 January 2011, Master Lai granted the following order (pages 10-12 of the exhibit to the P 2^nd Aff):

(a) “[HSBC] do recover against [Good Ascent] the sum of HK$10,490,834.74 secured by [the Mortgage] together with interest on the sum of HK$10,171,546.74 at the rate of 13% per annum or HK$3,622.74 per day and on the sum of HK$4,370.06 at the rate of 13% per annum or HK$1.56 per day both from 2 December 2010 to the date hereof and thereafter at judgment rate until payment.”

(b) “[Good Ascent] do within 28 days after service upon it of the Order deliver to [HSBC] vacant possession of the property comprised in the [Mortgage] and known as All That No.120 Stanley Main Street, Hong Kong (“the Mortgaged Property”).”

(c) “Upon [Good Ascent] paying to [HSBC] the money hereby ordered to be paid and all other moneys (if any) secured to [HSBC] by the said Mortgage, [HSBC] (subject and without prejudice to the due exercise of any power of sale for the time being vested in it) do redeliver to [Good Ascent] possession of the Mortgaged Property and release to [Good Ascent] the security constituted by the said Mortgage as [Good Ascent] may agree or the Court may direct.”

(d) “There be liberty to apply.”

59. The sealed copy of such order made by Master Lai on 4 January 2011 showed such order was sealed and filed on the following day, ie 5 January 2011. But in the Chronology in relation to the date of “4 January 2010” it was stated that “HCMP2376/2010, 原告人[HSBC], 被告人[Good Ascent]( 在清盤中) 內容說: [Good Ascent]同[HSBC] 簽借款合約2008-3-31日, 簽說[Good Ascent] 欠銀行10.300.000, 所以銀行不公開拍賣赤柱地段95號, 在2018年11月6日聆案官黎達祥書記符卓穎給[P] 的信說, 法庭記錄2011年1月4日並沒有聆訊於黎達祥聆案官前審理, 銀行用虛 ……” In my view, this was incorrect because the letter dated 6 November 2018 from Master Lai’s clerk (see page 8 of the exhibit to the P 2^nd Aff) stated that “根據法庭記錄, 2011年1月5日並沒有聆訊於黎達祥聆案官前審理。再者, [P] 和[林雪梅女士]並非本案的與訟方。如有任何查訊, 應向案件的與訟方提出”. It was plain the court only confirmed there was no court hearing on 5 January 2011, but the aforesaid order was granted at the hearing on 4 January 2011 by Master Lai after hearing submissions from solicitors for HSBC and Good Ascent.

60. In the Claim Document, P made the following allegation:

“7. It is strange that in HCMP 2367/2010 (Plaintiff: HSBC; Defendant: Good Ascent), it mentioned that Good Ascent represented Yeung Hon Yuen & Lam Mui Kwan, Solicitors owed the Bank $10,490,834. The then representative Solicitor of the Shareholders of Good Ascent, [P] & [Ting] was not aware of that litigation on 5 January 2011. That Order was passed to me from the [Official Receiver’s Office] in 2017.”

I disagree P was still a shareholder of Good Ascent in 2010. In fact, he ceased to be such shareholder on 22 April 2002 (see paragraph 38 above). Since P was by then neither a director nor a shareholder of Good Ascent, whether he was notified of the legal proceedings in HCMP2367/2010 and/or the order made by Master Lai on 4 January 2011 was neither here nor there.

61. HSBC obviously recovered vacant possession of Lot 95 (120 Address) pursuant to the order by Master Lai dated 4 January 2011 because HSBC eventually sold Lot 95 by way of mortgagee sale. By a provisional agreement for sale and purchase dated 27 February 2012 (“PASP”) and a formal agreement for sale and purchase dated 15 March 2012 (“FASP”) made between HSBC as vendor and D as purchaser, HSBC as mortgagee agreed to sell and D agreed to buy “Stanley Inland Lot No.95 (No.120 Stanley Main Street, Hong Kong)” for the agreed price of $27,500,000. The PASP and FASP were registered at the Land Registry on 16 March and 10 April 2012.

62. By an Assignment dated 16 April 2012 executed by HSBC as vendor “in exercise of the power of sale conferred on it by the Mortgage and of all other enabling powers (if any)” and D as purchaser (“Assignment”), HSBC assigned to D Lot 95 “Together with the messuages erections and buildings thereon now known as No 120 Stanley Main Street, Stanley, Hong Kong” to hold the same unto D for the residue of the term of years created by the Exchange Conditions “FREED AND ABSOLUTELY DISCHARGED of and from all rights or equity of redemption and of and from all claims and demands whatsoever under the Mortgage ……” The Assignment was registered at the Land Registry on 11 May 2012. D was therefore the present owner of Lot 95.

III. P’s BANKRUPTCY

63. According to the bankruptcy search record dated 24 May 2019 in respect of P that was obtained by YLC from the Official Receiver’s Office (“ORO”), a bankruptcy order was made against P on 25 April 2007, but such bankruptcy order was discharged on 25 October 2011. However, a 2^nd bankruptcy order was made against P in HCB1052/2015 on 11 May 2015, and P was presently an undischarged bankrupt. P admitted as much in the draft 2^nd ASoC (see paragraph 22 above) and at the 2^nd Hearing before me. The Official Receiver (“OR”) was the trustee-in-bankruptcy in respect of P’s property.

64. As seen in paragraph 122 below, P previously commenced legal action against D in HCA1180/2018. On 25 June 2018, P wrote to the ORO to enquire inter alia whether the OR had given approval to P to commence HCA1180/2018. On 10 July 2018, the ORO replied to confirm that the OR as the trustee-in-bankruptcy of P’s property had not given consent to P to commence HCA1180/2019 against D, and would not give retrospective approval and would not join in or bear legal costs of such proceedings unless P could demonstrate to the OR’s satisfaction that his claim was meritorious and there was adequate funding to cover her costs and any adverse costs that might be ordered against the OR in the proceedings.

65. On 29 May 2019, YLC wrote to the ORO to enquire inter alia whether the OR had given approval for P to commence the present action against D. As at the date of the Yeung Aff, the reply from the ORO was pending. Subsequently, the ORO replied by letter dated 10 June 2019 (“OR Letter”) to confirm that the OR as the trustee-in-bankruptcy of P’s property had not given any consent or approval for P to commence or continue the present action, and that the OR would not give any such consent or approval (whether retrospective or not) unless she was satisfied (a) that P’s claim was meritorious and (b) there was sufficient funding or full/effective indemnity to cover her costs in such proceedings and any adverse costs that might be ordered against her in such proceedings if P’s claim was unsuccessful. In such circumstances, the OR confirmed she would not adopt the present action or bear any legal costs of the present action.

IV. P’s LOCUS STANDI

66. Where a claimant has no locus standi to bring his claim as framed by him, the court will not allow the action to proceed and debate on the merits of his claim.

67. Turning to P’s claim in the present action, the essential basis of such claim rested in the following matters: (a) P was/is all along the owner of ⅓ share or interest of and in Lot 345RP, and (b) he claimed damages for injury to his ⅓ share or interest of and in Lot 456RP. As for the purported or so-called 1^st ASoC, its essential basis was the same as (a)-(b) above with added claim that the mortgagee sale by HSBC was defective, void and liable to be set aside as such sale was by private treaty and not by public auction (see paragraph 20(b) above).

68. Turning further to the purported draft 2^nd ASoC, it was inherently inconsistent as on one hand it alleged P acquired ⅓ share of and in Lot 456RP from Yung Jim Mei Jimmy in September 1997 and on the other hand it alleged P acquired ½ share of and in Lot 456RP from Yung Jim Mei Jimmy on 8 July 1997. But the proposed further amendments in the draft 2^nd ASoC acknowledged P acquired ½ share of and in Lot 456RP from Yung Jim Mei Jimmy on 8 July 1997 and ½ share of and in Lot 456RP from Litmond on 31 May 2000 (see paragraphs 22-23 above). The essential basis of the further amendments in the revised draft 2^nd ASoC were:

(a) The value of Lot 456RP (which P acquired from Yung Jim Mei Jimmy for $250,000 and Litmond for $2,000,000) was at least $6,000,000 as at 13 July 2001, so P could not have sold Lot 456RP to Good Ascent on 13 July 2001 for $3,000,000, and in fact what he really intended to sell to Good Ascent for $3,000,000 was ½ share of and in Lot 456RP that he acquired from Litmond, but the P / Good Ascent 2001 Assignment dated 13 July 2001 by P to Good Ascent in respect of Lot 456RP had “瑕疵”.

(b) P was unable to set aside the P/Good Ascent 2001 Assignment dated 13 July 2001 as he was an undischarged bankrupt, but if he were able to do so, he would go on to apply to set aside the Exchange Conditions in 2004 (as they were made without involving him as co-owner of Lot 456RP) and the assignment of Lot 95 by mortgagee sale to D in 2012 (as there was no proper and open valuation, and the value of such property should exceed $27,500,000).

(c) On such basis, P claimed against D for damages.

69. Section 58 of the Bankruptcy Ordinance Cap 6 (“BO”) provides as follows:

“(1)  On the making of a bankruptcy order, the property of the bankrupt shall vest in the [OR].

……

(2)  On the appointment of a trustee the property shall forthwith pass to and vest in the trustee appointed.

(3)  The property of the bankrupt shall pass from trustee to trustee, including under that terms the [OR] when he fills the office of trustee, and shall vest in the trustee for the time being during his continuance in office, without any conveyance, assignment or transfer whatsoever.”

70. The right of action in paragraph 67(b) and 68(c) above was a chose in action. Section 2 of the BO defines “property” as including “money, goods, things in action, land and every description of property, whether real or personal …… and every description of estate, interest and profit, present or future, vested or contingent, arising out of or incident to property as above defined” (my emphasis).

71. Thus, even on P’s claim, his alleged title, share and interest in Lot 456RP and his right of action being a chose in action were his properties / assets that came within his bankruptcy estate, and hence were vested in the OR as the trustee-in-bankruptcy of the property of P as an undischarged bankrupt.

72. In considering section 58 of the BO, Kwan JA (as she then was) in Cheung Wing Kwan Tommy v Hong Kong Export Credit Insurance Corp held as follows:[4]

“21. The legal principle established by the above cases and the relevant statutory provisions is that, upon the making of a bankruptcy order, the property of the bankrupt shall vest in the [OR], who will hold the property first as provisional trustee and then as trustee. …… The property of the bankrupt vested in the [OR] shall include the bankrupt’s right to sue in respect of certain causes of action at the commencement of the bankruptcy, namely on the day of the bankruptcy order (ss.2, 43(1) and 30), with the exception of rights of suit involving claims for damages for personal injuries and defamation (Chung Kau v Hong Kong Housing Authority [2004] 2 HKLRD 650, paras.6-8). The cause of action in the present case already existed by the time of the making of the bankruptcy order. It was purely related to a financial dispute and did not involve personal injuries or defamation. Therefore, the right of action was vested in the [OR].

22. The property vested in the trustee in bankruptcy is not returned to the bankrupt upon the automatic discharge of the bankruptcy order. Although the discharge releases a bankrupt from all the bankruptcy debts (subject to s.32(1), 32(3)-32(8)), it has no effect on the functions (so far as they remain to be carried out) of the trustee and the operation of the provisions of the [BO] (s.32(2)). Consequently, following the discharge of the bankruptcy order, the trustee is still under a duty to complete the administration of the bankrupt’s estate, including realising all realisable property vested in the trustee and distributing the proceeds to the creditors (Gosden v Dixon; Re Balhorn, ex p Official Receiver (1981) 39 ALR 223). As for the bankrupt, notwithstanding the discharge of the bankruptcy order, he is still under a legal duty to continue to assist the trustee in completing the administration of the estate, including realising the property vested in the trustee and distributing the proceeds to the creditors (s.30A(8); Re Balhorn, ex p Official Receiver; Re Waters (1874) LR 18 Eq 701).”

73. The Annotated Ordinances of Hong Kong – Bankruptcy Ordinance (Cap 6) also explains as follows:[5]

“Upon the making of a bankruptcy order and until a trustee is appointed, the property of the bankrupt is vested in the [OR]: see s 58 below. The effect of this is that the bankrupt ceases to have an interest in either his assets or his liabilities except in so far as there may be a surplus to be returned to him upon his discharge. Besides certain causes of action personal to the bankrupt (eg, defamation and assault), all other causes of action which were vested in the bankrupt at the commencement of the bankruptcy, whether for liquidated sums or unliquidated damages, vest in the trustee, and the bankrupt cannot commence any proceedings based on a cause of action which no longer vests in him, and if the proceedings have already commenced, he ceases to have sufficient interest to continue them: see Heath v Tang & Anor [1993] 1 WLR 1421 at p 1423, per Hoffmann LJ, followed in Re Tang Wai Yee Sylvia (A bankrupt) [1998] 1 HKC 736. ……”

74. I have no difficulty in accepting that P’s present action (whether as presently pleaded or as per the 1^st ASoC and/or 2^nd ASoC) was a chose in action within the meaning of section 2 of the BO and was vested in the OR as the trustee-in-bankruptcy under section 58 of the BO. In such circumstances, P had no right to even bring his pleaded claim because on his own case both his alleged ⅓ or ½ share or interest of and in Lot 456RP (if any) and his chose in action being the right to sue would have become vested in the OR as his trustee-in-bankruptcy upon his being adjudicated bankrupt in 2015. P is now an undischarged bankrupt, but such properties would not revert to P even upon his eventual discharge from bankruptcy. P’s bare assertion at the 2^nd Hearing that his bankruptcy could not affect his right to claim in respect of his alleged property rights was wrong. In short, P was the wrong party to commence the present action. In my view, P’s claim must be struck out because on its best pleaded basis P has no right to sue at all.

75. I have also considered P’s purported or so-called 1^st ASoC or purported revised draft in the 2^nd ASoC on de bene esse basis, which would not in any way affect or alter the above analysis and conclusion. After all, P’s claim under the purported 1^st and/or 2^nd ASoC still claimed for damages arising from his alleged share or interest of and in Lot 456RP, and such claim was a chose in action being property within the meaning of section 2 of the BO that became vested in the OR as the trustee-in-bankruptcy of P’s property.

76. Thus, it was only the OR as the trustee-in-bankruptcy who could have commenced the present action. There was nothing in the BO that would allow a bankrupt or even ex-bankrupt to start or continue legal action on his own without consent or approval by the OR as trustee-in- bankruptcy. Being an undischarged bankrupt, the burden was on P to show he had the OR’s consent or approval to start or commence the present action, but he failed to do so. It was quite insufficient for P to make the assertion, as he did at the 2^nd Hearing, that the OR had not prohibited him for commencing the present action. There was simply no evidence that the OR allowed P to do so. Indeed, in the revised draft 2^nd ASoC, P admitted he was presently an undischarged bankrupt, and hence he was unable to challenge the P / Good Ascent 2001 Assignment, let alone the Exchange Conditions and the mortgagee sale to D. So even without reference to or reliance on the OR Letter in paragraph 65 above, P’s claim was plainly liable to be struck out. The OR Letter merely made the position abundantly clear and obvious. I therefore order P’s claim to be struck out for want of locus standi.

77. As P could not even cross this first hurdle, there was no need to even consider whether or not his present claim in the SoC or his proposed claim by the 1^st ASoC and/or 2^nd ASoC had any merits. However, for completeness, I proceed to briefly deal with the other bases of D’s application to strike out P’s claim.

V. STRIKING OUT APPLICATION

(a) Legal principles

78. The Summons was made pursuant to Order 18 rule 19(1) of the RHC and inherent jurisdiction of the court. The principles governing striking out applications are well established. Hong Kong Civil Procedure 2020 states as follows:[6]

“…... It is only in plain and obvious cases that the court should exercise its summary powers to strike out the indorsement on any writ or any pleading under this rule. There should be no trial upon affidavit. Disputed facts were to be taken in favour of the party sought to be struck out. Nor should the court decide difficult points of law in striking out proceedings. The claim must be obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out. ……

Plain is not the same as simple and obvious is not the same as short. …… The mere fact that the case is weak and not likely to succeed is no ground for striking it out ……

It is for the party seeking to strike out an indorsement or pleading to demonstrate that the case is a plain and obvious one in which the other party’s claim is bound to fail. ……”

But the fact a question of law appears difficult/obscure does not necessarily preclude the court from striking out a claim if it is satisfied it has all the necessary information to decide the question, and has come to the conclusion after full argument in the face of all relevant information that the case is plainly and obviously one for striking out. In such circumstances, the court “should not decline to do so on the ground that the issues are difficult or complicated”.[7]

79. In respect of the ground of no reasonable cause of action, a reasonable cause of action means “a cause of action with some chance of success when only the allegations in the pleading are considered …… So long as the statement of claim or the particulars …… disclose some cause of action, or raise some question fit to be decided by a judge or jury, the mere fact that the case is weak, and not likely to succeed, is no ground for striking it out …….”[8]

80. In respect of the ground that the plea was frivolous or vexatious, Hong Kong Civil Procedure 2020 states that:[9]

“…… A proceeding is frivolous when it is not capable of reasoned argument, without foundation or where it cannot possibly succeed. A proceeding is vexatious when it is oppressive and/or lacks bona fides.

In Yifung Properties Ltd v. Manchester Securities Corp, (unrep., HCA1341 and 1359/2014, [2015] H.K.E.C. 2182), Au Yeung J stated:

12.  … Where a litigant brings a claim knowing that there is no substance in it or that it is bound to fail, or if the claim is on its face so manifestly misconceived that it can have no prospect of success, it may be deemed frivolous and an abuse of process …… the court should see what the party in question knew or ought to have known if he had gone about the matter seriously ……

13.  … Vexatiousness implies the doing of something over and above that which is necessary for the conduct of the litigation and suggests the existence of some spite, or desire to harass the other side to the litigation, or some other improper motive ……

14.  To decide that the litigant has been frivolous or vexatious and thus abused the process of the court is a serious finding to make, for it will generally involve bad faith on his part and one would expect the discretion to be sparingly exercised.[10]

In exercising a judicial discretion to determine whether proceedings are vexatious ……, the court may admit affidavit evidence ……”

81. As regards “abuse of the court’s process”, the court must be used bona fide and properly, and must not be abused. The court will prevent the improper use of its machinery and will, in a proper case, summarily prevent its machinery from being used as a means of vexation and oppression in the process of litigation.[11]

(b) Discussion

82. From the account in Part IV above, P ceased to have any title, share or interest in Lot 456RP upon sale of the same to Good Ascent in 2001, and P never had any title, share or interest in Lot 95.

83. P very recently by the P 4^th Aff and the revised draft 2^nd ASoC purported to challenge the P / Good Ascent 2001 Assignment on the basis that (a) he would not have sold Lot 456RP for a low price of $3,000,000, (b) he intended to sell ½ share of and in Lot 456RP acquired from Litmond, and (c) he did not receive the consideration of $3,000,000 at all.

84. Such bare allegations did not stand up to scrutiny even on the striking out threshold. First, P was the vendor and Good Ascent was the purchaser. At that time, P and Ting were the directors of Good Ascent. P did not dispute he signed the P / Good Ascent 2001 Assignment as vendor and/or as a director of the purchaser. Indeed, in the Claim Document and Chronology, P emphasised the P / Good Ascent 2001 Assignment contained both his and Ting’s signatures. In my view, P could not have been unaware that such Assignment was in respect of the entire Lot 456RP.

85. Secondly, the P / Good Ascent 2001 Assignment expressly stated the assignment of Lot 456RP from P to Good Ascent was “IN CONSIDERATION of the sum of DOLLARS THREE MILLION (HK$3,000,000.00) Hong Kong Currency paid by the Purchaser [ie Good Ascent] to the Vendor [P] (receipt whereof is acknowledged) ……” (my emphasis). Plainly, P as vendor had signed the P / Good Ascent 2001 Assignment to acknowledge receipt of the consideration of $3,000,000.

86. Thirdly, even if P had not received the consideration of $3,000,000 in 2001, it was far too late and outside the limitation period for P to now raise any contractual or property claim to set aside the P / Good Ascent 2001 Assignment.

87. Fourthly, as explained in Part IV above, if the alleged cause of action had any vitality (which I disagree), such cause of action being a chose in action would have been vested in the OR, and P personally had no cause of action now and/or even upon his eventual discharge from bankruptcy.

88. Fifthly, as explained in paragraphs 94-97 below, irrespective whether P had any cause of action against Good Ascent (which I doubt since it had been wound up) and/or HSBC, P had no viable claim against D who acquired Lot 95 (not Lot 456RP which no longer legally exist) via mortgagee sale.

89. In light of the account of chain of title in respect of Lot 456RP and Lot 95 in Part II above, P’s claim that he had and still has ⅓ (or ½) share or interest in Lot 456RP was plainly misleading and wrong:

(a) P never at any stage held ⅓ share or interest in Lot 456RP.

(b) P first acquired ½ share of and in Lot 456RP when he bought Yung Jim Mei Jimmy’s ½ share of and in Lot 456RP in 1995 (see paragraph 33 above). This ½ share of and in Lot 456RP was bought and sold between P and Yung Jim Mei Jimmy until P finally acquired the same by assignment on 8 July 1997 (see paragraph 34 above).

(c) P then became the sole owner of Lot 456RP when he bought the remaining ½ share of and in Lot 456RP from Litmond on 31 May 2000 (see paragraph 36 above).

(d) P ceased to have title, share or interest in Lot 456RP when he sold all his title, share or interest in Lot 456RP to Good Ascent by the P / Good Ascent 2001 Assignment on 13 July 2001 for consideration of $3,000,000 (see paragraph 37 above). In fact, P referred to and confirmed such Assignment in the Claim Document and Chronology, and such Assignment was registered at the Land Registry shortly after it was executed (see paragraph 37 above).

(e) In any event, all title, share or interest in Lot 456RP was extinguished upon Good Ascent’s surrender of Lot 456RP to the government in exchange for the grant of Lot 95 by the government to Good Ascent pursuant to the Deed of Surrender and Exchange Conditions in 2004 (see paragraphs 39-42 above).

(f) It was plain that Lot 95 was different and separate from Lot 456RP (even though the buildings on Lot 95 and Lot 456RP both used the street number No 120 Stanley Main Street, Stanley, Hong Kong) as Good Ascent had to pay premium of $630,000 for the grant of Lot 95 by the government under the Exchange Conditions (see paragraph 40 above). This was actually acknowledged by P in the Chronology (see paragraph 53(g) above and paragraph 93(a) below).

90. Further, as from 22 April 2002, P was no longer any director or shareholder of Good Ascent (see paragraph 38 above).

91. Thus, since 2001/2002 or at the latest since 2004, P had no title, share or interest in Lot 456RP. Indeed, P could not have any present title, share or interest in Lot 456RP which had no present legal existence. There was no arguably credible basis for P to assert, as he did at the 2^nd Hearing, he was still owner or part owner of Lot 456RP. In my view, P had no reasonable cause of action herein to sue in the capacity as owner of Lot 456RP.

92. Next, P’s pleaded claim (whether on the basis of the SoC or the purported or so-called 1^st ASoC or 2^nd ASoC) to any title, share or interest in Lot 456RP was premised on alleged sale of such ⅓ or ½ share of and in Lot 456RP to him by Yung Jim Mei Jimmy in September 1997 or July 1997 for a consideration of $250,000. But, subsequently in 2001, P sold all his title, share or interest in Lot 456RP to Good Ascent with the P / Good Ascent 2001 Assignment registered at the Land Registry (see paragraph 37 above). The above-described chain of title was by written conveyancing instruments and/or title deeds that were actually registered at the Land Registry, and P would be bound by the same.

93. Turning to the P 1^st Aff, it was specious for P to ask D to demonstrate that Lot 456RP had been exchanged for Lot 95 when he was obviously well aware of the same:

(a) P admitted in the Chronology that “[Good Ascent] 向地政總署申請換地的原因, 赤柱發展時因面積細, 需要向地政署買多60平方尺, 630,000, 條件要赤柱大街改叫赤柱地段95號, 有關地段同日完成換地程序”.

(b) In the Chronology, P claimed he was asked to bring the title deeds of Lot 95 to see Mr Li in March 2006, so he must have known Lot 456RP had been surrendered and exchanged for the grant of Lot 95 in favour of Good Ascent.

(c) The exhibits to the P 2^nd/3rd Affs included the 456RP Records (which showed Lot 456RP had been surrendered to the government), extract of the Exchange Conditions, the Surrender Plan and Exchange Plan, so P must have known of the aforesaid surrender and exchange involving Lot 456RP and Lot 95.

94. It was true that P did not sell Lot 95 to D (because he was not the owner and had no interest in Lot 95). But there was no basis for P to question the mortgagee sale of Lot 95 to D for which D paid $27,500,000 to HSBC. First, the Mortgage signed by Good Ascent permitted sale by private treaty, so HSBC could not be faulted for not selling Lot 95 by public auction. Thus, such sale by private treaty and not by public auction could not be said to be “私相授受交易” or “不合法交易”, and I disagree that on such basis “[D]在STANLEY LOT 456RP (1/3) 的業權有嚴重瑕疵, 應被宣佈為無效”. D’s title to Lot 95 could not be faulted on such basis.

95. Secondly, the Conveyancing and Property Ordinance Cap 219 (“CPO”) provides as follows:

“Where a sale is made under a mortgage, the title of the purchaser shall not be affected by the fact that no case had arisen to authorize the sale ort that due notice was not given or that the power was otherwise improperly or irregularly exercised; but any person who suffers loss through an unauthorized, improper or irregular exercise of power of sale shall have a remedy in damages against the person exercising the power” (section 52)

“Where a mortgagee …… sells under an express or statutory power of sale, the assignment shall operate to assign to the purchaser the mortgagor’s estate in that land, subject to any other mortgage having priority to the mortgage under which the sale is made ……” (section 53(1)(a))

96. On such basis, whatever title or interest P might have had in Lot 95 (albeit none had been shown), it would have become null and void against D’s title to Lot 95 acquired under the mortgagee sale, and at best P’s claim (if any) would be against HSBC as the mortgagee exercising the power of sale under the Mortgage and not against D. This conclusion is borne out by the authorities in the paragraph below. In fact, it was doubtful whether P could have any claim against any party at all since he had no title or interest in Lot 95 (and the former owner/mortgagor of Lot 95 was Good Ascent and not P), and P’s ownership/interest in Lot 456RP had ceased and/or extinguished on sale of such property to Good Ascent in 2001 and on surrender of such property to the government in 2004. But it would be sufficient for the present case that P as alleged owner of Lot 456RP had no cause of action against D.

97. In Lo Tai Yam v Hu Mu Simon & anor,[12] Stone J at page 593 said “….. it seems to me that this point is very strong in itself, in that s.52 [of the CPO] provides specific statutory protection for the purchaser when a sale is made under a mortgage ……” In China Citic Bank International Limited v Durrant Simon Patrick Michael,[13] which also concerned a mortgagee exercising its power of sale under a mortgage to effect mortgagee sale of the mortgaged property, at paragraph 116 of the judgment I explained that whilst the purchaser of the mortgaged property under a mortgagee sale would be bound by prior encumbrances other than “the mortgage under which the sale is made and other subsequent mortgage”, “I am unable to see how the purchaser agreeing to take subject to encumbrances in relation to the Property would cause any loss to the plaintiff as ex-mortgagor who no longer had interest in the Property and was only left with potential interest in the ultimate residue of the Surplus (if any) under section 54 of the CPO”.

98. In the circumstances, quite apart from the lack of locus standi, P’s claim as presently pleaded had no arguable merits and is liable to be struck out.

99. As regard the proposed amendments to the SoC by the purported or so-called 1^st ASoC and/or by the revised draft 2^nd ASoC, Hong Kong Civil Procedure 2020 states inter alia as follows:[14]

“…… This rule also empowers the court to amend …… any pleading. If a statement of claim does not disclose the cause of action relied on, an opportunity to amend may be given, …… However, unless there is reason to believe that the case can be improved by amendments, leave will not be given.

…… If the proposed amended SOC could not survive the striking-out application, it would be futile to allow the application: LY Group Development Ltd v. East Canton Ltd [2015] 4 H.K.L.R.D. 84 (at [12] – [13]). However, where the amendments would be far-reaching and so radical as to amount to a totally new pleading which would probably provoke a fresh application to strike out, the correct course is to strike out. ……”

100. In Total Lubricants Hong Kong Limited & ors v Christophe de la Cropte de Chanterac & ors, Poon J (as he then was) said as follows:[15]

“14. First, if a pleading is capable of being cured by amendments, it should not be struck out. An opportunity to amend should be given instead. However, if the pleading is so defective that no amendment can cure it or if the proposed amendment is incapable of improving the defects, the pleading is liable to be struck out and the proposed amendment should be refused.

15. Second, when a party seeking to amend his pleadings in order to save it from being struck out, the proposed amendment should be properly and exactly formulated, includes all necessary averments or mandatory particulars and constitutes a full and complete plea of a reasonable cause of action.”

101. For the reasons analysed and discussed above, such proposed amendments are incapable of salvaging P’s claim, and in such circumstances. P’s claim must be struck out.

VI. ABUSE OF PROCESS AND RESTRICTED PROCEEDINGS/ APPLICATION

(a) Winding up Good Ascent

102. The P 2^nd Aff exhibited a winding up order against Good Ascent made by Au J (as he then was) on 11 January 2010 in HCCW625/2009 (“Au Order”). The sealed copy of the Au Order showed the winding up petition was presented by Good Ascent’s creditor Mak Ko Kee Building Contractor Limited (“Mak Ko Kee”) (see paragraph 114 below), and the winding up order was made after hearing from counsel for Mak Ko Kee, counsel for Good Ascent, counsel for Max Express as intervener (see paragraphs 112-113 below) and the OR.

103. In a written note exhibited to the P 2^nd Aff, P noted the Au Order did not grant any order for possession in favour of HSBC over the building at 120 Stanley Main Street, Stanley Hong Kong, and did not appoint the OR as provisional liquidator of Good Ascent. P went on to further note that according to section 186 of the CO, a plaintiff must obtain leave of the court before it could take civil action against a company in liquidation such as Good Ascent (see paragraph 56 above). Apparently, P wrote to the Chief Judge of the High Court on 3 May 2015 alleging certain representations were made to him by Au J’s clerk, but the reply letter by the Registrar of the High Court disputed such allegations, and stated (a) Au J granted a usual winding up order on 11 January 2010, and (b) there was no record to show P was a director of Good Ascent at that time (see page 8 of the exhibit to the P 3^rd Aff and paragraph 38 above).

104. By a letter dated 13 June 2013 to Ting (“OR Further Letter”) (see page 25 of the exhibit to the P 2^nd Aff), the ORO advised that after the Au Order was granted on 11 January 2010, the ORO became the provisional liquidator of Good Ascent. Pursuant to section 194(1) of the CO, the OR on 11 January 2010 appointed 何文傑 (“Mr Ho”) and 江詩敏 (“Ms Kong”) of Manivest Asia Limited (宏傑亞洲有限公司) as joint and several provisional liquidators in place of the OR. No order of the court was required for such appointment, and on 15 May 2015 P acknowledged receipt of certified copy of the letter of appointment in respect of Mr Ho and Ms Kong as joint and several provisional liquidators of Good Ascent.

105. The OR Further Letter went on to say that pursuant to (a) the 1^st meeting of creditors and 1^st meeting of contributories and (b) application made by report of the joint and several provisional liquidators of Good Ascent, the court granted an order appointing Lai Kar Yan (Derek) and Darach E Haughey both of Deloitte Touche Tohmatsu as liquidators of Good Ascent without committee of inspection. The OR Further Letter enclosed a copy of the order Master J Wong dated 8 April 2010 to such effect, and explained there was no need for any hearing for granting such order, so no notice of hearing was sent to Ting.

106. The P 2^nd Aff (see pages 23-24 of the exhibit thereto) also enclosed an incomplete copy of the sealed copy order of Master J Wong that appointed Lai Kar Yan (Derek) and Darach E Haughey both of Deloitte Touche Tohmatsu as liquidators of Good Ascent. On 4 April 2018, Master Hui dealt with letter inquiries by P and a 林雪梅 (“Lam”) by granting the following written directions (see page 20 of the exhibit to the P 2^nd Aff) as follows:

「如你曾是高等法院清盤案件2009年625號清盤公司董事或分擔人，你有權在提供証明文件後，根據香港法例第32H章第16條規則到高等法院查閱2010年4月8日的法庭命令。該命令是一位聆案官在內庭作出的命令並沒有進行審訊和錄音騰本。為保障你的權益，你應尋求獨立的法律意見。」

Master Hui (as did the OR in the OR Further Letter) explained that the order made by Master J Wong on 8 April 2010 to appoint liquidators of Good Ascent was made in chambers without court hearing, so no court transcript was available. Master Hui also rightly queried the locus of P and Lam to ask for inspection of the order made by Master J Wong on 8 April 2010 as there was no evidence that either of them were directors or contributories of Good Ascent.

107. By a bilingual note found at page 21 of the exhibit to the P 2^nd Aff, P complained that the ORO failed to file Form W3 with the Companies Registry as to the appointment of Lai Kar Yan (Derek) and Darach E Haughey both of Deloitte Touche Tohmatsu as liquidators of Good Ascent: “I did not see such appointment document issued from the [ORO]. I made enquiry to the Companies Registry. It replied that it had not received such document.”

108. But in fact P himself disclosed a Form W3 at pages 26-27 of the exhibit to the P 2^nd Aff. Such Form W3 was signed by Lai Kar Yan (Derek) and Darach E Haughey, dated 20 April 2010 and received by the Companies Registry on 21 April 2010, and gave notice that Lai Kar Yan (Derek) and Darach E Haughey were appointed by court order on 8 April 2010 as joint and several liquidators of Good Ascent. At pages 30-31 of the exhibit to the P 2^nd Aff was a letter dated 25 August 2016 by the Companies Registry that confirmed such Form WR3 was registered on 21 December 2010 for public inspection.

109. It seemed therefore P’s complaint was not about notification of appointment of joint and several liquidators of Good Ascent but about notification of appointment of joint and several provisional liquidators of Good Ascent. At pages 30-31 of the exhibit to the P 2^nd Aff was a letter dated 25 August 2016 by the Companies Registry that explained the position. Section 195(a) of the CO provides that “[where] in the winding up of a company by the court a person other than the [OR] is appointed provisional liquidator or liquidator under section 194, that person – (a) shall forthwith give notice of his appointment to the Registrar in the specified form and give security in the prescribed manner to the satisfaction of the [OR] ……” (my emphasis). According to the Companies Registry records, someone did on 12 January 2010 submit to the Companies Registry Form WR3 to give notice that Mr Ho and Ms Kong were appointed as joint and several provisional liquidators of Good Ascent on 11 January 2010, but at that time the Companies Registry was not yet aware that Good Ascent had been wound up by the court on 11 January 2010, so in view of the provisions in section 195(a) of the CO the Companies Registry did not at that time register the Form WR3. After the Companies Registry liaised with the ORO to follow up on the status of Good Ascent, and the ORO delivered the Au Order to the Companies Registry on 3 March 2010, the Companies Registry registered the Au Order and the Form WR3 for public inspection.

110. In my view, none of the above matters raised by P were of merit. But such myriad and unmeritorious complaints by P served to add weight to D’s concerns that unless restrained P would continue to vex others (including P) with his complaints.

(b) Litigation concerning Lot 95

111. Notwithstanding the Conditions and Mortgage, (a) by a provisional agreement for sale and purchase dated 17 September 2009 and registered at the Land Registry on 7 October 2009 Max Express agreed to sub-sell Lot 95 to Techian, and (b) by a formal agreement for sale and purchase dated 30 September 2009 and registered at the land Registry on 19 October 2009 Max Express agreed to sub-sell Lot 95 to Techian. Disputes arose over the sub-sale of Lot 95, and Techian issued a writ of summons in HCA197/2010 against Good Ascent and Max Express, and registered such writ of summons with the Land Registry on 9 February 2010. Such writ of summons was amended on 9 February 2010 and the amended writ of summons was registered at the Land Registry on 17 March 2010.

112. According to the Yeung Aff, Max Express issued an originating summons on 11 June 2010 in HCMP1121/2010 to claim against Good Ascent (in liquidation with joint and several liquidators appointed) in relation to a dispute over a contract in April 2009 by which Good Ascent allegedly agreed to sell Lot 95 to Max Express. Max Express by its originating summons sought inter alia the following reliefs:

(a) a declaration that (i) the injunction order dated 24 July 2009 registered at the Land Registry and (ii) the order dated 31 July 2009 continuing the injunction order registered at the Land Registry would not prevent the completion of the sale and purchase of Lot 95 and 120 Address between Max Express and Good Ascent and the assignment of such property to Max Express in accordance with the agreement for sale and purchase dated 16 April 2009;

(b) an order of specific performance that Good Ascent (as vendor) shall by itself or though the joint and several liquidators of Good Ascent take all necessary steps to complete the sale and purchase agreement dated 16 April 2009 and to assign Lot 95 and 120 Address to Max Express (purchaser) according to the agreement for sale and purchase dated 16 April 2009;

(c) all necessary consequential orders to carry out the specific performance.

113. The injunction orders referred to in paragraph 112(a) above were obtained by Mak Ko Kee in July 2009 for restraining disposal of assets by Good Ascent in HCMP1406/2009. In fact, Mak Ko Kee also obtained charging order to show cause against Good Ascent in HCMP1406/2009 in September 2009. The initial injunction order on 24 July 2009 (see paragraph 113(a)(i) above) and the aforesaid charging order were registered with the Land Registry in respect of Lot 95 on 29 September 2009. Such injunction order was continued on 31 July 2009, and such continued injunction order (see paragraph 112(a)(ii) above) was registered with the Land Registry on 16 October 2009.

114. In 2012, D went ahead with the purchase of Lot 95 from HSBC in exercise of its power to effect mortgagee sale of such property. Since the Mortgage executed by Good Ascent in favour of HSBC was duly registered with the Land Registry, it took priority over any possible interests that Max Express, Mak Ko Kee and/or Techian might have had in Lot 95 arising from the aforesaid instruments registered with the Land Registry by virtue of sections 3(1) and 4 of the Land Registration Ordinance Cap 128,[16] which was also bolstered by sections 52 and 53(1) of the CPO discussed in paragraph 95 above, so D acquired Lot 95 free from any possible interests of Max Express, Mak Ko Kee and/or Techian in respect of such property.

115. The Yeung Aff explained in June 2014 that YLC received instructions from D in relation to Lot 95. The 95 Records revealed that D entered into a 2^nd mortgage with Hang Seng Bank Limited in 2014. At that time YLC conducted an updated land search and found out that on 27 June 2012 (ie about 1½ months after HSBC’s mortgagee sale of Lot 95 to D) Max Express caused to be lodged with the Land Registry for registration against Lot 95 the originating summons issued on 11 June 2010 in HCMP1121/2010 (see paragraph 112 above).

116. The Yeung Aff noted Max Express apparently waited for 2 years before registering such originating summons with the Land Registry against Lot 95 at a time when Lot 95 had already been sold to D by way of mortgagee sale. Although such originating summons as lodged was withheld from registration by the Land Registry, it appeared in the 95 Records as deed pending registration. D considered such attempted registration by Max Express “improper, unreasonable, totally without legal basis, and obviously not bona fide”, and was concerned such attempted registration shown in the 95 Records might deter future purchasers or other persons intending to acquire interest in Lot 95 as it might cast doubt and raise query over D’s title, and this might affect D’s future sale of and/or dealing with Lot 95. D via YLC demanded Max Express to withdraw the attempted registration but in vain.

117. As a last resort, D instructed YLC to sue Max Express in HCMP2770/2014 for an order inter alia that the attempted registration be removed from the records of Lot 95 at the Land Registry. By the originating summons filed on 3 November 2014, D sought inter alia the following reliefs:

(a) a declaration that (i) the sealed copy originating summons pending registration at the Land Registry and bearing memorial in 12062700840013 (“Pending Document”) was not a proper, valid or bona fide lis pendens capable of registration under the LRO, and (ii) by virtue of the Assignment dated 16 April 2012 through which Lot 95 was conveyed by mortgagee sale to P, all interests of Max Express in Lot 95 as the purchaser thereof pursuant to and under the sale and purchase agreement dated 16 April 2009 had been totally extinguished;

(b) an order that the Pending Document be removed from the “Deed Pending Registration” record of the Land Registry.

118. Shortly before the hearing of D’s claim in HCMP2770/2014, Max Express agreed to withdraw and eventually withdrew the attempted registration. The Yeung Aff noted with interest that P became the sole director and secretary to Max Express on 12 September 2013 (see Amended Notification of Change of Secretary and Director filed with the Companies Registry on 16 October 2013), and he also became the sole shareholder of Max Express when a Huang Yexing transferred 1 issued share to him about 2 months later on 11 November 2013 (see Amended Annual Return filed on 22 October 2014).

119. The Yeung Aff claimed it seemed likely that P was the mastermind behind the numerous attempts to commence legal proceedings in the name of Max Express and possibly also Techian, and to register such proceedings at the Land Registry against Lot 95. Yeung claimed although there was no documentary evidence linking Techian directly to P, the fact Techian was willing to enter into a contract for the sub-purchase of Lot 95 at a time when an injunction and charging order were registered against Lot 95 was, to say the least, highly suspicious. Notwithstanding such concern, none of the litigations in paragraphs 111-118 above affected D’s ownership and interest in Lot 95, but D had been put to the trouble of spending time and cost to protect its title and interest in Lot 95.

120. YLC also acted for D in 2 earlier legal actions commenced by Lam (whom Yeung claimed to be P’s agent) in HCA2513/2017 and by P in his own name in HCA1180/2018 in relation to Lot 95. The present legal action is the 3^rd litigation that D was sued on the same or similar subject matter.

121. In HCA2513/2017, Lam sued D on the same or similar subject matter as in the present claim by P against D herein. Yeung later found out that Lam was P’s sister, and Yeung believed she was P’s agent, front-person or accomplice as evident from the fact that paragraphs 1 and 5 of the Statement of Claim in HCA2513/2007 Lam described herself as “林永恒” (ie P). Upon D’s application by summons filed on 12 December 2007, Master J Wong on 18 May 2018 struck out Lam’s claim in HCA2513/2017 and dismissed the action on the ground that it was scandalous, frivolous or vexatious, or was otherwise an abuse of process with costs to D on indemnity basis assessed at $207,000.00 to be paid within 28 days.

122. 3 days after such dismissal of Lam’s claim in HCA2513/2017, ie on 21 May 2018, P by his own name commenced HCA1180/2018 against D on the same subject matter as HCA2513/2017. In fact, the Statement of Claim in both actions were identical, and in HCA1180/2018 P simply adopted the Statement of Claim in HCA2513/2017 as the Statement of Claim in HCA1180/208, crossed out Lam’s signatures and replaced them with his own. Again, on D’s application by summons filed on 11 June 2018, Master G Chan on 5 October 2018 struck out P’s claim in HCA1180/2018 on the ground that it disclosed no reasonable cause of action, was scandalous, frivolous or vexatious, or otherwise an abuse of process, and dismissed HCA1180/2018 with costs to D agreed at $130,000.

123. Yeung claimed the present action was another attempt to re-litigate the same or similar subject matter which had no merit, and which was in fact scandalous, frivolous or vexatious and/or was otherwise an abuse of process of the court. D was concerned that unless restrained by the court, P would continue to pursue unmeritorious litigation against D who had to incur substantial legal costs that were practically impossible to recover from P who was an undischarged bankrupt.

124. The fact that P was an undischarged bankrupt had not deterred him from pursuing unmeritorious claims. It is an abuse of process to re-litigate claims that had been dismissed and subject to the doctrine of res judicata.[17] Further in Ng Yat Chi v Max Share Ltd & anor,[18] Li CJ said as follows:

“2. It is not difficult to recognise the activities of the vexatious litigant. The person concerned will almost invariably be unrepresented and will pursue abusive proceedings which usually exhibit some of the following features. Hopeless claims are instituted. Totally misconceived appeals are launched. Judgments of the court, both interlocutory and at trial and both first instance and appellate, may not be accepted. There are likely to be attempts, often repeated, to re-litigate the same matters as have already been determined. The materials filed will often be irrelevant, incoherent or scandalous. When present at a hearing, some vexatious litigants are unable to conduct themselves with decorum and may hurl abuse at the opposite parties and/or the judge.

3. Abusive proceedings are oppressive to the other parties and result in unfairness to them. To protect themselves against such proceedings, time, effort and stress are involved and costs have to be incurred. They may be in a weak position to cope. Often, there may be little prospect of recovering the costs incurred.”

I accept that unless P is retrained by restricted proceedings order (“RPO”) / restricted application order (“RAO”), it was likely that he would continue to commence unfounded actions and applications against D and/or related party(ies) on the same subject matter. It would be a waste of court time and resources to allow such claims to proceed and RPO/RAO would prevent further abuse of the court process.[19]

125. I therefore order that RPO and RAO be imposed against P on terms set out in the Schedule to this Judgment.

VII. CONCLUSION

126. I therefore grant the following orders:

(1) P’s SoC herein be struck out on the ground that P had no locus standi, and that the SoC disclosed no reasonable cause of action or was scandalous, frivolity or vexatious, or was an abuse of the process of the court;

(2) P’s action herein be dismissed.

127. I also grant the RPO and RAO orders in the Schedule to this Judgment.

128. There is no reason why costs should not follow event. I therefore grant a costs order nisi that P do pay costs of the Summons and costs of the present action (including all costs reserved if any) to D on indemnity basis to be taxed if not agreed.

129. Should P required translation of this Judgment into punti language, he can contact my clerk to arrange an appointment for a court interpreter to verbally translate this Judgment to him at the High Court Building at a mutually convenient time. Further, D must serve Chinese translation together with the sealed copy the orders made herein to P.

(Marlene Ng)

Judge of the Court of First Instance

High Court

The plaintiff acting in person and present

Mr Mak Chi Biu, instructed by Yeung Law & Co, for the defendant

Schedule

1. P is prohibited from making any further application to court in HCA1180/2018 and the action herein, whether before or after judgment, without the leave of Marlene Ng J (“designated judge”) being first obtained;

2. P be prohibited from commencing any further fresh new legal proceedings by whatever originating process in the High Court or in the District Court or the Lands Tribunal concerning any matters involving or relating to or touching upon or leading to the proceedings in HCA1180/2018 and the action herein without the leave of the designated judge being first obtained;

3. all applications for leave to issue an application in the specified proceedings must be made in writing to the designated judge (and not to any other judge or a master) without giving notice of the application to the intended respondent/defendant;

4. in the event that the designated judge is not available to deal with the application for leave under paragraph 1 above, the same should be dealt with by another judge designated by the Chief Judge of the High Court or the Chief District Judge as the case may be;

5. all applications for leave under paragraph 1 above and all ancillary matters thereto should be dealt with on papers and without any oral hearing unless the designated judge otherwise directs;

6. where leave to make the substantive application is granted, service of the order giving leave must accompany service of the substantive application in question, which should be heard by a judge and not a master unless the judge otherwise directs;

7. if contrary to this order, P seeks to issue an application in the specified proceedings without prior leave of the court, the purported application should forthwith be referred by the registry to a master for such application to be dismissed in accordance with this order;

8. if, contrary to this order, P purports to serve on any intended respondent/defendant any application in the specified proceedings without at the same time serving on each of the intended respondents/defendants a copy of an order giving leave to issue such application, such application should automatically stand dismissed, so that neither the intended respondent/defendant nor the court would be required to take any steps in response;

9. all applications for leave under paragraph 2 above be made by P ex parte in writing to the designated judge;

10. at least 7 days before filing any application for leave under paragraph 2 above, P do notify in writing each intended respondent/defendant of his intention to make such application, enclosing a copy of the draft document by which the fresh proceedings are intended to be commenced, and if any response is received by P from any such intended respondent/defendant, that P do file a copy of each such response together with the said application for leave;

11. any intended respondent/defendant having notice of such intended proceedings be entitled, but under no obligation, to place before the court written representation regarding the same;

12. all applications made pursuant to the order made herein and any ancillary matters be dealt with by the court on papers and without any oral hearing unless the designated judge should otherwise direct;

13. if P should issue fresh proceedings falling or which may fall within the terms of paragraph 2 above without first seeking the court’s leave, and if such fact should come to the notice of the Registrar of the High Court or the Registrar of the District Court or the Registrar of the Lands Tribunal, such fresh proceedings be referred to the designated judge for a decision as to whether they should be permitted to continue or should be dismissed;

14. notice of each decision of the designated judge made pursuant to the order made herein be given in writing to P and to each intended respondent/defendant named in the fresh proceedings;

15. whether or not any such fresh proceedings are brought to the notice of the designated judge, if a respondent/defendant is served with such proceedings without the relevant documents being accompanied by either a court order giving leave to commence such proceedings or a court direction that leave to commence such proceedings is not required, such respondent/defendant be entitled to make no response to such service pending notification of the court’s decision in relation to those proceedings; and that time for acknowledging service of or otherwise responding to such proceedings be deemed extended accordingly.

[1] P should not have done so as the WoS / SoC were not for discovery/disclosure of documents but for pleading material facts in respect of P’s claim

[2] even though the original copy of the Summons filed with the court had no such error

[3] by such Letter of Undertaking dated 13 October 2006, Good Ascent referred to the building plan submitted by the authorised person to the Building Authority on 13 September 2004, and substantiated the application for exemption of balconies as a green feature from plot ratio and site coverage calculation

[4] [2012] 2 HKLRD 1255, 1262-1263 (which principles were reiterated in Wan Po Jun Mary Pauline v Au Yeung Yee Man [2017] 1 HKLRD 94, 99-100)

[5] 2016 Reissue at pp 74-75

[6] Vol 1 para 18/19/4 at p 503-504

[7] see Byjoy Ltd v Thorogood Estates Ltd [1985] 2 HKC 746, 758

[8] see Hong Kong Civil Procedure 2020 Vol 1 para 18/19/5 at pp 504-505 (see also Order 18 rule 19(2) of the RHC)

[9] Vol 1 para 18/19/7 at pp 506-507

[10] To J in Falcon Private Bank Ltd v Borry Bernard Edouard Charles Limited & anor HCA1934/2011 (unreported, 9 July 2012) at para 212(d) stated that: “…… In an appropriate case, the court ought not to be slow to exercise the power to strike-out in order to dispose of proceedings which are hopeless and without foundation in law. In those cases, such power is required by the very essence of justice to be exercised, so as to prevent the defendant from being harassed and put to expense by frivolous vexatious or hopeless claims: Riches v DPP [1973] 1 WLR 1019 at 1027”

[11] see Choy Bing Wing v Hong Kong Institute of Engineers HCA 309/2015, Au-Yueng J (unreported, 27 November 2015) para 16(d)

[12] [1997] HKLRD 588

[13] HCMP3196/2013, DHCJ Marlene Ng (unreported, 1 June 2018)

[14] Vol 1 para 18/19/4 at pp 503-504

[15] HCA 1694/2008, Poon J (as he then was) (unreported, 15 December 2009)

[16] the Land Registration Ordinance Cap 128 provides as follow: “Subject to this Ordinance, all such deeds, conveyances, and other instruments in writing ...... and registered in pursuance hereof, shall have priority one over the other according to the priority of their respective dates of registration ...... , no notice whatsoever, either actual or constructive, of any prior unregistered deed, conveyance, or other instrument in writing, ......, shall affect the priority of any such instrument as aforesaid as is duly registered.”

[17] See Thrasyvoulou v Secretary of State for the Environment [1990] 2 AC 273

[18] (2005) 8 HKCFAR 1

[19] see Practice Direction 11.3

林永恒是 STANLEY LOT 456RP 業主 v. WIN TALENT LTD

Citation

Court

Procedural posture

Issues

Holdings

Legal principles

Disposition

Key citations