TANG WAI KEUNG v. WONG SHUI FONG AND ANOTHER

HCA 1301/2021

[2023] HKCFI 967

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1301 OF 2021

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D E C I S I O N

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Introduction

1.  This is an appeal by the plaintiff against the decision of Master Jeffrey Chau made on 10 October 2022. 

2.  The master ordered, among other things, that the statement of claim against the 1^st and 2^nd defendants be struck out on the ground that it is an abuse of the process of the court and that the action against the two defendants be dismissed.  The master awarded costs in the sums of $105,000 and $92,200 to the 1^st and 2^nd defendants respectively.

3.  By notice of appeal dated 24 October 2022, the plaintiff appeals against the above orders.  I note here that there is no appeal against the other orders made by the master at the same hearing, including the order dismissing the plaintiff’s summons to amend his statement of claim dated 28 September 2022.

4.  In this action, the plaintiff was previously legally represented.  His pleading was settled by counsel.  He was also represented by counsel at the hearing before the master.  After that, he has been acting in person.  The notice of appeal was signed by him acting in person.  He also appears before me today in person.

The plaintiff’s adjournment application

5.  At the beginning of today’s hearing, I dealt with the plaintiff’s application to adjourn the appeal on the basis that he required translation of the two sets of skeleton submissions of the 1^st and 2^nd defendants respectively which are written in English and were served on him only two days ago and he needed more time to deal with them. 

6.  I dismissed his application.  I put on record here my reasons for doing so.

7.  The plaintiff confirms to the court today that he understands written English but he points out that he is not familiar with legal principles or concepts written in English.  Hence he requires written Chinese translations of the defendants’ respective submissions to be provided to him.  The hearing should not proceed today, as it would take time for him to understand the submissions and to consult with his friends.  He asks for an adjournment of four to six months. 

8.  The plaintiff also confirms that he is an engineer by training and he obtained a higher diploma from what was previous known as the Hong Kong Polytechnic.

9.  Given his background, the issue here, if any, is not a language issue but an issue going to one’s ability to grasp the relevant legal concept.  It is understandable that the plaintiff, who acts in person, would need time to prepare the case. 

10.  However, the plaintiff’s notice of appeal was dated back in October 2022.  The plaintiff has had from that time onwards up to today (that is almost five months) to prepare for the appeal.  Also, as pointed out by counsel for the defendants, the content of their skeleton submissions is substantially the same as those used at the hearing before the master.  To adjourn the appeal now in order to give the plaintiff yet more time to deal with the submissions is unfair to the defendants, who have a right to have the appeal disposed of expeditiously.  Today’s hearing should therefore proceed.  By agreement of all the parties, oral submissions were made in Cantonese. I also stood down the case for about 50 minutes for the court interpreter to translate the two sets of skeleton submissions to the plaintiff from English to Cantonese.

The plaintiff’s application to adduce new evidence

11.  Earlier this week, the plaintiff faxed to the court and the defendants a document entitled 「上訴理由」.  In that document, he reiterates some of the assertions already made in his affirmation filed in opposition to the striking out applications.  More importantly, he makes allegations which are partly new and which on the face are relevant to the striking out applications.

12.  Yesterday, he filed an affirmation exhibiting a copy of the document.  However, he did not serve the affirmation on the defendants.

13.  To the extent the document contains new factual allegations, the plaintiff ought to have obtained leave of the court before filing his latest affirmation: see Order 58, rule 1(5) of the Rules of the High Court.

14.  As I will explain below, there are no special grounds justifying the late filing of new evidence at the appeal stage.  The new allegations could have been made and adduced by the plaintiff with reasonable diligence for use at the hearing before the master.  For that reason, I refuse the plaintiff’s application made orally at today’s hearing to adduce the evidence contained in the document entitled 「上訴理由」for use in this appeal.

Legal principles

15.  An appeal from a master to a judge under Order 58, rule 1 of the Rules of the High Court is by way of re-hearing.  I should treat the summonses as though they came before me for the first time: Hong Kong Civil Procedure 2023 at 58/1/2.

Summary

16.  The present action concerns the beneficial ownership of the property situated at the Ground Floor and the Garden, No 9A, Wang Toi Shan, Wing Ning Lei, Yuen Long, New Territories (“the Property”).  In gist, the plaintiff now claims that he is the sole beneficial owner of the Property.  He seeks a declaration to that effect together with other reliefs.

17.  The 1^st and 2^nd defendants are separately represented.  However, they put forward the same ground to seek to strike out the statement of claim.  They contend that the present claim is an abuse of the court’s process since the plaintiff’s position in the present action is diametrically inconsistent with the position taken by him in the action in HCA 1015/2018 (“the 2018 action”) and the plaintiff has offered no proper explanation for that stark inconsistency. According to the principle recently applied by the Court of Appeal in Chu Yue Bun v Lai Shiu Woon [2021] HKCA 1929, the defendants submit that the present claim should be struck out. 

18.  It is convenient to set out at the outset the individuals involved or featured in the 2018 action and the present action. 

Dramatis personae

19.  The 1^st defendant is the plaintiff’s mother.  The 2^nd defendant is the plaintiff’s younger daughter.  I shall refer to the plaintiff, the 1^st defendant and the 2^nd defendant below as “the father”, “the grandmother” and “the younger daughter” respectively.

20.  The father was married to a Madam Lo (“the mother”) in about 1984.  Apart from the younger daughter, they had another daughter and a son (“the elder daughter” and “the son” respectively).  The father and the mother were divorced in about 2001.  Ancillary relief proceedings followed.

21.  The grandmother’s husband passed away in May 2021. I shall refer to him as “the grandfather”.

22.  I should also introduce here a Madam Zeng.  She was married to the father in 2003.  They were in divorce proceedings in 2011.

The Property

23.  Prior to 4 March 2011, the father was the legal owner of the Property.

24.  By assignment dated 4 March 2011, the legal title was transferred to the grandmother.

25.  By assignment dated 5 August 2021, the legal title was further transferred to the younger daughter. 

26.  Both the 2018 action and the present action are fights between some of the family members over the beneficial ownership of the Property.  In the 2018 action, the elder daughter claimed that she was the beneficial owner.  In the present action, the father says that he is the beneficial owner instead.

The 2018 action

27.  The elder daughter was the plaintiff in the 2018 action.  She claimed against the father, the grandmother and the grandfather as the 1^st to 3^rd defendants.

28.  According to her pleaded claim, pursuant to an agreement between the father and the mother made in about 2004, the father was to hold the Property as trustee for the elder daughter.  In breach of the trust, the father transferred the Property to the grandmother by assignment on 4 March 2011, without the knowledge of the elder daughter.  The grandmother provided no consideration for the transfer.  The transaction was a sham.  The elder daughter sought, among other things, a declaration that the assignment was void and an order the legal and beneficial title of the Property be transferred to her.  She also claimed that the father had been receiving rental income for her since about September 2002 and she sought the same as a relief.  (Her claim against the grandfather related to another property.)

29.  The father contested the claim in the 2018 action.  His case was revealed in (1) his amended defence dated 15 July 2020, (2) his 1^st affirmation dated 19 February 2019 and made in support of his application for security for costs, and (3) his 3^rd affirmation dated 16 March 2021 and made in support of his striking out application.

30.  In gist, the father denied that he held the Property on trust for the elder daughter.  He had made an agreement with the mother but the relevant terms with regard to the Property was replaced by his agreement to pay a sum of money to the mother and the mother’s agreement to transfer a certain sum to the elder daughter.  The father made the payment but he did not know whether the mother honoured her part of the agreement.

31.  In sum, the father contended in the 2018 action that prior to the assignment on 4 March 2011, he was the legal and beneficial owner of the Property.  The assignment was for value.  And after this assignment, he retained no further interest in the Property.

32.  I quote below the pleas in the father’s amended defence.  “Property 1” was a reference to the Property.  “Property 2” is not relevant here.

“7. … The 1^st Defendant [ie the father] avers that, at all material times until 4 March 2011 where Property 1 and Property 2 were transferred to the 2^nd and 3^rd Defendants [ie the grandmother and the grandfather], the 1^st Defendant was the sole legal and beneficial owner of Property 1 and Property 2 and was not in a trust relationship whatsoever with the Plaintiff [ie the elder daughter] or Ting Kwok [ie the son] in relation to the said Properties.

…

9. …

(2) It is further averred that:-

(a) Property 1 and Property 2 were transferred to the 2^nd and 3^rd Defendants respectively on 4 March 2011 by way of assignments; and

(b) The 2^nd and 3^rd Defendants gave consideration on the said date for the transfers, inter alia, two mortgages respectively of Memorial No. 11032802740098 for Property 1 and of Memorial No. 1103280740077 for Property 2 in favour of Dah Sing Bank Limited for a loan to repay the mortgage and rental assignment in favour of Mevas Bank Limited taken out by the 1^st Defendant on or about 3 August 2010.

…

11. Save it is admitted that there was an assignment with plan of Property 1 dated 4 March 2011 between the 1^st and 2^nd Defendants, the 1^st Defendant denies Paragraph 7 and repeats paragraph 10(2) of this Amended Defence. It is further averred that the 1^st Defendant no longer retained any interest in Property 1 upon the execution of the said assignment.” (underline added)

33.  The above pleas appeared also in the original defence of the father dated 13 November 2018.

34.  Both the defence and the amended defence were accompanied by statements of truth signed by the father.

35.  The same stance was repeated in the father’s affirmation filed in support of his security for costs application against the elder daughter.  He said:

“For this reason, I was clearly the sole legal and beneficial owner of Property 1 and Property 2 and was not in a trust relationship whatsoever with the Plaintiff at all material times until 4 March 2011, where Property 1 and Property 2 were then assigned respectively to the 2^nd Defendant and 3^rd Defendant, who were and are my father and mother and thus the paternal grandfather and grandmother of the Plaintiff.”

36.  Later on in the 2018 action, in his 3^rd affirmation filed in support of his striking out application, the father referred to, among other things, paras 7 and 9 of his amended defence, as quoted above.

37.  One should make a mental note here that the 3^rd affirmation was dated 16 March 2021 and filed with the court shortly afterwards.  It was made about five and a half months before the commencement of the present action.

38.  The 2018 action did not proceed to trial.  The grandfather passed away in May 2021.  The elder daughter withdrew her claim in July of the same year.

39.  Shortly after that, the assignment of the Property from the grandmother to the younger daughter took place on 5 August 2021.  This has prompted the father to commence the present action.

The present action

40.  The father’s pleaded claim is that at all times, he is the beneficial owner of the Property, notwithstanding the assignment by him to the grandmother in 2011.  He pleads that the grandmother is a bare trustee holding it on his behalf.  He refers to it as the “mutual understanding” between him and the grandmother as a “family arrangement”.  He also pleads that he made all the mortgage repayments after the assignment.  He avers at para 6 of the statement of claim as follows:

“In light of the Common Intention and/or the Plaintiff’ sole contribution of the mortgage instalments for both the 1^st Mortgage and the 2^nd Mortgage, the Plaintiff is the sole beneficial owner of the Property, whereas the 1^st Defendant is a bare trustee holding the Property on behalf of the Plaintiff.”

41.  By assigning the Property to the younger daughter on 5 August 2021 without the father’s authorisation, the grandmother was acting in breach of trust.

42.  Accordingly, the father claims against the grandmother and the younger daughter in the present action, seeking, among other reliefs, a declaration that he is the beneficial owner of the Property.

43.  In his affirmation filed in opposition to the present striking out applications, the father explained why the grandmother held the Property on trust for him.  This explanation was not pleaded in his statement of claim.

44.  He said that he was in divorce proceedings with Madam Zeng in 2011.  He learned that he would have to divide all his assets equally with her, including the Property.  In order to avoid this, he assigned the Property to the grandmother for free on 4 March 2011 and asked her to hold it on trust for him.  She agreed to do so.  In the affirmation, he also referred to a deed of release signed by him and Madam Zeng dated 8 July 2022, the effect of which is that he agreed to give her half of the interest in the Property or its sale proceeds if he succeeds in the present action.

45.  As regards the 2018 action, the father said in his opposing affirmation that it is unrelated to the present action.  This is how he put it:

“For unknown reason, Tang Sin Wah, the Plaintiff in HCA 1015 of 2018 (“the 2018 Action”), withdrew the Action.  I verily believe the 2018 Action was independent from this Action as I was one of the Defendants in the 2018 Action and I am the Plaintiff in this Action.  And yet, the 2018 Action had already been withdrawn by the Plaintiff Tang Sin Wah, my another Daughter and Sister of the 2^nd Defendant in this Action.  Once the 2018 Action had been withdrawn, I verily believe it is unrelated to this Action.” (underlined added)

Grounds for striking out

46.  Both defendants rely on the principle recently applied in Chu Yue Bun in support of their striking out applications.

47.  It may be an abuse of process for a party, with full knowledge of the facts, to advance a claim that is diametrically opposite to its position taken in an earlier set of proceedings.  The abuse lies in its effect on the integrity of the administration of justice, which would be no less compromised even if the previous inconsistent allegation was not followed through to judgment, particularly when such previous allegation was of some significance.  What constitutes an abuse of process in this type of case may vary with the circumstances of each case.  An important factor in determining whether it is an abuse of process is to see whether there is any explanation why diametrically inconsistent cases have been advanced in different proceedings: see para 35(2) and (3).

48.  The defendants contend that the principle applies to the father, who has not given any explanation why he has been advancing diametrically opposite cases as regards his beneficial ownership in the Property in the 2018 action and the present action.  As such, the pursuit of this action is an abuse of the court’s process and the claim should be struck out.

Discussion

49.  It is plain from the pleadings and the affirmations filed by the father in the 2018 action and the present action that his stances on who is the beneficial owner of the Property since the assignment in 2011 are diametrically opposite.  In the former, his stance was that he is not.  In the latter, his position is that he is.  The beneficial ownership is the very subject-matter of each of the two actions.  The resolution of the issue would conclusively determine the action in each case.

50.  The opposite stances plainly call for a proper explanation by the father, who must have full knowledge of all the related facts.  The material question here is – has he given any explanation?

51.  It should first be recognised that his allegation that he assigned the Property to the grandmother in 2011 because he wanted to avoid to share it with Madam Zeng only goes to explain why he effected the assignment in the first place.  This allegation goes to support his claim in the present action.  But it does not go to explain why he adopted the stance which he took in the 2018 action.

52.  If that allegation is true, there is no apparent reason why he could not have said so in his defence against the elder daughter’s claim in the 2018 action.  It will be recalled that the elder daughter contended there that both before and after the assignment in 2011, the father had been holding the Property as trustee for her.  The father denied that claim but pleaded and also confirmed on oath in unequivocal terms that he retained no interest after the assignment.  If his present allegation is true, there is prima facie no plausible reason why he denied having beneficial interest after the 2011 assignment.

53.  On the materials before the court, the father has attempted to put forward a number of explanations for his stance in the 2018 action.

54.  I have set out in para 45 above how he dealt with the 2018 action in the present striking out applications. 

55.  It is simply incorrect for him to say that the 2018 action is unrelated to the present action once the former was withdrawn. Insofar as he is saying that just because the 2018 action is no longer pursued, what he said in that action can now be completely forgotten or erased, that is totally unsustainable.

56.  Apart from this, earlier on in this action, at a hearing on 26 November 2021 in which the father applied for interlocutory injunction against the grandmother and the younger daughter, upon the court’s enquiry, counsel submitted to the court that the stances taken by the father in the 2018 action was irrelevant to the injunction application.  Upon further enquiry by the court, counsel stated from the Bar table that the father was misled by his former solicitors in the 2018 action and he did not understand what he had signed.  This allegation was notably not included in the father’s affirmation filed for that application but was only made at the hearing by way of submissions.

57.  What he did include in the affirmation was the following:

“I did not emphasize that the Property was mine in the 2018 Action because I did not think it was necessary because I fully entrust the 1^st Defendant as my Mother.”

58.  As commented by Recorder William Wong, SC in the decision for the interlocutory injunction, it was clearly not the case that the father did not emphasise that the Property was his in the 2018 action.  He actually took the diametrically opposite stance, confirmed both by statement of truth and on oath in that action, that he retained no beneficial interest in it.

59.  For the above submissions and evidence of the father made in the course of the interlocutory injunction application, see the decision at [2021] HKCFI 3627 at paras 19 to 21.

60.  I share the observation of the recorder. 

61.  Lastly, as noted at the outset of the decision, the father sought leave of the court today to rely on the new evidence contained in the document entitled 「上訴理由」.

62.  The most material part of the new evidence is the assertion that the father’s former solicitors in the 2018 action had misled him and induced him to state there that he “had no interest” in the Property as part of the litigation strategy.  The father believed him and went along with the suggestion.  At that time, he thought that it did not matter that he made that statement as it would not affect the overall scheme of things (“不影響大局”).

63.  I refuse to allow the father to rely on such new evidence at this stage.  This explanation is no doubt relevant to why he took the stance which he did in the 2018 action.  However, that is certainly something which he could have said when he filed his evidence to oppose the present striking out applications as he himself had full knowledge of those matters at all times.

64.  In his oral submissions today, the father accepts that the evidence could have been adduced then but his former solicitors in the present action had not acted properly when preparing the evidence. This explanation was given to the court by way of submissions, and only given when queried by the court.  The court will not accept it.  Hence the decision to refuse to grant leave to the father to adduce the new evidence.

65.  Overall speaking, I reject the father’s argument that the 2018 action is unrelated or irrelevant to the present action.  In fact, the direct opposite is true.  Both actions have everything to do with the beneficial ownership of the Property.  The father cannot disown what he said back in the 2018 action, simply because that action has been withdrawn.

66.  There is therefore before me no explanation at all as to why the father is advancing opposite stances in the two actions. Absent such explanation, the pursuit of the present action is clearly an abuse of the court’s process.  This statement of claim ought to be struck out and the claim dismissed.

67.  As to the quantum of costs assessed by the master, the father seeks an order that those costs be reduced by about half in the notice of appeal.  I see no reason why the master’s assessment should be disturbed as the overall sums assessed are reasonable for this type of application.

Orders

68.  The master’s order should be upheld.

69.  I dismiss the father’s appeals against both the grandmother and the younger daughter.

[Submissions on costs]

70.  I order that the plaintiff do pay the 1^st defendant’s and the 2^nd defendant’s costs of the appeals.  The 1^st defendant’s costs be summarily assessed at $45,000 and the 2^nd defendant’s costs be summarily assessed at $45,000.  Such costs be payable by the plaintiff on or before 6 April 2023.

71.  The sums claimed by the defendants are overall speaking reasonable.  But there is some duplication of works between solicitors and counsel.  Hence the fees of both the 1^st defendant and the 2^nd defendant are assessed down slightly.