Yeung Yeuk Chuen, The Executor of the Will of Chan Yuet See, Deceased v. Vincent T. K. Cheung, Yap & Co. (A Firm)

HCA 680/2015

[2018] HKCFI 1501

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 680 OF 2015

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Before:  Hon Lok J in Chambers

Dates of Written Submissions on Costs:  10 January 2017

Date of Decision on Costs:  3 July 2018

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DECISION ON COSTS

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1.By the consent order dated 3 January 2017, I granted leave for: (i) the withdrawal of the striking out application by the Defendant (“the Striking-out Application”); and (ii) the withdrawal of the action by the Plaintiff. The parties agreed for the costs application to be dealt with on papers. I now give my decision on such costs application.

2.The deceased was the registered owner of Ground Floor of No. 2D Tak Shing Street, Kowloon (“the Property”).   The Plaintiff is the executor of the estate of the deceased.

3.The Property formed part of Pak Cheung House, and there was a deed of mutual covenant dated 5 December 1996 governing all the properties of Pak Cheung House (“the DMC”) which was prepared by the Defendant whilst they were acting for the Financial Secretary Incorporated.

4.Pak Cheung House was subject to a compulsory sales application, LDCS 16000/2014, in the Lands Tribunal (“the Compulsory Sales Application”).

5.In this action, the Plaintiff alleges that due to an alleged colouring error in the DMC relating to the common area known as “the West Yard”, the size of the Property, which is registered in the Plaintiff’s name in his capacity as the executor of the estate of the deceased, was reduced, thereby adversely affecting the value of the Property in the Compulsory Sales Application.

6.The Plaintiff claims that the Defendant was responsible for the said error in the DMC and was therefore negligent.  In the Statement of Claim, the Plaintiff claims for, inter alia, the following relief:

(i)  an order that the Defendant do rectify the error in the DMC;

(ii)  alternatively, an order that the Defendant do provide the Plaintiff with an executed version of the statutory declaration;

(iii)  alternatively, damages.

7.The Defendant took out the Striking-out Application on 8 June 2015 which came before me on 3 occasions, i.e. the hearings on 6 October and 9 November 2015 and 15 March 2016.

8.In these hearings, I found that there were some problems with the Plaintiff’s claim.  In fact, it was quite difficult to understand the basis of the Plaintiff’s claim.

9.In the first hearing, I granted leave to the Plaintiff to amend the Statement of Claim.

10.In the third hearing, the Plaintiff’s counsel indicated to me that he only wanted to get a statutory declaration from the Defendant to the effect that the colouring of the West Yard in the DMC was wrong.  After hearing what the Plaintiff sought to achieve, I was of the view that, rather than suing the Defendant, the Plaintiff should commence an action to rectify the DMC joining all the interested owners of Pak Cheung House as defendants.

11.The Plaintiff then commenced HCMP 823/2016 against the Defendant and all the owners of Pak Cheung House seeking rectification of the DMC.

12.On 17 October 2016, the Lands Tribunal handed down the judgment in the Compulsory Sales Application (“the Judgment”) with an order for sale of the properties in Pak Cheung House including the Property.

13.It can be seen in paragraphs 76 and 77 of the Judgment that all the other owners agreed that the colouring of the West Yard in the DMC was wrong.  However, the Lands Tribunal held that the wrong colouring does not matter because the West Yard was still the common parts of Pak Cheung House.  The West Yard was not exclusively used or occupied by the owner of the Property.  In such case, it would not reduce the value of the Property for the purpose of the Compulsory Sales Application.

14.This alone shows that the Plaintiff’s claim in this action is misconceived because the colouring error, even if the Defendant was responsible for the same, would not cause the deceased’s estate to suffer any damages.  In other words, the rectification does not serve any purpose. Even if there was justification for the Plaintiff to ask for the rectification, the Plaintiff could not do so without involving the other owners of Pak Cheung House.  Procedurally, it would be wrong for the Plaintiff to commence the action against the Defendant alone.

15.Generally, costs should follow the event, and a party who seeks to withdraw an action has to pay for the costs of the counter party.  There is no basis for the court to depart from such general principle in the present case.  Indeed, the circumstances here suggest that it is not necessary to bring the claim against the Defendant.  Hence, I order that the costs of this action, including the costs of the Striking-out Application, be paid by the Plaintiff to the Defendant to be taxed if not agreed.

Written submissions by Mr Gavin Wan, instructed by Hon & Co, for the Plaintiff

Written submissions by P. C. Woo & Co for the Defendant