KWOK MEI HA MAY v. CHIU YUNG

CAMP 34/2018

[2018] HKCA 311

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 34 OF 2018

(ON AN INTENDED APPEAL FROM HCA NO 3079 OF 2015)

__________________

__________________

___________________

JUDGMENT

____________________

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

1.  On 5 February 2018, Recorder Whitehead SC dismissed the Plaintiff’s summons seeking summary relief under Order 14, Order 14A and Order 18 Rule 19 of the Rules of the High Court.

2.  The Plaintiff sought leave to appeal from the learned judge.  The judge refused to grant leave on 12 March 2018.  In the written decision refusing leave, the judge said these at [9] to [12]:

“ 9. A student in equity may, in these circumstances, be somewhat surprised by the submission made by Mr Wong, but whether Mr Wong is right or wrong, the same, in my view, is plainly arguable.

10. Mr Wong has then raised legal arguments in relation to common intention and constructive trusts, proprietary estoppel, and constructive notice. In this context, I note that the courts have repeatedly stressed that summary judgment is not appropriate where there is a serious dispute of law, and that Order 14 proceedings are only appropriate for crisp legal questions.

11. As I observed in the earlier hearing, there is nothing crisp about the legal issues raised in this case.

12. In conclusion, I have to decide whether the plaintiff’s proposed appeal has a reasonable prospect of success.  In my view this is a case which manifestly should go to trial.  The plaintiff’s applications for a strike-out or summary judgment and for a determination under Order 14A are, in my respectful view, entirely misconceived, and as such have in my view no prospect of success in the Court of Appeal.  The plaintiff’s application is dismissed.”

3.  Undeterred by the judge’s conclusions, the Plaintiff renewed the application before us by a summons of 26 March 2018.

4.  A draft notice of appeal was attached to the summons.  The gist of the grounds of appeal was set out in para 2 of that document, involving the following propositions:

(a)  At the highest, the Defendant could only establish personal claims against Charles Tang instead of proprietary claims over the subject property;

(b)  The Defendant only spent limited amount on the improvements to the property which, viewed against the rental and market value of the property and her free accommodation there from May 2014 to November 2015, cannot be regarded as any detriment;

(c)  The Defendant could not rely on Wong Chim Ying v Cheng Kam Wing CACV 75/1990, 18 Apr 1991 as Charles Tang had passed away without acquiring any legal estate or equitable proprietary interest which can bind the Plaintiff as a bona fide purchaser for value;

(d)  The Plaintiff had made reasonable inquiry and there was no constructive notice of the Defendant’s interest.  

5.  The factual background leading to the dispute are set out by the judge at [5] to [9] of the judgment of 5 February 2018:

“ 5. As such, the undisputed background for today’s purposes only is that the premises at Lot 3155 were previously registered in the name of a Mr Ho Kwok-lun. In about 2009, Mr Ho entered into an oral agreement with a Mr Charles Tang Chik-kit, whereby Mr Tang would finance the construction costs of a house on the lot, and upon completion, Mr Ho would transfer ownership of the 2nd Floor and roof of the premises to Mr Tang.

6. Mr Tang appears to have complied with his obligations, and once the house was substantially completed the defendant, who had been Mr Tang’s girlfriend for a number of years, together with her daughter, moved into the premises. The defendant says she paid about in the region of $200,000 to decorate and furnish the premises. Furthermore, it is the defendant’s case that Mr Tang had gifted the premises to her and her daughter.

7. On 14 October 2014, Mr Tang suddenly died before he could discharge his obligations to pay a premium required by the government.

8. On 5 October 2015, Mr Ho entered into a sale and purchase agreement for the premises with the plaintiff. But before doing so, he provided the plaintiff with a letter from the defendant’s solicitors dated 15 January 2015, which made clear that the plaintiff and her daughter resided in the premises and that the same, on the defendant’s case, had been gifted to her and her daughter by Mr Tang.

9. The plaintiff nevertheless bought the property but at a 20% discount to account for the fact the premises were occupied and then proceeded to try to evict the defendant and her daughter.”

6.  The judge further set out the defence case at [11]:

“ 11. The defendant, however, in her defence and counterclaim says there was a common intention constructive trust in that Mr Ho held the premises on trust for Mr Tang as equitable owner pending the transfer of legal title from Mr Ho to Mr Tang. Furthermore, that Mr Tang had gifted his equitable interest to the defendant and in reliance on the same, the defendant had moved into the premises and expended considerable sums in fixing it up.”

7.  A plaintiff who seeks to appeal against the grant of leave to defend and refusal to strike out a defence faces a high threshold, see the discussion at Hong Kong Civil Procedure 2018 at para 14/4/48.  In the recent case of Greater China Capital Inc v GB Times Ltd [2018] 1 HKLRD 210, this Court said at [4] and [5]:

“ 4.   Further, in respect of the assessment of arguability of a case on a point of fact in an Order 14 context, this Court will also be slow to intervene, so much so that it has been said that it would be surprising that a court of appeal would differ from the judge in such assessment, see Lloyd’s Bank Ltd v Ellis-Fewster [1983] 1 WLR 559 per Sir John Donaldson MR, cited with approval by Hunter JA in Worldcap Investment Ltd v Bosswell Estates Ltd CACV 108/1988, 20 October 1988.

5.   Hence, there is a high threshold for a party seeking to appeal against the grant of leave to defend, see Treewell Development v Tsang Chun Wah [2003] 4 HKC 401; Xpoly Recycling Ltd v Gold Leader Enterprises Ltd [2011] 4 HKLRD 230; Sham Oi Yun v Ma Ching Wah HCMP 1491/2015, 30 July 2015.”

8.  Whether a point of law is arguable in a summary application very often depends on the factual context.  In the present case, the judge concluded that none of the legal submissions were “crisp” points of law suitable for summary resolution.

9.  In the written submissions of 26 March 2018, solicitors for the Plaintiff relied on Southern Pacific Mortgages Ltd v Scott [2014] UKSC 52 and submitted that a purchaser has no equitable proprietary interest in the property.  With respect, we are dealing with an entirely different situation.  The equitable claim of the deceased Mr Tang stems not from his status as purchaser.  Rather, it arose from the construction of the house.  As regards whether such contribution was sufficient to give rise to equitable interest, we agree with the judge that it is not straightforward point suitable for summary resolution.

10.  In respect of the Defendant’s position, she is not claiming interest in the property simply based on her own contribution to the improvement by way of renovation expenses.  She claims that she had acquired the interest of Mr Tang by way of gift.  It is not an easy point. However, bearing in mind that the Defendant and her daughter had lived at the property since 2014, we are not prepared to say that the judge was wrong in holding that the matter should go to trial.    

11.  On the question of constructive notice, we agree with the judge that there are arguable issues and as presently advised we would not rule out that the Defendant could rely on Wong Chim Ying v Cheng Kam Wing CACV 75/1990, 18 Apr 1991.

12.  For these reasons, we refuse to grant leave and dismiss the summons of 26 March 2018.

13.  We are also for the view that the the application is totally without merit.  Pursuant to Order 59 Rule 2A(8), we make an order that no party may request this determination to be reconsidered at an oral hearing inter partes.

14.  As the Defendant did not file any response to the application, we make no order as to costs.