DIAMOND PLAN DEVELOPMENT LTD v. KWOK KUEN KWAN and HAR SIO YING (Third Party)

HCA 5478/89

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 5478 OF 1989

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J U D G M E N T

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1. This is a claim under third party proceedings for reimbursement of money paid, damages, interest and costs.

Background

2. At all material times Har Sio Ying (Madam Har) was the registered proprietor of a flat at Mei Foo Sun Chuen (the flat) and also owned furniture inside it.

3. By agreement for sale and purchase dated 4th February 1989 (the first agreement) Madam Har agreed to sell the flat to Kwok Kuen Kwan (the defendant) for consideration. There was also an agreement dated 3rd February 1989 between the parties for sale and purchase of the furniture. Completion date was fixed at 10th May 1989.

4. By agreement for sale and purchase dated 27th February 1989 (the second agreement) the defendant agreed to sell the flat to Diamond Plan Development Limited (the plaintiff) for consideration. There was also an agreement dated 27th February 1989 between the parties for sale and purchase of the furniture. Completion date was fixed at 10th May 1989.

5. Pending completion of the first agreement the defendant paid to Madam Har deposits of $150,000.00 and $8,250.00 towards the price of the furniture. She also paid to the real estate agent who introduced the parties his commission of $8,000.00. Pending completion of the second agreement the plaintiff paid to the defendant a deposit of $75,800.00 and $38,000.00 being the price of the furniture.

6. Madam Har died on 21st April 1989 before executing the assignment of title to the flat to the defendant. As a consequence completion of the sale to the defendant and the sale to the plaintiff did not take place on 10th May 1989 or thereafter.

Proceedings

7. The plaintiff sued the defendant for rescission of the first agreement, reimbursement of $113,800.00, interest and costs.

8. The defendant, with leave granted to join Madam Har's estate as third party, sued the personal representative(s) of the estate of Madam Har, deceased, for indemnity against the plaintiff's claim, reimbursement of $158,250.00 paid under the second agreement, damages, interest and costs.

9. There were various defences and a counterclaim also pleaded which are not relevant to the outcome.

10. By order by consent of 10th July 1990 the plaintiff obtained judgment against the defendant in the sum of $113,800.00 and interest on that sum at 8% per annum and agreed costs of $2,000.00. That judgment debt has been fully paid and satisfied.

The third party claim

11. I turn to a statement of 30th April 1998 which the defendant was later to adopt as her evidence in chief in these proceedings and which I was to accept as conclusive as to fact.

12. Madam Har was survived by two known children called Law Siu Ling (Miss Law) and Law Ip Po (Mr. Law). The defendant having settled with the plaintiff its claim told Mr. Law that she was still willing to complete a purchase of the flat or otherwise settle her claim as long as there was to be a prompt grant of probate or letters of administration as would enable Madam Har's estate to pass title or otherwise settle. But then she lost touch. After that Sin Hua Bank Limited, the mortgagee in a mortgage registered against title to the flat, sold the flat in exercise of its power of sale by reason of default. The net proceeds of sale after payment of the mortgage debt were paid into Court by order of Mr. Registrar Betts of 2nd March 1998. This amount exceeds the defendant's claim.

13. Meanwhile to the defendant's knowledge and after due enquiry by her legal representatives no steps have yet been taken by Mr. Law, Miss Law or any other person to obtain a grant of probate or letters of administration in Madam Har's estate. By order of 14th August 1997 the official solicitor was appointed to represent the estate in these proceedings but that was expressly limited to the acceptance of service and that has been fulfilled.

14. I revert now to an affidavit of Tang Pui Shan of 16th October 1998. He is employed by the solicitors representing the defendant and has conduct of her case.

15. His affidavit reveals steps taken by his firm to pursue a grant of letters of administration of Madam Har's estate so that these proceedings could be taken to trial or otherwise resolved. Their efforts have been hampered by the fact that both Mr. Law and Miss Law are or have been undischarged bankrupts which has prevented their being entitled to be appointed administrators. Furthermore, attempts to seek their co-operation in putting themselves forward have, it seems, proved unsuccessful. Mr. Law is frequently out of Hong Kong in China where his present job takes him and letters sent to his various known addresses have not been answered. Miss Law cannot be traced. Neither, it seems, have expressed any interest at all, in the past and at present, in settling the mortgage, preserving the flat, defending the defendant's third party claim or taking any steps at all. Neither, it seems, are interested in pursuing a grant of administration of their mother's estate.

The trial

16. Against this background the defendant came before me on 10th February 1999 in pursuit of her claim under the third party proceedings.

17. The first matter for me to deal with was the name and description of the third party. The proceedings all along have described such entity as the personal representative(s) of the estate of Har Sio Ying deceased. As there was to date no such person or entity and, in light of those matters known to me, no prospect of an appointment, I acceded to Counsel's request to grant leave to amend the name and description to "The estate of Har Sio Ying, deceased".

18. The second matter was an application by Counsel to proceed under Order 15 rule 15 RHC in the absence of a person representing the estate.

19. In considering the exercise of my discretion I paid heed to the circumstances giving rise to these proceedings, the remoteness of prejudice associated with granting it, the efforts made by the defendant to trace the descendants of Madam Har and their lack of interest. I granted the application and proceeded with the trial of her claim.

20. I heard evidence from the defendant in which she adopted her statement of 30th April 1998, and itemised the quantum of her claim for relief.

21. I accept her evidence is correct and her case proved on a balance of probabilities.

22. Her claim is itemised as follows:

A refund of the following money paid to Madam Har, namely,

interest on $172,955.00 at judgment rate to date of judgment to be calculated; costs to be taxed.

She is, as I find, entitled to all that she claims, save that I shall fix the interest rate at 10% per annum.

Judgment shall be entered in her favour as follows:

23. Costs of these proceedings including the defence of the plaintiff's claim taxed if not agreed shall be to the defendant.

24. Pursuant to Order 22 rule 8(2) RHC I order payment of the judgment debt and costs as taxed to be paid out of the sum paid into Court under HCA 5478/89 by order of Mr. Registrar Betts of 2nd March 1998 to the defendant's solicitors.