Dextra China Ltd and Another v. Lam Wing Kit
Read the full judgment text of HCMP 1852/2015 on BabelCite. This High Court CFI judgment was delivered on 30 November 2017.
1. There are before the court the following 2 matters:
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HCMP 1852/2015 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO 1852 OF 2015 _____________________
_____________________ D E C I S I O N _____________________ Matters before the court 1.There are before the court the following 2 matters:
Background 2.The background to these matters can be stated very shortly. 3.On 28 April 2014, the plaintiffs obtained judgment for, inter alia, sums totalling RMB 5,458,951 (inclusive of pre-judgment interest) (“Judgment”) against the defendant after a 7-day trial in HCA 38/2010. 4.In enforcement of the Judgment, on 30 July 2014, the plaintiffs obtained a charging order absolute over the Property, which was acquired by the defendant and his late father, Mr Lam Wah Chun (“Father”), as joint tenants by assignment dated 9 November 1999 and of which the defendant became the sole owner by operation of the doctrine of survivorship upon his father’s death on 7 February 2006. 5.By the originating summons issued herein against the defendant on 31 July 2015, the plaintiff sought an order for the sale, and the delivery up of vacant possession, of the Property. 6.On 30 September 2015, the plaintiffs’ solicitors caused a notice to occupants (“Notice to Occupants”), giving notice of these proceedings and the hearing of the originating summons on 17 November 2015, to be affixed to the Property. 7.On 17 November 2015, the originating summons came before Master R Lai who refused the defendant’s request through counsel for an adjournment made on the basis that there was an on-going dispute as to the beneficial ownership of the Property (but without any supporting affidavit) and granted the Order for Sale. 8.On 31December 2015, Registrar Lung issued a writ of possession for the bailiffs to take possession of the Property, the defendant having failed to comply with the Order for Sale. 9.In the meantime, the Siblings had, by a writ of summons issued in the District Court Action on 10 November 2015, claimed against the defendant for declarations that the defendant held the Property on trust for them to the extent of 74.51%. 10.Broadly, as it appeared from their pleadings in the District Court Action, the Siblings so claimed on the basis of:
11.The Sibling’s statement of claim contained a number of tables setting out their case as to
over different periods of time in the 20 years from December 1999 to November 2019. The numbers put forward were very specific, to the precise dollar. The crystalisation of the interest claimed by the Siblings at 74.51% was based on their assertion that, between December 1999 to November 2019, their contributions would add up to 74.51% of the total sum of $4,196,445 that had been expended (and would continue to be expended) on the repayment of the Loans, the outgoings and expenses of the Property and the parents’ maintenance. 12.Insofar as the defendant was concerned, it appeared from his defence in the District Court Action that he did not dispute the Siblings’ claims to have a beneficial interest in the Property but he took issue with the inclusion of certain expenses taken into account by them and therefore the percentage of contributions and beneficial interest worked out by the Siblings. 13.The commencement of the District Court Action was followed by the issuance of a summons herein on 23 December 2015, by which the Siblings made the Joinder Application and the Stay Application. 14.Such applications were supported by 2 affirmations of the Sister, one made on 22 December 2015 and the other made on 26 February 2016. These affirmations altogether contained less than 10 pages of substantive text in Chinese. I think it is not unfair to describe the former affirmation as being, in substance, a mere reproduction of the Siblings’ statement of claim in the District Court Action. Neither affirmation exhibited any documents so that the Siblings’ case on evidence before Master Chow can be said to be consisting entirely of their bare assertions, albeit made on oath by the Sister. In particular, I note that the lack of documentary evidence was commented on in paragraph 28(a) of the affirmation in opposition made by the plaintiffs’ solicitor on 5 February 2016. This criticism was however not met or in any way dealt with in the Sister’s 2nd affirmation, which was stated to be in reply to the plaintiffs’ affirmation in opposition. 15.While the Joinder Application and the Stay Application were pending, the District Court Action was concluded by the Tomlin Order, whereby all further proceedings therein were stayed upon the terms set out in a Settlement Agreement made between the defendant and the Siblings following a 4-hour mediation on 24 June 2016. Insofar as it is material, it was agreed that the defendant should transfer a 70% interest in the Property to the Siblings. The Tomlin Order was subsequently sealed on 5 October 2016 and registered (by memorial No.16101900080010) at the Land Registry against the Property on 19 October 2016. 16.Against this background, the Joinder Application and the Stay Application came before Master Chow on 8 September 2016. The Siblings were represented by counsel namely, Ms Zoe Ning instructed by Phyllis K Y Kwong & Associates. The Master dismissed both applications on the ground that, notwithstanding the Tomlin Order which she had taken into account, the Siblings failed to show an arguable case by a wide margin. In particular, she observed in her oral reasons that the Siblings had not produced a single piece of documentary record, whether as to their being in actual possession of the Property or their having a beneficial interest in the Property, not to mention the gaps and contradictions in their claims, which they chose not to explain. 17.Following a failed application by the Siblings for a stay of the execution of the Order for Sale pending the determination of the Appeal in early October 2017, the writ of possession was executed in that month. 18.The Siblings ceased to be represented, and began to act in person, in these proceedings in January 2017. The Appeal The Stay Application 19.The Stay Application had been rendered academic by the conclusion of the District Court Action by the Tomlin Order. The Tomlin Order which was made by consent between the defendant and the Siblings, however, did not bind the plaintiffs who were not made parties to the District Court Action. Nor did it bind Master Chow (or this court). As between the plaintiffs and the Siblings, the question remained whether the Siblings should be allowed to intervene in these proceedings to contest the plaintiffs’ right to an order for the sale of the Property in enforcement of the Judgment because of their partial beneficial interest in the Property. The Joinder Application 20.Although the margin of the Siblings’ summons referred to Order 15 rules 4[1] and 6[2] of the Rules of the High Court (Cap 4A), the Joinder Application was argued before Master Chow with reference to Order 15 rules 6 and 10[3]. Applicable legal principles 21.Where the applicant for joinder is asserting a beneficial interest in the property that is the subject-matter of the proceedings, under both rules, the burden is upon him to demonstrate an arguable bona fide claim to such beneficial interest. In this regard, Mr Christopher Chain, counsel for the plaintiffs, has drawn my attention to:
22.In addressing the question whether the Siblings have demonstrated an arguable bona fide claim to partial beneficial ownership of the Property to justify their joinder in these proceedings, Mr Chain has reminded the court to bear in mind the following:
Discussion on the basis of the Siblings’ case and evidence before Master Chow 23.Mr Chain has addressed me on:
24.I have taken some care in describing in some detail, in paragraphs 10, 11 and 14 above, the evidence put by the Siblings before Master Chow in support of their claim to partial beneficial ownership of the Property. As stated above, the Siblings’ case on evidence before Master Chow consisted entirely of their bare assertions, unsupported by any documentary or other independent or objective evidence. And given the nature and basis of the Siblings’ claim, one would have expected some probative written records to exist, especially documents in proof of some, if not all, of the financial contributions upon which the Siblings rest their case, particularly when such contributions were supposed to be continuing. There was no explanation by the Siblings as to why they could, or would, not adduce any documentary evidence, despite the criticism in paragraph 28(a) of the plaintiffs’ affirmation in opposition. 25.On such evidence, even leaving aside the other points mentioned by Mr Chain as summarised in paragraph 23 above, I am of the view that the Siblings had fallen fall short of what is required to show an arguable bona fide claim to a beneficial interest in the Property. Any decision otherwise would oblige the court to act on bare assertions. Documents produced by the Siblings at the hearing 26.However, this is not the end of the matter. Immediately before the hearing on 5 May 2017, the Siblings handed up to the court, and copied to the solicitors for the plaintiffs, a bundle of copy documents under the cover of a letter addressed to me dated 5 May 2017 and signed by the Brother. 27.In short, in addition to repeating some of the assertions already made in the Sister’s said affirmations, the Brother’s said letter seeks to explain, inter alia, why the Siblings failed to produce any documentary evidence in support of their claim before Master Chow,[5] which explanation I will go into in a moment in paragraph 34 below. 28.In support of such explanation, included in the bundle were, inter alia, a 1-page list of the documents claimed to have been passed by the Siblings to the lawyers formerly acting for them and copies of what appeared to be the documents on that list (“New Documents”) which are arranged in chronological order below:
29.The Siblings invited me to have regard to the New Documents in deciding the Appeal. 30.After the Civil Justice Reform, in an appeal under Order 58, rule 1(5) provides that no further evidence, other than evidence as to matters which have occurred after the date on which the judgment, order or decision was given or made by the master, may be received on the hearing of the appeal, except on “special grounds”. 31.The expression “special grounds” is the same as the test in Order 59 rule 10(2) (governing appeal to the Court of Appeal) and requires the following 3 conditions laid down in Ladd v Marshall [1954] 1 WLR 1489 to be satisfied:
See Hong Kong Civil Procedure 2018, Volume 1, paragraph 58/1/3. 32.In the context of an appeal from Order 14 proceedings in which the defendant has to show just a triable issue, the application of the conditions laid down in Ladd v Marshall has been somewhat modified by Lord Bridge in Langdale v Danby [1982] 1 WLR 1123 at 1133:
33.I am afraid I find the Siblings failing at the first condition of Ladd v Marshall, even as modified in Langdale v Danby. 34.Unlike most cases in which pertinent evidence was obtained after the decision under appeal so that the question arises as to whether the new evidence could have been obtained earlier with reasonable diligence, as I understand it, the Siblings had already located and put together the New Documents by the time they commenced the District Court Action against the defendant. They claimed to have given such documents, as per the list mentioned in paragraph 28(1) above, to the lawyers then acting for them. They were however advised that it was not necessary for the time being to adduce such documents in support of the Joinder Application. This seems to be consistent with the statements made by former counsel for the Siblings before Master Chow that there were documents which, it was suggested, need not be produced because it was not required for the purpose of the Joinder Application as the issue of the Siblings’ interest in the Property was raised and dealt with in the District Court. 35.The fact that the Siblings might have been wrongly advised as to the burden of proof on them for the Joinder Application (for which they may seek redress elsewhere) does not detract from the fact that, vis-à-vis the plaintiffs, the Siblings could have without any difficulty adduced, but had chosen (albeit on advice) not to adduce, the New Documents before Master Chow. 36.In view of the non-fulfilment of the first condition, it is unnecessary for me to consider the second and third conditions of Ladd v Marshall. 37.I refuse the Siblings’ application to adduce the New Documents. 38.The conclusion I reach in paragraph 25 above on the Appeal stands. Registration Application 39.According to paragraphs 8 to13 of the plaintiffs’ solicitors’ 2nd affirmation dated 2 May 2017, the sale of the Property was unsuccessful as interested buyers were deterred by the registration of the Tomlin Order against the Property at the Land Registry. 40.In invoking the court’s inherent jurisdiction, Mr Chain has referred me to:
41.This case does not fall exactly into either situation. The Tomlin Order was registered. The schedule to the Tomlin Order recorded the terms of settlement between the defendant and the Siblings regarding the allocation of the beneficial ownership of the Property and was prima facie capable of being registered against the Property. 42.Nevertheless, I have come to the view that the registration of the Tomlin Order should be vacated from the Land Register pursuant to the court’s inherent jurisdiction to prevent an abuse of its process.
Orders 43.For the above reasons:
44.Lastly, I note that paragraph 4e of the Order for Sale provides for the payment of what is left of the proceeds of sale of the Property after the deductions allowed under the preceding sub-paragraphs. In view of the Siblings’ attempt to intervene, the plaintiffs may wish to consider making an application in respect of the handling of such residue.
Mr Christopher Chain, instructed by Winston & Strawn for the plaintiffs Mr Lam Wing Kit, the defendant, unrepresented and appearing in person Madam Lam Chui Ha and Mr Lam Wing Kwan unrepresented and appeaing in person [1] Which provides generally as to when 2 or more persons must or may be joined together in one action as plaintiffs or as defendants with or without leave of the court. [2] Sub-rule (2)(b) of which allows the court to order the joinder, as a party, of (i) persons who ought to have been joined or whose presence before the court is necessary to ensure that all matters in dispute in the cause or matter may be effectually and completely determined and adjudicated upon or (ii) persons between whom and any party to the cause or matter there may exist a question or issue arising out of or relating to or connected with any relief or remedy claimed in the cause or matter which in the opinion of the court it would be just and convenient to determine as between him and that party as well as between the parties to the cause or matter. [3] Which deals specifically with actions for possession of land in which, without prejudice to rule 6, the court may at any stage of the proceedings order any person not a party to the action who is in possession of the land (whether in actual possession or by a tenant) to be added as a defendant. [4] The defendant was said to have stopped all financial contributions since he lost his job since January 2010. [5] The letter also sought to explain why the Siblings had not come forward right after the affixation of the Notice to Occupants at the Property on 30 September 2015 in that they claimed that the litigation between the plaintiffs and the defendant, of which they had no understanding, had gone on for a few years. They habitually passed to the defendant any court documents served at the Property. They did not pay attention to the contents of such documents, thinking that they pertained only to the defendant. | ||||||||||||||||||||||||||||||||||||
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