YEUNG BEE LEE, BILLY v. HONG KONG HOUSING AUTHORITY

HCMP 6606/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 6606 OF 1999

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D E C I S I O N

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INTRODUCTION

1. I have before me three summonses. One was taken out on behalf of the Hong Kong Housing Authority seeking a stay of the proceedings in HCMP 6606 of 1999, instituted by the Plaintiff, Mr Billy Yeung. The second one was taken out on behalf of the Government of the Hong Kong SAR seeking to strike out the Plaintiff's, Mr Billy Yeung's, statement of claim in Action No. 1425 of 2001. The third one was taken out by Mr Yeung seeking to set aside a settlement agreement ("the Settlement Agreement") made in connection with the proceedings in HCMP 6606 of 1999. There were two other summonses issued by Mr Yeung, which were disposed of by consent. Both the Housing Authority and the Government are represented by Messrs Simmons & Simmons ("S&S"). Mr Yeung appeared in person.

Background

2. These proceedings arose out of the Government's action in the Rennie's Mill clearance in 1996 in connection with the development of Tseung Kwan O. A total of 82 residents of Rennie's Mill sought judicial review of the validity of the notices to quit issued by the Housing Authority against the residents, via HCMP 965, 1927 and 1972 of 1996. The three applications were consolidated and heard by Sears J ("the 1996 proceedings"). Mr Yeung was not a party to the consolidated proceedings, however, he was a resident of Rennie's Mill at the material time when the notices to quit were issued. He assisted one of the applicants and attended court throughout the proceedings. In his judgment of 27 June 1996, Sears J found in favour of the applicants that they were entitled to damages but he did not assess those damages.

3. On 12 January 1998, Mr Yeung issued an originating summons under HCMP 114 of 1998 seeking to be joined with the applicants in the 1996 proceedings in a hearing fixed on 9 March 1998 on assessment of damages in respect of his cottage in Rennie's Mill. On 18 March 1998, Sears J ordered that all summonses filed subsequent to the commencement of the hearing on 9 March 1998 be treated as new applicants in the Judicial Review under HCMP 114 of 1998, i.e. Mr Yeung's summons and that costs will be borne by any new applicants who are found to have wasted court's time and such costs may be deducted from any compensation awarded. On 19 March 1998, Sears J gave a formula for assessing damages which provided also that where there were more than one household member in a cottage eligible for compensation, the damages must be divided equally between them ("the Sears' formula").

4. The Originating Summons of Mr Yeung and the other applicants in the consolidated proceedings under HCMP 114 of 1998 were heard on 16 September 1998. His claim for compensation of $25 million for the loss of his cottage was dismissed by Sears J as absurd and his valuation as a nonsense. Sears J awarded Mr Yeung $593,473.42 less the Housing Authority's costs of $60,000. The net amount payable to Mr Yeung was therefore $533,473.42. The amount of $593,473.42 represented one third of the total amount of compensation of $1,780,420.26 determined in accordance with the Sears' formula as the Housing Authority was of the opinion that there were two other eligible household members in respect of that cottage, i.e. Mr Yeung's brother and sister. That opinion, the Housing Authority subsequently admitted, was incorrect.

5. Mr Yeung and some applicants appealed against the order of Sears J on issues of eligibility and quantum, but their appeals were dismissed by the Court of Appeal on 27 September 1999. Mr Yeung's appeal was CACV 282/1998.

6. On 26 October 1999, Mr Yeung issued an originating summons under HCMP 6606/1999 for an order, inter alia, that he should be paid not just his share of the compensation but the full share of the compensation. Having conducted further investigation, the Housing Authority was satisfied that Mr Yeung's brother and sister were not qualified under the Sears' formula. After adjusting for the life expectancy of Mr Yeung as the single household member, the amount of compensation under the formula should be $1,774,442.48. In the meantime, the net amount of $533,473.42 was paid to Mr Yeung on 18 November 1999.

7. On 16 August 2000, under the auspices of his solicitor, Mr Yeung and the Housing Authority entered into and signed the Settlement Agreement whereby the Housing Authority agreed to pay Mr Yeung $1,180,969.06 and Mr Yeung agreed to withdraw his action in HCMP 6606/1999 and undertook to waive all future claims he might have against the Housing Authority and the Government in respect of the Rennie's Mill clearance ("the Undertaking"). This is the agreement which Mr Yeung seeks to set aside by the third summons.

8. Despite having signed the Undertaking and having been paid the said sum of $1,180,969.06 on 24 August 2000, Mr Yeung did not withdraw the action under HCMP 6606/1999. Instead, he filed a Notice to Act In Person on 28 August 2000 and a Notice of Intention to Proceed on 24 May 2001. The Housing Authority hence seeks a permanent stay of these proceedings in the first summons.

9. In addition, Mr Yeung instituted another action, HCA 1425/2001, against the Government for damages in respect of his loss in the Rennie's Mill clearance. By the second summons, the Government seeks to have this statement of claim struck out on the ground that the action is res judicata.

10. I think it convenient to consider these summonses in the following order: Mr Yeung's application to set aside the Settlement Agreement in HCMP 6606/1999 (the third summons), the Housing Authority's application for staying HCMP 6606/1999 (the first summons) and the Government's application to strike out Mr Yeung's statement of claim in HCA 1425/2001 (the second summons).

SETTING ASIDE THE SETTLEMENT AGREEMENT (HCMP 6606/1999)

11. By this summons, Mr Yeung seeks to set aside the Settlement Agreement dated 16 August 2000 and the Undertaking dated 24 August 2000 on the ground that the Settlement Agreement was not supported by consideration and was obtained by fraud, concealment of important facts and duress.

Whether costs order under HCMP 114/1998 was binding

12. Mr Yeung submits that his action in HCMP 6606/1999 is not based on his action in HCMP 114 of 1998. He was not a party to the 1996 proceedings, but according to the Sears' formula and on the basis that he was the only household member in respect of his cottage, he would be entitled to the entire amount of $1,774,442.48 and not $533,473.42, which was one third of the compensation less $60,000 costs, as was determined by Sears J in HCMP 114 of 1998.

13. He said that the original HCMP 114/1998 was instituted by him and he paid the appropriate filing fee. However on 19 March 1998, Sears J ordered that all applicants instituting action after 9 March 1998 shall be treated as new applicants of HCMP 114/1998 to the judicial review proceedings. The Court of Appeal held at page 16 that this is an incurable irregularity as Sears J had no jurisdiction to entertain public law proceedings instituted by an applicant otherwise than in accordance with provisions of Order 53 of the Rules of the High Court. Mr Yeung submits that the consolidated proceedings of HCMP 114/1998 as ordered by Sears J was not the same as the original proceedings of HCMP 114/1998 which he instituted. Hence he submits that he was not a party to the consolidated proceedings (or "order proceedings" in his own words), or the subsequent appeal, which he says are not binding on him. The purpose is apparent. He wishes to avoid the costs order made against him by Sears J in HCMP 114/1998.

14. I am unable to agree with his views. He instituted proceedings under HCMP 114/1998 which was consolidated with other applications. He was heard before Sears J who ordered compensation in his favour but penalised him in costs in view of his absurd claim. He appealed and was heard before the Court of Appeal. Despite the Court of Appeal found that Sears J had no jurisdiction to entertain the public law proceedings and to award compensation as he did, his judgment was not disturbed while the appellants', including Mr Yeung's, appeals were dismissed. He can hardly argue that he was not a party to HCMP 114/1998 or to his appeal under CACV 282/1998. Thus Sear J's award of compensation in his favour is binding on the Housing Authority which did not appeal, while the costs order against Mr Yeung is binding on him as his appeal was dismissed.

Consideration

15. Mr Yeung submits that the Settlement Agreement is not supported by any consideration. His argument is based on the two judgements of Sears J in the 1996 proceedings and the Housing Authority's willingness to adopt the Sears' formula in determining eligibility and quantum in respect of residents, such as Mr Yeung, who were not applicants in the 1996 proceedings. He submits that on the above basis, he was entitled as of right to the full amount of compensation and the Housing Authority could not by agreeing to give him what he was entitled as the consideration for his entering into the Settlement Agreement.

16. It should be noted that the Housing Authority's willingness to adopt the Sears' formula is not a legal obligation. In fact, the Court of Appeal concluded at page 16 K to Q as follows:

"The judge held (correctly) that all the notices to quit of which the applicants had complained were "valid" (see his judgment reported at [1996] 2 HKLR 293, at p.301I). So there was no peg on which he could properly hang any applicant's entitlement to "damages". There was no breach of contract or tortious behaviour by the Hong Kong Housing Authority here which could have justified an award of "damages" in these public law proceedings. His order of 27 June 1996 was accordingly misconceived and the present appellants cannot rely on it, as they must do, in order to found their claims to monetary compensation, or as the case may be, to greater monetary compensation. Insofar as many of the applicants originally before the judge have recovered compensation, they were fortunate, in that, although the judge's order was plainly wrong, the Hong Kong Housing Authority (no doubt for administrative and political reasons, and mindful of the fact that it was the taxpayer who would foot the bill anyway) chose not to appeal against it."

Thus in effect, the Court of Appeal was saying that none of the applicants were entitled to any compensation at law. Mr Yeung received one third of the compensation under the Sears' formula. According to the Court of Appeal, he was fortunate because the Housing Authority chose not to appeal against a decision which was wrong in law. As for the payment of the two-thirds under the Sears' formula, it never formed part of the judgment of Sears J. Thus, there was no legal obligation on the part of the Housing Authority to pay the two-thirds to Mr Yeung as it was not a judgment sum, even though that amount would have been the appropriate amount payable under the Sears' formula. But for the Settlement Agreement, the Housing Authority's payment of the two-thirds to Mr Yeung would have been ex-gratia in nature, like those payments made to the residents who had not instituted legal proceedings. There was certainly no legal obligation to pay anything over and above the one-third he had received. Hence, the promise to pay the two-thirds was good consideration.

17. Mr Yeung initiated and entered into negotiations with the Housing Authority under the auspices of his solicitors and reached agreement in terms of Clause 3.1 which provides as follows:

"Upon the execution of this Agreement, the Housing Authority will pay Mr Yeung the sum of HK$1,180,969.06, being the balance of the Compensation after deduction of HK$533,473.42 already collected by him on 18 November 1999 and HK$60,000.00 being the legal costs as ordered by the Court to be paid by Mr Yeung to the Housing Authority."

On the above analysis, there was no legal obligation on the part of the Housing Authority to pay the sum of $1,180,969.06 in law. Thus, the promise to pay the said sum was the price he agreed which constituted the consideration moving from the Housing Authority to secure Mr Yeung's promise to provide the Undertaking and to withdraw the proceedings.

18. Furthermore, while a promise to pay what one is obliged to pay may not be sufficient to discharge the obligation to pay, it is good consideration in support of an agreement to withdraw or to compromise legal proceedings. A promise to pay what is in dispute and to bring a dispute to an agreed conclusion without the other party having to incur time and costs of the legal proceedings and without having to run the risk of uncertainties of litigation must be good consideration to support the undertaking by the other party to withhold proceedings pending such payment and to withdraw or to discontinue proceedings altogether upon such payment, which would in any event discharge the obligation to pay being sued upon. Thus, even assuming that Mr Yeung were entitled to the full compensation under the Sears' formula, the promise to pay him the full compensation under that formula, less the amount he has received and the costs order made against him under HCMP 114/1998 in order to avoid the need for litigation in HCMP 6606/1999 constituted good consideration for the Settlement Agreement.

Fraud, concealment and duress

19. Mr Yeung alleges that the Settlement Agreement was made as a result of fraud, concealment, duress and "hidden power". In a nutshell, he alleges that all the counsel and solicitors he engaged formed a massive conspiracy with those of the Housing Authority to cheat him out of his compensation. He described in his affirmations, particularly the fourth one, the pressure he had from those acting for him and also the financial pressure he was subject to. He described how he came to be introduced to his first solicitors, Messrs Robertson Double & Lee ("RD&L"), through an Urban Councillor. RD&L instructed a senior and junior counsel and property surveyor for him. He was legally represented by RD&L in HCMP 114/1998 until February 1998 when he considered the legal fees unreasonable. His counsel, Mr Chiu, then recommended another firm of solicitors, Messrs Au Kong & Tang ("AK&T") to him. He was therefore legally represented before Sears J in the HCMP 114/1998 in March 1998. Again, he considered the legal fees excessive. At one stage, his solicitor suggested to him that his counsel, Mr Chiu, was not competent. He informed Mr Chiu who then suggested him to terminate the services of AK&T, which he did. Mr Chiu then introduced Messrs Yip Tse & Tang to him for preparing the appeal. Later, he decided to join with the other applicants in prosecuting the appeal. Again, Mr Chiu introduced another firm of solicitors to him and the appellants. Then following a split of opinion between him and the other appellants, the other appellants changed their solicitors and Mr Yeung was left unrepresented at the appeal.

20. After the Court of Appeal dismissed the appeal, including Mr Yeung's, the Housing Authority started making payments to the residents in accordance with the Sears' formula. As the Housing Authority considered that there were three household members in Mr Yeung's cottage, he was only offered one-third of the full compensation. His request for the full compensation was ignored by the Housing Authority and he started the proceedings under HCMP 6606/1999. Through the introduction of his friend, he was introduced to Mr Yu of Messrs Danny KH Yu & Co ("DY"). After seeking advice from Mr Chiu, he appointed DY as his solicitors.

21. On 16 May 2000, the parties attended before Deputy Judge Li at a call over hearing. On that occasion, Mr Gall of S&S pointed out to Mr Yu that according to the Court of Appeal decision the residents never had any valid claim to damages and that Mr Yeung was fortunate to have been awarded $593,473.42. After that Mr Yeung had a conference with Mr Yu during which Mr Yu suggested him to withdraw the case or he might risk losing the action and having to pay huge amount of legal costs. He then arranged a meeting with Mr Yu and Mr Chiu whom he had great confidence. At the meeting, Mr Chiu confirmed his agreement with the views of Mr Yu and suggested Mr Yeung to approach the Housing Authority for settlement.

22. On 26 May 2000, at Mr Yeung's instruction, DY wrote to S&S proposing that the parties refrain from fixing a date for hearing of HCMP 6606/1999 so that Mr Yeung could approach the Housing Authority to discuss the terms of settlement. As Mr Yeung did not approach the Housing Authority, S&S wrote to DY giving Mr Yeung until 3:00 pm on 19 June 2000 to respond so that either the settlement negotiation could take place or the matter could proceed to court. Then on 22 June 2000, DY wrote to S&S with instructions to offer settlement on terms which now form the terms of the Settlement Agreement. On 8 August 2000, S&S wrote to DY enclosing a copy of the proposed Settlement Agreement. On the following day, DY confirmed that Mr Yeung accepted the terms of the Settlement Agreement and would contact the Housing Authority to arrange signing the Settlement Agreement and Undertaking. Subsequently, on 16 August 2000, Mr Yeung signed the Settlement Agreement in the presence of his solicitor, Mr Yu. Upon signing the Undertaking on 24 August 2000, Mr Yeung was paid the sum of $1,180,969.06 in accordance with the Settlement Agreement .

23. Mr Yeung had by then incurred about $1 million in legal fees and was in debt. He was under some pressure which could well be very great pressure in view of the very high target he had set for himself, $25 million and his financial constraints. This is the usual pressure which litigants must face in any litigation. In addition, there was also pressure coming from the weakness of his own case. The Court of Appeal judgment clearly indicates that the residents in Rennie's Mill had no valid claim in law. His counsel, Mr Chiu and his solicitor, Mr Yu, to whom he confided, rightly agreed with that view. There was nothing wrong in Mr Gall pointing out to him the weakness of his case in order to persuade him to withdraw the action or to come to terms. Weakness of his own case and his financial pressure could not be duress, let alone they did not originate from the Housing Authority. That S&S imposed a time limit for Mr Yeung to come to terms could not be regarded as improper pressure or duress, as reasonable time had been allowed for him to consider his position. After all, he was legally represented and had the liberty to choose not to settle.

24. Mr Yeung is unable to show any evidence of fraud or concealment of important or material facts or misrepresentation which induced him into signing the Settlement Agreement or the Undertaking. All along, he took advice from his trusted counsel and solicitor. With his consent, his solicitor initiated the negotiation process. He entered into the Settlement Agreement on proper legal advice due to the weakness of his case. There was no impropriety on the part of S&S in the conduct of the settlement. There is no evidence to suggest those advising Mr Yeung had conspired with S&S. His allegation that those acting for him had colluded with S&S is bizarre and unfounded.

25. The above events show that it was after having recognised the weakness of his case, Mr Yeung's solicitor and counsel advised a settlement and with his consent initiated the negotiation process with S&S. Mr Yeung offered the terms of settlement. The price he asked for was $1,180,969.06 which was clearly stated as "being the balance of the Compensation after deduction of HK$533,473.32 already collected by him on 18 November 1999 and HK$60,000.00 being the legal costs as ordered by the Court to be paid by Mr Yeung to the Housing Authority." The deduction of the costs formed part of the package and was the price he offered and accepted by the Housing Authority. That was the price agreed under the agreement.

26. I have not the slightest doubt that the Settlement Agreement was entered into out of his own free will and upon proper legal advice. The agreement was fully supported by good consideration and had not been vitiated by fraud, concealment or duress or any other vitiating factors. It is a valid and binding agreement. It has been duly and wholly performed by the Housing Authority upon payment of the sum of $1,180,969.06 in accordance with the terms of the agreement. In the circumstances, Mr Yeung's application to have the Settlement Agreement and Undertaking set aside must be dismissed with costs, to be taxed if not agreed.

STAY OF PROCEEDINGS (HCMP 6606/1999)

27. Mr Yeung argues that he should not be deprived of the $60,000 from the compensation awarded by Sears J. That is the result of a costs order made against him for wasting the Court's time. While it could be argued that the Housing Authority was wrong to have withheld two-thirds of the compensation from him, that was not the way Mr Yeung conducted his case before Sears J. His case was he had a proprietary interest in his cottage which was worth $25 million. That was dismissed by Sears J as absurd and nonsense. And I should say, rightly so. By no stretch of imagination could one come up with such a valuation in respect of a cottage of 143.34 square metres. He appealed but his appeal was dismissed. The Court of Appeal found that he had no right to any compensation though the award and costs order of Sears J was not disturbed. I do not think it open to him now to avoid the costs order in this way.

28. Where parties to a dispute reach a compromise freely without concealment of material information, undue influence or duress which brings that dispute to an end and avoids the need for litigation or further litigation, such a compromise is a valuable part of dispute resolution within the machinery of the administration of justice. Such an agreement to compromise an action or a dispute which may lead to litigation forms a valid and binding contract between the parties.

29. I have found that the Settlement Agreement was entered into freely by the parties, without concealment of essential information or undue advantage taken by the Housing Authority of Mr Yeung. It is a valid and binding agreement which is enforceable against him. The Settlement Agreement has been wholly performed on the part of the Housing Authority, what remains is to give effect to that agreement. Mr Yeung may not, having obtained the benefit under that agreement, turn around and continue with the proceedings in HCMP 6606/1999 in fragrant breach of his agreement. To allow him to continue with the proceedings would be to allow him to practice a fraud on the Housing Authority. It remains for him to honour that agreement, and in the present case, to file a notice of withdrawal and to obtain a sealed order of the court for the withdrawal of the proceedings. That would be a neat and tidy way to conclude the action. However, the Housing Authority has not asked for specific performance. In fact, I do not think it necessary. An order to stay the proceedings would be as effective and has the merit of saving costs. Accordingly, I order that there be a permanent stay of the proceedings in HCMP 6606/1999. I also order that the Plaintiff, Mr Yeung, shall pay costs of this application, to be taxed if not agreed.

APPLICATION TO STRIKE OUT (HCA 1425/ 2001)

30. In addition to going back on the Settlement Agreement, Mr Yeung started a fresh action, this time, against the Government of the Hong Kong Special Administrative Region. His claim is precisely in respect of the same subject matter, i.e. his cottage in Rennie's Mill. The Government seeks to have Mr Yeung's Statement of Claim struck out and the action dismissed pursuant to Order 18 rule 19 of the Rules of the High Court and/or under the court's inherent jurisdiction on the ground that this action is res judicata, the subject matter of such proceedings having already been finally determined by the Court of Appeal under CACV 282/1998.

31. There is a well and long established rule of public policy that there should be finality in litigation. Hence, collateral attack on a final decision of a court of competent jurisdiction is not permissible. Lord Halsbury LC said in Reichel v Magrath 14 Appellant Cas 665 at 668:

"... I think it would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again."

The courts should not be slow in striking out a statement of claim or defence, and to dismiss an action as frivolous and vexatious if it has been shown that the identical question sought to be raised has already been decided by a competent court (per Smith LJ in Stephenson v Garnett [1898] 1 QB677 at 680-681, cited with approval by Lord Diplock in the House of Lords in Hunter v Chief Constable [1981] 3 All ER 727).

32. A specific application of this rule of public policy is to be found in the doctrine of issue estoppel. This doctrine was considered in great details by the House of Lords in Carl Zeiss Stiftung v Rayner & Keeler [1967] 1 AC 853. The requirements of issue estoppel are:

(1) that the same question has been decided;

(2) that the judicial decision which is said to create the estoppel was final; and

(3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised.

Thus, if it can be shown that Mr Yeung's action against the Government meets the above requirements, then he would be estopped from raising the same question again and his statement of claim should be struck out on the ground that his action is res judicata.

Whether the same question has been decided

33. Mr Yeung says that his present action against the Government is based on private law and not public law. He submits that the basis of his claim in private law is that he and those through whom he claims had acquired a right of property by reason of the labour and expenditure they had incurred in Rennie's Mill between 1950 and 1961, whereas the case against the Housing Authority was argued on the basis that the 1961 communications from the Government have altered the status of the residents from permittees to owners of a proprietary right. Hence, he argues that the question to be decided in this action is not the same as the one decided in CACV 282/1998.

34. I think in determining whether the same question has been decided, the court should look at the pleadings in both actions, the arguments of the parties at the previous hearing and the decision of the court and ask itself what was the question that has been decided and what is the question now sought to be determined. In the application for judicial review, the original 82 applicants sought to challenge the validity of the notice to quit and whether the 1961 communications gave them any legal rights (see page 11 of the judgment of Sears J dated 27 June 1996). The residents' status as permittees was not in dispute. Sears J found in favour of the applicants. In the originating summons filed by Mr Yeung two years later, he sought an order that he is eligible to claim damages/compensation from the Housing Authority for the clearance and to be joined with the 82 original applicants in the hearing on 9 March 1998 on the assessment of damages/compensation payable for the deprivation of his right to use and occupy the land and to remain in Rennie's Mill indefinitely. Impliedly, he accepted the decision of Sears J. The question for the Court of Appeal was also whether the 1961 communications precluded the Housing Authority from revoking the permits granted to the residents of Rennie's Mill.

35. Based on these pleadings, I have two observations. Firstly, Mr Yeung did not join in the 1996 proceedings for judicial review along with the 82 original applicants. But he was aware of the proceedings and actively participated in assisting one of the applicants. He attended the hearing throughout and was fully aware of what was being litigated. Secondly, after the judgment of Sears J was delivered, he sought to claim damages/compensation and to join in for the hearing on assessment of the damages/compensation on 9 March 1998. By seeking to join in that hearing, he must be taken to have accepted the decision of Sears J, otherwise, he should have started a fresh action on his own right and litigated on his own case. So he accepted that he and those through whom he claimed were led into possession of the land on which his cottage stood as permittees in 1950. He accepted his rights to remain on the land was based on the 1961 communications. He never claimed he had acquired any proprietary right between 1950 and 1961.

36. Based on the above observation, both Mr Yeung and the appellants in CACV 282/1998 accepted that they did not have any rights other than as permittees. Indeed that was what appeared to Godfrey JA (see page 14 of the judgment of the Court of Appeal). Their right was based on estoppel raised by the 1961 communications. At the appeal, the thrust of the original applicants' case was also that they had acquired a proprietary interest by estoppel because of the 1961 communications, though neither senior counsel for the original applicants nor Mr Yeung argued that the residents had acquired any proprietary interest between 1950 and 1961. Taking a broad view, the question that was decided by the Court of Appeal in CACV 282/1998 was whether the residents had acquired a proprietary interest in Rennie's Mill by estoppel.

37. In the 6th paragraph of his statement of claim in the present action, Mr Yeung alleges that "it was declared by the Hong Kong Government that the refugee camp have been allotted for the refugees' permanent residence" and that they incurred labour and expenses in building up the resettlement. So the question he is seeking to be determined is also whether the residents had acquired any proprietary interest in Rennie's Mill by estoppel.

38. Mr Yeung says he is now relying on events between 1950 and 1961 whereas the Court of Appeal in CACV 282/1998 decided on the basis of the 1961 communications only. Hence, he argues the question he now seeks determination is a new one. The residents did not have any rights other than as permittees. The subject matter is the same, i.e. his cottage in Rennie's Mill. The circumstances are the same, i.e. the same historical setting and the clearance of Rennie's Mill. In the earlier action, the question they asked the court to consider was whether they had acquired any proprietary interest in the land by estoppel. The evidence they relied on was the promises in the 1961 communications. Mr Yeung is also seeking to ask the court to determine an identical question, though the evidence he now intends to rely on is a "declaration" made by the Government some time between 1950 and 1961. I do not think he is right nor do I think he may narrow down the two questions in this manner. In my view, the questions in the two actions are the same, i.e. whether the residents had acquired any proprietary interest in Rennie's Mill by estoppel, though the evidence he is now seeking to rely on is different.

39. Even if he were right, he would in any event be precluded under the principle of issue estoppel from relying on the "declaration". In Mills v Cooper [1967] 2 QB 459, Diplock LJ, as he then was, said at pp 468G-469A:

"... a party to civil proceedings is not entitled to make, as against the other party, an assertion, whether of fact or of the legal consequences of facts, the correctness of which is an essential element in his cause of action or defence, if the same assertion was an essential element in his previous cause of action or defence in previous civil proceedings between the same parties or their predecessors in title and was found by a court of competent jurisdiction in such previous civil proceedings to be incorrect, unless further material which is relevant to the correctness or the incorrectness of the assertion and could not by reasonable diligence have been adduced by that party in the previous proceedings has since become available to him."

40. Estoppel is an essential element in his cause of action. Mr Yeung should have adduced all evidence available in support of his earlier action. Though he actively participated in those proceedings in assisting another applicant, he did not join in the action until after Sears J had found in favour of the applicants. He just stood by and watched others litigating on a matter in which he was interested. He did not present any evidence about the declaration before 1961 which he now seeks to rely on. Instead, by seeking to be joined in the hearing on 9 March 1998 for assessment of damages, he accepted the judgment of Sears J. He accepted his case for estoppel is just based on the two communications in 1961. He offered nothing to explain why this "declaration" could not by reasonable diligence have been adduced in the previous proceedings. There is nothing to suggest that this "declaration" only became available to him recently. In my view, he is estopped from re-litigating on the basis of estoppel. If it were otherwise and if this action is dismissed after trial, it would be open to him to start another action on estoppel based on another promise contained in yet another document. If so, there can never be finality in litigation. That cannot be right. This also supports my earlier conclusion that the question decided in the earlier proceedings cannot be narrowed down in the way he attempts to persuade me to accept.

41. Mr Yeung argues that his present action is based on private law claim whereas the earlier proceedings were in respect of public law claim. In my view, that difference is immaterial. The claims under the two actions are for compensation in respect of the same subject matter, that is Mr Yeung's cottage in Rennie's Mill. Whether the claim be one of public law claim or private law claim, the ultimate question is whether he has acquired any proprietary right over the land on which stood his cottage.

42. For the above reasons, I conclude that the question he is now seeking to be determined is the same question as that determined by the Court of Appeal in CACV 282/1998.

Whether the decision in CACV 282/1998 was final

43. After his appeal was dismissed by the Court of Appeal, Mr Yeung filed a Notice of Appeal to the Court of Final Appeal but did not prosecute with that appeal. Instead, he now chooses to sue the Government in respect of the same subject matter and seeks determination of the same question which has been decided in CACV 282/1998. This is a clear case that the present proceedings were initiated for the purpose of mounting a collateral attack on a final decision against him which has been made by another court of competent jurisdiction in previous proceedings in which he had a full opportunity of contesting that decision in the Court of Appeal which made the decision or in the Court of Final Appeal.

44. Mr Yeung argues that he was not a party to the proceedings in HCMP 114/1998 and the appeal in CACV 282/1998 which are not binding on him and hence there could be no question of abuse of process. I have dismissed that argument in Paragraphs 12 to 15 of this Decision and found that he was a party to both proceedings.

45. Next, Mr Yeung says the decision of the Court of Appeal is inoperative and the court only gave its opinion on certain matters. He relies on the following dictum of Godfrey JA at page 2 of the judgment:

"In these circumstances, nothing said in this judgment is intended to operate (nor indeed could it operate) so as to disturb any of the decisions of the judge to the cases of those applicants who have not appealed against the judge's decision on 'eligibility' and 'quantum of damages'."

In my view, Mr Yeung cited the dictum out of context by totally ignoring the qualification after the word "operate" and seriously misinterprets what was said. What Godfrey JA meant was that though Sears J was wrong to have awarded damages to some of the residents, as the Housing Authority has submitted to Sears J's order and has not appealed, the judgment of the Court of Appeal will not operate to disturb the cases of those applicants who have been awarded damages but have not appealed. Those applicants did not include Mr Yeung, who has appealed. I am satisfied that Mr Yeung was a party to the proceedings in HCMP 114/1998 and the subsequent appeal CACV 282/1998. The Court of Appeal decision must be binding as between him and the Housing Authority. That decision is a final decision of a court of competent jurisdiction and is binding on Mr Yeung. If the next element which I am going to consider is also satisfied, this is a clear case of abuse of process.

Whether the parties are same: Degree of identity between the Housing Authority and the Government

46. The Housing Authority was established on 1 April 1973 under section 3 of the Housing Ordinance, Cap 283. Section 6 provides that it shall be a body corporate with perpetual succession and a common seal and, for the purposes of that Ordinance, with capacity to acquire and hold land and to sue and be sued in the corporate name of the Housing Authority. It is a statutory body which may sue and be sued independently of the Government. Upon its establishment on 1 April 1973, it replaced the Resettlement Department as the competent authority responsible for the control of cottage resettlement areas, including Rennie's Mill. In that capacity, it was sued by Mr Yeung under the proceedings in HCMP 114/1998.

47. The Housing Authority consists of the Director of Housing, who is a civil servant and such other public and non-public officers as the Chief Executive may appoint. The Chairman is a non-public officer appointed by the Chief Executive. Section 4 imposes on the Housing Authority the duty to secure the provision of housing and such amenities ancillary thereto as the Housing Authority thinks fit for such kinds or classes of persons as the Housing Authority may, subject to the approval of the Chief Executive, determine. Section 9(1) empowers the Chief Executive to give directions with respect to the exercise or performance by the Housing Authority or a public officer, of any power, function or duties under the Housing Ordinance. Section 9(2) requires the Housing Authority and every public officer to comply with such directions as given by the Chief Executive under subsection (1). Thus, as such the Housing Authority is the corporate embodiment or the executive arm of the Government in respect of control and management of housing matters such as housing estates and resettlement areas, of which Rennie's Mill was one. From the interaction between the Government and the Housing Authority, I have no difficulties in finding that there is sufficient degree of identity between the Government and the Housing Authority to make one a privy of the other.

Whether the action is an abuse of process which should be struck out

48. Though the defendants in the two actions are different, I have found that one is a privy of the other. So for all intents and purposes, the parties may be treated as the same. The subject matter is the same, i.e. Mr Yeung's cottage in Rennie's Mill. The surrounding circumstances are the same, i.e. the clearance of the resettlement for redevelopment. The background history is the same: the loads of refugees brought to the barren rock which they turned into a thriving community.

49. All these evidence were before the court, both at first instance and on appeal. At page 5 of the judgment of Sears J, he cited the fact that 20,000 refugees were loaded onto wooden boats and taken to this barren, remote and inhospitable part of Hong Kong with no electricity or water, which they developed into a thriving and comfortable village between 1950 to 1961. At page 23 of the judgment of the Court of Appeal, Rogers JA, as he then was, recognised that the residents of Rennie's Mill undertook considerable work in bettering the environment and in providing both personal and communal facilities prior to 1961. Thus, the basis for building a case on estoppel prior to the 1961 communications was there before the court except for this "declaration" which Mr Yeung now alleges. It is not known what that "declaration" is, but no reliance has been placed on it by senior counsel representing the original applicants, whether at first instance or on appeal. Instead, senior counsel argued on the promises contained in the 1961 communications. If there were such a "declaration", it would be most surprising that the 82 applicants with their combined knowledge of the background history and resources and the wisdom and ingenuity of senior counsel would choose to ignore it. On the other hand, though he was not a party to the 1996 proceedings, Mr Yeung just stood by watching the 82 applicants fighting the case in which he has an interest. According to him, at the appeal he had said what he wanted to say when invited by Godfrey JA to present his appeal. But he did not advance his argument of estoppel based on the "declaration" prior to 1961. Quite apart from whether the "declaration" did exist or could be proved or not, whatever right of property the residents might have acquired before 1961, they must have lost it by 1995 after having paid permit fees for 31 years in recognition of the Housing Authority's right as owner of the land to grant permits and to charge a fee. His new action is doomed from the start.

50. In all the circumstances, it would be unfair to the Government to allow him to re-litigate on the same question again. Public interest requires that there should be finality in litigation. The Court of Appeal in CACV 282/1998 has decided that the residents, including Mr Yeung, has no valid claim to compensation whether in public law or in private law. Mr Yeung is estopped from raising new evidence about the "declaration" under the doctrine of issue estoppel. The question he is now seeking a determination has been decided by a court of competent jurisdiction to which he and the Housing Authority were parties. There is sufficient degree of identity between the Government and the Housing Authority to make it just to hold that the decision of the Court of Appeal in CACV 282/1998 against Mr Yeung should be binding on him in HCA 1425/2001. Mr Yeung has been paid the compensation according to the Sears' formula, which as a matter of law, the Housing Authority or the Government was under no obligation to pay. He had the benefit of an ex-gratia payment out of public funds. The Government as a privy of the Housing Authority should not be twice vexed in a litigation in respect of the same subject matter, which for reasons as I have explained has no merit at all and no chance of success. There is hardly any reason why the Government should be required to incur public funds a second time in defending such an unmeritorious claim in respect of which the chance of recovering costs is less than remote. In my judgment, Mr Yeung's statement of claim should be struck out and his action dismissed with costs as an abuse of process under Order 18 rule 19 of the Rules of the High Court or under the court's inherent jurisdiction on the ground of res judicata.

51. One cannot help feeling sympathetic for Mr Yeung who has spent all the compensation he received in legal costs in these actions which led him into greater debt and caused him great stress. In my view, he has fallen prey to his own irrational and even bizarre belief that history has changed his 143.34 square metre cottage to a luxurious villa worth $25 million. It was remarkable and unfortunate that there were others who encouraged him in that belief. However, as a result, the Government was forced to incur unnecessary legal costs in defending the actions, which are practically unrecoverable. Not only that the Government should not be vexed twice in such a litigation, he should also wake up from his irrational belief.

SUMMARY OF CONCLUSION

52. Mr Yeung's summons dated 25 October 2001 to set aside the Settlement Agreement in action HCMP 6606/1999 is dismissed with costs to the Housing Authority.

53. In respect of the Housing Authority's summons dated 8 October 2001, I make an order that there be permanent stay of the proceedings in HCMP 6606/1999. Mr Yeung shall pay the costs of the application to the Housing Authority.

54. In respect of the Government's summons dated 8 October 2001, I order that the Plaintiff's statement of claim in HCA 1425/2001 be struck out and the action be dismissed with costs to the Government.

55. All costs are to be taxed, if not agreed.