林雪梅是赤柱街120號 AND ANOTHER v. 雋暉有限公司

HCA 2333/2019

[2020] HKCFI 1557

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2333 OF 2019

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J U D G M E N T

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I.  INTRODUCTION

1.  On 18 December 2019, the plaintiff “林雪梅是赤柱街120號和赤柱地段95號(業主)” commenced the present action against the defendant “雋暉有限公司” (Win Talent Limited, “D”). I shall refer to “林雪梅” as “P” below.

2.  By her Statement of Claim (“SoC”), P averred as follows:

3.  In short, P alleged she and Good Ascent held “real” title to Lot 95 as she had issued a cheque to the Lands Department (presumably for the premium paid for the Exchange Conditions), and in 2012-2019 D was not the rightful owner of Lot 95 because (a) Good Ascent never borrowed loans from banks, and (b) Good Ascent and/or its directors never executed any sale and purchase documents for the sale of Lot 95 to D, so P suffered loss due to damaged furnishings at Lot 95 and D’s wrongful ownership of Lot 95, and she was entitled to damages in the sum of $20,000,000.

4.  On 23 December 2019, D by its solicitors filed acknowledgment of service giving notice of intention to defend.

5.  On 22 January 2020, D filed a summons (a) to strike out the SoC 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) to dismiss P’s claim in the present action, (c) to seek restricted application/proceedings orders against P, (d) to apply for extension of time to file/serve its Defence (if necessary) until after disposal of the Summons, and (e) to apply for costs (“Summons”). On the same day, D filed the affirmation of its solicitor Yeung Yun Por (“Yeung”) in support of the Summons (“Yeung Aff”).

6.  The Summons was scheduled to be heard on 5 March 2020. On 2 March 2020, this court granted directions for re-fixing such hearing which had to be generally adjourned due to public health considerations. By a letter dated 9 March 2020, P wrote to the court stating that “本人[P]決定終止HCA2333/2019。故此無需排期審理被告方的剔除申請”. But in such letter P did not state her stance on the other reliefs that D sought in the Summons, eg D’s claims for restricted application/ proceedings orders and for costs. So on 16 March 2020, this court granted written directions to the parties that unless D withdrew the Summons, the earlier directions for re-fixing the hearing for the Summons do stand.

7.  Eventually, the hearing of the Summons was re-fixed to be heard by this court on 17 June 2020 (“Hearing”). On 4 June 2010, the court duly posted a notice of hearing to P. On 16 June 2020, D filed an affirmation of service by the process server of D’s solicitors (“Process Server”) verifying that on 4, 10 and 12 June 2020 the Process Server served on P (a) Chinese notice of the re-fixed hearing of the Summons, (b) the hearing bundle for the Summons, and (c) the skeleton submissions and list of authorities by D’s counsel by way of ordinary post to her address for service.

8.  P was absent at the Hearing. On the same day but after the Hearing, D filed an affirmation of service by the Process Server verifying that on 23 January 2020 the Process Server attended P’s address for service and left copies of the Summons, the Yeung Aff and the Chinese translations thereof with the person thereat (who claimed to be P’s friend), and such person signed to acknowledge receipt of such documents, and told the Process Server that she would inform P about receipt of such documents.

II.  LOT 456RP AND LOT 95

9.  It was unclear from the SoC what was the status of the historical and present title/ownership of the Remaining Portion of Stanley Lot No 456 (“Lot 456RP”) and Lot 95. The historical and present title of Lot456RP and Lot 95 was traced and set out in Part II of my judgment handed down on 4 December 2019 HCA889/2019 (“2019 Action”) commenced by P’s brother Lam (who claimed to be the owner of Lot 456RP) against D (“Judgment”),[3] which chronology of title was also evident from the title documents exhibited to the Yeung Aff. Unless contradicted by abbreviations adopted herein or otherwise set out in the judgment herein, I shall adopt the abbreviations in the Judgment.

10.  I shall adopt (but do not propose to repeat here) Part II of the Judgment. The status of the historical and present title/ownership of Lot 456RP and Lot 95 could be summarised as follows:

III.  STRIKING OUT THE SoC AND DISMISSING THE ACTION

11.  P’s name and/or Lam’s name never appeared in the 95 Records as owner or part owner of Lot 95. Further, P’s SoC did not reveal any written instrument that evidenced any ownership of title over Lot 456RP and/or Lot 95 by P. Bearing in mind that Lot 456RP was different and separate from Lot 95, and Good Ascent was different from Lam and/or P, it was plain that P had no title, share or interest in Lot 95 or any part thereof.

12.  Whilst it was true Good Ascent was not the one who sold and/or executed documents to sell Lot 95 to D, the sale of Lot 95 was effected by HSBC as mortgagee under the Mortgage. As explained in paragraphs 94-98 of the Judgment, there was no basis for P and/or Lam to question such mortgagee sale for which D paid $27,500,000 to HSBC. Not only was such mortgagee sale by private treaty permitted under the Mortgagee made between HSBC and Good Ascent, sections 52 and 53(1)(a) of the CPO made clear that whatever title or interest Lam (and/or P) might have had in Lot 95 (albeit none had been shown), it would 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. Actually, it was doubtful whether P had any claim against any party at all since she had no title or interest in Lot 95 (the former owner of which land being Good Ascent and not P and/or Lam). Even if it was said P had some alleged interest in Lot 456RP, she still would not have any cause of action against D.

13.  In any event, I cannot see how P being interested to develop Lot 456RP or P submitting building plans to the BD by her agent (as she alleged in the SoC) would give her any title/interest in Lot 456RP and/or, more importantly, in Lot 95. Further, P’s claim of alleged payment of the premium sum of $630,000 under the Exchange Conditions to the government was neither here nor there. It was Good Ascent who surrendered Lot 456RP to the government under the Surrender Deed and who exchanged and acquired Lot 95 from the government under the Exchange Conditions. Thus, Good Ascent and not P/Lam became the 1^st owner of Lot 95. Any arrangements by Good Ascent for P to pay the premium on its behalf to the government would be a matter between P and Good Ascent. In any event, P’s alleged payment of the premium and/or any unwritten equities that might arise as a result (eg beneficial interest in Lot 95 due to resulting trust) do not bind D as bona fide purchaser for value without notice.

14.  In my view, on the above analysis in light of the legal principles on striking out claims as set out in paragraphs 78-81 of the Judgment, which I adopt but will not repeat here, P’s SoC ought to be struck out and the present action ought to be dismissed for disclosing no reasonable cause of action, and for being scandalous, frivolous and vexatious.

15.  But Mr Wong, counsel for D, went further. He drew attention to HCA2513/2017 (“2017 Action”) whereby P as the plaintiff therein sued D on the same or similar subject matter as the present action, ie the matter of ownership interest of Lot 95 at the 120 Address. According to the Yeung Aff, P brought such claim as the front-woman for her brother Lam, who as the plaintiff in HCA1180/2018 (“2018 Action”) and in the 2019 Action also sued D in relation to the same or similar subject matter. Mr Wong submitted the SoC in the present action was also liable to be struck out for abuse of process as P (or Lam via P) issued multiple claims against D on the same or similar subject matter, which claims were unmeritorious and were brought to vex D.

16.  As for the relevant legal principles for striking out claims based on issue estoppel, collateral attack and abuse of process, I gratefully adopt the succinct summary in Mr Wong’s written submissions:

“6. In relation to Henderson v Henderson issue estoppel, the Court of Appeal summarized in Yifung Properties Ltd v James Nicholas Barrie Smith [2018] HKCA 866 [2019] 1 HKLRD 36 that:

(1) Where there is an attempt to raise in subsequent proceedings claims or issues which could and should have been raised in earlier proceedings, the claim can possibly be struck out on the basis of the doctrine, which is founded on an abuse of process (§16).

(2) The abuse usually takes the form of a party or his privy being vexed twice, but it can also take other forms including bringing the administration of justice into disrepute or manifest unfairness to the other party in the subsequent proceedings (§17).

(3) One must allude to the background of the dispute between the parties in the earlier proceedings and the earlier judgments in conducting the broad merits-based assessment in the context of the doctrine (§§14-15).

7. As to abuse of process and collateral attack, the Court of Appeal held in China North Industries Investment Ltd v Chum [2010] 5 HKLRD 1 that:

(1) With the Court’s inherent power to prevent an abuse of its process, the Court will in an appropriate case occlude an attempt to relitigate a decided issue even though the parties to the actions were not the same and/or where a different form of proceedings is to set up the same case: §§51, 52, 55.

(2) Where the parties to the later proceedings are not parties or privies of those who were parties to the earlier proceedings, it suffices to establish an abuse if a collateral attack may be manifestly unfair or an affront to the administration of justice in the minds of right-thinking people: §61.”

17.  The Yeung Aff described the 2017, 2018 and 2019 Actions as follows:

18.  14 days after this court struck out the 2019 SoC, dismissed the 2019 Action and granted restricted application/proceedings orders against Lam, P commenced the present action against D. Having traced the history of the 2017, 2018 and 2019 Actions and now the present action, Yeung believed (and I accept) that in this series of litigation P and Lam were complicit in making concerted efforts to bring unmeritorious legal proceedings against D, and to re-litigate unfounded claims on the same subject matters against D. There was strong hint that by the present action P (who obviously had no title/interest in Lot 456RP and/or Lot 95 as evident from the 456RP and 95 Records) was attempting to re-run Lam’s case in the guise of her own claim, in which case the present action would amount to a collateral attack against the Judgment so as to further vex D on the same or similar facts/issues despite the dismissal of the 2018 and 2019 Actions.

19.  Although the cause of action P advanced and the relief she sought in the present claim were on their face somewhat different from those relied on and sought by Lam in the 2019 Action, there could be no doubt that the present action and the 2019 Action were, as Mr Wong submitted, based on the same factual matrix and concerned the same or similar subject matter, ie the ownership of Lot 95. In fact, the issues in the 2017, 2018 and 2019 Actions and the present action overlapped because these actions required the court to investigate into the title, ownership and interest of the former Lot 456RP and the present Lot 95 by tracing the title documents referred to in paragraph 10 above. Thus, despite the slightly different formulations in the 2017, 2018 and 2019 Actions and the present action, which formulations were all lacking in essential particulars, the core issues were the same, ie whether D’s acquisition of Lot 95 was wrongful, and whether P/Lam suffered loss as a result.

20.  In the circumstances, P’s present claim was an abuse of process and was bound to fail. There was also no persuasive reason as to why P could not have included all her allegations in relation to her ownership, use and possession (if any) in respect of Lot 456RP and/or Lot 95 in the 2017 SoC, and there was no explanation forthcoming as to why she had to “reserve” her claim for damages in the sum of $20,000,000 until the present action. I have no hesitation in concluding that the SoC ought to be struck out, and that the present action ought to be dismissed.

IV.  RESTRICTED PROCEEDINGS/APPLICATION

21.  Yeung noted that although the court dismissed the 2017, 2018 and 2019 Actions with costs to D, it was practically impossible for D to recover such costs from Lam (who was an undischarged bankrupt) and/or from P (who was not ordinarily resident in Hong Kong but in the United States).[11] D was concerned that unless restrained by the court, P would continue to pursue unmeritorious litigation against D who would have to incur substantial legal costs that were practically impossible to recover from P.

22.  The dismissal of the 2017 Action and the costs order imposed had not deterred P from pursuing unmeritorious claims. Although P indicated to the court that she would terminate the present action, the very existence of the 2017, 2018, 2019 Actions and the present action spanning several years illustrated real concern that P might continue to abuse the court’s process by seeking to re-litigate failed claims that had been determined against her. It is an abuse of process to re-litigate claims that have been dismissed and subject to the doctrine of res judicata or issue estoppel. D feared P would have incentive to so re-litigate in order to circumvent the restricted application/proceedings orders imposed in the 2019 Action that prohibited Lam from inter alia commencing fresh proceedings in the Court of First Instance, the District Court and the Lands Tribunal concerning any matters involving or relating to or touching upon or leading to the proceedings in the 2018 and 2019 Actions.

23.  In Ng Yat Chi v Max Share Ltd & anor, Li CJ said as follows:[12]

“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”), she would continue to commence unfounded actions and applications against D and/or related party(ies) on the same or similar 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.[13] In any event, I agree with Mr Wong that P’s readiness not to continue with the present proceedings clearly showed it could not reasonably be said the RPO/RAO sought would deny her access to the court in respect of the same or similar subject matters.

24.  I therefore order that RPO and RAO be imposed against P in the present action on the terms set out in the Schedule to this judgment.

V.  CONCLUSION

25.  I therefore grant the following orders:

(a)  P’s SoC herein be struck out on the ground 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;

(b)  P’s action herein be dismissed.

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

27.  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.

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

Schedule