|
CACV 36/2020
[2021] HKCA 476
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO 36 OF 2020
(ON APPEAL FROM HCA 1637/2015)
____________________
| BETWEEN |
YUEN KWOK LEUNG ERIC(袁國樑) and LAI SAU NGAR(賴秀雅) |
Plaintiffs |
|
and |
|
|
MING CHOR PAO(閔楚寶)
by her guardian ad litem
CHU KWOK KEE KOOKIE |
1st Defendant |
|
CHU KWOK BING(朱國彬) |
2nd Defendant |
____________________
(BY ORIGINATING WRIT)
AND
| BETWEEN |
|
|
|
YUEN KWOK LEUNG ERIC(袁國樑) and LAI SAU NGAR(賴秀雅) |
Plaintiffs |
|
and |
|
|
CHU KWOK KEE KOOKIE,
the Personal Representative of
MING CHOR PAO (閔楚寶),
deceased (“the Deceased”) |
1st Defendant |
|
CHU KWOK BING(朱國彬) |
2nd Defendant |
__________________________
(By Order to Carry On of Master S Lo dated 2 November 2017)
Before: Hon Lam VP and Chu JA in Court
Dates of the Written Submissions: 10, 24 February 2021, and 3 March 2021
Date of Judgment: 19 April 2021
________________________
JUDGMENT
________________________
Hon Lam VP (giving the Judgment of the Court):
1. This appeal was brought by the 2nd Defendant against the judgment of Deputy High Court Judge Ambrose Ho SC (“the Judge”) of 30 December 2019 in the trial in HCA 1637 of 2015. The trial concerned a sale and purchase agreement of 27 March 2015 in respect of a property at Mei Foo Sun Chuen owned by Ming Chor Pao (“Madam Ming”). The Plaintiffs were the purchasers under the agreement. The vendor was Madam Ming though the agreement was made by the 2nd Defendant (one of Madam Ming’s son) on her behalf pursuant to an Enduring Power of Attorney (“the EPA”) of 15 January 2014.
2. The EPA was subject to dispute by another son of Madam Ming, Chu Kwok Kee Kookie (“Kookie”) who had commenced legal proceedings, including mental health proceedings, in respect of the management of the estate of Madam Ming.
3. In the conveyancing process, solicitors for the Plaintiffs raised requisitions regarding the development in such legal proceedings. It was the contention of the Plaintiffs that those requisitions were not properly answered and therefore good title had not been shown. They therefore sought to rescind the agreement and asked for the return of the deposit paid under the agreement. The writ was issued on 20 July 2015.
4. Long before the trial, Madam Ming passed away on 21 November 2016. By an order of Master Lo on 2 November 2017, Kookie was appointed to represent the estate of Madam Ming in the action under Order 15 Rule 7 of the Rules of the High Court. The title to the action was amended accordingly.
5. The 2nd Defendant appealed against the order of Master Lo. His appeal was dismissed by B Chu J on 20 March 2018. The 2nd Defendant did not appeal further. Thus, by the time the action came before the Judge, Kookie was the only person who was authorized to conduct the case on behalf of the estate of Madam Ming.
6. The Plaintiffs had an alternative claim in the action against the 2nd Defendant based on warranty of authority.
7. The 2nd Defendant advanced a counterclaim seeking:
(a) “certification” that the EPA was valid; and
(b) Enforcement of the agreement by way of forfeiture of the deposit and claim of damages.
8. The 2nd Defendant also referred to himself as the sole and legal and beneficiary of the last Will of Madam Ming.
9. The Defence and Counterclaim was filed on 5 November 2015, before the death of Madam Ming. It can immediately be said that the 2nd Defendant could not seek any determination in the context of HCA 1637 of 2015 on matters which could only be properly canvassed in a probate action commenced after the demise of Madam Ming. It appears that Madam Ming had apparently made 3 wills at different times. There was indeed a probate action commenced by Kookie subsequent to the death of Madam Ming challenging 2 purported wills of Madam Ming. We have not been informed of the progress of the probate action. As explained further below, the development in the probate action could not take the 2nd Defendant’s case in the present appeal any further.
10. On the second day of trial, Kookie and the Plaintiffs reached agreement to settle the Plaintiffs’ claim. The development at the trial was summarized by the Judge at [12] to [13] of the judgment of 30 December 2019:
“ 12. On the second day of the trial, the plaintiffs’ counsel (Miss Astina Au) submitted an application made jointly with KKK Chu seeking judgment to be entered by consent against Madam Ming’s Estate, among other things, for rescission of the Agreement, and that Madam Ming’s Estate should return the deposits and part payment to the plaintiffs, and reimburse the plaintiffs for the expenses incurred in the transaction with interest.
13. As a result of the agreement reached between the plaintiffs and KKK Chu, the plaintiffs formally withdrew their claim against KB Chu. However, KB Chu insisted that the transaction was validly entered into by use of the EPA. He would pursue his counterclaim against the plaintiffs to enforce performance of the Agreement and to compel the plaintiffs to make payment of the balance of the purchase price. He apparently did not realise that his claim for forfeiture of the deposits would be an impediment to specific performance. Be that as it may, no issue was taken by the plaintiffs and the hearing proceeded to deal with the merits of his counterclaim for specific performance. This Court also considers it more appropriate to hear KB Chu’s counterclaim before pronouncing judgment on the Consent Summons between the plaintiffs and KKK Chu in view of the fact certain declaratory reliefs are being sought therein.”
11. The trial continued to deal with the 2nd Defendant’s counterclaim. In the end, the Judge held that the 2nd Defendant did not have locus to pursue the counterclaim regarding the enforcement of the agreement. Regarding the validity of the EPA, the Judge held at [6]:
“ … the medical evidence presented in this trial would not be sufficient to enable this Court to come to a definitive view on Madam Ming’s mental capacity at the relevant time, and in any event the resolution of the dispute with the plaintiffs in this Action does not require this Court to make a specific finding as to Madam Ming’s mental capacity, KB Chu has nevertheless persisted in his complaint.”
12. The Judge also held that the requisitions of the Plaintiffs had not been adequately answered by the solicitors acting for Madam Ming in the conveyancing transaction and no good title had been shown nor could such title be given on the date for completion: see [25] to [52] of the judgment.
13. The Judge gave the following judgment as between the Plaintiffs and the 2nd Defendant at [56],
“(1) Leave be granted to the plaintiffs to discontinue its claim against the 2nd defendant;
(2) The 2nd defendant’s counterclaim is dismissed:
(3) An order nisi that there be no order as to costs in respect of the plaintiffs’ claim;
(4) An order nisi that the plaintiffs’ costs in respect of the 2nd defendant’s counterclaim be borne by the 2nd defendant on a party-and-party basis.”
14. The Notice of Appeal of the 2nd Defendant was filed and served on 22 January 2020. Notwithstanding so, he had so far failed to comply with the requirement in Order 59 Rule 5(1)(a) to file a copy of the sealed judgment within 7 days.
15. According to the evidence, the sealed judgment of the Judge had been served on the 2nd Defendant on 4 May 2020. The Registrar had also directed that he could lodge the sealed judgment by post. Despite repeated directions and extensions of time granted by the Registrar of Civil Appeals, the 2nd Defendant still failed to do so. Such failure precluded the Registrar from setting down the appeal and hampered the progress of the appeal.
16. In light of the long delay of the 2nd Defendant, the Plaintiffs took out a summons on 12 November 2020 seeking to strike out the appeal. From the affirmation of the solicitor for the Plaintiffs in support of the summons and the written submissions lodged, the grounds for the striking out are,
(a) Failure to comply with Order 59 Rule 5(1)(a); and
(b) Lack of merit in the appeal in view of lack of locus on the part of the 2nd Defendant to represent the estate of Madam Ming.
17. Solicitors acting for the Plaintiffs and the 2nd Defendant lodged written submissions on the summons.
18. Having read the papers, we are satisfied that the application is suitable for determination on the papers.
19. In respect of the failure to comply with Order 59 Rule 5(1)(a), the 2nd Defendant said the delay was due to the on-going COVID-19 pandemic and the quarantine in place. According to his emails to the solicitors for the Plaintiffs and his submissions, he has been residing in the Mainland since the outbreak. But he had been following the progress in the appeal and had responded to letters from the solicitors for the Plaintiff and lodged submissions to oppose the summons.
20. However, his residence in the Mainland and the quarantine cannot be sufficient to exonerate him for his failure to comply with the directions of the Registrar of Civil Appeals in light of the permission granted to him to lodge the sealed judgment by post. He was able to comply with the directions for lodging submissions in the summons by sending the same to the court by post. If he has any serious intention to prosecute the appeal, he should have complied with his obligation by lodging the sealed judgment by post. His failure to do so is evidence of his failure to prosecute the appeal with due diligence since, as mentioned, such failure has hampered the progress of the appeal.
21. If this default on the part of the 2nd Defendant were the only ground for striking out, we would have made an unless order to give him a last opportunity to comply.
22. However, this is not the only ground. Parties have fully canvassed their respective case on locus in their written submissions.
23. Though this Court will not lightly entertain a striking out application based on arguments on the merit of an appeal (since this would escalate the costs and delay the resolution of the appeal if the application is not successful), we would do so in plain and obvious cases where the appeals could readily be seen as frivolous, vexatious or an abuse of process: see Lam Pak Cheung v Lin Zhen Lue [2009] 1 HKLRD 35; Competition Commission v W Hing Construction Co Ltd [2020] HKCA 930.
24. The issue of locus is the core issue in this appeal. It is very clear and plain to us that the Judge was correct in holding that the 2nd Defendant had no locus to pursue any counterclaim based on the agreement on behalf of Madam Ming after her demise.
25. It is clear and established law that upon the demise of a donor of a EPA the donee ceased to have authority to act for the deceased donor. In addition to the authorities cited by the Judge at [23] of the judgment, see also the recent judgment of this Court in FNG v BCJ [2021] HKCA 160 at [34].
26. We also agree with the Judge’s clear explanation at [20] to [21] of the judgment on the effect of the representation order of Master Lo which was upheld by B Chu J. In the absence of any appeal against the judgment of B Chu J, it does not lie in the mouth of the 2nd Defendant to challenge that order. The doctrine of issue estoppel barred him from raising such challenge and his attempt to do so constituted an abuse of process.
27. The procedure under Order 15 Rule 7 is to provide for a mechanism to address the representation of a deceased person’s estate in pending litigation when no probate has been granted. The person so appointed has full authority to act for the estate as far as the conduct of the litigation (including its settlement) is concerned.
28. Thus, the estate of Madam Ming was duly represented by Kookie at the trial and the settlement reached between Kookie and the Plaintiffs bound the estate. The 2nd Defendant had no locus to dispute such settlement with the Plaintiffs.
29. The 2nd Defendant’s claim to be the sole executor and beneficiary under the last will of Madam Ming has to be resolved in the probate action. It cannot be a valid ground of appeal in this action when no probate had been granted at the time of the trial before the Judge.
30. As the Judge rightly pointed out, the dispute in this action between the Plaintiffs and the Defendants should focus on the conveyancing process and whether Madam Ming’s solicitors had answered the requisitions adequately and showed a good title before completion. The resolution of the validity of the EPA depends upon assessment of the evidence of the medical experts which was not before the court.
31. In any event, since the dispute had not been resolved at the conveyancing stage, it could not advance the position of Madam Ming (and the 2nd Defendant) vis-à-vis the Plaintiffs in respect of the rescission of the agreement for failure to answer requisition adequately and failure to show good title. It is trite that a vendor who has a good title but failed to show good title by answering requisitions is still in breach of the agreement. A purchaser can still rescind in such circumstances: see Active Keen Industries Ltd v Fok Chi Keong [1994] 1 HKLR 396.
32. For these reasons, it is plain and obvious to us that the 2nd Defendant’s appeal is frivolous and vexatious and an abuse of process. We order that the appeal be struck out and dismissed accordingly.
33. We also make an order that the 2nd Defendant shall pay the costs of the summons. Having considered the statement of costs of the Plaintiffs, after deducting some items which we consider to be excessive, we fix such costs at $90,000.
(M H Lam)
Vice President |
(Carlye Chu)
Justice of Appeal |
The plaintiffs represented by Fred Kan & Co
The 2nd defendant acting in person
|