Yang Foo-oi By Leung Ping Chiu, Roy Her Next Friend v. Wai Wai Chen and Another

HCA 1739/2010

[2018] HKCFI 1825

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1739 OF 2010

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R U L I N G

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1.Although this is a direction hearing, there is an important point which calls for a few words from the court.

2.Judgment in these matters was handed down on 29 November 2016 after a 21-day trial which concluded on 11 November 2016.  An appeal of the Judgment was scheduled to be heard over 4 days beginning on 24 October 2017.

3.On the day before the hearing of the appeal, the Defendants issued a Summons seeking leave to adduce 4 documents as additional evidence in the appeal.  These documents (Gift Documents) include a Deed of Gift dated 12 December 2012 by which, the Defendants contend, the claims in this action were gifted to Angela by her mother (Assignment). 

4.As a result of this development, the appeal was adjourned pending the determination by the Court of First Instance (CFI) of the Summonses to be issued by the parties as indicated to the Court of Appeal (CA).  Hence, there are now before this court, inter alia, a Summons by the Defendants to challenge the locus of Yang in this action and a Summons by Yang to join Angela as a party in this action.

5.These Summonses came before this court for directions on 28 November 2017.  At the conclusion of that hearing, directions for, inter alia, an Agreed List of Issues were given.  It is lamentable that it has taken more than 8 months for these matters to return to court for a further direction hearing.  As indicted in para 264 of the Judgment, it is highly undesirable for the resolution of this action to be delayed in light of the circumstances of Yang.  The Judgment has been in limbo for over 20 months.  That is not an acceptable situation.  It is the duty of the court to ensure that there will be no avoidable delay in the conclusion of these matters. 

6.The important point concerns the inconsistent stance taken by the Defendants in respect of the validity of the Assignment via the Deed.  Although they seek to overturn the Judgment by contending that Yang had no locus in these matters because she had divested herself of the causes of action therein, their primary case is that the Deed is invalid because it was executed under the undue influence of Angela.  However, it is accepted by the Defendants that, as matters now stand, they have no locus to challenge the validity of the Deed.

7.On behalf of the Defendants, Mr Strachan SC[1] referred to this situation as a “conundrum”.  He maintains that the Defendants are entitled to run such inconsistent cases in the alternative.  It has to be said that the Locus Summons has no basis unless the Assignment is valid.  Unsurprisingly, Yang takes issue with the position of the Defendants, and it will be considered by the court in due course when the Locus Summons is argued.

8.However, in light of the “conundrum”, this court’s attention has been drawn to the English Court of Appeal judgment in Aldi Stores Ltd v WSP Group plc & Ors [2008] 1 WLR 748, in which certain guidelines were set out for cases where a litigant contemplates that he may later wish to pursue his case against another defendant in respect of the same subject matter of litigation.  In such cases, he should notify to court so that it may consider exercising its case management power so as to deploy its resources in the most costs effective and efficient manner.

9.Aldi Stores is distinguishable from the present case.  It was a case where the plaintiff, left with no satisfaction from the judgment it had obtained, subsequently sued other parties who were allegedly liable for the same claim.  Here, the Defendants simply want to run inconsistent cases.

10.No less than 3 alternatives have been advanced by Mr Strachan as to how these matters should be taken forward.  I regret to say that none of them is attractive.

11.The first suggestion that these matters should come back for a further direction hearing is premised on the hope that various other disputes which may impact upon the locus of Yang may be resolved by then.  With respect, there seems to be no end in sight on the scope of the disputes between the parties (involving also Angela).  I agree with Yang that it is not for the court to speculate on how various other disputes may develop. I see no justification to allow these matters to be dragged on. 

12.Secondly, it is proposed that the court may deal with the Locus Summons on the basis that, if it holds in favour of the Defendants, the Judgment be set aside on condition of it not being later shown that the Deed is invalid (Condition).  Whilst it is not for this court to speculate on the Defendants’ strategy in this litigation, it is quite clear that they aim to keep their powder dry and have all their options preserved. However, it is not for this court to endorse any such strategy, and it would not countenance any suggestion that it had in any way permitted the Defendants to run inconsistent cases.

13.If the Defendants maintain that the Condition is justified, the matter will have to be determined on merits if the Locus Summons succeeds.

14.At the hearing, Mr Strachan also suggested that the court may grant a declaratory relief in the event that the Locus Summons succeeds, but without prejudice to the Defendants’ challenge to the validity of the Deed.  I have not seen a proposed order for this suggestion, and I do not believe that this takes the second alternative any further.

15.Thirdly, it is suggested that these matters should be remitted back to the CA with the view to having the appeal resolved before dealing with the Locus and Joinder Summonses.  This is contrary to the CA’s decision to remit these matters back to the CFI and, effectively, they would have travelled an entire circle, after having wasted a good deal of time and costs.  Assuming that it is within the power of this court to have these matters send back to the CA, I see no good reason so to do, not to mention further delay.  This suggestion is therefore also rejected.

16.Finally, it must be made clear that, with the resources at their disposal, the Defendants are in the position to obtain whatever legal advice they desire.  No doubt they would conduct their case as they see fit, but they must accept the legal consequences which flow from their conduct.  It is not the function of the court to preserve their options.

17.I consider Aldi Stores to be inapplicable to this case.  In any case, it would not be possible or appropriate for this court to “manage” the case on the basis of a challenge to the validity of the Deed which has not arisen and may not materialise.  

Mr Benjamin Yu SC, Mr Bernard Man SC and Mr Keith Lam, instructed by Clifford Chance, for the Plaintiff

Mr Mark Strachan SC, Mr Victor Dawes SC, Mr Jeffrey Chau and Mr James Man, instructed by Mayer Brown JSM, for the 1^st and 2^nd Defendants