YANG YIHE v. QIU YUEWEN

HCA 1238/2019

[2023] HKCFI 2166

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1946 OF 2020

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BETWEEN

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JUDGEMENT

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Introduction and procedural history

1.  Before me is the Plaintiff’s application by summons issued on 5 May 2023 for default judgment upon the Defendant’s default to file his Defence, pursuant to O 19 r 7 of the Rules of the High Court and the liberty granted by Deputy High Court Judge Jenkin Suen SC on 23 March 2023 as below mentioned.

2.  This Writ of Summons herein was issued on 11 July 2019 endorsed with a Statement of Claim.

3.  On 1 August 2019, leave was given to serve a concurrent Writ to the Defendant out of jurisdiction.

4.  On 9 March 2020, the Defendant filed in person his Acknowledgement of Service with an Intention to Defend, and therein giving the address of the Property (defined below) as his address for service. However, no Defence was filed by the Defendant within time, or at all; and indeed, the Defendant did not appear in any of the hearings mentioned below nor has he in any way participated in this action.

5.  The Plaintiff has previously made an application for default judgment in May 2020, but the same was initially adjourned sine die, and later withdrawn, following queries raised by the court hearing the application based on the Plaintiff’s case as then pleaded, which queries included the jurisdiction to enforce the pleaded agreement in the Statement of Claim which was made in the then pending proceedings in the Family Court litigated by the parties as respectively wife and husband.

6.  On 23 March 2023, Deputy High Court Judge Jenkin Suen SC gave leave to the Plaintiff to substantially amend her Statement of Claim, and ordered, among others, that the Acknowledge of Service earlier filed by the Defendant do stand and that should the Defendant be in default of filing and serving his Defence within 28 days the Plaintiff be at liberty to apply for default judgment against the Defendant.

7.  By this substantial amendment, the Plaintiff supplemented, updated and clarified her pleaded case in relation to the 2 matrimonial proceedings between the parties – one in Mainland and another in Hong Kong, and importantly, that the Plaintiff is enforcing an agreement evidenced by the signed Consent Summons and not enforcing the Consent Summons itself.

8.  I am satisfied by the 2^nd Affirmation of Ng Pak Hin that the Amended Writ of Summons with and the Amended Statement of Claim, the said Order of Deputy High Court Judge Jenkin Suen SC, the Notice of Intention to Enter Default Judgment and the present summons applying for default judgment have been duly served on divers days on the Defendant. The Defendant defaulted in filing the Defence within time, or at all. Hence, this application was made. The Defendant also did not appear at the hearing of this summons.

9.  I am satisfied that there was such default entitling the Plaintiff to apply for default judgment.

The approach

10.  It is trite that upon such an application for default judgment the court shall give judgment as the plaintiff appears entitled to on his statement of claim only, and only if the pleaded facts give rise to the relief sought; though the court retains its discretionary power whether to give judgment or, say, to extend time when it is just to do so.

The Plaintiff’s pleaded case in the Amended Statement of Claim

11.  As mentioned, the plaintiff claims to specifically enforce what was essentially a settlement agreement reached by the parties and evidenced by a Consent Summons signed by their respective solicitors and filed in FCMC 5263/2012 on 28 June 2016 (“the Agreement”).

12.  The Plaintiff’s pleaded case is summarized below. The paragraph numbers put in brackets are the paragraphs in the Amended Statement of Claim.

13.  The background facts leading to the Agreement being made and the 2 matrimonial proceedings are these (§§1-4 and §5A(a)):

a. The Defendant is the sole registered owner of the property known as Flat A, L18/F, Tower 11 and Car Parking Space No 618 on B2/F, Vista Paradiso, No 2 Hang Ming Street, Shatin (“the Property”).

b. The Plaintiff and the Defendant were both citizens of the PRC and were former wife and husband respectively.

c. The Defendant in November 2010 obtained from Shanghai Putuo People’s Court in the absence of the Plaintiff an order dissolving the marriage but without any provision for financial relief to the Plaintiff (“the Shanghai Order”).

d. Not knowing about the Shanghai Order, the Plaintiff commenced divorce proceedings in Hong Kong (FCMC 5263/2012) in April 2012. In December 2014, the Family Court in Hong Kong adjudicated under section 61(2)(a)(ii) of the Matrimonial Causes Ordinance Cap 179 that it did not recognize the Shanghai Order.

14.  In June 2016, the parties have orally reached the Agreement with the following terms (§4). The Agreement was evidenced by a Consent Summons signed by respective solicitors representing the Plaintiff and the Defendant (§5) and the Consent Summons was filed in FCMC 5263/2012 on 28 June 2016 (§6). I will not mention the details of the terms relating to the affairs of their children and only set out the other relevant terms:

a. The parties agreed that the Agreement was to settle all the parties’ claims under the following ordinances on a clean break basis, namely Matrimonial Causes Ordinance Cap 179, Matrimonial Proceedings and Property Ordinance Cap 192, Married Persons Status Ordinance Cap 182 and Inheritance (Provision for Family and Dependants) Ordinance Cap 481 or their related legislations;

b. There were a number of matters concerning the affairs of their children agreed to be performed by the parties.

c. The Defendant would sell the Property in the open market within 6 months at a price (unless parties later agreed otherwise) no less than HK$9,500,000;

d. If the sale and purchase agreement for the sale of the Property was not signed within 6 months, the parties might apply to court for further directions to carry the agreement for the sale of the Property into effect;

e. The Defendant would cause the sitting tenant of the Property to deliver vacant possession of the Property to facilitate its sale; and

f. The proceeds of sale would be used to pay, in order of priority, (i) all outstanding utility fees, management fees, Government Rent and Rates, and such, (ii) outstanding mortgage amounts owed to the bank, (iii) estate agency fee, legal costs and other reasonable costs of the sale, (iv) legal fees of the Plaintiff in FCMC 5263/2012 agreed at HK$480,000, (v) the balance of the proceeds be paid to the Plaintiff, (v) but if the balance exceeded RMB 5,500,000, only RMB 5,500,000 would be paid to the Plaintiff and the remainder be paid to the Defendant.

15.  There was an implied term in the Agreement, implied in order to give it efficacy, that if the Defendant refused or did not carry out these terms to sell the Property, the Plaintiff could seek to effect the sale on the Defendant’s behalf to specifically perform the Agreement (§4A).

16.  By a letter dated 21 July 2016, the Family Court asked the Defendant to confirm that the Family Court in Hong Kong has jurisdiction over the parties’ matrimonial dispute (§7). The Defendant however refused to or did not give his response (§8).

17.  In the meantime, the Plaintiff pursuant to the Agreement performed her obligations under the Agreement on matters relating to their children and did not make any claims for ancillary or other relief under any of the above-mentioned ordinances (§6).

18.  In December 2018, upon the parties’ acknowledging that they had agreed to the Agreement and would carry it out, the Jiangsu Court issued its Decision stating that the arrangement of the Defendant selling the Property and paying to the Plaintiff RMB 5,500,000 was a satisfactory and final arrangement, and further ancillary relief would not be granted (§11).

19.  On 8 November 2021, the plea in the Petition in FCMC 5263/2012 that the Plaintiff was domicile in Hong Kong was struck out. On 20 October 2022, FCMC 5263/2012 was dismissed by the Family Court (§10).

20.  Despite repeated demands all along, the Defendant refused and failed to perform the Agreement by selling the Property and paying the Plaintiff as agreed (§13).

21.  The Plaintiff expressly pleaded and sought, either pursuant to the express term agreed that the parties could apply to court for directions and as consequential orders for the specific performance of the Agreement (§16), or pursuant to the said implied term (§17A), for an order for sale of the Property at a price no less than HK$9,500,000, that the Defendant do deliver up the title deeds to the Property and that the Plaintiff’s solicitors be given the conduct of the sale of the Property (in place of the Defendant) according to the terms of the Agreement.

Default judgment and the reliefs

22.  On the Plaintiff’s case as pleaded, which is deemed to have been admitted by the Defendant upon his default in filing a Defence, the Plaintiff is entitled to judgment for the specific performance of the Agreement.

23.  As submitted by Ms Shum, which I accept, that on the pleaded facts it is abundantly clear that the Defendant has persistently, since June 2016 and for a very long time, evaded his obligation to perform the Agreement by effecting the sale of the Property and then paying the Plaintiff. And he so evaded despite his express promise to and before the Jiangsu Court in December 2018. Moreover, the Defendant’s conduct of merely filing an Intention to Defend but thereafter not taking even a single step to participate in this action or appearing once in any of the hearings showed that he merely wanted to obstruct or delay the performance of the Agreement.

24.  It is thus reasonably anticipated that he will continue to evade his obligation to perform, and would be unwilling to cooperate in performing, the Agreement. In such circumstances, the court is entitled to give such order or directions, pursuant to O 45 r 8 of the Rules of the High Court, for the act required to be done to be done by the party by whom the judgment for specific performance is obtained without having to wait for the actual occurrence of disobedience, so as to prevent further delay (see Pacific Electric Wire & Cable Company Limited v Texan Management Limited & Ors (HCA 2203/2004, HCA 2746/2004 & HCA 2763/2004, unrep, 4 July 2008; and Li Yong Ming v Chen Jian Ming [2021] HKCFI 1893).

25.  In my view, this is clearly an appropriate case to give an anticipatory order under O 45 r 8 to give the conduct of the sale of the Property to the Plaintiff’s solicitors. Moreover, this order was expressly sought in the Amended Statement of Claim and yet the Defendant has chosen not to contest. Thus, I will so order.

26.  It is also appropriate to invoke the court’s Power under section 25A of the High Court Ordinance Cap 4 to appoint a partner of the Plaintiff’s solicitors, Mr Li Chun Tak, to execute all documents and instruments necessary to complete the sale of the Property, should the Defendant fail to do so.

27.  Paragraphs 2 to 8 of the revised draft order annexed to the Plaintiff’s Supplemental Submissions provide for the performance of the Agreement according to its terms with the addition of the said anticipatory order and s25A order I mentioned above. The Plaintiff is entitled to them, and I will grant them in such terms. I think the liberty to apply sought under paragraph 9 of the draft is also appropriate.

28.  I refuse to grant the declaration sought under paragraph 1 of the said draft order that “The Plaintiff has interest in [the Property] in the sum of RMB5,500,000 and HK$480,000”. The Agreement was pleaded as merely an agreement to sell the Property and then pay the Plaintiff. I do not think its terms can be interpreted to mean that some beneficial interest in the Property was agreed to be conveyed to the Plaintiff or that a charge was thereby created. I do not think that by the Agreement the parties intended to create some form of co-ownership in the Property.

Disposal

29.  I will give judgment to the Plaintiff and give an order in terms of paragraphs 2 to 9 of the said draft order. There be an order that the Defendant pays the Plaintiff her costs of this action, including the costs of this application and all costs reserved, to be taxed if not agreed.

30.  I thank Ms Shum for her assistance.