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

HCA 1739/2010

[2018] HKCFI 2277

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1739 OF 2010

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D E C I S I O N

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1.This is the Defendants’ application for leave to appeal against the Ruling of this court dated 2 August 2018. The Ruling was made after a direction hearing for the purpose of taking forward the disputes between the parties arising from the Gift Documents – a Summons filed by the Defendants on 8 November 2017 to challenge the locus of Yang and a Summons filed by Yang on the same day to join Angela in these proceedings.

2.It is important to be reminded that there were also before the court a host of other applications: 3 Summonses on discovery taken out by the Defendants; another one by the Defendants concerning the investment risk of the payment they made into court; a Summons of Yang to rectify the Deed of Gift; and a request from the court appointed expert for discovery of documents.

3.All applications were in dispute.  Three rounds of written submissions were filed and served by Yang and 4 by the Defendants. 

4.At the hearing, this court decided that the Joinder, Locus and Rectification Summonses (Summonses) would be set down for a 10‑day hearing, and detailed directions were given by the court on the further conduct of the same.

5.The Ruling dealt with what Mr Strachan SC referred to as the “conundrum”, namely, although the Defendants sought to overturn the Judgment based on the contention that Yang had no locus in these matters because she had divested herself of the causes of action via the Deed of Gift, their primary case was that the Deed was invalid because it was executed under the undue influence of Angela.  Relying on Aldi Stores Ltd v WSP Group Plc & Ors [2008] 1 WLR 748, the Defendants asked the court to adopt 1 of the 3 proposals they advanced on how this case should proceed. 

6.Much of the written submissions of the Defendants were dedicated to the “conundrum” issue.  In addition, the matter was fully ventilated in the viva voce submissions from both sides.  This court eventually decided to proceed with the Summonses, and the question of condition to be imposed if the Judgment is set aside will have to be determined on merits: see paras 12 and 13 of the Ruling.

7.The Ruling is plainly an interlocutory case management decision.  There is no argument over the applicable principle that the threshold for an appeal against such a decision is a “very high hurdle”: see Wong Kar Gee Mimi v Severn Villa Ltd [2012] 1 HKLRD 887, §§29‑31.

8.With respect, I am unable to see any merit in the intended appeal.  The real purpose of the appeal is to have the court endorsing the Defendants to run inconsistent cases when Vivien admittedly has no locus to challenge the validity of the Deed.  This has been laid bare in paras 23 and 24 of Mr Strachan’s skeleton arguments dated 3 October 2018.  I am unable to see how the court can be constrained into doing so in the name of exercising its management power, especially when Yang strongly disagrees with the position taken by the Defendants.

9.Aldi Stores does not support the Defendants’ position, and neither does the case of Twinsectra Ltd v Lloyds Bank Plc [2018] EWHC 672 (Ch) cited not at the hearing on 2 August 2018 but in the latest supplemental list of authorities of the Defendants.  None of these cases suggest that the court may exercise its management power to enable a defendant to overcome the rule that a party may not approbate and reprobate.  Such an issue is clearly a substantive matter which requires resolution after a full hearing or trial.

10.I agree with Mr Man’s analysis of Twinsectra.  In that case, the defendant bank sought to strike out a claim on the basis that the claimants earlier obtained a judgment against a different defendant (which was not satisfied) on a basis which was inconsistent with their claim against the bank (see first para of the judgment).  This was upheld by the court.  At §§95‑96 (relied on by the Defendants), the learned Deputy Judge was simply saying that the claimants could have preserved their position in the earlier proceedings or cater for the possibility of the later claim by various means.  Whilst the Judge mentioned the possibility of case management in the earlier decision (§95(v)), he did not express any view as to what the court in the earlier case should have done. The Judge mentioned “no conditionality” at §95(ix) in respect of the final order in the earlier decision, but he was not expressing any view on that point.  Plainly, the Judge was not suggesting that the issue of conditionality must be decided as a matter of case management in advance of the final decision.

11.It is important to note that unlike Vivien’s intended challenge of the Deed of Gift, the claimants’ claim against the bank in Twinsectra (a claim alleging invalidity of certain charges which were assumed to be valid in the first claim) was already vested in them at the time of the first action.  There is no answer from the Defendants on this point.

12.This court does not intend to do any injustice to the detailed submissions of Mr Man SC, who appeared with Mr Lam for Yang, on the merits of this application with which I agree.  However, I believe that it is appropriate to deal with this application succinctly.

13.A few observations in relation to the draft Notice of Appeal are to be made:

(1)  The Defendants appear to have overlooked the fact that there is a judgment against them in which Vivien was found to have short-changed her mother.  It is trite that a judgment of the court stands until and unless it is set aside;

(2)  The court does not pre-judge Yang’s case on the effect of the Deed, and therefore does not proceed on the basis that there was a deliberate concealment of the same.  For the purpose of the case management, there was no question of attributing fault on any of the parties in respect of the delay in the progress of this case;

(3)  With respect, the “conundrum” issue was fully argued at the hearing.  That should be reflected in the transcript.  Further, whilst the court said at the beginning of the hearing that it was not minded to deal with any controversial matter that day.  It went on to say that it was “more interested in managing this case so that it can go forward in a constructive way.”  (see the transcript, p.1U to p.2B).  No doubt those observations would be understood in their context.  The Ruling served to explain the management decision made by the court.

14.For these reasons, this application is dismissed with an order nisi that the costs be to Yang with a certificate for 2 counsel.

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

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