Cheng Yip Chi v. Kan Ming Construction Investments Ltd and Another

HCA 3291/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3291 OF 2000

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HCA 3292/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3292 OF 2000

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(Heard together)

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DECISION

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Introduction

1.Madam Cheng commenced these two actions in 2000 and there has been little progress in both actions after her pleadings were filed. Mr Tang, the 2^nd defendant in HCA 3291/2000 (“the 1st Action”) and Mr Cheng, the 2^nd defendant in HCA 3292/2000 (“the 2^nd Action”) are on the same front and speak with the same voice, contending that these two actions are an abuse of process and should be struck out.

2.Indeed, Master de Souza dismissed the 1^st Action for want of prosecution on 2 September 2011 (“the Dismissal Order”) upon the application of Mr Tang.

3.There are altogether 4 summonses calling for the determination of this court, 2 taken out in each action. In the 1^st Action, Madam Cheng applies to set aside the Dismissal Order by her summons dated 9 June 2015 (“Setting aside Summons”) as amended on 7 October 2015.

4.Further, Mr Tang by his summons dated 6 October 2015 applies to strike out Madam Cheng’s Amended Statement of Claim and dismiss the 1^st Action in case this court accedes to her application to set aside the Dismissal Order by the Setting aside Summons (“Mr Tang’s Dismissal Summons”).

5.Similarly, in the 2^nd Action, Mr Cheng, by his summons dated 11 March 2015, applies to strike out Madam Cheng’s Amended Statement of Claim and dismiss the 2^nd Action for want of prosecution (“Mr Cheng’s Dismissal Summons”).

6.Lastly, in the 2^nd Action, Madam Cheng, by her summons dated 23 February 2016 applies for leave to re-amend her Amended Statement of Claim (“the Amendment Summons”).  

7.In this Decision, I shall first briefly outline the respective pleaded cases of Madam Cheng in both actions and Mr Tang’s pleaded defence filed in the 1^st Action. Then I shall give an account of the procedural history of each action. Finally, in light of the established principles, I shall examine the merits of each of the applications.

Madam Cheng’s claims in both actions

The 1^st Action

8.Mr Tang is the registered owner of a piece of agricultural land known as Lot 1D of Demarcation District 109 (“Lot 1D”). In the 1^st Action, Madam Cheng sues on a written agreement relating to Lot 1D.

9.The 1^st Action was commenced by a writ issued on 28 March 2000 and amended on 6 May 2000. Madam Cheng alleges that she entered into a written agreement with Kan Ming Investments Company Limited (“Kan Ming”), a developer, as an agent of Mr Tang (“the 1D Agreement”). The 1D Agreement was entitled “Agreement for Transfer of Rights” and dated 15 October 1998.   Madam Cheng avers that by the 1D Agreement, she agreed to purchase and Kan Ming itself being the developer of Lot 1D and as the agent on behalf of Mr Tang agreed to sell Lot 1D with a three-storeyed village house to be erected thereon at the price of HK$1,950,000.

10.Madam Cheng further claims that Mr Kan Ming and one Madam Cho on behalf of Kan Ming fraudulently or recklessly represented to her that the building works on Lot 1D would be completed within three months from the date of the 1D Agreement (“the 1^st Misrepresentation”).

11.Madam Cheng avers that despite her full settlement of the purchase price pursuant to the 1D Agreement, both Kan Ming and Mr Tang repudiated the 1D Agreement by their failure to complete the building on Lot 1D within three months from the 1D Agreement and to assign Lot 1D with the three-storeyed building thereon to her (“the 1^st Repudiation”). The 1^st Misrepresentation proved to be fraudulent or reckless too.

12.Madam Cheng avers that she accepted the 1^st Repudiation by her verbal notice to Kan Ming some time in March 1999 or alternatively by the issue of the writ in the 1^st Action. She claims against both Kan Ming and Mr Tang for the refund of the purchase price with interest and a declaration that she has a lien against Lot 1D for the like amount.

13.Kan Ming and Mr Tang filed a joint defence and counterclaim on 29 April 2000 by their former solicitors Messrs. Chan & Tsu. There, Kan Ming accepted that it entered into the 1D Agreement albeit with terms differing from those set out by Madam Tang whereas Mr Tang made no admission thereto. Kan Ming only accepted that it had received HK$600,000 and HK$640,000 from Madam Tang in part payment of the purchase price of a building licence and construction works pursuant to the 1D Agreement. Both of them denied having any contractual obligations to assign Lot 1D or the building to be erected thereon to Madam Cheng.

14.Kan Ming alleges that Madam Cheng repudiated the 1D Agreement by the issue of the writ and the repudiation was accepted.

15.In their counterclaim, Mr Tang pleads that he was wrongly joined as a defendant in the 1^st Action despite the fact that he is not a party to the 1D Agreement. He claims damages for the wrong joinder and demands Madam Tang to vacate the registration of the writ against Lot 1D as lis pendens.

16.The counterclaim of Kan Ming on the other hand is not entirely comprehensible to me and there is no need to deal with it for the present purposes.

The 2^nd Action

17.Mr Cheng is the registered owner of the neighbouring lot known as Lot 1K of Demarcation District 109 (“Lot 1K”). Madam Cheng’s claim against Cho Yee and him is very much similar to her claim in the 1^st Action against Kan Ming and Mr Tang. A similar agreement dated 12 October 1998 (“the 1K Agreement”) the is alleged to have been entered into between Madam Cheng on the one hand and Cho Yee as the developer of Lot 1K and the agent of Mr Cheng.  

18.Madam Cheng alleges the same fraudulent and/or reckless misrepresentation against Cho Yee and she avers that she had paid HK$1,140,000 to Cho Yee as agent for Mr Cheng and for itself as the developer of Lot 1K.

19.She further alleges the same repudiation and likewise she pleads that she has accepted the repudiation. She claims damages for loss of bargain without any particulars and also a lien against Lot 1K for the sum of HK$1,140,000. She prays for the return to the like amount in addition to damages to be assessed.

Procedural history

20.The procedural history of the 1^st and 2^nd Actions is very simple. For the 1^st Action, after Mr Tang filed and served his joint defence and counterclaim, Madam Cheng filed her Amended Statement of Claim with two very minor amendments not calling for response on 6 May 2000. Since then, Madam Cheng has done nothing to prosecute her claim.

21.It was Mr Tang who took the next step in the proceedings. He took out a summons dated 26 July 2011 for dismissal of the 1^st Action against him for want of prosecution. Master de Souza heard the summons in the absence of Madam Cheng on 2 September 2011 and made the Dismissal Order with costs to Mr Tang. Hence, Madam Cheng took out the Setting aside Summons albeit only after almost three years later.

22.The 2^nd Action is even more uneventful. Madam Cheng first issued the writ and filed her Statement of Claim on 28 March 2000. Mr Cheng has not filed any defence to her pleading after he filed his notice of intention to contest the proceedings on 14 April 2000 in person. Madam Cheng on 5 May 2000 obtained leave to file and serve her Amended Statement of Claim on 5 May 2000. After Mr Cheng’s Dismissal Summons was taken out, Madam Cheng took out a summons for default judgment for the sum of HK$1,140,000 and damages to be assessed on 11 June 2015. This summons is not pursued.

23.On 2 December 2014, Messrs Pancy Leung Tang & Chua (“PLTC”) filed both a Notice to Act on behalf of Mr Cheng and a Notice of Intention to Proceed. Then Mr Cheng’s Dismissal Summons was taken out on 11 March 2015 and was amended on 8 October 2015.

24.Madam Cheng issued the Amendments Summons on 23 February 2016, just a month before the present hearing.

25.Two matters are noteworthy. First, Kan Ming was wound up on 9 November 2011. Second, Messrs Josip Ma & Co (“JMC”) had been on record the solicitors for Madam Cheng from the very beginning in both actions. It is quite a well-known and widely publicised fact that JMC ceased business on 30 September 2001 and its sole practitioner Mr Ma Pui Tung had some troubles with the Law Society.  Mr Ma went bankrupt on 17 May 2004

26.Nevertheless, JMC remained to be the solicitors for Madam Cheng on record in both actions and I note that PLTC even served the Notices on Madam Cheng purportedly through JMC on 2 December 2014. Messrs. Fu and Cheng (“F&C”) filed a Notice to Act for Madam Cheng on 6 June 2015 in the 1^st Action and 14 May 2015 in the 2^nd Action.

Setting aside Summons (the 1^st Action)

27.Mr Li SC with Mr David Tang for Madam Cheng submits that the Dismissal Order must be set aside for want of valid service. The evidence of the service of the documents relating to the application of Mr Tang for the Dismissal Order is not in dispute.

28.The affirmation of Pauline Ip shows that the summons of Mr Tang and the related documents were served on JMC and Madam Cheng by ordinary pre-paid post on 27 July 2011 at the office of JMC situated at Rooms 2205-6, Hollywood Plaza, 610 Nathan Road, Kowloon (“the Hollywood Plaza address”).  Not surprisingly, the papers were returned to PLTC through the dead letter service. Ms Ip’s averment that in the opinion of Mr Tang, the papers should have come to their respective knowledge of JMC and Madam Cheng within 7 days after they had been posted to the Hollywood Plaza address has never been expressly retracted.

29.It is fair for Mr Li to point out that counsel for Mr Tang did point out to the master at the hearing that JMC ceased business in 2001 and the papers had been returned to PLTC. Nevertheless, he submitted that the service was good enough since the Hollywood Plaza address was the last known address of Madam Cheng. The master, though raising the need of substituted service himself at the outset, was eventually convinced by this submission, as shown in the transcript of the hearing.

30.Mr Li relies on a line of authorities to support his submission that the Dismissal Order must be set aside for want of valid and proper service. Service at a knowingly unreachable address can hardly be deemed valid or proper service: Bank of China (Hong Kong) Limited v Worldex Dcor Material & Marble Engineering Limited formerly known as Worldex Engineering Limited, unreported, HCMP787/2004, 3.9.2009  per Chung J, Chu Kam Lun v Yap Lisa Susanto [1999] 3 HKC 378 at 382B-D per Leong JA , Law Hung v Tse Ping Man [1999] 4 HKC 397 at 494D-E per Yuen J (as she then was) and Cosec Nominees Ltd v Lau Hon Ming [2001] 2 HKLRD 581 per DHCJ Poon (as he then was). I have no hesitation in accepting his submission.

31.In my judgment, serving the documents on Madam Cheng at the defunct address of JMC simply made a mockery of the service procedure under O.32 and O.65 of the Rules of the High Court. The defunct address cannot be a valid address for service even though it is the last known address of Madam Cheng. Service cannot be effected by going through the motions with a clear knowledge that the proceedings would never be brought to the notice of the party on which the documents are purportedly served. It requires genuine steps to be taken to bring the proceedings to the notice of the relevant parties. The Dismissal Order is obviously indefensible and must be set aside.

32.Mr Wong SC together with Mr Ho for Mr Tang (and Mr Cheng in the 2^nd Action as well) sensibly does not say much to uphold the validity of service but nevertheless urges this court to take into account the parties’ conduct when exercising the unfettered discretion in this application. In this connection, he relies on Sinokawa Investment (Holdings) Ltd & Anor. v Li Chun [2006] 3 HKLRD 441 where Sakhrani J made it clear that the court has an unfettered discretion to have regard to the conduct of the parties when an application  to set aside a judgment was made.

33.Mr Wong submits that this court should take into account the fact that Madam Cheng has failed to provide a valid address for service after the cessation of business of JMC in compliance of O.67 and that the non-prosecution of the 1^st Action for more than a decade.

34.I accept that this court should also take into all the circumstances including the parties’ conduct in the exercise of the unfettered discretion. The fact that PLTC knowingly served the documents at a defunct address and further insisted that the Hollywood Plaza address was still good for service purpose is alarming and defies fairness and natural justice. This court must mark a strong disapproval of this practice and send out an unequivocal message to the legal profession. The Dismissal Order could not be allowed to stand and it must be set aside with indemnity costs to be paid by Mr Tang to Madam Cheng, to be taxed if not agreed.

Mr Tang’s Dismissal Summons and Mr Cheng’s Dismissal Summons

35.These two summonses involve the same legal principles and can be dealt with together though this court is aware that the particular circumstances of each of the 1^st and 2^nd Actions should warrant independent and separate considerations.

36.The legal principles relating to striking out an action for want of prosecution are authoritatively expounded by Ma CJ in Wing Fai Construction Co Ltd v Yip Kwong Robert (2011) 14 HKCFAR 935 and both Mr Wong and Mr Li refer to me the relevant passages thereof.

37.I believe it suffices for me to set out Holding (5) summarized by the learned editor of the report in respect of paragraph 75 of Wing Fai:

·    “ (5)Where the court was faced with an application to strike out for want of prosecution, the applicable principles to be considered were:

·    (a) Striking out was a remedy of last resort and only where it would be plain and obvious to do so. Greater use should be made of other powers of the court, thus avoiding an "all or nothing" approach to dismissal. (See paras.33, 47, 75(1).)

·    (b) Abuse of the process of the court was the foundation for the exercise of the jurisdiction to strike out for delay. (See paras.66, 68-69, 75(2).)(c) Abuse could take many forms. Mere delay would not suffice. Abuse included (per Birkett v James ) inordinate and inexcusable delay causing prejudice to a defendant or contumelious conduct. It might, however, also take many other forms, such as "warehousing" of claims, inexcusable non-compliance with or wholesale disregard of an order of the court or the rules of court and litigation anxiety (Biss prejudice) (Birkett v James [1978] AC 297, Biss v Lambeth Southwark and Lewisham Health Authority (Teaching) [1978] 1 WLR 382, Grovit v Doctor [1997] 1 WLR 640, Annodeus Ltd v Gibson (unrep., The Times, 3 March 2000) considered). (See paras.75(3)-(4).)

·    (d) Regarding the "warehousing" of claims, that is where a plaintiff had initiated a number of actions against various people and, for tactical reasons or otherwise, selected which action to proceed with or not, for the "warehousing" to justify striking out it must be clear that the plaintiff was abusing the process of the court. Accordingly, where the "warehousing" of claims indicated that there was simply no intention to bring proceedings to a conclusion or there was a "wholesale disregard" of the rules or court orders, abuse could be found to exist. The courts existed to assist parties to resolve disputes and they should not be used by litigants for other purposes (Grovit v Doctor [1997] 1 WLR 640, Arbuthnot Latham Bank Ltd v Trafalgar Holdings Ltd [1998] 1 WLR 1426 followed). (See para.75(4).)

·    (e) When considering the aspect of the delay it was important that it should be both inordinate and inexcusable, and that abuse was shown. It had never been the law that mere delay would be sufficient to justify an order to strike out (Arbuthnot Latham Bank Ltd v Trafalgar Holdings Ltd [1998] 1 WLR 1426, Annodeus Ltd v Gibson (unrep., The Times, 3 March 2000) adopted; New China Hong Kong Group Ltd v AIG Asian Infrastructure Fund LP [2005] 1 HKLRD 383, A & M Manufacturing and Marketing Ltd v Iu Po Shing (unrep., CACV 15/2011, [2011] HKEC 1233) approved; Nanjing Iron & Steel Group International Trade Co Ltd v STX Pan Ocean Co Ltd (unrep., HCAJ 177/2006, [2009] HKEC 1492) explained). (See para.75(5), (6).)

·    (f) Where abuse was clearly demonstrated, for example where there was contumelious conduct on the part of the plaintiff, proceedings could be struck out even where prejudice to the defendant could not be shown. However in the majority of applications, the aspect of prejudice would often be extremely relevant (Purefuture Ltd v Simmons & Simmons [2001] CP Rep 30 considered). (See para.75(7).)

·    (g) The conduct of the parties remained a relevant consideration. It was relevant both to the critical question of abuse as well as to the overall justice of the case. Post-CJR where all parties to the proceedings had the obligation to prosecute the proceedings and assist the court in furthering the underlying objectives, it would be highly relevant to consider any failure on the part of the parties. There was no place anymore for defendants to adopt the attitude of "letting sleeping dogs lie" (Hymer v Mass Transit Railway Corp [2000] 2 HKLRD 589 considered). (See paras.47, 75(8).)

·    (h) Pre-CJR, the courts' attitude had very much been to look only to the position of the parties themselves. Post-CJR, the underlying objective of ensuring that the court's resources were distributed fairly (O.1A r.1(f)) was referable to the administration of justice. The court must bear in mind its own practical limitations and take into account the fact that there are other litigants who were entitled to have their disputes resolved and their day in court (Grovit v Doctor [1997] 1 WLR 640, Arbuthnot Latham Bank Ltd v Trafalgar Holdings Ltd [1998] 1 WLR 1426, Biguzzi v Rank Leisure Plc [1999] 1 WLR 1926 followed). (See para.75(9).)

·    (i) The fact that the limitation period had not yet expired should no longer militate against an order striking out an action. Where there had been abuse, any fresh proceedings by a plaintiff might be met by an application to stay or strike out those proceedings on the ground of abuse and the burden would be on the plaintiff to justify why he should be permitted to continue with the fresh action (Trill v Sacher [1993] 1 WLR 1379, Arbuthnot Latham Bank Ltd v Trafalgar Holdings Ltd [1998] 1 WLR 1426 considered). (See paras.49-51, 75(10).)

·    (j) It remained the position under the CJR that any delay caused by the plaintiff's legal advisers would not be relevant to the exercise of the court's discretion to strike out. (See para.75(11).)”

38.I also find the following passage in Wing Fai (§80) to be instructive:

“Finally, I would like to stress that the power to strike out for delay is of course discretionary and derives from the inherent jurisdiction of the court. The inherent jurisdiction of the court exists to avoid injustice, prevent abuse, preserve the dignity of the court or to facilitate the administration of justice:- see Credit Lyonnais v SK Global Hong Kong Limited [2003] 4 HKC 104, at 107B-C (at para. 2). In exercising its discretion under the inherent jurisdiction, a court must, in applying those principles I have earlier set out, ultimately asks itself the question whether or not in the circumstances, it is just to strike out. A mechanistic approach in which the bigger picture is lost sight of (or, to adopt a more colourful phrase commonly used in our courts, to ‘lose the wood for the trees’), is to be eschewed.”

Application of the principles to the present applications

39.With these principles in mind, I turn to the particular circumstances of the two actions.

40.I am readily convinced that Madam Cheng has delayed both inordinately and inexcusably in the two actions. The delay in both actions is disturbing. In the 1^st Action, Madam Cheng did not act until 15 years after her last move when she claims to become aware of the actual non-determination of the 1^st Action.  In the 2^nd Action, Madam Cheng did not even bother to enter default judgment against Mr Cheng and only reacted when Mr Cheng made the present application in March 2015 again after 15 years.

41.The delay of 15-year is most inordinate. Mr Li can hardly make any submissions to argue otherwise.

42.He nevertheless makes forceful submissions on the explanations proffered by Madam Cheng concerning the delay. Despite his effort, I am not convinced that the delay is excusable.

43.Madam Cheng explains in her affirmation that she is of limited education and she relied heavily on JMC to make a claim against both Mr Tang and Mr Cheng. She expected JMC to start a single action against them and Kan Ming and Cho Yee whom she believed to be commercially related. She left the matter entirely in the hands of JMC. She claims that the unidentified staff member of JMC had advised her that her claim had already succeeded and there was nothing further she needed to do. She was totally convinced and remained convinced throughout all the 15 years because both Lot 1D and Lot 1K had been laid dormant and she believed both lots belonged to her as a result of her successful claim against Mr Tang and Mr Cheng.

44.Madam Cheng claims that she only found out the details of the two actions in light of the legal advice given to her by F & C in May 2015.

45.If Madam Cheng is to be believed, she must have taken the most cavalier attitude to these proceedings. She allowed herself to be totally ignorant of the very existence of the two actions. She did not bother to look at the pleadings filed on her behalf. She claims now that she all along had intended to claim her interest and right over the two lots though her pleadings asked for damages and refund of the monies she had paid pursuant to the 1D and 1K Agreements instead. She did not even seek to recover any legal costs from the defendants though she believed she had already succeeded in her claim in respect of the two lots. She merely relied on the oral report of JMC and did not even ask for any documents evidencing the alleged victory.    

46.In light of the cogent submissions of Mr Wong on the credibility of Madam Cheng, I am convinced that I should outright reject the truthfulness in her explanation and dismiss it as improbable. I am aware that she has been an estate broker since 1998. She entered into serious commercial transactions involving small houses in the New Territories and was willing to pay substantial sums thereunder. She is an investor if she is not a mere nominee in the 1D and 1K Agreements. There is no suggestion that she is. Notwithstanding this, however sophisticated or ignorant she is, as a litigant, her purportedly absolute reliance on JMC is both improbable and unreasonable. I could not accept that she ever genuinely believed that she had succeeded her claims against Mr Tang and Mr Cheng and hence nothing more she should do in these actions. She affirmed that she had paid legal costs to JMC and it is inexplicable she has taken no step to recover such costs from the losing parties if she thinks she is the winner. Nor has she done anything to recoup the payments she made to Kan Ming (despite its liquidation) and Cho Yee. Even if she believes her claim was a proprietary one against the two lots contrary to her pleaded cases, there is no reason why she would allow the two lots to be dormant and has never exerted any proprietary rights thereon for 15 years. Her affirmation evidence is utterly unconvincing.

47.In my view, the explanation cannot provide her with any reasonable excuse of the delay. If Madam Cheng has any conviction in her allegation against JMC or Mr Ma, she can have her own recourse against them if her allegation can be substantiated. In the context of an application for striking out a claim for want of prosecution, it is clear that in any event Madam Cheng’s legal representative’s actions or inactions should also be attributable to her. I do not think that the 15-year delay in both actions is excusable even if I accept, which I cannot, her explanation to be genuine.

48.Therefore, I come to the conclusion that the delay is indeed inordinate and inexcusable in both actions. I should nevertheless bear in mind the ultimate question as to whether it is just in all the circumstances to strike out. Mere delay does not suffice. Abuse of the process is the foundation for the exercise of the jurisdiction to strike out for delay. Prejudice caused by inordinate and inexcusable delay is a prime example of abuse.

49.Mr Wong urges this court to adopt the approach in other common law jurisdictions where the limitation period has expired and delay is shown in Woodheath Developments Ltd v Goldman [2001] OJ No.4018, Armstrong v McCall [2006] OJ Np.2055 and Beverage Bottlers (SA) Ltd (in liq) v Abode Enterprises Pty Ltd. [2009] SASC 272. In those cases, the courts applied a presumption of prejudice calling for the rebuttal of prejudice by the plaintiff if the action is allowed to proceed.

50.Interesting these authorities as they are, Wing Fai being the highest authority binding on this court requires the applicant to prove any alleged prejudice by credible evidence. Thus, I am unable to accept Mr Wong’s submission to apply the presumption of prejudice.

51.Mr Wong submits that Madam Cheng’s abuse of the process of the court is shown by her warehousing the two actions in the sense that she had no intention to bring them to conclusion.

52.I accept that if it is shown that a plaintiff has no intention to bring his action to conclusion, he merely abuses the process of the court and his action is liable to be struck out in appropriate circumstances. However, in such a case the plaintiff may or may not have warehoused his action. As pointed out by Ma CJ in Wing Fai, the notion of the “warehousing of claims” was first referred to by Lord Woolf MR in Arbuthnot Latham Bank Ltd v Trafalgar Holdings Ltd [1998] 1 WLR 1426 and it refers generally to a situation where a plaintiff has initiated a number of actions against various people and, for tactical reasons or otherwise, selects which action to proceed with or not, as the case may be: §55 of Wing Fai at p.964 per Ma CJ.

53.In light of the explanation of the notion of warehousing of claims by Ma CJ, I am unable to accept that the long delay in the 1^st and 2^nd Actions could substantiate the allegation that Madam Cheng actually warehoused her claims. This is nonetheless not really determinative of the core issue of these applications.

54.As I have rejected the explanation of Madam Cheng for not proceeding with her claims for 15 years, there is no believable reason before this court as to why she has not prosecuted her claims since 2000. She indeed did not act until Mr Tang and Mr Cheng had done so. The compelling inference is that she has no intention to bring the two actions to conclusion and this is prima facie an abuse of the process of the court.  

55.I should also take note of the fact that JMC on behalf of Madam Cheng registered the two writs of the 1^st and 2^nd Actions as lis pendens against the two lots. Whilst I accept the submission of Mr Li that Mr Tang and Mr Cheng could themselves apply to remove such registrations and any allegations of prejudice suffered should be assessed in light of this, Madam Cheng should not take such a carefree approach to these proceedings and she must be expected to prosecute her claims with due diligence after having obtained some kind of security by the registration of the lis pendens: see §75(5) of Wing Fai at p.971. This isparticularly so in the wake of the CJR coming into effect on 2 April 2009. Her complete inaction after the registration of the lis pendens reinforces this court’s belief that she actually abuses the process of the court.

56.To sum up, in the absence of a plausible explanation for the 15-year inaction, coupled with the registrations of lis pendens and the fact that Madam Cheng did not even apply for default judgment in the 2^nd Action, in my judgment, Madam Cheng shows no intention to conclude her claims in the two actions. Abuse is clearly demonstrated in all the circumstances and this court should frown upon the conduct of Madam Cheng in the two actions. On this ground alone, these proceedings can be struck out: §75(7) of Wing Fai at p.971.

57.Nevertheless, I proceed to consider whether there is any real prejudice caused to Mr Tang and Mr Cheng and whether a fair trial is still possible in both actions.

58.Given the Dismissal Order, it is understandable why Madam Cheng has not yet applied to amend her pleadings in the 1^st Action. Indeed Mr Li indicates that if the Dismissal Order is set aside and Mr Tang’s Dismissal Summons is dismissed, Madam Cheng will apply to amend the pleadings.

59.Madam Cheng does apply to amend her pleadings in the 2^nd Action. She relies on her affirmation evidence to the effect that JSM has messed up her claims and did not truly reflect her proprietary claims over the two lots in her pleadings. She actually did not accept the repudiations of the 1D and 1K Agreements and does not wish to make the monetary claims. Instead, she seeks specific performance of the 1D and 1K Agreements.

60.This assertion is indeed disquieting. It means that if the two actions are to allow to proceed, the pleadings should be revamped and the two actions have to be proceeded on the basis of the new allegations stated in her affirmations. Now Madam Cheng even alleges that Mr Tang and Mr Cheng are mere nominees/trustees holding the two lots on constructive and/or resulting trust for Kan Ming and/or Cho.

61.Further, Madam Cheng has to retract her previous allegation that she had given verbal notice to Kan Ming and Cho Yee in March 1999 of her acceptance of the respective repudiations of Mr Tang and Mr Tang of the 1D and 1K Agreements.

62.In respect of the 1^st Action, I have little doubt that the long delay would cause prejudice to Mr Tang if he is to deal with all the new allegations in the new claim against him after all these years. Despite the allegation that Mr Kan of Kan Ming can be easily found, I believe that the liquidation of Kan Ming would pose difficulties to him in investigating any allegations against him and Kan Ming including the newly alleged trust relationship. It is difficult for Mr Tang to find out now whether anyone of Kan Ming indeed received the alleged verbal notice given by Madam Cheng so as to resist her intended plea of specific performance too.  

63.As regards the 2^nd Action, Mr Cheng suffers more or less the same prejudice though there is no issue of liquidation of his co-defendant. They are to face the new claim with new allegations after 15 years and I can readily accept any investigation of the validity of the new claim of Madam Cheng and preparation of their own defence case on the part of Mr Cheng would be somehow hampered. 

64.In the premises, a fair trial in both actions is rendered impossible. In light of my finding of an inordinate and inexcusable delay and abuse, together with the prejudice caused to Mr Tang and Mr Cheng due to the delay, I believe it is only just in all the circumstances to strike out the 1^st and 2^nd Actions as against Mr Tang and Mr Cheng respectively.

The Amendment Summons

65.Given my conclusion on Mr Cheng’s Dismissal Summons and my reasons given therefor, the Amendment Summons cannot be allowed. It should be dismissed with costs to Mr Cheng.

Conclusion

66.In summary, the four summonses should be disposed of in the following manner:

(1)   The Setting aside Summons is allowed and the Dismissal Order must be set aside. Mr Tang do pay Madam Cheng indemnity costs of and occasioned by the Setting aside application, to be taxed if not agreed.

(2)   Mr Tang’s Dismissal Summons is allowed with costs to Mr Tang, to be taxed if not agreed. Madam Cheng’s claim against Mr Tang in the 1^st Action be struck out with costs as well.

(3) Mr Cheng’s Dismissal Summons is allowed with costs to Mr Cheng, to be taxed if not agreed. Madam Cheng’s claim against Mr Cheng in the 2^nd Action be struck out with costs.

(4)   Madam Cheng’s Amendment Summons be dismissed with costs to Mr Cheng, to be taxed if not agreed.

67.I allow certificate for two counsel in respect of all the costs orders above, which are all made on a nisi basis.

68.Lastly, I thank counsel on both sides for their able and helpful submissions.

Mr C.Y. Li S.C. and Mr David Tang, instructed by Fu & Cheng, for the plaintiffs in both actions

Mr Anson Wong S.C. and Mr Leon Ho instructed by Pansy Leung Tang & Chua, for the 2^nd defendants in both actions