Lyyc v. Chl and Csms, The Executrices of the Estate of Cgsk also known as Cskg, Deceased

FCMP 223 / 2017

[2019] HKFC 7

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FAMILY COURT

MISCELLANEOUS PROCEEDINGS

NUMBER 223 OF 2017

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JUDGMENT
(Striking out)

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Introduction

1.This is an application to strike out an Originating Summons made under the Inheritance (Provisions for Family and Dependants) Ordinance, Cap 481. The Respondents are the executrices in the estate of CGSK, a wealthy shipping magnet, who passed away on the XX July 2016. It is not disputed that the Applicant was CGSK’s former employee. In addition, she claims to have been his lover. This is hotly contested by the Respondents.  

2.In her Originating Summons, filed on the 1 November 2017, the Applicant seeks general financial relief including a lump sum and periodical payments under sections 3 and 4 of the ordinance, to be paid out of the net estate of the deceased. The Respondents in turn seek to strike out this application. In their summons of the 26 February 2018 the Respondents state as follows:

1.  the Applicant’s application for financial provision pursuant to sections 3 and 4 of the Inheritance (Provisions for Family and Dependents) Ordinance (Cap. 481) by way of her Originating Summons filed on 2 November 2017 be struck out and dismissed as disclosing no reasonable cause of action and/or alternatively scandalous, frivolous or vexatious and/or alternatively may prejudice, embarrass or delay the fair trial of the action and/or alternatively an abuse of process of the Court;

2.  all further proceedings in this action be stayed pending the final determination of this application; and

3.  the costs of this action and costs of and occasioned by this application be to the Respondents, to be taxed on an indemnity basis.

3.I should say at the outset that I do not intend to strike out the Applicant’s summons as it is clear from both the submissions filed and the arguments raised in court that there are significant disputes to be determined in this case, both as to fact and with respect to the meaning and the definition of the law. These will require to be fully adjudicated, in the event that this matter does not settle and the matter proceeds to a full trial. 

The law

4.Both parties have helpfully set out the law in their respective submissions, for which I thank them. These submission overlap but in any event I have taken the liberty of reproducing them below. Mr Todd Q.C. and Mr Chan have summarized the legal position thus:

Basic Principles of Striking-Out

4.  First and foremost there is to be no “take a view” on the affidavits; everything that the plaintiff says must be assumed to be true for a strike out application.

“It is only in plain and obvious cases that the court should exercise its summary powers to strike out ……There should be no trial upon affidavit. Disputedfacts were to be taken in favour of the party sought to be struck out. Nor should the court decide difficult points of law in striking out proceedings. The claim must be obviously unsustainable, ... and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out.” [§18/19/4, HKCP 2018].

5.  Thus all of the plaintiff’s case and allegations are taken to be true and correct for the purposes of this very ambitious application.  If there is any question as to who is correct, it is to be assumed that the defendants are wrong and that the plaintiff is right [Eugene JH Oh v. Kate Richdale [2003] 4 HKC 318; in particular 326C-F per Lam J. (as he then was). This principle of trite law was not disputed on appeal to the Court of Appeal (it was the tort of malicious prosecution and its elements that were disputed); see Eugene JH Oh v. Kate Richdale [2004] 4 HKC 315]

6.  “The court is loath to strike out a case that involves an area of the law which is in the process of developing - summary dismissal would deprive the court of hearing full argument on the subject” [§18/19/4, HKCP 2018].

5.In addition, Mr Coleman S.C. and Ms Tong have elaborated the legal position as follows:

C.    LEGAL PRINCIPLES FOR STRIKING OUT

42.  The Striking Out Summons is under RDC Order 18 rule 19 of the and the inherent jurisdiction of the Court.  Order 18 r.19(3) provides that “[this] rule shall, so far as applicable, apply to an originating summons … … as if the summons  ... ... were a pleading”.

43.  The principles governing striking out applications are well-established and summarized in Hong Kong Civil Procedure 2018 (“HKCP 2018”) Vol 1 § 18/19/4 to § 18/19/23.  In particular:

(1)  It is only in plain and obvious cases that the court should exercise its summary powers to strike out the indorsement on any writ or any pleading under this rule.  There should be no trial upon affidavit.  Disputed facts are to be taken in favour of the party sought to be struck out.  Nor should the court decide difficult points of law in striking out proceedings.  The claim must be obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out (see HKCP 2018_§ 18/19/4).

(2)  But the fact a question of law appears difficult/obscure does not necessarily preclude the court from striking out a claim if it is satisfied it has all the necessary information to decide the question, and has come to the conclusion after full argument in the face of all relevant information that the case is plainly and obviously one for striking out.  In such circumstances, the court “should not decline to do so on the ground that the issues are difficult or complicated”: see HKCP 2018 §18/19/4; Byjoy Ltd v. Thorogood Estates Ltd [1985] 2 HKC 746, 758.

(3)  A “reasonable cause of action” means a cause of action with some chance of success when only the allegations in the pleadings are considered: see HKCP 2018 §18/19/5.

(4)  A claim is frivolous when it is incapable of reasoned argument, without foundation or where it cannot possibly succeed; and a claim is vexatious when it is oppressive and/or lacks bona fides: see HKCP 2018 §18/19/7.

(5)  The Court will strike out a claim if its machinery is being abused.  The process of the court must be used bona fide and properly, and the court will, in a proper case, summarily prevent its machinery from being used as a means of vexation/oppression in the process of litigation.  Pursuing a claim where the pleadings are entirely without substance or where the claim is frivolous and vexatious claim is an abuse of the court’s process: see HKCP 2018 § 18/19/9.

(6)  Any action/claim which the plaintiff cannot prove and which is without solid basis may be dismissed under the Court’s inherent jurisdiction as frivolous and vexatious: see HKCP 2018 §18/19/12.  As stated in The New China Hong Kong Group Ltd v. Ng Kwai Kai Kenneth (unreported, HCA 519/2010, 11.2.2011) at §70 per Fok JA (as he then was) a party should know his case and be in a position to identify the relevant evidence when he starts a claim.  It is an abuse of the process of the court for a party to start a case without a solid foundation hoping that evidence will turn whether proceedings, of the course of proceedings, whether by discovery or otherwise.

6.In this instance, the Applicant says that she has jurisdiction to issue the application by virtue of s.3 (1) (ix) of the Inheritance (Provision for Family and Dependants) Ordinance, Cap 481 (Inheritance Ordinance) which states as follows:     

PART II

APPLICATIONS AND ORDERS FOR FINANCIAL PROVISION

3.  Application for financial provision from deceased’s estate

(1)  Where after the commencement of this Ordinance a person dies--

(a)  domiciled in Hong Kong; or

(b)  having been ordinarily resident in Hong Kong at any time in the 3 years immediately preceding his death,

and is survived by any of the following persons-

…

(ix)  any person (not being a person included in the foregoing paragraphs of this subsection) who immediately before the death of the deceased was being maintained, either wholly or substantially, by the deceased.

In addition, she relies on section 1(2) (b) and 3 which states as follows:

(2)  In this Ordinance, “reasonable financial provision” (合理經濟給養)

…

(b)  in the case or any other application made by virtue of subsection (1), means such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance.

(3)  For the purposes of subsection (1)(ii), (iv), (v), (vi), (vii), (viii) and (ix), a person shall be treated as being maintained by the deceased, either wholly or substantially, as the case may be, if the deceased, otherwise than for full valuable consideration, was making a substantial contribution in money or money’s worth towards the reasonable needs of that person.

7.Reference was also made to section 5(1) (d) which sets out the matters that the court is required to take into account when coming to a decision.

8.Mr Coleman added, and I accept this to be the case, that the court is concerned with a two stage approach under the Inheritance Ordinance as follows:

D3. Summary of the two-stage approach

58.  Hence, an applicant who is not a surviving spouse or tsip bears a two-stage burden of proof as follows:

(1)  First, in order to establish locus standi, that: (i) he or she was being maintained, either wholly or substantially, by the deceased immediately before his death, and (ii) any disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for him or her.

(2)  Second, if the applicant can get over the first hurdle (which is a question of fact), then he or she will have to persuade the Court to exercise its discretion to award such financial provision that is reasonable in all the circumstances for their maintenance by considering the factors as set out in s.5 (which is a question of discretion).

Discussion

9.It is the Respondent’s case that the Applicant has no locus standi, as they argue that on the undisputed evidence before the court, that she was not a person who was being maintained by the deceased either wholly or substantially before his death. The is not accepted by the Applicant. It is her case that she was and has continued to be maintained by the deceased. There is also a related argument concerning the nature of the Applicant’s relationship with CGSK and whether or not the money she received from him was in the nature of a salary or whether she was being “maintained” by him. It is the Applicant’s case that she had an ongoing and intimate relationship with CGSK. This is not accepted by the Respondents. Given that this is a factual dispute, it is clearly not appropriate for the court to come to a decision simply based on the affidavit evidence currently before it. Further I accept that it is not for me to take a “view” on the affidavit evidence filed to date.      

10.There are also other arguments with respect to the law and in particular whether the phrase “immediately before his death” should be construed widely or narrowly.  

Decision

11.It seems to me that these arguments, are of themselves, sufficient to defeat the Respondent’s striking out application. Consequently, the Respondent’s summons dated the 26 February 2018 shall be dismissed. Costs shall follow the event in the normal way. Thus there shall be an order nisi to be made absolute in 14 days’ time that the Respondents do pay the costs of and arising out of their summons dated the 26 February 2018 on a party and party basis to be taxed if not agreed. There shall be certificate for both counsel.   

Further directions

12.I am also asked by the Applicant to give further directions as follows:

44.     …

(1)  By virtue of Paragraph 1.15 of Practice Direction 15.12, Practice Direction 15.11 is hereby directed to be extended and shall apply to the proceedings herein;

(2)  The Applicant and the Respondents (in respect of the Estate of the Deceased) do file and exchange Form E’s covering full and frank financial disclosure and discovery of documents for the period starting from 6 years before the date of death up to date;

(3)  The Applicant’s Originating Summons be adjourned for further call-over and further directions on a date to be fixed in consultation with Counsel’s diaries with 1 hour reserved;

(4)  Costs reserved.

13.However, in the first instance there shall be a further callover on the 24 April 2019 at 9:30 a.m. with 15 minutes reserved. The parties are invited to file short written submissions of not more than 2 A4 pages in length setting out their proposed directions at this stage of the proceedings.  

Mr Richard Todd and Mr Jeremy Chan instructed by Withers for the Applicant

Mr Russell Coleman SC and Ms Sara Tong instructed by MinterEllison LLP for the Respondents