TANG WOUNG SHIU v. TANG KUN YEUNG & ANOTHER

HCA 5527/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 5527 OF 1998

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REASONS FOR JUDGMENT

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The plaintiff's pleaded claim

1. On 8 April 1998, the plaintiff, acting in person, issued the Writ in this action against the defendants. He claimed to be suing on behalf of himself and his 4 brothers. The Statement of Claim endorsed on the Writ read as follows (written exactly as it stands in the original):

"1	(a)	The Plaintiff is the elder brother of TANG Woung Chiu, Davies, TANG Johnson, TANG Wai Ting, Samson, and TANG Wai Tat and is bringing this action for himself and on behalf of his brothers.
	(b)	The Plaintiff and his brothers are the natural sons and lawful successors of the late TANG Koon Yau, alias TANG Tak Foon, also known as George Koon Yau TANG, who died on 15 February 1975, within the meaning of section 17 of the New Territories ordinance, Cap. 97.
2	(a)	On or about 31 July 1972, the 1st Defendant was appointed as manager of TANG Man Fat Tso in place of TANG Yun Tsau who died some time on or before 1954.
	(b)	The Plaintiff's father in the name of TANG Tak Foon was appointed as manager of TANG Yun Tsau Tso on or about 28 June 1954 and still is its registered manager. The Plaintiff is therefore a member and beneficiary of TANG Man Fat Tso.
3		The 2nd Defendant is the son of TANG Yuen Loi who is the natural brother of the 1st Defendant. In the early 1950s, TANG Yuen Kung, head of a Fong whose membership includes one TANG Cho Tai, female, died leaving no issues. TANG Yuen Loi was adopted by TANG Cho Tai, in the mid-1950s, as brother and successor to her family. TANG Cho Tai thereafter married one WU Yung Tai in Tai Lam Chung. The 2nd Defendant is therefore a successor of the late TANG Yuen Kung and/or the Fong headed by TANG Yuen Kung.
4	(a)	On or about 1 February 1945, as evidenced by a Chinese document, TANG Yuen Kung and TANG Cho Tai on behalf of themselves and/or their Fong agreed to sell Lots 266, 356, 357 and 2584 in Demarcation District 111 ('the Property') to the Plaintiff's father for a price of one hundred catties of white threshed rice. Pursuant to the agreement the Plaintiff's father delivered the rice to TANG Yuen Kung and TANG Cho Tai who accepted and acknowledged receipt of the same. The Plaintiff's father and grandmother LAM Sai Mui took possession of the Property on the same date.
	(b)	TANG Man Fat Tso was the legal owner of the Property but TANG Yuen Kung and/or TANG Cho Tai were/was entitled in equity to the Property on their own behalf and/or on behalf of their Fong at all the material times.
	(c)	In the premises, the equitable title of the Property was vested in the Plaintiff's father who never abandoned the same.
5		On or about 9 November 1979, the 1st Defendant wrongfully and/or in breach of trust and/or fiduciary duty applied to District Officer, Yuen Long to assign the Property to the 2nd Defendant as a gift.
		Particulars
		(i) The application was made without the knowledge or consent of the Plaintiff. The 1st Defendant failed or neglected to inform the Plaintiff of the application when the Plaintiff returned to the village on or about 16 November 1979, resided there for 2 weeks and met with the 1st and 2nd Defendant on several occasions.
		(ii) The 1st Defendant failed or neglected to inform the District Officer of the sale under Paragraph 4 herein and the Property was assigned to the 2nd Defendant on or about 4 March 1980 and the assignment was witnessed by 2nd Defendant's father.
6		The Plaintiff discovered the assignment in or about early 1981 when the District Officer replied to Plaintiff's written objection to 2nd Defendant's application to erect a house in Lot 357. The 2nd Defendant fails or neglects to transfer the legal title of the Property to the Plaintiff.
7		Despite Plaintiff's or Plaintiff's Solicitors' written requests on 27 June 1986, 2 February 1988, 19 March 1988, 26 May 1988, 29 November 1988, 5 December 1988 and 13 March 1989, the 1st Defendant fails or neglects to furnish to the Plaintiff full and accurate information of the trust property of TANG Man Fat Tso and the reasons of the disposition of property.
8		The Plaintiff avers that he is entitled to and hereby claims interest pursuant to S.48 and S.49 of Supreme Court Ordinance.

AND the Plaintiff claims:-

Against the 1st Defendant:

(1) Damages for breach of trust and fiduciary duty;

(2) An order that account be taken of the dealings and transactions of the 1st Defendant with the properties of TANG Man Fat Tso and that the 1st Defendants be ordered to pay to the Plaintiff the amount which shall be found to be due from them upon the taking of such accounts together with interest thereon;

(3) A declaration that the assignment of property under paragraph 5 was improper and in breach of trust;

(4) such further or other Accounts, Inquiries, and Directions and Relief shall be just; and

(5) costs.

Against the 2nd Defendant:

(1) Under paragraph 4, a declaration that the legal title of the Property be vested in the Plaintiff and his brothers;

(2) Further or alternatively, specific performance of the said agreement;

(3) Further or alternatively, damages for breach of the said agreement;

(4) Further or alternatively, a declaration that the 2nd Defendant have held and do hold the Property, profits and monies arising therefrom as constructive trustee on behalf of the Plaintiff;

(5) Costs."

The first "trial"

2. The defendants served their Defence on about 23 June 1998. By paragraphs 6, 7 and 8 of their Defence, the defendants disputed the capacity and authority of the 2 Tangs to sell.

3. By Order dated 15 March 2000, Yeung J. granted leave for this action to be set down for trial in the fixture list.

4. The action first came up for trial on 31 October 2001 before Deputy Judge To. The learned Deputy Judge granted the plaintiff leave to amend the Statement of Claim within 4 weeks, gave other directions, adjourned the trial to a date to be fixed and ordered the plaintiff to pay the defendants costs of and occasioned by the adjournment on indemnity basis, to be taxed and paid forthwith.

The second "trial"

5. The action next came up for trial on 13 May 2002 before Deputy Judge Saunders. The learned Deputy Judge adjourned the trial to be re-fixed before a bi-lingual Judge and ordered the plaintiff to pay the defendants costs of and occasioned by the adjournment on indemnity basis, to be taxed and paid forthwith.

Amending and re-amending

6. Although leave to amend was granted by Deputy Judge To on 31 October 1991, the plaintiff did not amend his Statement of Claim until about a year later on 11 October 2002. What he did was to delete "266" and "2584 in paragraph 4(a) and to change "and" between "TANG Yuen Kung" and "TANG Cho Tai" in paragraph 4(a) to "and/or".

7. 6 days later, the plaintiff sought the consent of the defendants' solicitors to re-amend his Statement of Claim. The defendants' solicitors gave their consent on 17 October 2002. The plaintiff deleted the words "within the meaning of section 17 of the New Territories Ordinance, Cap. 97" in paragraph 1(b) and added the words "witnessed by TANG Ah Kung who died on 22 March 1981 at Chuk Hang Tsuen, Pat Heung" after the words "white threshed rice" in paragraph 4(a).

The plaintiff's opening

8. On 21 October 2002, the action came up for trial before me. In view of the defendants' consent, I gave the plaintiff leave to re-amend the Statement of Claim.

9. In the course of the plaintiff's opening, I asked him how the head of 1 fong (and/or a female person) could validly agree to sell tso land, it being common ground that the tso had 3 fongs. The plaintiff said "the proposition is that they already sub-divided the land". The sub-division was a new allegation raised by the plaintiff for the first time on 21 October 2002. It had neither been pleaded nor mentioned in the plaintiff's witness statement. I asked him when that took place and he said "before 1945". A few minutes later, he said "there's agreement, unanimous agreement between the members". However, he said at a later stage that "I cannot ascertain there was a subdivision before 1945". To sum up, all he could say in answer to the questions on how the head of 1 fong (and/or a female person) could validly agree to sell tso land and on when and how tso land was subdivided was that he had no answer "at this stage".

The defendants' striking out application

10. Mr Chan, counsel for the defendants, told me that he was serious about proceeding with an application to strike out the plaintiff's claim. I decided to adjourn the hearing until the following morning, instead of resuming in the afternoon, in order to give the parties an opportunity to prepare a written skeleton argument and to prepare a bundle of authorities.

11. On 22 October 2002, Mr Chan applied on behalf of the defendants to strike out the Re-Amended Statement of Claim under Order 18 rule 19 on the grounds that the pleading disclosed no reasonable cause of action; was scandalous, frivolous or vexatious; and was otherwise an abuse of the process of the court. The plaintiff interrupted Mr Chan's submission and conceded that 1 fong out of 3 was incapable of selling the land of tso.

12. The plaintiff applied for leave to further amend the Statement of Claim by amending paragraph 4 (b) to read as follows:

"TANG Man Fat Tso was the legal owner of the Property but TANG Yuen Kung and/or TANG Cho Tai were/was entitled in equity to the Property on their own behalf and/or on behalf of their Fong as the Property, with consent of all the members of TANG Man Fat Tso, was for their absolute use and discretion at all the material times."

13. In the course of his submission, the plaintiff revised the proposed amendments as follows:

"TANG Man Fat Tso was the legal owner of the Property but TANG Yuen Kung and/or TANG Cho Tai were/was entitled in equity to the Property on their own behalf and/or on behalf of their Fong as the Property, with consent of all the members of TANG Man Fat Tso, was for TANG Yuen Kung and/or TANG Cho Tai's absolute use for ever at all the material times."

14. In contrast with what the plaintiff said the day before, the plaintiff felt able to assert and tell me that he knew about the consent because his father and grandmother had told him about it; that consent was given by calling a meeting and all elders got together; that he did not know the exact date when consent was given; that he was not told of the details of any distribution except what he had put in the proposed amendments; that the consent was a matter "for inference"; that he was not aware that this matter had to be particularised in the Statement of Claim; and that he did not realise that he had to put that particular fact in his witness statement.

15. The plaintiff contended that he had an arguable case without the proposed amendments. Although he had put in a bundle of the following authorities (written exactly as it stands in his "List of Authorities for the Plaintiff"), he read only a short passage on p. 455 of no. 3 of his list:

"List of authorities for the Plaintiff

(1) Chinese Commercial & Family Law - Jamieson

(2) Lam Shing Shou and Lam Hon Man & others - HCA 361/2001

(3) Chinese Customary Law in the New Territories of Hong Kong

(4) The ownership of, and succession to, Land in the New Territories

(5) Chinese customary Law in Hong Kong's New Territories Some Legal Premises - E. Haydon

(6) Wu Koon Tai and another & Wu Yan Loi [1996] 2 HKLR P.477

(7) Tsang Wing Lung v Tsang Lun & Ano [1992] 2 HKC P.440

(8) Kan Fat Tat and Kan Yin Tat [1987] HKC 516

(9) Brisilver Investment Ltd. and Wong Fat Tso Wong Cho Mui - HCMP 1997 No. 2038

(10) Tang Kai-chung and Tang chik-shang [1970] HKLR P.276

(11) Tang Yan Yi Tong & Tang Mou Shau Tso [1995] 2 HKC P.245

(12) Re Estate of Lau Wai Chau [1998] 3 HKC P.562".

16. He went on to refer to a memorial dated 29 April 1955 in respect of other lots of land, not the subject matter of dispute in this action. He conceded that his paragraph 4(b) "needs clarification".

17. He opposed the striking out application and cited the passage under "Timing" in paragraph 18/19/3 of the Hong Kong Civil Procedure 2002.

18. In his reply, Mr Chan sought to justify his application to strike out at the trial on the basis of the plaintiff's clarification during his opening.

The orders made

19. I ordered that:

(a) The Re-Amended Statement of Claim be struck out.

(b) The plaintiff's application for leave to further amend the Statement of Claim be dismissed.

(c) The plaintiff's action against the defendants be dismissed with costs to be paid by the plaintiff to the defendants.

20. I told the parties that reasons for my Judgment would be handed down on 29 October 2002.

REASONS FOR JUDGMENT

The Re-Amended Statement of Claim

21. In my judgment, the Re-Amended Statement of Claim disclosed no reasonable no reasonable cause of action, was frivolous or vexatious in that it was obviously unsustainable, and was otherwise an abuse of the process of the court.

22. To start with, by using the "bastard" conjunction "and/or" twice, the plaintiff seemed to have difficulty making up his mind whether his father contracted with:

(a) Tang Yuen Kung, or

(b) Tang Cho Tai, or

(c) Tang Yuen Kung and Tang Cho Tai, or

(d) Tang Yuen Kung on behalf of his fong, or

(e) Tang Cho Tai on behalf of her fong, or

(f) Tang Yuen Kung and Tang Cho Tai on behalf of their fong, or

(g) Tang Yuen Kung on behalf of himself and his fong, or

(h) Tang Cho Tai on behalf of herself and her fong, or

(i) Tang Yuen Kung and Tang Cho Tai on behalf of themselves and their fong.

23. More importantly, it is well known that the members of a tso are the living male descendants from time to time of the focal ancestor, that even the managers cannot dispose of tso property against the wishes of the members, and that in the absence of a distribution, each member only has a life interest, see e.g. Chu Tak Hing & others v Chu Chan Cheung Kiu & others [1968] HKLR 542, Tang Kai Chung & another v Tang Chik Shang [1970] HKLR 276, Kan Fat Tat v Kan Yin Tat [1987] HKLR 516, Tang Yau Yi Tong & another v Tang Mou Shau Tso & others [1995] 2 HKC 245 and [1996] 2 HKLR 212, and Leung Kuen Fai v Tang Kwong Yu Tong [2002] 2 HKLRD 705.

24. Female membership of tso land seems unheard of. The plaintiff had cited no authority in support of a female person's interest in tso land. His witness statement, the only witness statement filed on his behalf, dealt neither with custom nor practice. In this context, one must not assume that the exceptions in favour of female persons under Chinese law of succession also apply to tso land.

25. In my judgment, it was clearly unarguable that the head of 1 fong (and/or a female person) could validly agree to sell tso land, it being common ground that the tso had 3 fongs. I noted the plaintiff's concession that 1 fong out of 3 was incapable of selling the land of tso.

26. A prior distribution (or sub-division or consent) of the Property to the 2 Tangs or 1 of them was a material fact which must be pleaded, Order 18 rule 7. A material fact must first be pleaded before the question whether it was to be established by "inference" could arise. No prior distribution was alleged in the Re-Amended Statement of Claim. The pleaded claim was clearly premised on and only on the contract pleaded in paragraph 4(a).

27. The plaintiff's contention that the Re-Amended Statement of Claim of Claim disclosed an arguable claim was neither coherent nor intelligible.

28. The plaintiff's pleaded claim was clearly hopeless.

Paragraph 18/19/3 of Hong Kong Civil Procedure 2002

29. Paragraph (1) of paragraph 18/19/3 of Hong Kong Civil Procedure 2002 reads as follows:

"Timing - Although the rule expressly states that the application to strike out an indorsement on a writ or a pleading may be made at any stage of the proceedings, the application should always be made promptly and as a rule before the pleadings are closed. Where the statement of claim is being attacked, the application may in a proper case be made before the defence is filed and served (per A.L. Smith L. J. in Att.-Gen. of The Duchy of Lancaster v. L. & N.W. Ry. [1892] 3 Ch. 274 at 278, CA. However, where it is sought to stay or dismiss the action, the application should not be made before the statement of claim is served (per Neville J. in Wright v. Prescot U.D.C. (1916) 115 L.T. 772; cf. Electrical Co. v. Att.-Gen. for Ontario [1919] A.C. 687 at 695). Where the defence or other subsequent pleading is being attacked, the application should be made as soon as practicable after the service of such defence or pleading. However, the application may be made even after the pleadings are closed (per Brett M.R. in Tucker v. Collinson (1886) 34 W.R. 354, or the trial set down (Goymer v. Lombard North Central Wheelcase Ltd (1993) The Times, April 1, CA), though it should not be heard at the commencement of the trial after the costs of preparation have been incurred save in a most exceptional case and on receipt of a valid explanation for the lateness of the application (Halliday v. Shoesmith [1993] 1 W.L.R. 1, CA)."

30. This passage is taken substantially from paragraph 18/19/3 of the Supreme Court Practice 1999 but the note in the English White Book on Halliday v Shoesmith is shorter:

"... though it should not be heard at the opening of the trial, save in exceptional circumstances".

31. The Hong Kong White Book seems to suggest that a line is drawn at the commencement of the trial. This is akin to imposing a judicial limitation period after which the recipient of a pleading which offends against Order 18 rule 19 will as a general rule lose the remedy to have the offending pleading struck out. Both he and the Court must continue to waste their time and resources dealing with a plea which is bound to fail. In cases of abuse of process, the court decidedly declines to put an end to the abuse of its process. This is the position despite the words "at any stage of the proceedings" in the rule itself.

32. In my judgment, the duty must lie fairly and squarely on a party not to put in, and persist on the basis of, a pleading which offends against Order 18 rule 19. The recipient of an offending pleading cannot be under a greater duty to enforce the rule before the commencement of the trial. I am not bound by the Halliday v Shoesmith line of cases and I decline to follow or apply it.

33. With all respect, the Hong Kong White Books seems to give undue prominence to the approach in the Halliday v Shoesmith line of cases at the expense of the approach in another line of cases. In Goymer v. Lombard North Central Wheelcase Ltd (1993) The Times, April 1, CA, a case cited in paragraph 18/19/3 as authority for the proposition that the application may be made after trial set down, Leggatt LJ said:

"Despite pleas to the court to take a realistic view of the statement of claim, Mr Newman felt able to argue that in a case such as the present in which considerable costs had been incurred before the application was made, the court should decline to exercise its power to strike out and so compel a defendant to incur the substantially greater costs of a 14-day trial on the ground that the application should have been made sooner. In my judgment the argument lacks reason as well as common sense: if correct, it would commit the court, in the interests of punishing a dilatory defendant, to waste 14 days trying a case in which ex hypothesi no cause of action is disclosed. The Rules of the Supreme Court, Order 18, rule 19(1), provides that 'The court may at any stage of the proceedings order to be struck out . . .'. The rule means what it says, and although such applications should be made as soon as practicable the court will not nowadays feel precluded from exercising its power on the ground that trial is imminent or that issue has been joined on the pleadings. The court should therefore not refrain from striking out the statement of claim, if satisfied that it discloses no cause of action. Since I am so satisfied, I would dismiss the appeal."

34. In Goodwill v British Pregnancy Advisory Service [1996] 1WLR 1397. At p. 1402, Peter Gibson LJ said:

"To deal with the last point first, the County Court (like the High Court: see rule R.S.C. Ord. 18, r. 19(1)) is expressly empowered under Ord. 13, r. 5 to strike out at any stage of the proceedings. Of course litigants should be encouraged, if they are minded to make an application to strike out, to do so earlier rather than later. But if the trial will be long and expensive and the claims are hopeless it defies common sense to refuse to allow the saving of the time and expense of the trial simply in order to punish the applicant party for failing to strike out earlier. Similar views were expressed ... in Goymer v Lombard North Central Wheelease Ltd (1993) Times, 1 April, [1993] CA Transcript 238, Leggatt LJ saying that 'the court will not nowadays feel precluded from exercising its power on she ground that the trial is imminent or that issue has been joined on the pleadings'. Halliday v Shoesmith was a case where the application to strike out had not been made until the trial. In the present case, although the case has been set down for trial, the substantial costs of a trial lasting two to three days would be saved if the application to strike out succeeded. The application to strike out was made shortly after the exchange of witness statements and the defendants particularly rely on the plaintiff's proof of evidence which they then saw for the first time. Miss Booth for the plaintiff sensibly accepted that the real question in this case is whether the grounds for the application to strike out were made out. If so, the lateness of the application could not be determinative."

35. In Johnson v Gore Wood & Co., unreported, 12 November 1998, CA, Ward LJ, delivering the judgment of the Court of Appeal said:

"The point remains, and it is a powerful point, that there has been very considerable delay by the defendants. There is great force in the words of Beldam LJ in Halliday-v- Shoesmith [1993] 1 WLR 1, 5, where he said:-

'It seems to me that where a party to litigation delays making an application of this kind until the opposite party has incurred all the costs of preparing for trial and has indicated that he is himself intending to exercise his right to proceed to trial, he has conducted himself in a way which has induced the opposite party to incur costs and expense and, if his contention be right, he has unwarrantably increased the potential liability of the opposite party to pay his costs. It seems to me that such an application should, in the ordinary way, be made at the earliest opportunity and that a court should not embark on hearing such an application at the eleventh hour, save in the most exceptional case and on receiving a valid explanation for the lateness of the application.'

On the other hand there is much force in the judgment of Peter Gibson LJ in Goodwill -v- Pregnancy Advisory Service [1996] 2 All ER 161, [1996] 1 WLR 1397, at 1402 of the former report, where he said:-

'... the High Court : see R.S.C., Ord 18, r. 19(1), is expressly empowered...to strike out "at any stage of the proceedings." Of course litigants should be encouraged, if they are minded to make an application to strike out, to do so earlier rather than later. But if the trial will be long and expensive and the claims are hopeless, it defies common sense to refuse to allow the saving of the time and expense of the trial simply in order to punish the applicant party for failing to strike out earlier. Similar views were expressed by this court in Goymer -v- Lombard North Central Wheelease Ltd The Times 1st April 1993...Leggatt L.J. saying "the court will not now days feel precluded from exercising its power on the ground that trial is imminent...Halliday -v- Shoesmith was a case where the application to strike out had not been made until the trial." '

Drawing the line between these two approaches is difficult. Two factors weigh heavily with us.

1. The fact that costs may have been wasted through not taking the point earlier is a matter which the court can address when deciding what costs to order on the disposal of the late application to strike out.

2. In Hunter at p. 536 Lord Diplock spoke of the court having a duty to exercise this salutary power. He disavowed the word discretion. We understand him to have been saying that because it is the court's own process which is being abused the court has the duty, in the interests of the administration of justice generally, to control the abuse. It does so, of course, by exercising judicially the undoubted discretion it has whether or not to strike out the claim. It is a question of gauging where the greater public interest lies. Will the court's refusal to allow another eight weeks of its time to be taken up litigating issues which could and should have been litigated earlier outweigh the hardship to the plaintiff who has got so far but is now not allowed to proceed further? The whole emphasis of the current reforms of Civil Justice is upon saving precious court time. The submissions of counsel have moved us one way and then the other. In the end, having weighed all the competing considerations in the balance, we have come to a firm conclusion that the plaintiff's claim must be struck out as an abuse of process."

36. I do not know why Mr Chan did not rely on he fact that the plaintiff did not amend his Statement of Claim until 11 October 2002 when he offered an explanation for not making the striking out application until 22 October 2002.

37. I was satisfied that the Re-Amended Statement of Claim disclosed no reasonable cause of action. Since I was so satisfied, I ordered it to be struck out.

Application for leave to amend

38. I was not satisfied that the application for leave to further amend the Statement of Claim was a bona fide application. According to the plaintiff's witness statement, he was born in 1951. I saw no reason why leave should be given to enable the plaintiff to engage in a fishing expedition when he had no factual basis for his proposed amendments.

39. Even assuming the bona fides of his application, I would still have refused it.

40. Crown leases in the New Territories did not exceed 99 years. A case of the Tangs' entitlement in equity "for ever" was doomed to failure.

41. I asked Mr Tang (who was called to the Bar in 1995) to identify the Tangs' interest in land in terms of a known interest in land under English law or under Chinese customary law. He was not able to. There was no reason why he should be given leave to amend when he could not make up his mind what the Tangs' interest was.

42. The plaintiff was unable or unwilling to tell me when consent was given, how consent was given, the persons who gave consent, and what else was agreed in respect of other tso land. In the normal case, the remedy would have lied in an application for particulars. But as this was the third time the action had come up for trial, the appalling lack in material particulars was a factor which weighed heavily against the grant of leave.

43. I dismissed the plaintiff's application for leave to amend.

Costs

44. If the defendants had applied to strike out at an earlier stage, I might have greater sympathy with an application for costs on a more generous basis.

45. As the plaintiff had persisted in pursuing what I held to be a hopeless case, the plaintiff must pay the defendants the costs of the action.