MA TOI LING AND ANOTHER v. LAM MAN KWONG

HCA 2208/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2208 OF 2014

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D E C I S I O N

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INTRODUCTION

1. I have before me a Notice of Appeal issued by the 1^st plaintiff dated 29 July 2015 against the order of Master Chow given on 15 July 2015 (“the Order”) on the 1^st defendant’s summons dated 2 February 2015 and filed on 3 February 2015 (“the Striking Out Summons”).

2. For reasons which I shall explain in a moment, I regret to say that this case is a very bad example of unnecessary waste of time and legal costs which could easily have been avoided had the parties’ legal advisers paid some heed to the underlying objectives of the Rules of the High Court introduced under the CJR.

Basic facts relevant to the present appeal

3. The 1^st plaintiff is the mother of the defendant and Lam Man Yung, deceased (“the Deceased”), who passed away on 17 March 2002.

4. The Deceased and Madam Ngai Shun (“Madam Ngai), originally the 2^nd plaintiff, were husband and wife, and they had 3 sons.

5. The defendant is the registered owner of the property known as Flat C, 27^th Floor, Tower 9, Park Avenue, No 18 Hoi Ting Road, Kowloon, Hong Kong (“the Property”), pursuant to an assignment dated 28 June 2001.

6. It is the 1^st plaintiff’s case that the Property was in fact purchased by her, and that the entire purchase price, legal costs, stamp duty, agency fees, monthly mortgage instalments, monthly management fees, and all related miscellaneous outgoings in respect of the Property were and are paid by her, save that some of the mortgage instalments were paid out of rental income derived from the Property.  On this basis, she claims to be the beneficial owner of the Property with the defendant holding it on trust on her behalf.

7. It is not necessary, for the present purpose, for me to set out in any detail the 1^st plaintiff’s case regarding the circumstances under which the Property came to be purchased in the name of the defendant or the evidence which the 1^st plaintiff has adduced in support of her case, because it is accepted by the defendant that:-

“ the merits of the 1^st Plaintiff’s claims could not be determined (at this stage) on affirmations and there is no point for [the defendant] (on affirmation) to argue [his] case” (see paragraph 12 of the 2^nd affirmation of the defendant filed on 9 June 2015).

8. This action was commenced by the 1^st plaintiff and Madam Ngai by way of a writ of summons issued on 31 October 2014, which was later amended on 6 November 2014.

9. In the amended statement of claim dated 6 November 2014, the 1^st plaintiff and Madam Ngai sought, inter alia, (i) a declaration that the 1^st plaintiff was and is the beneficial owner of the Property and the defendant was and is holding the registered/legal title of the Property as trustee for the 1^st plaintiff, and (ii) an order that the defendant do forthwith and at his own expense and effort duly convey the registered/legal title of the Property to the 1^st plaintiff.

10. Pausing here, it may be noted that although Madam Ngai was named as the 2^nd plaintiff in the amended writ of summons, and the prayer for relief in the amended statement of claim referred to the claims for the aforesaid declaration and order as being claims of “the plaintiffs”, it is clear from the averments in the amended statement of claim that Madam Ngai did not have any claim in her own right against the defendant in respect of the Property.

11. On 6 November 2014, the amended writ of summons was registered in the Land Registry against the Property by memorial no 14110702310045.

12. On 3 February 2015, the defendant filed the Striking Out Summons seeking, inter alia, the following relief:-

(1)  the references to the 2^nd plaintiff (ie Madam Ngai) in (a) the amended writ of summons and (b) the amended statement of claim in various specified paragraphs and all parts therein that refer to the claim of the 2^nd plaintiff be struck out; and

(2)  the registration of the amended writ of summons in the Land Registry against the Property be vacated.

13. The Striking Out Summons was supported by the 1^st affirmation of the defendant also filed on 3 February 2015.

14. On 13 February 2015, Madam Ngai (through Messrs Tung, Ng, Tse & Heung) filed a notice of discontinuance of her claim in this action against the defendant.

15. On the same date (ie 13 February 2015), Messrs Tung, Ng, Tse & Heung, who also acted for the 1^st plaintiff in this action, wrote a letter to the defendant’s solicitors (Messrs Keith Lam Lau & Chan) stating that the 1^st plaintiff intended to further amend the amended writ of summons and amended statement of claim, and enclosed with that letter a draft re-amended writ of summons indorsed with a draft re-amended statement of claim.

16. In the draft re-amended writ of summons, the reference to Madam Ngai as the 2^nd plaintiff is deleted.

17. In the draft re-amended statement of claim, all references to “the 2^nd plaintiffs” are replaced by “Ngai Shun” (or the abbreviated form, “Ngai”).

18. The defendant, however, rejected the 1^st plaintiff’s proposed amendments.

19. The Striking Out Summons then came before Master J Wong on 16 February 2015, who gave directions for the filing of evidence and adjourned the substantive hearing of the summons to a date to be fixed with 1 day reserved in consultation with counsel’s diary.

20. In due course, the 1^st plaintiff filed an affirmation in opposition to the Striking Out Summons on 27 April 2015, and the defendant filed his 2^nd affirmation in reply on 9 June 2015.

21. The Striking Out Summons came before Master Chow for substantive argument on 15 July 2015. After hearing counsel for the parties, Master Chow made the following order:-

(1)  the references to the 2^nd plaintiff in the amended writ of summons and amended statement of claim and all parts therein that refer to the claim of the 2^nd plaintiff be struck out;

(2)  a sealed copy of the order be registered by the 1^st plaintiff at the Land Registry;

(3)  the 1^st plaintiff shall file and serve her re-amended statement of claim within 14 days;

(4)  time for the filing and service of the defence and counterclaim (if any) of the defendant be extended until 28 days after the filing and service of the 1^st plaintiff’s re-amended statement of claim;

(5)  80% of the costs of the application and the hearing (including any reserved costs) be to the defendant with certificate for counsel, to be taxed if not agreed and to be payable by the 1^st plaintiff forthwith.

Discussion

22. It is apparent from the contents of the amended statement of claim that the 2^nd plaintiff has no valid or reasonable cause of action against the defendant in so far as the beneficial ownership of the Property is concerned.  That being the position, Madam Ngai should not have been joined as a co-plaintiff in this action in the first place. For this reason, it was justifiable for the defendant to seek to strike out Madam Ngai’s claim against him.

23. However, one would have thought that, after the discontinuance of Madam Ngai’s claim against the defendant, it would be a simple matter for the amended writ of summons to be further amended by removing Madam Ngai as the 2^nd plaintiff in the action, and for the amended statement of claim to be further amended by replacing all references to the 2^nd plaintiff therein by “Ngai Shun” (or simply “Ngai”), as proposed to be done in the draft re-amended writ of summons and re-amended statement of claim.

24. Mr Frederick H F Chan (for the defendant) says, however, that is not good enough because, as I understand from his submissions, the references to, or pleas relating to, Madam Ngai, are irrelevant and should not appear in the re-amended statement of claim.

25. In my view, the references to Madam Ngai in the draft re-amended statement of claim can, by and large, be justified on the basis that they set out the factual background relevant to the 1^st plaintiff’s claim against the defendant.  I accept that it may be possible to delete some of the references to, or pleas relating to Madam Ngai, in the draft re-amended statement of claim without affecting the completeness of the 1^st plaintiff’s pleaded cause of action against the defendant, and that the draft re-amended statement of claim can be improved or shortened in some way.  However, the court cannot insist on perfect pleadings in every case.  Very often, parties include some non-essential facts or averments in their pleadings, and in many cases the pleadings would be allowed to stand, because it would not be realistic or practicable for the court to micro-examine every pleading and strike out those parts which are not strictly necessary for that pleading.  It is, in every case, a question of fact and degree how the court should respond to a pleading which contains some unnecessary facts or averments.  Assuming that the pleading does disclose a reasonable cause of action or defence, the important consideration is whether, looking at the pleading as a whole, it is scandalous, frivolous or vexatious, may prejudice, embarrass or delay the fair trial of the action, or is otherwise an abuse of the process of the court.

26. Looking at the draft re-amended statement of claim as a whole, I do not consider that the various references to Madam Ngai therein would be objectionable on any one or more of the above grounds, or are such as would justify a standalone striking out application.

27. Mr Chan also argues that the registration of the amended writ of summons should be vacated consequent upon the striking out of Madam Ngai’s claim, because:

“ the Lis Pendens is predicated on the detailed pleas in the [amended statement of claim] with Madam Ngai being posed as a co-plaintiff with [the 1^st plaintiff] and now that she has abandoned her entire case against [the defendant], the Lis Pendens is (as it stands) incorrect and misleading to the public” (see paragraph 19(6) of Mr Chan’s written submissions dated 31 December 2015), and

“ the Lis Pendens should not be allowed to remain in the Land Registry as it could not convey the correct picture to the general public as its contents and substratum are no longer true given that the alleged pleas on Madam Ngai are unsustainable and she is not a party to the litigation anymore” (see paragraph 19(9) of Mr Chan’s written submissions).

28. I do not accept Mr Chan’s argument.  While the amended writ of summons, as registered in the Land Registry against the Property, would not bring to the attention of the public that Madam Ngai’s claim against the defendant in respect of the Property has been discontinued and, for that reason, it may be said to portray a misleading picture, the fact remains that the 1^st plaintiff has asserted a reasonable cause of action or claim against the defendant for or to the Property, and such action or claim is embodied in the amended writ of summons.  Accordingly, the amended writ of summons is properly registrable in so far as the 1^st plaintiff’s action or claim is concerned.

29. In passing, I may add that requiring the 1^st plaintiff to vacate the registration of the amended writ of summons and register afresh a re-amended writ of summons in Land Registry may affect the priority of the 1^st plaintiff’s claim in view of the fact that, under section 5A of the Land Registration Ordinance (Cap 128), a lis pendens which is duly registered shall have priority “from the commencement of the day following the date of its registration”.

30. It has not been suggested by Mr Chan that somehow, the registration of the re-amended writ of summons could be deemed to have occurred on the date of registration of the amended writ of summons.  In any event, even if the re-amended writ of summons could be deemed to have been registered on the date of registration of the amended writ of summons, I am unable to see what practical advantage it would to accrue to the defendant by requiring the 1^st plaintiff to vacate the registration of the amended writ of summons and register afresh the re-amended writ of summons in the Land Registry.

31. In my view, the various interlocutory steps in this action taken by the parties after 13 February 2015 are wholly unnecessary and costs wasting exercises.  The sensible and obvious thing to do would be for the defendant to consent to the plaintiff’s proposed amendments to the amended writ of summons and amended statement of claim with costs to the defendant (including the costs of and occasioned by the Striking Out Summons up to 13 February 2015).  In the absence of consent, the 1^st plaintiff ought to have taken out a summons to seek to further amend the amended writ of summons and amended statement of claim, and the court would be able to make a proper costs order taking into account the reasonableness of the parties’ conduct.

32. As it was, there was no consent on the part of the defendant.  Neither did the plaintiff take out any summons to further amend the amended writ of summons and amended statement of claim.  On the contrary, I am informed by Mr Patrick Szeto (for the 1^st plaintiff) that he maintained before the Master, as he has done today before this court, that it was strictly not necessary for there to be any amendments of the amended writ of summons and amended statement of claim.  I do not accept that contention.  If that be the correct position, it would have been quite unnecessary for Messrs Tung, Ng, Tse & Heung to seek the defendant’s consent to the 1^st plaintiff’s proposed amendments to the amended writ of summons and amended statement of claim on 13 February 2015.

33. In my view, the order made by Master Chow is correct.  In particular, in the absence of any application by the 1^st plaintiff to further amend the amended writ of summons and amended statement of claim, the references in the amended writ of summons and amended statement of claim to the 2^nd plaintiff and all parts therein that refer to the claim of the 2^nd plaintiff were properly struck out.  It was also correct that a copy of the Order ought to be registered in the Land Registry against the Property, which would give the public notice of the fact that the claim of Madam Ngai has been struck out or dismissed.

Disposition

34. For the above reasons, I do not consider that the substantive order made by Master Chow (ie paragraphs 1 to 4 of the Order) can be faulted[1]. I dismiss the 1^st plaintiff’s Notice of Appeal, and I shall hear the parties on the question of costs here and below as well as any consequential directions that may be required.