JAMES CHOR CHEUNG WONG AND ANOTHER v. HARK CHUNG WONG

HCA 469/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 469 OF 2013

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DECISION

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Background

1.  By summons dated 7 June 2013 (“the Summons”), the defendant applies for a declaration that in the circumstances of the case, the court has no jurisdiction over the defendant in respect of the subject matter of the claim; alternatively, a declaration that the court should not exercise any jurisdiction that it may have on the grounds that (a) the proceedings should be conducted in another court and (b) there are other proceedings pending between the plaintiffs and the defendant in another court.

2.  The Summons was originally fixed for hearing on 24 June 2013, but by a consent summons dated 21 June 2013, the hearing on 24 June 2013 was adjourned to a date to be fixed for argument. Both parties were then legally represented, the plaintiffs by Messrs W K To & Co and the defendant by Messrs Hart Giles.

3.  However, no hearing date was fixed by the parties until 26 October 2016 when Messrs Hart Giles wrote to the court to fix a hearing date for the Summons.  The Summons was then fixed to be heard before Master Cheung on 28 December 2016.

4.  On 28 December 2016, Master Cheung adjourned the Summons to a date to be fixed again.  The plaintiffs were then acting in person.

5.  The Summons was then fixed before me on 1 June 2017.  At the hearing on 1 June 2017, the plaintiffs were represented by Messrs W K To & Co again, but this time the defendant was acting in person.

6.  However, Messrs W K To & Co issued a summons dated 31 May 2017 which was fixed to be heard on 1 June 2017 as well.  In that summons, the plaintiffs sought to adjourn the Summons again.  Ms I Chin, a trainee solicitor of Messrs W K To & Co, appeared for the plaintiffs and applied for an adjournment on the ground that her firm was only instructed by the plaintiffs again recently and they had limited instructions to apply for an adjournment only.

7.  I refused to adjourn the case as I see no justification to grant the adjournment at all.  Ms Chin then indicated that her firm could not represent the plaintiffs further and she was not qualified to argue the case for the plaintiffs.  I then asked her to inform her principal to come to court to explain the situation.

8.  Mr A Chan of Messrs W K To & Co then appeared at the hearing and confirmed that his firm would still represent the plaintiffs but as they had no instructions to argue the case, he would make no submission on behalf of the plaintiffs.

9.  Thus, I do not have any submission from the plaintiffs in respect of the Summons although they are legally represented, which is entirely unsatisfactory.

10.  Although the defendant was acting in person at the hearing, his then counsel, Mr Wayne Hariman, had already prepared the skeletion submissions dated 22 December 2016 and the supplemental skeleton submissions dated 23 December 2016 on behalf of the defendant.  The defendant simply adopted his then counsel’s submissions at the hearing, which are the only assistance I have in dealing with the Summons.

The case

11.  This case concerns a family dispute over the legal and beneficial ownership of a property situate at 40 Rumrunner Street, Mermaid Waters in the State of Queensland, Australia ("the Property").

12.  The second named plaintiff is the sister of the defendant, and the first named plaintiff is the husband of the second named plaintiff.

13.  The plaintiffs were the previous owners of the Property.  It is the plaintiffs’ case that by an agreement made partly orally and partly in writing in November 1999 (“the Agreement”), the defendant agreed to loan the sum of AUD295,000.00 to the plaintiffs, with the loan to be secured by the transfer of the Property to the defendant.

14.  On or about 7 January 2000, the plaintiffs executed the documents for the transfer of the Property to the defendant.  The defendant then advanced to the plaintiffs the sum of AUD295,000.00 on or about 31 January 2000.

15.  However, the plaintiffs allege that the Property was redeemable upon full repayment of the principal sum of the loan plus interest, costs and fees accrued, and that despite tendering the sum of AUD486,517.36 to the defendant, the defendant failed to effect the re‑conveyance of the Property back to the plaintiffs in breach of the Agreement.

16.  Thus, the plaintiffs in this action claim for a declaration that the plaintiffs are the holders of an equitable estate in the Property, a declaration that they do have a right to redeem the advance made to them by the defendant by payment of AUD295,000.00 plus interest and costs and to a re‑conveyance of the Property from the defendant, as well as an order for specific performance of the Agreement or alternatively damages.

17.  However, the defendant’s case is simply that the Property was sold to him by the plaintiffs when they had financial difficulty at the time, without any loan agreement or agreement for the plaintiffs to redeem the Property as alleged.

Proceedings in Queensland, Australia

18.  The present action was taken out by the plaintiffs against the defendant on 15 March 2013.  Nevertheless, there are parallel and almost identical proceedings commenced by the first named plaintiff as trustee of the James Wong Family Trust against the defendant in Queensland, Australia on 17 August 2006 under case number 6834 of 2006 ("the Australian Proceedings").

19.  In the Australian Proceedings, statement of claim and defence had been filed and served.  The allegations made and reliefs sought are almost identical to those in the present proceedings in Hong Kong.  By the order of Justice Daubney dated 4 February 2009, both the first named plaintiff and the second named plaintiff were ordered to pay AUD50,000.00 as security for the defendant’s costs, failing which the Australian Proceedings would be stayed.

20.  However, no security was provided by the plaintiffs and the Australian Proceedings were stayed.  There has been no further progress to the Australian Proceedings since then.

Applicable legal principles

21.  In making the present application, the defendant relies principally on Order 12, rule 8 of the Rules of the High Court. However, the defendant also relies on the principle of forum non conveniens which is in fact more or less codified in Order 12, rule 8.

22.  Challenge to jurisdiction on the basis of forum non conveniens was traditionally premised upon the court's inherent jurisdiction.  However, following the Civil Justice Reform, Order 12, rule 8 provides a single mechanism for dealing with all forms of challenges to the jurisdiction of the court, including staying the proceedings on the ground of forum non conveniens (see MGM Grand Paradise Ltd v Wong Sing wa, HCA 2140/2011, 21 May 2012).

23.  The principle of forum non conveniens guides the discretion of the court in determining whether it should hear a particular case.  The basic principle is that “a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice" (see Spiliada Maritime Corporation v Cansulex Ltd [1987] 1 AC 460 at 476C).

24.  If the court concludes that there is some other available forum which prima facie is clearly more appropriate for the trial of the action, it will ordinarily grant a stay unless there are circumstances by reason of which justice requires that a stay should nevertheless not be granted (see the case of Spiliada, supra, at 478C).

Is there another appropriate forum?

25.  Applying the above principles, the first question for me to decide is whether there is another appropriate forum for the case to be tried more suitably for the interests of all the parties and the ends of justice.

26.  This is in fact similar to the ground laid down in Order 12, rule 8(2A)(a) of the Rules of the High Court, which stipulates that one of the grounds for the court to exercise its jurisdiction under Order 12, rule 8(2) is that “considering the best interests and convenience of the parties to the proceedings and the witnesses in the proceedings, the proceedings should be conducted in another court”.

27.  Moreover, another ground laid down in Order 12, rule 8(2A)(c) is that “in respect of the same cause of action to which the proceedings relate, there are other proceedings pending between the defendant and the plaintiff in another court”.

28.  Based on the undisputed facts of the case, I am satisfied that the defendant can rely on the specific grounds under Order 12 rule 8(2A)(a) and (c) as well as the aforesaid principle of forum non conveniens to make the present application,and Queensland, Australia is the appropriate forum to try this case.

29.  First of all, it is clear that in respect of the same cause of action to which the proceedings relate, there are other proceedings pending between the defendant and the plaintiff in another court, namely the Australian Proceedings, and hence it falls within the ground stipulated in Order 12, rule 8(2A)(c).

30.  The undesirability of multiplicity of proceedings and the risk of contrary decisions in parallel proceedings mean that it is most undesirable for the present action to proceed in Hong Kong in the light of the almost identical Australian Proceedings (see Gain Park Holdings Ltd v Eversino Investments Ltd, HCA 1638/2014, 26 November 2014).

31.  Secondly, it is also clear that with regard to the best interests and convenience of the parties to the proceedings, the subject matter of the present action should be litigated in Queensland, Australia.

32.  The subject matter in issue and in dispute is the legal and beneficial title to the Property.  Under the Mocambique rule, Hong Kong courts generally have no jurisdiction to determine disputes concerning title to or interests in immovable property outside Hong Kong (see British South Africa Co v Campanhia de Mocambique [1893] AC 602, which is referred to and accepted in Hong Kong in DX v LN, FCMC 7870/2014, 30 November 2015).

33.  The reliefs sought by the plaintiffs are declarations and specific performance for the transfer of the Property from the defendant to the plaintiffs.  These are orders or decrees for the court of the situs, i.e. where the Property is situated, namely the Supreme Court of Queensland, to make.

34.  It makes no sense either in terms of logistics, fair use of the court's resources, costs or practical prosecution of the case for any judgment to be obtained in Hong Kong only for the plaintiffs to have to then take enforcement measures in Queensland, Australia.  It is also uncertain whether the Supreme Court of Queensland may necessarily give effect to any Hong Kong judgment.

35.  Even if the plaintiffs seek to argue that their claim against the defendant is one based on personal obligations between them and/or where the issue of the title of the Property only arises incidentally, thereby placing reliance on one of the exceptions to the Mocambique rule, that is still not enough for Hong Kong to be rendered as the most proper and appropriate for the case to be heard and tried.

36.  In effect, what the plaintiffs are seeking to establish is the existence and validity of the Agreement, which would determine who should get the legal and beneficial title of the Property.  In First Laser Ltd v Fujian Enterprises (Holdings) Co Ltd, (2012) 15 HKCFAR 569 at 594 to 596, it was held that:-

(1) Questions of title and transfer may be governed by a law (lex situs) different from the applicable or proper law of the contract relating to them.

(2) The common law rule is that the law applicable to a contract is the system of law by which the parties intended the contract to be governed, or, where their intention is neither expressed nor to be inferred from the circumstances, the system of law with which the transaction has its closest and most real connection.

(3) In theory, in the absence of an express choice as the first test, the court should consider as a second test whether there are any other indications of the parties' intention, and only if there is no such indication to go on to consider the third stage, namely with what system of law the contract has its closest and most real connection. But in practice the same result can be reached by the application of the second or third tests, and frequently the courts move straight from the first stage to the third stage.

37.  In the present action, the plaintiffs have pleaded that the Agreement was partly oral and partly written, but no jurisdiction clause has been pleaded, let alone any exclusive jurisdiction clause.  Nothing has been pleaded either as to which jurisdiction the parties intend the Agreement to be governed.  Thus there was nothing expressed in terms of jurisdiction.

38.  In terms of inference from the circumstances, they point towards Queensland, Australia as the proper and appropriate governing jurisdiction in that:-

(1) The sum of AUD295,000.00 was expressed and paid by the defendant in Australian currency.

(2) The purported tendering of AUD486,517.36 for redemption of the Property was also in Australian currency.

(3) Matters pertaining to the transfer and conveyance of title from the plaintiffs to the defendant were conducted and dealt with in Queensland, Australia.

(4) Living arrangements and occupation of the Property in Queensland, Australia were purportedly tied in as part and parcel of the Agreement.

39.  Thus, only the courts in Queensland, Australia can be in a position and be reasonably expected to deal with issues or disputes emanating from the above.

40.  In fact, the plaintiffs can only really point to two factors in support of any contention that Hong Kong is the proper and appropriate jurisdiction:-

(1) The plaintiffs and the defendant being purportedly Hong Kong residents (notwithstanding the lack of clear evidence on this).

(2) The Agreement being entered into in Hong Kong and comprising of a Chinese written document.

41.  However, following the Court of Final Appeal judgment in First Laser Ltd, supra, little or no weight should be placed on such factors. There, reliance was also placed on the defendant company being a Hong Kong company and the agreement in question being entered into in Hong Kong to argue Hong Kong law to be applicable and Hong Kong as the most proper and appropriate jurisdiction.  It was however held that weight must be placed on the subject matter of the agreement and its place of performance.  Emphasis is not on the place where the party is based, but the place where performance is to be effected (see First Laser Ltd, supra, at paras 54-56).

42.  In addition, the other issues, such as the nature of the AUD295,000.00 transferred from the defendant to the plaintiffs; the legal and beneficial title of the Property; the nature and existence of the AUD 486,517.36 purportedly tendered from the plaintiffs to the defendant and the alleged refusal of the defendant to re‑convey the Property back to the plaintiffs, took place and/or are concerned with events and allegations in Queensland, Australia.

43.  The place of performance of the Agreement and in particular the re-conveyance of the Property sought for by the plaintiffs was, is and could only be in Queensland, Australia.  Great weight should be attached to this fact (see First Laser Ltd, supra, at para 56, citing Chatenay v Brazilian Submarine Telegraph Co [1891] 1 QB 79 at 83).

44.  Furthermore, there is and can be no legitimate, personal or juridical prejudice to the plaintiffs if their claim is not heard or tried in Hong Kong, as the Australian Proceedings have not yet concluded or reached finality.  Conversely, if the plaintiffs were allowed to continue their claim against the defendant in Hong Kong, it would be in essence condoning the plaintiffs' failure to pay security for costs in the Australian Proceedings and may lead to serious costs implications for the defendant.

45.  The defendant would have to expend time, resources and costs to defend two parallel proceedings, as the present action is a mirror image of the Australian Proceedings and not brought in aid of and/or cover lacunas in the latter.  Findings of facts made therein may also present issue estoppel problems and complicate (possibly even compromise) the present action.

46.  Thus, I find no good reasons for the plaintiffs to be allowed to continue their claim against the defendant in Hong Kong.

47.  It also seems that most if not all of the witnesses anticipated to give evidence in any trial of the present dispute are based in Australia. It would be most undesirable to have the trial in Hong Kong where most of the witnesses will not be present.

48.  By reasons aforesaid, I conclude that the court in Queensland, Australia, having competent jurisdiction, is the appropriate forum to hear and try the case and the proceedings should be conducted there for the interests of all the parties and the ends of justice.

Should the present proceedings be stayed or struck out?

49.  Applying the principle of forum non conveniens as stated above, the present proceedings should ordinarily be stayed.  As I see no circumstances that would justify a stay not being granted in this case, I will order the present proceedings be stayed.

50.  The defendant has also established the grounds in Order 12, rule 8(2A)(a) and (c), and is entitled to the reliefs mentioned in Order 12, rule 8(2)(a) and (b), namely, a declaration that in the circumstances of the case the court should not exercise any jurisdiction it may have, and an order staying the proceedings.

51.  However, I will not go so far to say that this court has no jurisdiction over the defendant in respect of the subject matter of the claim, as it is not clear whether the parties are Hong Kong residents and the Agreement may have been entered into in Hong Kong.

52.  Thus, I am not prepared to grant an order to strike out the plaintiffs’ claim.

Conclusion

53.  In the premises, I order as follows:-

(1) The summons dated 31 May 2017 be dismissed.

(2) A declaration that in the circumstances of the case, this court should not exercise any jurisdiction that it may have in the present proceedings.

(3) The present proceedings be stayed.

(4) Costs order nisi: the plaintiffs do pay the defendant costs of the Summons and the summons dated 31 May 2017 to be taxed if not agreed.