YIP KIN WAH v. YIP FUNG TO

HCA 2067/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2067 OF 2011

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BETWEEN

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D E C I S I O N

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1.  This appeal is narrowly confined to only one request for further and better particulars of the defence and the costs before Mr Registrar Lung.

The background

2.  The parties are siblings. They hold the subject property (‘the property”) as joint owners.  There is no dispute that their mother provided all the purchase monies and the property has been leased out.  The plaintiff asks for account of 50% of the rental income retained by the defendant.  In view of the breakdown in relationship between the parties, the plaintiff also asks for an order for sale of the property pursuant to section 6 of the Partition Ordinance, Cap 352.

3.  The defendant contests the action on the ground that the mother had, sometime in 2006 shortly before her death, given “specific instructions” to the plaintiff, the defendant and their brother (“Keung”) that the beneficial interest in the property should belong to the 3 siblings in equal shares.  The defendant is only willing to account for 1/3 of the entitlement to the property to the plaintiff.  In resisting the claim for a sale under the Partition Ordinance, the defendant pleaded, in paragraph 10 of the defence:

“(ii) It is not the interest nor intention of two of the beneficiaries namely, the Defendant and Keung, to sell the Property to outsiders.” (underline added)

(iii) Provided that there be consent from Keung, the Defendant is prepared to acquire all that the interest estate right of the Plaintiff’s interest of and in the Property at market price, if agreeable.”

4.  In his request for further and better particulars of paragraph 10(ii) (“question 3”), the plaintiff asked the defendant to, amongst others, identify the “alleged interest” of the defendant and Keung in not selling the property to outsiders.

5.  The reply to question 3 was that the defendant was not obliged to plead further as all material facts have been clearly stated. 

6.  At the hearing before Mr Registrar Lung (“the hearing”), Mr Yeung, the solicitor for the defendant, informed the court that he was not saying that there was hardship. The “interest” meant “wish”.  There was no interest ab inito. Effectively, he says that in paragraph 10(ii), the defendant was pleading something negative (“not the interest”), so particulars could not be given of something affirmative.  

7.  In paragraphs 4 and 5 of his Reasons for Decision (“the Decision”), Mr Registrar Lung stated:

“4. Mr Yeung acting for the defendant now tells the court that the particulars requested for paragraph 10(ii) of the defence is that the defendant has no intention of selling the property and that is all. That is equivalent to paragraph 10(iii) of the defence.

5. Mr Kwong, Counsel for the plaintiff says that he could take that as the reason but the defendant should state it clearly that is her reason.”

8.  Mr Registrar Lung then ordered the defendant to provide the answer to question 3 by identifying the meaning of “interest” as pleaded in paragraph 10(ii).  He also ordered the defendant to pay costs of $23,000 to the plaintiff.

9.  The defendant now appeals against the Registrar’s order.

The legal principles for ordering provision of further and better particulars

10.  Properly particularized leadings are to inform the other side of the nature of the case that they have to meet: Hong Kong Civil Procedure 2012, Vol 1, para 18/12/1.  The precise degree of particularity shall be as is reasonable having regard to the circumstances and the nature of the facts alleged: Jacob and Goldrein on Pleadings: principles and practice, 1990, chapter 10, at page 166.  No order for provision of further and better particulars shall be made unless the court is of the opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs: Order 18, rule 12(3B). 

11.  If the traverse is a mere denial, even though of a negative allegation, and it is not possible to read into it an affirmative allegation, particulars will be refused: Jacob and Goldrein on Pleadings: principles and practice, 1990, chapter 10, at page 173. 

Application of the principles

12.  In this appeal, Mr Yip, counsel for the defendant, maintains the same stance as Mr Yeung.  He submits that the sentence structure of paragraph 10(ii) of the defence clearly shows that the word “interest” carries the meaning of “wish”.  It ought to be understood as its ordinary English meaning of “wish” or “being keen on something”.  Nothing could or should be particularized therefrom.  He submits that the application for particulars should not have been made in the first place.

13.  The dictionary meaning of the word “interest” means “having a right”, “an advantage” and “benefit”: Shorter Oxford English Dictionary (Vol I), 5^th ed, page 1400.  Mr Yip has not produced other definitions that meant “wish”. 

14.  I agree with the Registrar that it was appropriate for the defendant to state that “interest” meant “wish”, if that was the case.  As was apparent from the transcript, the learned Registrar clearly considered that clarification to be needed although he made clear that he was not barring the defendant from giving any further answer to question 3 on second thought.  (See page 22K of the transcript.)

15.  Further, paragraph 10(ii) was in reply to the plaintiff’s plea on sale of the property under the Partition Ordinance.  Mr Kwong, counsel for the plaintiff, explained the basis for seeking further and better particulars as follows.  In Liu Chung Hang & others v Liu Chung Leung Alfred, HCMP 1255/2007, 19 December 2007, Recorder Benjamin Yu SC, after reviewing a line of authorities, adopted the following propositions in the exercise of his discretion under section 6 of the Partition Ordinance:

“15(1) A co-owner has a basic right to rid himself of the shackles of co-ownership and ask for an order for partition or sale if he has no other remedy.

(2) When it is impracticable to make an order for partition, the court should make an order for sale unless it is persuaded (the burden being on the opposing co-owner) that such an order will not be beneficial to all the co-owners, or that it will result in very great hardship to one co-owner.

(3)  Whether an order for sale is beneficial to all the co-owners is not determined by the dissent of the opposing co-owners or the assertion by them that it is not beneficial.  It has to be determined by the court objectively.”

16.  In view of these principles, Mr Kwong submits that the burden is on the defendant to show great hardship if she were to resist the sale.  In view of the plea in paragraph 10(ii), the alleged “interest” (whether financial, emotional or otherwise) should be particularized and properly identified.  This will enable the plaintiff to decide what evidence to adduce for trial. 

17.  I agree.  On a fair reading of paragraph 10(ii) in context, one may take the view that the defendant’s plea was that it was not “to her benefit” to sell the property to outsiders.  The plea was not just a negative averment but the defendant appeared to be asserting some interest to protect, which might affect the court’s discretion in refusing a sale under section 6 of the Partition Ordinance.  Not only was the request relevant, but it was also necessary and will save costs if the defendant were to state her case clearly before trial, avoid surprises and enable the other side to prepare the necessary evidence in rebuttal.

18.  Even if the defendant is not pleading hardship, as confirmed by Mr Yip, there was no reason why the defendant should not clarify her meaning as required by the Registrar.  The appeal as regards question 3 must be dismissed.

Costs of the hearing before the Registrar

19.  Mr Yip submits that even if the defendant should fail in this appeal, she should get costs of and occasioned by the plaintiff’s summons for further and better particulars (excluding the costs of the appeal). The defendant had answered the requests on 29 March 2012 after the summons was issued.  The plaintiff only abandoned the first 2 questions of the request at the hearing on 15 May 2012.  Insofar as question 2 was concerned, it was never the defendant’s case that there was a common intention constructive trust.

20.  With regard to an appeal against a master’s decision on costs, the court has consistently applied the principle in Hoddle v CCF Construction Ltd [1992] 2 All ER 550,namely, that unless the appellant can show that the master demonstrably erred in the exercise of his discretion in the order that he made; or that the master took into account matters that he should not have taken into account; or failed to take into account matters that he should have taken into account, the judge in chambers will not disturb his order.  For Hong Kong cases applying this principle, see Lam Sik Shi v Lam Sik Ying, HCMP 1464/2004, 16 February 2006, Deputy Judge Carlson, at paragraph 3; Paul Y-ITC Construction Ltd vKin Shing Co Ltd [1999] 1 HKC 511, at page 515A-C.

21.  In paragraph 8 of his Decision, the learned Registrar explained that he was not concerned with the agreement between the parties outside the court on that day; the fact remained that when counsel explained to him the reason for not pursuing the first 2 requests, Mr Yeung did not raise objection. 

22.  With respect to the Registrar, I fail to see why it was necessary for Mr Yeung to raise objection when the parties had agreed that it was not necessary to go into the 2 requests.  It was also, in my view, an error in principle, not to take into account the circumstances surrounding the request and the parties’ agreement outside the court as they formed part of the conduct that might affect the exercise of the discretion under Order 62, rule 5.  Further, costs to follow the event is but one option in an interlocutory application: Order 62, rule 2A.

23.  The plaintiff has served a request by letter in February 2012.  It was not answered.  The summons was justifiably issued.  The defendant has purportedly answered all 3 requests before the call-over hearing before Master de Souza.  It was in response to the plaintiff’s skeleton submission that the defendant confirmed that she was not relying on common intention constructive trust.  Her case has not changed whether in the defence or in the particulars she supplied under the first 2 questions, which formed the main bone of contention of the plaintiff.  Substantial costs on preparing for the hearing would have been saved had the plaintiff’s abandonment come earlier.  The parties’ agreement reduced the hearing time.  Had the hearing been concerned with only those 2 questions, the defendant might well have got costs in her favour.

24.  On the other hand, the fact remained that the hearing was inevitable because question 3 was contested, although on a much reduced scale.  The ruling of the Registrar is upheld in this appeal. 

25.  Taking all circumstances into account, I exercise the discretion afresh and order each party to bear his or her own costs.

Costs of this appeal

26.  The defendant has won on the appeal on costs.  However, the appeal as regards question 3 is totally unmeritorious.  Whether the plaintiff had sought clarification of the defendant’s case by a request for further and better particulars or served an interrogatory, it would have taken the defendant no more than one line in a solicitor’s letter (costing about $2,000 for own costs and party-and-party costs) to confirm that “interest” meant “wish”. Alternatively, she could have proposed to amend the defence by deleting the words “interest nor” in paragraph 10(ii) (again, costing hardly anything more than $2,000).  In contrast, the Registrar’s focused approach on ascertaining the defendant’s meaning and confirmation with Mr Kwong that that was what the plaintiff required showed common sense and practicality.

27.  The defendant’s conduct of her case in this respect not only lacks common sense but also flies in the face of the underlying objectives in Order 1A, rule 1 of the Rules of the High Court.  Her resistance to question 3 was not cost-effective.  It prevented the case from being dealt with expeditiously as is reasonably practicable.  Resisting question 3 and the resultant appeal caused the proceedings to be delayed by 5 months. The costs incurred were wholly disproportionate to the procedural needs, which could have been dealt with by a simple letter.  The court’s time was also wasted.  Costs on indemnity basis would have been justified if she has not been successful on the appeal on costs.

28.  Taking all circumstances into account, I make an order for the parties to bear his/her own costs of the appeal.

Conclusion

29.  I dismiss the appeal to the extent that paragraph 1 of the Registrar’s order shall stand.  I allow the appeal to the extent that the costs order is set aside and replaced by an order for each party to bear his/her own costs of the summons.  I also make an order nisi that each party bears his/her own costs of this appeal.