China Citic Bank International Ltd v. Durrant Simon Partrick Michael
Read the full judgment text of HCMP 3196/2013 on BabelCite. This High Court CFI judgment was delivered on 1 June 2018.
1. The plaintiff was the former mortgagee bank of Unit 04 on 42 nd Floor, Southorn Garden, No 2 O’Brien Road, Hong Kong (“ Property ”) pursuant to a Deed of Mortgage dated 19 December 2000 (“ Mortgage ”). The defendant was the former registered owner and mortgagor of the Property.
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HCMP 3196/2013 [2018] HKCFI 1183 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO 3196 OF 2013 ________________________
________________________ BETWEEN
________________________ Before: Deputy High Court Judge Marlene Ng in Chambers Date of Hearing: 24 May 2018 Date of Handing Down Judgment: 1 June 2018 ________________________ JUDGMENT ________________________ I. BACKGROUND 1.The plaintiff was the former mortgagee bank of Unit 04 on 42nd Floor, Southorn Garden, No 2 O’Brien Road, Hong Kong (“Property”) pursuant to a Deed of Mortgage dated 19 December 2000 (“Mortgage”). The defendant was the former registered owner and mortgagor of the Property. 2.On 26 November 2013, the plaintiff commenced the present proceedings by originating summons for a money and possession order against the defendant (“OS”). 3.On 3 December 2013, the defendant filed acknowledgment of service that gave notice of intention to defend. However, the defendant did not file affirmation evidence in opposition. 4.On 17 December 2013, the plaintiff filed the supporting affirmation of its senior officer Tse Kai Yin (“Tse”) in support of the OS (“Tse 1st Aff”), and a notice of appointment to hear originating summons (“Notice”). 5.On 14 January 2014, the OS was returnable for hearing before Master Chow. Master Chow directed that the OS, Notice and Tse 1st Aff be re-served on the defendant (who intimated that the package of documents originally served on him was damaged), and the hearing of the OS was adjourned to 11 February 2014. 6.On 17 January 2014, the plaintiff filed notice of appointment for adjourned hearing of originating summons. 7.On 11 February 2014, the OS was returnable for hearing before Master Leong. At such hearing, the defendant advanced an argument that the plaintiff provided incorrect information to other financial institutions as a result of which he was unable to re-mortgage the Property. Master Leong refused the defendant’s request to allow him to file affirmation evidence in opposition as the learned master was of the view that the proposed defence did not amount to an arguable defence. Master Leong then proceeded to grant judgment in favour of the plaintiff (“O88 Judgment”) inter alia that the defendant was:
8.On 25 February 2014, the defendant filed notice of appeal to set aside the O88 Judgment (“1st Appeal”), and also filed his affirmation in support that complained inter alia that Master Leong had not given him opportunity to file affirmation in opposition (“Durrant 1st Aff”). 9.On 11 March 2014, the plaintiff filed the affirmation of its solicitor Chan Ning Chun (“Chan”) in reply to the Durrant 1st Aff. 10.At the first hearing of the 1st Appeal on 13 March 2014, the defendant advanced an additional defence argument to challenge the accuracy of the plaintiff’s account of the outstanding amounts, and complained that the plaintiff’s supporting affidavit evidence did not give sufficient information as to how the plaintiff arrived at the final outstanding amounts. Burrell J adjourned the 1st Appeal for argument on a date to be fixed, and gave leave for the defendant to file/serve his affirmation in support and for the plaintiff to file/serve its affirmation in reply. 11.On 9 April 2014, the defendant filed a summons asking the court to direct the plaintiff to provide him with supporting documents for its claim, and to grant extension of time for him to file and serve his “defence” after the plaintiff supplied such documents. On the same day, the defendant filed his supporting affirmation. 12.On 17 April 2014, the defendant’s summons was returnable for hearing before DHCJ ST Poon. DHCJ ST Poon dismissed such summons, and directed that unless the defendant filed his affirmation in support (pursuant to Burrell J’s order dated 13 March 2014) on/before 4:00pm on 24 April 2014 he would be debarred from filing any further affirmation in support of the 1st Appeal. 13.On 24 April 2014, the defendant filed his affirmation (pursuant to Burrell J’s order dated 13 March 2014) that explained inter alia the difficulties faced by his business, the plaintiff’s refusal to lend further money to him, the difficulties he had in attempting to refinance the Mortgage, the plaintiff’s failure to disclose his repayments in 2012, and the alleged false/inaccurate information given out by the credit reference company Transunion Limited that was believed to have come from the plaintiff. 14.On 2 May 2014, the plaintiff filed Tse’s 2nd affidavit in reply to refute the defendant’s allegations. On the same day, the plaintiff applied and obtained a writ of possession and fieri facias combined. 15.On 5 May 2014 (ie 3 days before the adjourned hearing of the 1st Appeal), the defendant filed a summons to “dismiss the summons HCMP3196/13” and to “hold [the plaintiff] in contempt of court for committing perjury in the filing of a factually inaccurate affidavit in attempt to extort money via court order in excess of the outstanding loan”, and also filed his affirmation in support. 16.On 7 May 2014, the defendant filed a summons for DHCJ ST Poon to recuse himself from hearing the 1st Appeal, and also filed his affirmation in support. 17.At the hearing of the 1st Appeal on 8 May 2014, DHCJ ST Poon dismissed the defendant’s summons filed on 7 May 2014. The 1st Appeal and the defendant’s summons filed on 5 May 2014 were adjourned part-heard to 26 May 2014 for the parties to submit legal authorities. 18.As explained in paragraphs 9-11 of the decision handed down by DHCJ ST Poon on 23 June 2014 (“Poon Decision”, see paragraph 22 below), Chan who appeared for the plaintiff at first relied on a conclusive evidence clause in the Mortgage, but had yet to provide relevant legal authorities for the court’s consideration. 19.On 14 May 2014, the defendant filed a summons for stay of execution of the O88 Judgment, and also filed his affirmation in support. On 19 May 2014, Master Ho granted interim stay of execution pending the determination of the 1st Appeal. 20.On 23 May 2014, the plaintiff filed Tse’s 3rd affidavit in further reply to the defendant’s affirmation evidence to which 2 tables setting out the monthly arrears of instalments and the principal/interest due under the mortgage loans were exhibited (“Tse 3rd Aff”). 21.On the same day, the defendant filed a summons for an order that “summons be dismissed because of: - the actions of the plaintiff, - the mis-representation of the facts, - Citic knowingly deceived the defendant”, and also filed his affirmation in support. According to paragraph 8 of the Poon Decision, DHCJ ST Poon found the defendant’s summonses filed on 5 and 23 May 2014 to be identical in substance albeit framed in different wordings. The learned judge further found such summonses totally without merit and were liable to be dismissed. 22.At the adjourned hearing of the 1st Appeal on 26 May 2014, the defendant raised several lines of defence before DHCJ ST Poon, which were helpfully summarised in paragraphs 6-10 of the written judgment handed down by the Court of Appeal in CACV127/2014 on 23 June 2016 (“CA Judgment”, see paragraphs 33-37 below) as follows:
23.On 23 June 2014, DHCJ ST Poon handed down the Poon Decision and dismissed the 1st Appeal with order nisi that costs of the 1st Appeal be to the plaintiff to be taxed if not agreed save and except there be no order as to costs for the hearing on 8 May 2014. By the Poon Decision (summarised in paragraphs 11-13 of the CA Judgment), DHCJ ST Poon rejected all 4 defences raised by the defendant set out in the above paragraph. The learned judge found the 3 defences in paragraph 22(a)-(c) above would at most amount to a separate claim against the plaintiff for damages and not any viable defence to the plaintiff’s claim based on the defendant’s breaches of the loan agreements upon default in paying the mortgage instalments. As for the challenge over the accuracy of the amounts claimed, the learned judge was satisfied on the evidence before him that the defendant started to default payment of the mortgage instalments in March 2011, that the few sums paid between 1 April and 1 June 2012 had been taken into account, and that the Tse 1st and 3rd Affs accurately reflected the status of the mortgage loan accounts set out in the Tse 1st Aff. 24.On 24 June 2014, the defendant commenced his appeal against the order of DHJC ST Poon dated 23 June 2014. On the same day, the defendant applied to the Practice Master to further stay the O88 Judgment, but Master S Lo dismissed such application. Again on the same day, the defendant filed a summons to further stay the O88 Judgment and writ of possession and fieri facias combined pending the outcome of his appeal to the Court of Appeal, and also filed his affirmation in support. On 27 June 2014, Master S Lo dismissed such summons. 25.On 27 June 2014, the defendant filed a notice of appeal to set aside the order of Master S Lo dated 27 June 2014 (“2nd Appeal”). The hearing of the 2nd Appeal came before DHCJ B Chu (as she then was) on 2 July 2014. On 8 July 2014, DHCJ B Chu (as she then was) handed down her written judgment (“Chu Judgment”), and dismissed the 2nd Appeal with costs to the plaintiff. 26.On 10 July 2014, the defendant applied to the Court of Appeal in CACV127/2014 for stay of execution of the O88 Judgment until the hearing and determination of his appeal against the order made by DHCJ ST Poon on 23 June 2014. On 21 July 2014, Chu JA handed down her written decision to dismiss such application with costs to the plaintiff. The defendant appealed against the decision of Chu JA. After the hearing of such appeal on 7 August 2014, the Court of Appeal handed down its written decision on 13 August 2014 to dismiss such appeal with costs to the plaintiff. 27.In the meantime, on 15 July 2014, the defendant applied by affirmation on ex parte basis in the present proceedings for interim stay of execution of the O88 Judgment. On the same day, J Yau J granted leave for the defendant to withdraw his application. 28.On 17 July 2014, the defendant renewed his application by affirmation on ex parte basis in the present proceedings for interim stay of execution of the O88 Judgment. On the same day, J Yau J dismissed such application. 29.On 2 September 2014, the defendant issued notice of motion in CACV127/2014 seeking leave to appeal against the order of the Court of Appeal dated 13 August 2014 to the Court of Final Appeal. Such notice of motion was heard by the Court of Appeal on 11 September 2014. On 15 September 2014, the Court of Appeal handed down its written decision to dismiss such application with costs to the plaintiff. 30.On 26 November 2015, the plaintiff issued the 2nd writ of possession and fieri facias combined. 31.On 7 December 2015, the defendant applied ex parte to the Practice Master for stay of execution of the O88 Judgment, but Master J Wong dismissed such application. 32.On 8 December 2015, the defendant filed a summons for stay of execution of the O88 Judgment, and also filed his affirmation in support. On 17 December 2015, Registrar K W Lung dismissed such summons. 33.On 17 June 2016, the Court of Appeal in CACV127/2014 heard the defendant’s appeal against the O88 Judgment. On 23 June 2016, the Court of Appeal handed down the CA Judgment to dismiss such appeal and to order the defendant to pay the plaintiff’s costs on indemnity basis. 34.According to paragraphs 14(2) and 15-20 of the CA Judgment, the Court of Appeal rejected the defendant’s allegation that DHCJ Poon had allowed his personal bias against him to influence his decision and actions during the hearing. 35.As regards the defendant’s contention that DHCJ ST Poon had erred in fact and law, it was said that as the Tse 1st Aff did not exhibit any bank or account statements to support the status of the 2 mortgage loan accounts as deposed by Tse or the total amount that was due as at the date of such affidavit (ie HK$3,413,056.42), the defendant could not verify the accuracy of the plaintiff’s claim, and the plaintiff therefore failed to prove the money claimed was due and payable as required by Order 88 rule 5(3) and (6) of the Rules of the High Court (“RHC”). But in paragraphs 24-30 of the CA Judgment, the Court of Appeal rejected such argument. It was held that the plaintiff by the Tse 1st Aff had given the particulars required under Order 88 rule 5(3) of the RHC, and Order 88 rule 5(6) of the RHC did not require proof to be furnished by exhibiting a bank/account statement, and did not prevent the Tse 1st Aff to be supplemented by subsequent affidavit evidence. As there was no or no credible evidence that prior to the O88 Judgment the defendant disputed or challenged the accuracy of the amounts claimed, the Court of Appeal found “[the defendant’s] contention that he is unable to verify the accuracy of the amounts claimed is disingenuous, to say the least” (see paragraph 26 of the CA Judgment). Such challenge as to the accuracy of the status of accounts of the 2 mortgage loans were raised at the 1st Appeal. The Court of Appeal found DHCJ ST Poon “did not err in law in taking into account all the affidavits filed by the plaintiff in holding that the evidence before him reflected accurately the status of the two mortgage loan accounts” (see paragraph 26 of the CA Judgment). The Court of Appeal also held DHCJ ST Poon had not erred in exercising his discretion to refuse the defendant’s application for the plaintiff to produce supporting documents including bank statement, repayment history and source of interest (see paragraph 27 of the CA Judgment). The Court of Appeal also rejected the defendant’s new arguments about miscalculation of default interest (see paragraphs 28-30 of the CA Judgment). 36.The Court of Appeal rejected the defendant’s allegations that the plaintiff (a) had reneged on the promise of refinancing held out by its officer, and (b) did not therefore come to the court with clean hands (see paragraphs 31-35 of the CA Judgment). The Court of Appeal noted such allegations were contradicted by a contemporaneous email by the bank officer to the defendant, and held such allegations at most amounted to a separate claim by the defendant against the plaintiff for damages that did not amount to any viable defence to the plaintiff’s claim. The Court of Appeal also did not see how the plaintiff gave inaccurate information to Transunion Limited when the defendant was in default of the monthly instalments since March 2011 notwithstanding isolated payments in April and May 2012. 37.The Court of Appeal was satisfied the defendant’s challenge as to the accuracy of the sums claimed by the plaintiff had no merits (see paragraph 36 of the CA Judgment). 38.The defendant sought leave to appeal to the Court of Final Appeal. On 27 July 2016, the Court of Appeal handed down its written judgment to dismiss his application for leave to appeal as well as his summons for stay of execution of the O88 Judgment, and made a nisi order for the defendant to pay the plaintiff’s costs, which eventually became absolute. On 8 December 2016, the Appeal Committee refused leave for the defendant to appeal to the Court of Final Appeal as he failed to disclose reasonable grounds for leave to appeal. 39.On 21 December 2016, the plaintiff issued the 3rd writ of possession and fieri facias combined. 40.On 5 April 2017, the defendant made ex parte application by affirmation for (a) the plaintiff to provide the exact amount due and owing by the defendant as at 10 April 2017 to discharge the O88 Judgment together with all supporting documents and formulae for verifying the calculation of such sum, and (b) the execution of the writ of possession and fieri facias combined be extended to a date not earlier than 28 days after such verification by the defendant/court. On the same day, DHCJ Alex Lee dismissed such application. 41.On 25 April 2017, the plaintiff filed notice of commencement of taxation in the present proceedings together with the plaintiff’s bill of costs (“HCMP Bill”) pursuant to the costs orders made by DHCJ ST Poon on 23 June 2014 and by DHCJ B Chu J (as she then was) on 8 July 2014. 42.On 2 May 2017, the plaintiff executed the 3rd writ of possession and fieri facias combined. 43.On 22 May 2017, the defendant applied ex parte for an order that the plaintiff should not to sell the Property below a minimum value or to set aside any such sale if the price was 2% below such minimum value. On the same day, DHCJ To dismissed such application. 44.On 24 May 2017, the plaintiff filed an application to set a bill down for taxation. On 22 June 2017, it was ordered that the HCMP Bill be set down for provisional taxation by the Chief Judicial Clerk on 14 July 2017. 45.On 12 July 2017, the defendant filed a summons for leave (a) to file objections to the HCMP Bill out of time, (b) to have partial access to his equity in the Property though temporary overdraft until completion of sale of the Property, and (c) to be provided with the exact amount with calculation breakdown under each section of the O88 Judgment, and he also filed his 2 affirmations in support. On 18 July 2017, Master Chow ordered inter alia that (i) unless the defendant filed and served his list of objections by 5pm on 1 August 2017 he shall be debarred from filing his objections to the HCMP Bill and the bill of costs in CACV127/2014 (“CA Bill”), (ii) the hearing on 1 August 2017 in CACV127/2014 be vacated, and (iii) leave be granted to the plaintiff to file and serve fresh application to set a bill down for taxation upon receipt of the defendant’s list of objections (“Master Chow Order”). 46.On 14 July 2017, the Chief Judicial Clerk taxed the HCMP Bill and made an order nisi as to the amount of taxed costs at HK$145,534.34 with taxing fee allowed at HK$7,524. 47.On 1 August 2017, the defendant filed a summons for the following order (“1st Miscellaneous Summons”), and also filed his affirmation in support:
48.On 1 August 2017, the defendant filed 2 summonses for “Wasted Costs order” against solicitor Chan and solicitor Hau Wing Shing Vincent (partner of the plaintiff’s solicitors, “Hau”) respectively “in the sum of HK$1,356,771 comprising: Plaintiff’s claimed costs: $164,827 + $483,766 = $648,593 [and] Interest on [the O88 Judgment] (over and above contracted mortgage interest): $708,178” “[pursuant] to High Court Ordinance Cap 4 Section 52A in whole but specifically parts 4, 5 and 6 [and] Rules of the High Court Cap 4A, Order 62 Rule 8”, and for the plaintiff to pay costs of the application to the defendant (“Chan Wasted Costs Summons” and “Hau 1st Wasted Costs Summons”). On the same day, the defendant also filed his respective affirmation in support of each of such summonses. 49.On 1 August 2017, the defendant filed a summons for an order “[that] the costs claimed by the Plaintiff be denied pursuant to Cap 4A O62, r7 and Cap 4A O2, r1”, and that costs of the application be paid by the plaintiff to the defendant (“Costs Denial Summons”). On the same day, the defendant filed his affirmation in support of the summons. 50.On 1 August 2017, the defendant filed his affirmation of objections to the HCMP Bill and the CA Bill. 51.On 18 August 2017, the defendant filed a summons for the following order (“Taxation Dismissal Summons”), and also filed his affirmation in support:
52.At the hearing on 29 August 2017, in the absence of the plaintiff’s solicitors, Master K Lo adjourned the Taxation Dismissal Summons to 5 September 2017 for the defendant to file his affirmation of service. Such affirmation of service was filed on the same day. 53.On the same day, Master Chow set aside the costs order nisi granted by the Chief Judicial Clerk in the present proceedings (see paragraph 46 above). 54.The defendant’s 4 summonses filed on 1 August 2017 were returnable to be heard by DHCJ To on 22 September 2017. 55.On 1 August 2017, the defendant also issued 3 summonses to the Court of Appeal in CACV127/2014 for orders that the costs claimed by the plaintiff be denied, and for wasted costs orders to be made against Hau and Chan. On 28 August 2017, the defendant filed another summons in CACV127/2014 for the Court of Appeal to clarify the directions made by the Registrar for Civil Appeals on 7 August 2017. Following directions made by the Registrar for Civil Appeals on 30 August 2017, the defendant filed an affirmation on 19 September 2017. On 20 October 2017, the Registrar for Civil Appeals allowed such affirmation insofar as the same contained the defendant’s submissions. On 24 November 2017, the Court of Appeal handed down written decision to dismiss all 3 summonses filed on 1 August 2017 with order nisi that the defendant should pay the plaintiff costs of such applications. On 22 December 2017, the Court of Appeal by a written decision on costs summarily assessed costs of the application as HK$26,000. 56.On 4 September 2017, the plaintiff filed a summons for leave to file notice of commencement of taxation and the HCMP Bill in the present proceedings out of time (“Taxation Time Extension Summons”), and also filed Hau’s affirmation in support. 57.On 5 September 2017, Master Lai adjourned the Taxation Dismissal Summons and Taxation Time Extension Summons to be heard by DHCJ To on 22 September 2017. 58.On the same day, Reed Smith Richards Butler filed Notice to Act for Chan. On 18 September 2017, Chan filed his 2nd affirmation to oppose the Chan Wasted Costs Summons. 59.On 21 September 2017, V Hau & Chow filed Notice to Act for Hau. On 20 September 2017, Hau filed his 3rd affirmation to oppose the Hau 1st Wasted Costs Summons. 60.On 21 September 2017, the plaintiff filed Hau’s 4th affirmation to oppose the defendant’s other summonses filed on 1 August 2017 (ie the 1st Miscellaneous Summons and Costs Denial Summons). 61.On 22 September 2017, DHCJ To granted leave (a) for the defendant to file and serve his affirmation in reply in respect of the defendant’s 3 summonses (not the Chan Wasted Costs Summons) filed on 1 August 2017 and also to file his affirmation to oppose the Taxation Time Extension Summons within 28 days, (b) for the plaintiff to file and serve its affirmation in reply in respect of the Taxation Time Extension Summons within 14 days thereafter, and (c) for adjournment of all 4 summonses to a date to be fixed. 62.On the same day, DHCJ To heard arguments in respect of the Chan Wasted Costs Summons. 63.On 31 October 2017, the plaintiff as mortgagee and Dou Cog as purchaser entered into a formal agreement for sale and purchase (“FASP”) of the Property for the price of HK$11,800,000 with completion scheduled to take place on 18 December 2017. It was clear from the land search of the Property made on 5 December 2017 there were various subsequent encumbrances on the Property, including charging orders in favour of different parties and a second legal charge in favour of Chan Wing Sun. 64.On 3 November 2017, the defendant filed his affirmation in support of the Hau 1st Wasted Costs Summons. On the same day, the defendant also filed his affirmation in support of the Chan Wasted Costs Summons. 65.On 9 November 2017, the defendant filed an ex parte summons for leave to apply for committal for contempt under Order 52 of the RHC against Chan for (a) knowingly and deliberately making untrue statements to the court, and (b) knowingly making statements designed to mislead the court as to events that had occurred in his affirmation dated 18 September 2017, and for costs to be paid by the plaintiff to the defendant. Such summons was supported by a statement and the defendant’s affirmation filed on the same day. On 30 November 2017, Au Yeung J refused leave for the defendant to apply for committal for contempt as there was no arguable case of contempt or perjury. 66.On 29 November 2017, the defendant wrote to the plaintiff’s solicitors for information and documents with calculations/explanations in relation to the sale of the Property. On 30 November 2017, the plaintiff’s solicitors replied by email that the plaintiff had no duty to inform the defendant any offer to purchase the Property before the acceptance of it, and to save time and costs the plaintiff would provide the defendant’s requested information in one go upon completion of the sale and purchase of the Property. On the same day, the defendant replied by demanding the plaintiff to provide any information that was available within that day with explanation as to what/why other information was not available and when it would be provided. In such letter, the defendant also complained that the plaintiff failed to inform him of the offer and its acceptance thereof and/or to check the detail/accuracy of any charge against the Property. On the same day, the plaintiff’s solicitors replied by email that some time would be needed to ascertain the requested information but it would be provided to the defendant as soon as practicable. 67.On 4 December 2017, the defendant filed a summons for an order that (a) the plaintiff should supply information relating to the sale of the Property within 7 days or 7 days prior to the completion date, and (b) the plaintiff shall deposit into the defendant’s account a minimum of 50% of the sale proceeds (after deducting the outstanding mortgage loan amounts and sums relating to encumbrances against the Property) within 24 hours of the completion, and for the plaintiff to pay costs of the application to the defendant. At the hearing on 7 December 2017, Chow J adjourned the hearing of such summons to an early day to be fixed preferably before 18 December 2017 (if possible) with 30 minutes reserved. 68.Upon the plaintiff’s undertaking to the court that it would hand over the residue of the proceeds of sale to the next person entitled thereto within 14 days after completion of the sale of the Property (“Undertaking”), Chow J handed down his written decision on 15 December 2017 (“Chow Decision”) to dismiss such summons with costs to the plaintiff to be taxed if not agreed. 69.According to paragraph 7 of the Chow Decision, Chow J rejected the defendant’s request for the following information/documents relating to the sale of the Property within 7 days or 7 days prior to the date of completion: “[date] offer was received and accepted”, “[copy] of the offer letter and provisional agreement of sale”, “copies of any other documents relevant to the sale”, and “[detailed] list of the encumbrances (with explanation as to how the final figure for each amount is calculated) … charged against [the Property]”. The learned judge held there was no legal basis to say the plaintiff was under a duty to provide such information/documents to the defendant at that stage, and the plaintiff as mortgagee could exercise its power of sale without consulting the mortgagor or keeping him informed of the progress of sale. 70.According to paragraph 8 of the Chow Decision, Chow J rejected the defendant’s request for the following information/documents relating to the sale of the Property within 7 days or 7 days prior to the date of completion: “[amount] of deposit and date it was received”, “[proof] of receipt of deposit”, “[copy] of formal agreement of sale and assignment documentation”, and “[projected] (or actual if already occurred) Date of Completion of Sale”. The learned judge adopted the analysis and conclusion set out in the above paragraph, and noted the defendant had already obtained a copy of the FASP. 71.According to paragraph 9 of the Chow Decision, Chow J rejected the defendant’s request for “proof of sale completion” (if the sale had been completed) since the sale had not taken place. 72.According to paragraph 10 of the Chow Decision, Chow J rejected the defendant’s request for the following information/documents relating to the sale of the Property within 7 days or 7 days prior to the date of completion: “[detailed] final list of the amounts (with relevant calculations as to how each amount is calculated – excluding those in the disputed Bills of Costs) claimed due under [the O88 Judgment] based on the above dates”, and “[detailed] list of fees claimed incurred in the sale of [the Property]”. The learned judge said as follows:
73.As regards the defendant’s claim for payment of 50% of the net proceeds of sale, Chow J referred to section 54 of the Conveyancing and Property Ordinance Cap 219 (“CPO”) which required the mortgagee to apply the proceeds of sale of a mortgaged property in the order provided therein and pay the residue (if any) to “the person who, immediately before any sale or other dealing, was entitled to the mortgaged land or authorized to give a receipt for the proceeds of the sale of that land”, which generally would be the next subsequent mortgagee or, if there is no subsequent mortgagee, the mortgagor. The learned judge noted the defendant’s contentions that some of the subsequent encumbrancers had been paid off and that the subsequent mortgagee had agreed to remove his encumbrance within 7 days of receipt of HK$250,000, but found it unnecessary to deal with such arguments since it was the duty of the plaintiff and not the court to ascertain who was the next encumbrancer entitled to the residue of the proceeds of sale. Chow J recorded in paragraph 12 of the Chow Decision that Mr Ip on behalf of the plaintiff had given the Undertaking to the court. For all of the above reasons, the learned judge found the defendant failed to make out a case that he was entitled to be paid directly by the plaintiff the monies set out in paragraph 67(b) above. 74.On 15 December 2017, the defendant filed a summons for extension of time to appeal against Au Yeung J’s decision made on 30 November 2017 (see paragraph 65 above), and for the plaintiff to pay costs of the application to the defendant. On 2 January 2018, the hearing of such summons on 9 January 2018 was vacated upon the defendant’s withdrawal of such summons. 75.On 18 December 2017, the plaintiff’s mortgagee sale of the Property to the purchaser was completed. 76.On 21 December 2017, the defendant issued a notice of motion in CACV127/2014 for leave to appeal against the Court of Appeal’s decision dated 24 November 2017 (see paragraph 55 above) to the Court of Final Appeal. On 14 March 2018, the Court of Appeal handed down its written decision to dismiss such application with order nisi that the defendant do pay costs of the application to the plaintiff assessed at HK$14,600. 77.On 22 December 2017, the plaintiff’s solicitors wrote to the solicitors for Dah Sing Bank Limited (“Dah Sing”) being the encumbrancer next entitled to advise them the mortgagee sale of the Property was completed on 18 December 2017, to provide them with the plaintiff’s statement of account (“Statement of Account”) and to inform them there was a surplus of HK$6,718,133.59 from the proceeds of sale of the Property (“Surplus”). The plaintiff’s solicitors warned of possible volatility of legal costs, and indicated it would forward the Surplus subject to their confirmation that (a) Dah Sing had no objection to the computation of the Surplus as shown in the Statement of Account, (b) the plaintiff was still liable to Dah Sing under their encumbrance, and (c) Dah Sing would hold any surplus after satisfying indebtedness due to it as trustee and distribute it to the encumbrancer next entitled to such fund pursuant to section 54 of the CPO. 78.On 29 December 2017, the plaintiff’s solicitors wrote to Dah Sing’s solicitors enclosing a cheque for the Surplus in favour of Dah Sing. 79.On the same day, the plaintiff’s solicitors wrote to the defendant to inform him (a) the mortgagee sale of the Property was completed on 18 December 2017, and (b) after applying the sale proceeds for settlement of the outstanding indebtedness secured by the Mortgage the Surplus was released to Dah Sing. The plaintiff’s solicitors also sent a copy of the Statement of Account to the defendant. 80.On 5 January 2018, Dah Sing’s solicitors replied to say that in the absence of documentary evidence Dah Sing was not in a position to comment, confirm and/or accept the computation of the Surplus shown on the Statement of Account, but they were prepared to confirm the Surplus would not be less than HK$6,718,133.59, and Dah Sing would hold such sum on trust and distribute the same to subsequent interested parties after applying it to settle the indebtedness owed to Dah Sing under its encumbrance. Dah Sing’s solicitors asked the plaintiff’s solicitors to let them have the revised computation of the Surplus for their consideration and handling once the taxation proceedings in the present proceedings and CACV127/2014 were concluded. 81.On 16 January 2018, the defendant filed a summons for the following order (“2nd Miscellaneous Summons”), and also filed his affirmation in support (“Durrant 2nd Aff”):
82.On 16 January 2018, the defendant filed a summons for “a Wasted Costs Order against Solicitor [Hau] in the sum of: HK$1,818,313.53 comprising Revised claim amounts: Plaintiff’s claimed costs: $272,647 + $514,366 + HK$195,142.53 = $1,009,955.533 [and] Interest on [the O88 Judgment] (over and above contracted mortgage interest): $708,178” “[pursuant] to High Court Ordinance Cap 4 Section 52A in whole but specifically parts 4, 5 and 6” [and] “Rules of the High Court Cap 4A, Order 62 Rule 8”, and for the plaintiff to pay costs of the application to the defendant (“Hau 2nd Wasted Costs Summons”), and also filed his affirmation in support (“Durrant 3rd Aff”). 83.On 17 January 2018, the hearing of the 1st Miscellaneous Summons, Hau 1st Wasted Costs Summons and Costs Denial Summons all filed on 1 August 2017, the Taxation Dismissal Summons filed on 18 August 2017 and the Taxation Time Extension Summons filed on 4 September 2017 (collectively, “Five Summonses”) came before DHCJ Joseph Kwan. After hearing arguments, the learned judge reserved judgment on the Five Summonses, which had not been handed down to date. 84.On 24 January 2018, the plaintiff filed a summons (“RAO Summons”) for an order that the defendant be prohibited from making further application to the Court of First Instance in the present proceedings without leave of the designated judge being first obtained, and other consequential directions/orders. 85.On 28 January 2018, the plaintiff filed Hau’s 5th affirmation to oppose the defendant’s 2 summonses filed on 16 January 2018. On the same day, Hau filed his 6th affirmation to oppose the Hau 2nd Wasted Costs Summons. 86.At the hearing of the 2nd Miscellaneous Summons, Hau 2nd Wasted Costs Summons and RAO Summons on 31 January 2018, DHCJ Joseph Kwan granted an order that (a) the plaintiff do file and serve its affirmation to oppose the 2nd Miscellaneous Summons and Hau 2nd Wasted Costs Summons within 28 days, (b) the defendant do file and serve his affirmation in reply within 28 days thereafter, (c) the plaintiff do file and serve its affirmation in support of the RAO Summons within 28 days, (d) the defendant do file and serve his affirmation in opposition within 28 days thereafter, (e) the plaintiff do file and serve its affirmation in reply within 21 days thereafter, (f) no further affirmation shall be filed without leave of the court, and (g) hearing of the 2nd Miscellaneous Summons, Hau 2nd Wasted Costs Summons and RAO Summons be adjourned to a date to be fixed. 87.On 23 February 2018, DHCJ To handed down his written decision to strike out the Chan Wasted Costs Summons as an abuse of the process of the court, and ordered costs to Chan on indemnity basis (“To Decision”). 88.On 26 February 2018, the defendant wrote to the plaintiff to request for confirmation in writing with invoices/receipts in respect of various expenses listed in the Statement of Account, and details of other payments made from the Surplus to the Incorporated Owners of Southorn Garden (“IO”) and/or other parties in relation to the management of the Property. 89.On 28 February 2018, the plaintiff’s solicitors replied by email enclosing copy correspondence with the IO’s management office in November/December 2017 in relation to settlement of outstanding management fee, overdue interest, outstanding external wall refurbishment contribution in respect of the Property, and related expenses. The plaintiff’s solicitors also referred to the cost engaging a company to manage the Property for 3 months after repossession, and stated that the relevant documents would be sent to the defendant once received from the plaintiff. The plaintiff’s solicitors further stated that the purchaser paid for the management deposit and apportioned management fee. 90.On the same day, the defendant replied on without prejudice basis to ask for (a) notice of satisfaction from the IO which appeared to have been received by the plaintiff, and (b) other documents relevant to monies paid to the IO from the sale of the Property. 91.The 2nd Miscellaneous Summons, Hau 2nd Wasted Costs Summons and RAO Summons were scheduled to be heard by this court on 24 May 2018 (“Hearing”). On 15 May 2018, the defendant wrote to the court with copy to the plaintiff’s solicitors to ask for an adjournment of the Hearing so he could apply for audio-recordings of previous court hearings since 2017 which he claimed he could now afford to pay (when he previously could not) and which he said was necessary to demonstrate his contentions by “the Plaintiff’s own words” at such hearings. II. RAO SUMMONS 92.Given the outcome of the Five Summonses that had been heard by DHCJ Joseph Kwan on 17 January 2018 is presently unknown as the learned judge had yet to hand down his reserved judgment, and given there were other outstanding summonses before the court, Mr Ip, solicitor for the plaintiff, agreed that the Hearing would not be an appropriate point in time to proceed with the RAO Summons, and further agreed it should be adjourned sine die with liberty to restore. Since such stance accorded with the defendant’s wish to adjourn such summons, I granted an order at the Hearing that the RAO Summons be adjourned sine die with liberty to restore. 93.Since both parties were agreeable to have the RAO Summons adjourned, I consider it appropriate to grant a costs order nisi that costs of and occasioned by the hearing of the RAO Summons on 24 May 2018 and the adjournment thereof be costs in the cause of the RAO Summons. III. DEFENDANT’s SUMMONSES 94.The remaining summonses before this court at the Hearing were the defendant’s 2nd Miscellaneous Summons and Hau 2nd Wasted Costs Order. At the Hearing itself, the defendant handed up 11 pages of written submissions with a number of annexures. Mr Ip rose to the occasion and was prepared to address the same at the Hearing. He also had no objection for this court to refer to the FASP, the letter/email correspondence between the defendant and the plaintiff’s solicitors dated 29-30 November 2017 (see paragraph 66 above), and the letter/email correspondence between the defendant and the plaintiff’s solicitors dated 26 and 28 February 2018 (see paragraphs 88-90 above) annexed to the defendant’s written submissions. 95.The defendant complained that the plaintiff’s solicitors failed to refer to the aforesaid correspondence which he claimed would show he had made requests for post-sale information and documents. However, the defendant’s letter dated 29 November 2017 was already exhibited to the Durrant 3rd Aff. As for the correspondence in February 2018 (see paragraphs 88-90 above), Mr Ip explained that the defendant’s email dated 28 February 2018 was marked without prejudice, so the plaintiff’s solicitors did not refer to the relevant series of correspondence so as not to infringe without prejudice privilege. In any event, such complaint was neither here nor there since Mr Ip readily agreed to let this court review such correspondence and given my analysis and conclusions below. IV. DEFENDANT’s ADJOURNMENT APPLICATION 96.As explained in paragraph 91 above, the defendant indicated a wish to adjourn the 2nd Miscellaneous Summons and Hau 2nd Wasted Costs Summons. But it was inappropriate for this court to deal with his unilateral letter application (albeit copied to the plaintiff’s solicitors) for adjournment of the inter partes Hearing on paper. Hence, the defendant made his application to adjourn the 2nd Miscellaneous Summons and Hau 2nd Wasted Costs Order at the Hearing. Mr Ip opposed such application. Having heard arguments by the defendant and Mr Ip at the Hearing, I declined to adjourn such summonses and delivered oral reasons for decision. 97.In my view, there was no reason why costs should not follow event, and I grant a costs order nisi that the defendant shall pay the plaintiff costs of and occasioned by the defendant’s application to adjourn the 2nd Miscellaneous Summons and Hau 2nd Wasted Costs Summons to be taxed if not agreed. To assist the taxing master, I apportion 1 hour of hearing time for such application. V. 2nd MISCELLANEOUS SUMMONS 98.The starting point in dealing with the 2nd Miscellaneous Summons would be to have proper understanding of the nature/scope of the plaintiff’s claim in the present proceedings. The plaintiff commenced the present proceedings by way of the OS to seek a money and possession order, ie monetary judgment and vacant possession of the Property against the defendant. Two matters are of note. 99.First, the plaintiff in the OS did not seek and Master Leong in the O88 Judgment did not grant any order for sale of the Property. The plaintiff effected mortgagee sale of the Property pursuant to its express power of sale under the Mortgage and not pursuant to any court order. Thus, the sale of the Property and consequential matters arising therefrom under the Mortgage and/or CPO were outside the scope of the present proceedings. The defendant only raised defence contentions and did not raise any counterclaim in the present proceedings, but his defence contentions were all rejected by Master Leong, DHCJ ST Poon and the Court of Appeal. The Court of Final Appeal refused to grant leave to appeal, so the defendant had exhausted all avenues of appeal. With his defence found to be unsustainable, the money and possession order under the O88 Judgment was a final judgment that was binding on him. As the Court of Appeal explained in its written decision handed down on 24 November 2017 in CACV127/2014, the principle of funtus officio applied. In the absence of any counterclaim in these proceedings and in view of the principle of functus officio, the defendant could not make any claim against the plaintiff in the present proceedings for declarations, damages and/or interest for any cause of action whether related to the Mortgage, the Property, its sale or otherwise. 100.Indeed, the defendant must have understood the above principle from the Poon Decision and CA Judgment, which held that his defence contentions in paragraph 22(a)-(c) above did not amount to any viable defence to the plaintiff’s claim in the OS for a money and possession order, but at best could only ground a separate claim for damages. 101.Secondly, the 2nd Miscellaneous Summons was an interlocutory summons, and as such it could only be made under and within the ambit of the claim set out in the OS (and defence thereto in contra-distinction to any possible separate claim). As explained in the paragraphs 99-100 above, the sale of the Property was not made under any relief sought in the OS nor under any court order in the O88 Judgment. Thus, in the absence of any counterclaim by the defendant and given the principle of functus officio, the defendant could not introduce extraneous claim against the plaintiff by way of interlocutory summons. Further, the claims for declarations and/or damages raised by the defendant for alleged breach of fiduciary/statutory duties and for alleged breach of the rules of the High Court, the claims for compensation in relation to interest, and the claims for challenging the plaintiff’s calculations and deductions in relation to the disposal of the proceeds of sale of the Property were primary and originating claims outside the ambit of the OS and the O88 Judgment, and if the defendant were to pursue such claims he would have to commence separate legal action against the plaintiff for such purpose, and could not do so under the guise of interlocutory summons in the present proceedings. 102.I agree with Mr Ip that the plaintiff’s cause of action in the present proceedings had been litigated and adjudicated upon, so the only outstanding matters would be the Five Summonses already heard but pending adjudication by DHCJ Joseph Kwan, and the taxation of costs incurred in these proceedings. If the defendant wished to challenge the propriety of the conduct of the sale of the Property pursuant to the mortgagee’s power of sale under the Mortgage, the application of the net sale proceeds to settle the outstanding indebtedness under the Mortgage and/or the payment of the Surplus to the encumbrancer next entitled under section 54 of the CPO, he had to start separate legal action. In the circumstances, the 2nd Miscellaneous Summons is liable to be dismissed. 103.But the defendant made oral and written submissions as to how (a) the plaintiff failed to provide supporting evidence, documents and invoices to support the Statement of Account despite the defendant’s request on 26 February 2018 for clarification/documents (which was only partially and not fully answered by the email by the plaintiff’s solicitors dated 28 February 2018), (b) the plaintiff’s solicitors erred in saying the defendant had not asked for such information and details when he had done so on 29-30 November 2017 (see paragraph 66 above), (c) a subsequent encumbrancer (ie the IO) had been paid off several years ago (see paragraphs 89-90 above), (d) the plaintiff still failed to provide the aforesaid information/documents notwithstanding the defendant’s summons filed on 4 December 2017, and (e) various disbursements (eg cleaners’ costs, door cost, etc) were excessive and certain legal disbursements (eg deposits for writ of possession and fieri facias and taxing fee for the HCMP and CA Bills) were duplicated. 104.The defendant also (a) disputed items of expenses and costs set out in the plaintiff’s Statement of Account, eg conveyancing costs, agency commission, valuation fee, lock change, management fee and reimbursement of small claims, (b) complained about inability to verify the breakdown of outstanding loan amounts and interest, and (c) challenged the claimed legal costs and sum stakeheld by the plaintiff for such purpose. 105.On the basis of the above contentions, the defendant argued that (a) the plaintiff’s solicitors were in breach of their professional duty under the RHC, Legal Practitioners Ordinance Cap 159 and their professional code of conduct in failing to ensure full and proper discovery of the information/documents he requested for the proper administration of justice, (b) the plaintiff were in breach of their fiduciary and statutory duties of care in relation to the proceeds of sale of the Property including the Surplus, and (c) since the plaintiff was a trustee of the Surplus it had a duty to account and provide necessary information and documents to the defendant as one of the beneficiaries. 106.In light of my conclusion in paragraphs 94-102 above, it is unnecessary for me to deal the defendant’s contentions in paragraphs 103-104 above, but I shall do so briefly in deference to the defendant’s submissions. 107.In respect of the contention in paragraph 103(a) and (e) and paragraphs 104-105 above, it was for the defendant to raise such claim/complaint by way of separate legal action (if so desired) and not by way of the interlocutory 2nd Miscellaneous Summons. It is inappropriate and unnecessary for this court to consider and determine these matters (ie whether the plaintiff’s payment of the Surplus to Dah Sing as the encumbrancer next entitled, the plaintiff’s Statement of Account provided to Dah Sing and the defendant, and the information in the email of the plaintiff’s solicitors dated 28 February 2018 amounted to sufficient compliance with section 54 of the CPO and the plaintiff’s duties (if any) towards the defendant) on interlocutory basis in the present proceedings. 108.In respect of the contention in paragraph 103(b) and (d) above, whether the defendant had requested for information on 29-30 November 2017 was, in my view, neither here nor there. The plaintiff’s solicitors replied by email on 30 November 2017 that the plaintiff had no duty to inform the defendant of any offer to purchase the Property before acceptance and that the plaintiff would provide information in one go upon completion of the sale and purchase of the Property. Such stance was repeated at the hearings of the defendant’s summons filed on 4 December 2017 before Chow J, and in the Chow Decision the learned judge held there was no legal basis for the defendant to demand the information sought at that stage, so he dismissed the defendant’s summons for such information/documents filed on 4 December 2017. 109.I also find the Undertaking was the only undertaking given to the court by the plaintiff’s solicitors on behalf of the plaintiff (and on 29 December 2017 the plaintiff had passed the Surplus to Dah Sing as the encumbrancer next entitled), and the plaintiff’s indication of willingness to provide information to the defendant upon completion of the sale of the Property (see paragraph 10 of the Chow Decision in paragraph 72 above and the email reply by the plaintiff’s solicitors dated 30 November 2017 in paragraph 66 above) was aired at the hearing before Chow J, but it was not a formal undertaking given to the court. 110.In my view, insofar as the plaintiff and its solicitors claimed that upon sale of the Property the plaintiff had applied the net proceeds of sale to settle the outstanding indebtedness due to it, paid the Surplus to the encumbrancer next entitled, and rendered its Statement of Account to the encumbrancer next entitled and to the defendant, any dispute as to the sufficiency or otherwise of the plaintiff’s Statement of Account and the documents provided under the email of its solicitors dated 28 February 2018 must be debated and resolved in separate action to be brought by the defendant (if he so wished). 111.In respect of the contention in paragraph 103(c) above, it was neither here nor there because the plaintiff was only concerned to pass on the Surplus to Dah Sing as the encumbrancer next entitled, and it was for Dah Sing to deal with other encumbrancer next entitled down the line. 112.The defendant referred to the letter from Dah Sing’s solicitors dated 5 January 2018 (see paragraph 80 above) to submit that Dah Sing as the encumbrancer next entitled also criticised the plaintiff’s Statement of Account as insufficient for proper verification of the calculation therein. However, I am unable to conclude from the correspondence in December 2017 and January 2018 that the plaintiff necessarily failed in its duty to provide information and documents to the defendant. Such correspondence merely suggested that as between the plaintiff mortgagee and subsequent encumbrancer, the latter being a third party was not in a position to confirm the Statement of Account, but it did not follow that as between the plaintiff as mortgagee and the defendant as mortgagor who had defaulted mortgage instalment payment the information and some documents provided by the plaintiff was insufficient or inadequate to discharge its duty as mortgagee bank. After all, Master Leong, DHCJ ST Poon and the Court of Appeal did not accept the defendant did not know or understood how the outstanding mortgage loan amounts were due to the plaintiff, which according to DHCJ ST Poon was easily ascertainable as a matter of arithmetic from the Tse 1st and 3rd Affs. In any event, as explained above, these disputes between the plaintiff and the defendant over the sufficiency or otherwise of provision of post-sale information and documents to the defendant as mortgagor would have to raised and/or resolved in separate legal action by the defendant (if he so desired). 113.Further, I am unable to see how Dah Sing would incur extra legal costs for they had made clear they would simply proceed on the basis that the Surplus would not be less than HK$6,718,133.59 and asked the plaintiff to let them have a revised computation of the Surplus when the taxation proceedings in the present proceedings and in CACV127/2014 were complete. 114.The defendant argued it was unreasonable and improper for the plaintiff to provide information to some beneficiaries of the Surplus, ie subsequent encumbrancer or interested party in respect of the Property (eg the defendant) later than others (eg Dah Sing), which conduct amounted to breach of duty of impartiality. I disagree. Such assertion reflected misunderstanding of section 54 of the CPO. As explained in paragraphs 11-12 of the Chow Decision, a mortgagee is required to pay the residue of the proceeds of a mortgagee sale (after application of such proceeds to settle indebtedness due to the mortgagee) to the encumbrancer next entitled. It is for such encumbrancer who is next entitled to apply such residue to settle the indebtedness due to him and then pay the deducted residue (if any) to the subsequent interested party. This is repeated down the line until there is no more subsequent encumbrancer whereupon the ultimate remaining residue (if any) will be paid to the mortgagor. Thus, section 54 of the CPO contemplated that the subsequent encumbrancers would be notified at different times, and there was nothing wrong for the plaintiff as mortgagee to first inform Dah Sing as the encumbrancer next entitled as required under section 54 of the CPO and pursuant to the Undertaking. 115.The defendant next argued that the even though Mr Ip’s written submissions mentioned that the plaintiff was to sell the Property free from encumbrances, clause 30 of the FASP provided that the purchaser expressly agreed to purchase the Property subject to all existing encumbrances. The defendant claimed the plaintiff had deliberately chosen to defy the court’s direction, wasted the court’s time and caused the defendant considerable loss. I disagree. 116.Clause 22 of the FASP provided inter alia that (a) the plaintiff was selling as mortgagee and was only required to enter into a covenant that it had not encumbered the Property and the concurrence of any other persons in the assurance of the Property was not required, and (b) the purchaser shall assume the plaintiff was entitled to exercise its power of sale and shall not raise any objection or requisitions in respect thereof. Plainly, the plaintiff as mortgagee sold the Property on the basis that it had not encumbered the Property, which was consistent with section 53(1) of the CPO that provides as follows:
Thus, the purchaser of the Property would be bound by all encumbrances other than “the mortgage under which the sale is made and other subsequent mortgage”, and such binding encumbrances would include, for example, GN3082 dated 30 April 2015 and GN7099 dated 16 December 2016 evident from the land search record in respect of the Property. In my view, there was no merit in the defendant’s contention in this respect. In any event, I am unable to see how the purchaser agreeing to take subject to encumbrances in relation to the Property would cause any loss to the plaintiff as ex-mortgagor who no longer had interest in the Property and was only left with potential interest in the ultimate residue of the Surplus (if any) under section 54 of the CPO. 117.The defendant then argued that the plaintiff’s Statement of Account was obviously inaccurate as it referred to execution of the 3rd writ of possession and fieri facias combined dated 21 December 2017 which was 3 days after the completion of the sale of the property on 18 December 2017. I accept this was an error, but it was necessarily a clerical error because the 3rd writ of possession and fieri facias combined was actually dated 21 December 2016 (see paragraph 39 above) and it was executed on 2 May 2017 (see paragraph 42 above). I also note the defendant was well aware of this because in the 1st Miscellaneous Summons filed 1 August 2017 he already complained that the plaintiff made no move to sell the Property since repossession on 2 May 2017 (see paragraph 47(d) above). There was no mileage in this argument for the defendant. 118.The defendant next suggested the plaintiff’s unreasonable conduct in withholding information delayed settlement. The defendant had already raised this contention before DHCJ To. In paragraph 24 of the To Decision, the learned judge rejected such argument. The findings by Master Leong and DHCJ ST Poon were upheld on appeal by the Court of Appeal. As DHCJ To said, the defendant’s conduct in the present proceedings was to delay the legal process by repeated unmeritorious appeals and applications to stay. “He has no intention to pay. His argument that had he been given the statements and records he would have settled the action is artificial and disingenuous.” I agree. 119.The defendant then complained the plaintiff did not make payment to other subsequent encumbrancers which had the effect of delaying or depriving him use of the surplus, eg the plaintiff should have settled the amount due and owing to the Inland Revenue Department, but it was not reflected in the deductions in the plaintiff’s Statement of Account. As explained above, section 54 of the CPO required the plaintiff as mortgagee to pass the whole Surplus to Dah Sing as the encumbrancer next entitled. The Commissioner of Inland Revenue was not the encumbrancer next entitled, but a subsequent encumbrancer with a charging order absolute obtained on 12 December 2011 and registered on 12 January 2012. As Hau’s 5th affirmation explained, the outstanding sum that the defendant owed to the Inland Revenue Department would be settled by the subsequent encumbrancer down the line pursuant to section 54 of the CPO. Indeed, the plaintiff would be in breach of section 54 of the CPO had it directly paid the Inland Revenue Department from the Surplus. 120.As regards the defendant’s suggestion that the plaintiff’s solicitors were in breach of duty and the plaintiff was in breach of the underlying objectives under Order 1A of the RHC in not ensuring adequate disclose of information and documents to him (se paragraph 104 above), I am not persuaded such contentions would overcome the need for the defendant to take out separate legal action to raise such complaints and to seek reliefs against the defendant. 121.As regards the defendant’s application to hold the plaintiff in contempt of court for breach of undertaking/statements to the court to provide list of calculations/deductions upon completion of sale of the Property, and for deliberately, maliciously and knowingly withholding information from him until 2 January 2018 (when in fact the plaintiff had notified Dah Sing on 22 December 2017) (see paragraph 81(a) and (d) above), such application must be dismissed. The alleged breaches (in contra-distinction to the alleged undertaking and statements to the court by the plaintiff) were not made in face of the court, and the defendant failed to follow the procedural requirements prescribed in Order 52 of the RHC. Order 52 rule 2(1) of the RHC provides that no application for an order of committal against any person may be made unless leave to make an application has been granted in accordance with such rule. Such application for leave must be made ex parte to a judge supported by a statement and by an affidavit. As seen from paragraph 65 above, the defendant was well aware of such procedure for leave to apply for committal for contempt, and yet he failed to comply with such procedure when he sought the reliefs in paragraphs 81(a) and (d) above by way of the 2nd Miscellaneous Summons. In the circumstances, such applications must fail. 122.The defendant had cited a number of legal authorities in his written and oral submissions. I have carefully considered the same, but do not find them to be of assistance on the more fundamental shortcomings of the 2nd Miscellaneous Summons discussed above. For all of the above reasons, the 2nd Miscellaneous Summons is liable to be dismissed. VI. HAU 2ND WASTED COSTS SUMMONS 123.In the defendant’s written submissions, he suggested the Hau 2nd Wasted Costs Summons was to “amend” the Hau 1st Wasted Costs Summons. This is plainly incorrect since (a) the defendant knew the Hau 1st Wasted Costs Summons had been argued before and heard by DHCJ Joseph Kwan on 17 January 2018, and (b) the Hau 2nd Wasted Costs Summons was a fresh summons seeking similar relief with no mention at all of any intention to amend the Hau 1st Wasted Costs Summons. In fact, the Hau 2nd Wasted Costs Summons did not even refer to the Hau 1st Wasted Costs Summons at all. That being the case, it is an abuse of process to make a fresh but repeated application to the court when the earlier application was already seized by the court, and is presently sub judice. 124.I also note that on 1 August 2017 the defendant had also filed a summons in CACV127/2014 for a wasted costs order against Hau (see paragraph 55 above). The judgment of the Court of Appeal handed down on 24 November 2017 held that:
125.It was clear from the defendant’s oral and written submissions that he was making the same or similar arguments that he had put forward to the Court of Appeal in respect of the summons he filed on 1 August 2017 in CACV127/2014 for wasted costs order against Hau. Such arguments and such summons had been rejected by the Court of Appeal, and the decision by the Court of Appeal is binding on the defendant and left no room for him to revisit the matter and raise collateral attack against such decision by the Hau 2nd Wasted Costs Summons. 126.In any event, I am unconvinced there was evidence or sufficiently persuasive evidence that Hau acted improperly or was guilty of misconduct in the prosecution of the present proceedings on behalf of the plaintiff and/or in the supervision of his professional staff Chan and Mr Ip, and I find the defendant had failed to satisfy the court that it should consider exercising its jurisdiction to make any wasted costs order. 127.I gratefully adopt but not repeat here the relevant legal principles as set out in paragraphs 2-3 of the To Decision. 128.As he did before DHCJ To, the defendant complained that Hau by himself or through Chan failed to exhibit or produce documentary evidence to explain or prove calculation of outstanding sums under the mortgage loans. In my view, there was no merit to this argument since the defendant never challenged the accuracy of the outstanding sums prior to the O88 Judgment, and such challenge was only raised at the hearing of the 1st Appeal. Both DHCJ ST Poon in the Poon Decision and the Court of Appeal in the CA Judgment dismissed such contention. DHCJ ST Poon considered it was a mere delaying tactic, and Kwan JA considered the defendant’s allegation that he was unable to verify the amounts claimed to be “disingenuous, to say the least”. The Court of Appeal in paragraphs 24-27 of the CA Judgment explained it was not necessary for the plaintiff to produce statements and records prior to the hearing before Master Leong as the defendant did not query then the correctness of the amount claimed, and further explained why DHCJ ST Poon had not erred in the exercise of his discretion to refuse the defendant’s application for the plaintiff to provide supporting documents. I am unable to see how Hau’s failure (by himself or though Chan) to produce supporting documents could be said to be improper and/or could form any basis for a wasted costs order. 129.In his oral and written submissions, the defendant still complained that the plaintiff failed to prove his case with proper documentary evidence. Such argument was not sustainable for Master Leong, DHCJ ST Poon and the Court of Appeal were all satisfied that (a) the plaintiff had adduced sufficient proof and (b) the defendant’s complaint was mere delaying tactic or disingenuous assertion. Since the Court of Final Appeal declined to grant leave for the defendant to appeal, the decisions by Master Leong, DHCJ ST Poon and the Court of Appeal were final and binding on the defendant, and it was no longer open for him to revisit such complaint. 130.Again as he did before DHCJ To, the defendant pointed to Chan’s initial reliance on the conclusive evidence clause and subsequent reliance on the Tse 3rd Aff which he claimed demonstrated that Chan (and hence his supervisor Hau) had not done proper legal research and had not prepared well for the hearing of the 1st Appeal. The defendant further claimed Chan (and hence his supervisor Hau) should not advance unsustainable legal argument, and such shortcoming reflected a “pattern” of unprofessional behavior on the part of Chan/Hau. 131.But as DHCJ To explained in paragraphs 18-23 of the To Decision, DHCJ ST Poon had no difficulty in arriving at the outstanding amount and was satisfied the Tse 1st and 3rd Affs reflected accurately the outstanding amounts, and on such basis DHCJ ST Poon dismissed the 1st Appeal. DHCJ To in paragraphs 21-23 of the To Decision considered Chan’s handling of the matter and noted DHCJ ST Poon in the Poon Decision did not raise any criticism in relation to Chan’s conduct. DHCJ To was not satisfied Chan’s handling amounted to misconduct or improper conduct. The Durrant 3rd Aff that set out the defendant’s own transcription of the audio-recording of the hearing of the 1st Appeal on 8 and 26 May 2014 did not take the matter any further. That being the case, I am unable to see how Hau’s supervision of Chan would amount to any vicarious misconduct or improper conduct. 132.Further, DHCJ To noted in paragraph 23 of the To Decision that the defendant failed to ask for costs of the adjournment of the hearing of the 1st Appeal, but DHCJ ST Poon had taken into account the adjournment in granting his costs order, ie he made no order as to costs of the hearing on 8 May 2014. Since the defendant was unable to obtain costs of the adjournment against the plaintiff, he could hardly have asked for wasted costs order against the plaintiff’s solicitor. The costs order made by Master Leong was upheld by DHCJ ST Poon, and the costs order made by DHCJ ST Poon was upheld by the Court of Appeal. Like DHCJ To, I find I have no jurisdiction to revisit the matter of costs of the adjournment or the OS. Further, I am not convinced Chan (and hence Hau as his supervisor) acted improperly, and there was no basis for the defendant to assert a “pattern” of obstructive or poor behavior in relation to the provision of information and documents in the context of the present proceedings. 133.In any event, this court had no jurisdiction to grant any claim for the difference between interest on the outstanding amount calculated at judgment rate and at contractual rate. As explained in paragraph 25 of the To Decision, the defendant had not advanced any ground for such claim, and in any event such claim was outside the scope of the wasted costs provisions in section 52A of the High Court Ordinance Cap 4 and Order 62 rule 8 of the RHC. 134.The defendant submitted that like Chan Mr Ip was equally obstructive in relation to the provision of proper evidence and documents to prove the plaintiff’s claim and to enable the defendant to verify the plaintiff’s use of the proceeds from the sale of the Property, so Hau as Mr Ip’s supervisor should be liable for Mr Ip’s misconduct or improper conduct. Notwithstanding Hau’s supervision over Mr Ip, for the reasons set out in paragraphs 123-125 above, I find it was an abuse of process for the defendant to file and pursue the Hau 2nd Wasted Costs Summons. Further, as regards the defendant’s wish to sight documentary support for the plaintiff’s disposal of the proceeds of sale in respect of the Property, for the reasons set out in Part V above, there was simply no basis to say there was misconduct on the part of Mr Ip (and/or Hau as his supervisor) in the context of the present proceedings in contra-distinction to any fresh originating claim that the defendant (if he so wished) might separately bring against the plaintiff. In any event, the Chow Decision made clear there was no legal basis at that stage (ie before the sale of the Property) for the defendant to seek the information and documents set out in his summons filed on 4 December 2017, so there was again no basis to suggest any misconduct on the part of Mr Ip and/or Hau. As for the defendant’s request for information and documents for the post-sale stage (and presumably for wasted costs arising from any alleged obstruction against access to such information at that stage), as explained in Part V above, it is not a claim that the defendant could legitimately raise in the present proceedings, especially by way of interlocutory summons, and the court also could not revisit/reopen the costs orders already made. 135.The defendant then suggested that the court’s inherent power over solicitors as officers of the court and the underlying objectives in Order 1A of the RHC would enable this court to sanction Hau for withholding information and documents from him and from the court by making a wasted costs order against Hau. In my view, the tenor of the underlying objectives in Order 1A of the RHC essentially concerned case management of litigation between opposing litigants rather than the special jurisdiction of wasted costs order against solicitors expressly provided for in section 52A of the High Court Ordinance Cap 4 and Order 62 rule 8 of the RHC. But even if there is such jurisdiction, for the reasons set out in Part V above and in this Part there was no merit to the Hau 2nd Wasted Costs Summons. 136.In my view, the Hau 2nd Wasted Costs Summons was an abuse of process and was bound to fail. It is liable to be dismissed. VII. CONCLUSION 137.In the premises, I dismiss the 2nd Miscellaneous Summons with costs order nisi that the defendant shall pay costs of and occasioned by such summons (including all costs reserved if any) to the plaintiff to be taxed if not agreed. I also dismiss the Hau 2nd Wasted Costs Summons with costs order nisi that the defendant shall pay costs of and occasioned by such summons (including costs all reserved if any) to Hau on indemnity basis to be taxed if not agreed. 138.Mr Ip urged for summary assessment of costs. However, bearing in mind there were other costs yet to be taxed, the nuanced assessment that was required for dealing with costs of the 3 summonses before me, and the different basis for taxation for the Hau 2nd Wasted Costs Summons, I consider it more appropriate for costs in favour of the plaintiff under the above nisi orders to be taxed if not agreed. 139.I also direct my clerk to forward a copy of this Decision to DHCJ Joseph Kwan.
Mr C Y Ip of V Hau & Chow, solicitors for the plaintiff and for Hau Wing Shing Vincent The defendant acting in person and present [1] “mortgage” is defined in section 2 of the CPO as “a security over land for securing money or money’s worth” |
Cases cited in this judgment
Further hearings and rulings under HCMP 3196/2013