Chan Sau Wah and Another v. Chan Sau Wah and Others

CACV 81/2019

[2019] HKCA 584

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 81 OF 2019

(ON APPEAL FROM HCA NO 2522 OF 2016)

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(By Original Action)

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(By Counterclaim)

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J U D G M E N T

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Hon Kwan VP (giving the judgment of the court):

1.This is an unusual application to the Court of Appeal. The 1^st and 3^rd defendants by original action (also the 1^st and 2^nd plaintiffs by counterclaim) seek leave to amend the Re‑Amended Defence and Counterclaim after judgment was given against all the defendants on 23 January 2019 by Deputy High Court Judge To ([2019] HKCFI 177)[1] who presided over a four-day trial. The effect of the proposed amendments is to raise a new case of contractual licence, and would entail the withdrawal of a concession made by the defendants’ former trial counsel that the defendants have been occupying the suit premises pursuant to bare licences which had been validly revoked.

2.Pursuant to Order 59 rule 14A(1), we exercise our power to determine this interlocutory application without a hearing on the basis of written submissions only.

3.It is not in dispute that under Order 20 rule 8 and Order 59 rule 10(1), the Court of Appeal does have power to allow a pleading to be amended, even after judgment has been handed down and when the judgment is under appeal (Hong Kong Civil Procedure 2019, vol 1, §§20/8/9, 20/8/14A, 20/8/15).  The question is whether the discretion to do so should be exercised.  The court would of course require an exceptional case before acceding to an application of this nature, as there is public interest in the finality of litigation (Nam Kwong Medicines & Health Product Co Ltd v China Insurance Co Ltd [2003] 2 HKLRD 345 §10).  Order 20 rule 8 (1A) should also be noted.  This provides that the court shall not under rule 8(1) order a pleading to be amended unless it is of the opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs.

Background

4.The relevant background matters may first be related as follows.

5.The 1^st and 2^nd plaintiffs, the 1^st and 3^rd defendants and Chan Sau Fat (“Sau Fat”) (collectively “the five brothers”) are the sons of Chan Wing Kee (“the Father”).  They also have two sisters.  The plaintiffs are the legal owners of House 13 of Sam Tung Uk Resite Village (“House 13”), a three-storey house[2]. The 1^st and 2^nd defendants (who are husband and wife) occupy the 2^nd floor of House 13.  The 3^rd and 4^th defendants (also husband and wife) occupy the 1^st floor of House 13.

6.In this action, the plaintiffs claimed vacant possession of the 1^st and 2^nd floors of House 13 and mesne profits against the defendants, claiming that the plaintiffs are the only beneficial owners of House 13, that the defendant are in occupation of the 1^st and 2^nd floors as bare licencees and that the licences have been revoked.

7.The defence as pleaded[3] is that the plaintiffs held the legal title of House 13 under an express or constructive trust (“the 1959 Trust”) for themselves, the 1^st and 3^rd defendants and Sau Fat (i.e. the five brothers) as the beneficial owners.  As such, the plaintiffs have no right to require the defendants to move out of House 13.  The defendants counterclaimed for a declaration of the trust to that effect and for a vesting order of their interest in House 13.

8.House 14, which is a corner house adjoining House 13 and a property of higher value, is not the subject matter of this action as pleaded.  It is pleaded in the defence[4] and admitted by the plaintiffs[5] that House 14 was held by Chan Wing Kai (“Uncle Kai”), a younger brother of the Father, on trust for the five brothers absolutely in equal shares (“the 1963 Trust”) and that the five brothers are entitled to live there with their respective families.  It is not in dispute that the 1^st and 2^nd plaintiffs have lived in House 14 with their families to the exclusion of the other three brothers.  The plaintiffs do not dispute the entitlement of the 1^st and 3^rd defendants to one-fifth each of the interest in House 14.

9.House 13 and House 14 had their origin from the family house, which was situated on Lots 1946RP and 1570A in DD 449.  In 1979, the government offered the villagers of Sam Tung Uk Village new houses in Sam Tung Uk Resite Village under a land exchange scheme.  Lots 1946RP and 1570A were surrendered to the government pursuant to the scheme.  In 1980, the government granted Lot 1373 in DD 451 to Uncle Kai (on which House 14 is situated) as trustee for the five brothers and Lot 1380 in DD 451 to the 1^st and 2^nd plaintiffs (on which House 13 is situated).

10.At the trial, the defendants’ former counsel conceded that if the defendants are unable to prove the 1959 Trust, the plaintiffs are entitled to the reliefs claimed in that their respective occupation of House 13 was pursuant to bare licences which had been validly revoked[6]. It was accepted on their behalf if they “could not prove a trust, they necessarily became trespassers by reason of the revocation of the bare licence”[7]. As the legal title of the plaintiffs to House 13 was not disputed, and the defendants acknowledged they bore the burden of proof in establishing the alleged trust, the judge allowed the defendants to open their case first and to have the last word[8].

The judgment below

11.At the time of the trial, the Father’s mother (“the Grandmother”) had passed away in 1976, the Father died in November 2000 and the mother of the five brothers (“the Mother”) died in December 2009.  Uncle Kai is the only witness who can testify about the circumstances surrounding the making of the 1959 Trust and the 1963 Trust.

12.The defendants relied on the 1963 Trust (which is not in dispute) as evidence of a family tradition and Grandmother’s intention that the plaintiffs were to hold Lot 1946 RP as trustees for the five brothers[9]. The judge considered Uncle Kai’s evidence not credible and held that his evidence has failed to prove any family tradition as alleged[10]. He is far from satisfied that the defendants have discharged the burden of proving that the 1959 Trust over Lot 1946 RP was in favour of the five brothers and the terms of the trust as pleaded and that the plaintiffs knew and agreed to the terms of the trust[11]. Furthermore, the defendants’ reliance on the 1959 Trust must also fail as not being evidenced by any written document as required by section 5(1) of the Conveyancing and Property Ordinance, Cap 219[12].

13.The judge gave judgment for the plaintiffs of vacant possession of those parts of House 13 occupied by the defendants and ordered the defendants to pay mesne profits, the quantum of which from the date of termination of the licences had been agreed.

14.The judge however ordered a stay of execution of his judgment for eight months until 23 September 2019 with liberty to apply and made an order nisi there be no order as to costs.  His reasons may be gleaned from these paragraphs now relied on by the defendants in this application and are set out in full as follows:

“15. At the direction of Grandmother, the brothers were to choose the flats in House 13 and House 14 according to their seniority. The 1^st and 2^nd plaintiffs respectively chose the second and first floors of House 14. The ground floor is at present rented to the eldest sister. The 1^st defendant, 3^rd defendants and Sau Fat respectively chose to live in the second, first and ground floor of House 13. Subsequently, the spouses of the 1^st and 3^rd defendants, ie the 2^nd and 4^th defendants moved in to live with them. The youngest sister also moved into the 2^nd floor.”

“22. Having heard the evidence, it is obvious to me that it is strongly arguable that the defendants’ licence to occupy House 13 is not a bare licence. The five brothers had an arrangement orchestrated by Grandmother whereby the two plaintiffs lived in House 14 of which they are co‑owners with the defendants and Sau Fat but to their exclusion. The allocation of the flats in the two houses were inextricably related. There must be an implied cross-licence given by the defendants to the plaintiffs to occupy House 14 to their exclusion, which is the consideration for the defendants occupying House 13. But this issue was not pleaded.

23. If the defendants are unable to prove the 1959 Trust, the inequity of the plaintiffs’ claim is apparent.  Each of the 1^st and 3^rd defendants is entitled to one-fifth of House 14 or three‑fifth of a flat in House 14.  Though the 1^st and 3^rd defendants’ right to House 14 is not the subject matter of this action, they are excluded from House 14 and are now being evicted from House 13 as well. Regardless of my conclusion in this action, justice requires that the parties’ rights to House 13 and 14 should be resolved together.  Unless the parties are able to reach a settlement, the 1^st and 3^rd defendants might have to commence partition proceedings to enforce their undisputed rights to House 14.  Because House 14 commands a highervaluation than House 13, the 1^st and 3^rd defendants’ rights in three-fifths of aflat in House 14 is worth more than three-fifths of a flat in House 13 in which they are residing.  I therefore suggested the parties to come to settlement[13] on the basis of allowing the 1^st and 3^rd defendants to trade their rights in House 14 for a flat in House 13 with or without topping up by cash supplement.  The amount of cash supplement depends on the parties’ assessment of their chances of success in this action, their assessment of the valuation of the two houses, the legal costs, the acrimony such settlement could save and natural love and affection.  But while blood is thicker than water, it is not as thick as money.  The parties were unable to come to settlement.”

“52. I have mentioned the unfairness and unconscionable nature of the plaintiffs’ claim. In short, they are occupying House 14 to the exclusion of the 1^st and 3^rd defendants who are co‑owners of that house and entitled to use and occupation of that house. They did so under a flat swapping arrangement agreed upon by the five brothers and that agreement was supported by consideration. The alleged “bare licence” given to the 1^st and 3^rd defendant to occupy House 13 is not a bare licence, but a contractual licence. This “bare licence” was conceded by the defendants. Had they not so conceded, they would most probably succeed in their defence. Now, to seek justice, the defendants would have to commence partition proceedings against the plaintiffs to recover their interest in House 14. It is regrettable that the parties have refused my suggestion to have a global settlement of this action and their rights in relation to House 14. Further costs are going to be incurred to bring the partition proceedings so that the parties’ dispute can be fully disposed of. In view of the unfair and unconscionable nature of the plaintiffs’ claim, I shall order a stay of execution of the judgment for eight months for the 1^st and 3^rd defendants to consider commencing partition proceedings and making arrangement for delivering possession of the part of House 13 they occupied to the plaintiffs. The interest rate I am going to award is also tied to this period.”

“54. I repeat my call to the parties to come to settlement of all their dispute concerning House 13 and House 14 during this eight months’ period of stay of execution.”

The application to amend the defence

15.The 1^st to 4^th defendants filed a notice of appeal on 19 February 2019 against the judgment.  They do not seek to challenge the rejection of their defence based on the 1959 Trust.  Among other things, the grounds of appeal in the notice of appeal seek to argue the judge had made a finding of fact that the defendants did not occupy House 13 under a bare licence but a contractual licence, which cannot be revoked at will.  And if the raising of a contractual licence is to be regarded as raising a new point on appeal, it is contended that this should be allowed as there is no contravention of the principle in Flywin Co Ltd v Strong & Associates Ltd (2002) 5 HKCFAR 356.  They seek an order that the counterclaim in the draft amended pleading be granted to include a claim of mesne profits against the plaintiffs for occupying House 14 under the contractual licence.

16.Also on 19 February 2019, the 1^st and 3^rd defendants issued the present summons to amend the Re‑Amended Defence and Counterclaim.  The summons was supported by an affirmation of the 1^st defendant filed on the same day.  He deposed that the finding in §15 of the judgment is correct, except that the judge had mis‑stated that the arrangement was at the direction of “Grandmother” as Grandmother had passed away by then and the arrangement was at the direction of the Mother.  He claimed that he was told by his then legal advisers that House 13 and House 14 should be dealt with together in this action but he “was not aware” that the defendants “had not claimed vacant possession and mesne profits in relation to House 14”.  He asserted that this omission was a “technical error”.  He gave no explanation why the concession of bare licence was made at the trial.

17.The proposed amendments are in §§26B, 26C, 36, 37, 38 of the draft Re‑Re‑Amended Defence and Counterclaim and §§1B to 1G of the prayer for relief.  The added paragraphs pleaded that:

(1)   The 1^st plaintiff and his family have been residing on the 2^nd floor of House 14 and the 2^nd plaintiff and his family have been residing on the 1^st floor of House 14 pursuant to a contractual licence particularised as follows. In around 1980, after the government had granted the two pieces of land on which House 13 and House 14 are situated, at the direction of the Mother, the brothers were to choose the flats in the two houses according to seniority.  The 1^st and 2^nd plaintiffs chose the 2^nd floor and 1^st floor of House 14.  The 1^st defendant, 3^rd defendant and Sau Fat chose the 2^nd floor, 1^st floor and ground floor of House 13.  Accordingly, there was an “implied cross-licence” given by the defendants to the plaintiffs to occupy House 14 to the exclusion of the defendants, which is the consideration for the defendants occupying House 13.

(2)   The parties moved into House 13 and House 14 pursuant to the contractual licence and since the contractual licence had been acted upon, it cannot be revoked at will.  So long as the plaintiffs are occupying House 14, they are not entitled to revoke the contractual licence to prevent the defendants from occupying House 13.  The 1^st and 3^rd defendants make a new counterclaim for a declaration that the contractual licence had not been terminated and seek an injunction to restrain the plaintiffs from breaching the contractual licence by demanding the defendants to deliver vacant possession of House 13.

(3)   Further or alternatively, if the contractual licence for the defendants’ occupation of House 13 had been terminated, the 1^st and 3^rd defendants make a new counterclaim against the plaintiffs for vacant possession of House 14 and mesne profits for their occupation from the date of termination of the contractual licence.

18.Ms Carol Wong submitted on behalf of the defendants that the proposed amendments are consistent with the factual findings by the trial judge, who recognised the “unfairness and unconscionable nature of the plaintiffs’ claim” (mentioned twice in §52 of the judgment) when he had to decide the case without being able to let the defendants rely on contractual licence which was not pleaded.  It is unjust and inequitable to permit the plaintiffs to revoke the “implied cross-licence”, when the plaintiffs have been and still are enjoying the benefits of the consideration under the implied cross-licence, namely, the right to occupy House 14.  The amendments seek to rectify the inherent injustice in that the trial judge was disabled from making a ruling whereby the outcome is consistent with the factual findings due to a “technical error”, namely, that the former legal team of the defendants did not plead contractual licence but conceded instead there was a bare licence.

19.In support of the contention that the judge had made a factual finding of an “implied cross-licence”, Ms Wong cited §§15, 23 and 52 of the judgment.  She submitted the factual basis that the licence is contractual has been determined in §15, and the legal basis that the licence is contractual has been determined in §52.  There is therefore no prejudice occasioned to the plaintiffs by allowing the amendments since the entire pleaded amendments are based on the findings of the trial judge, nothing more or less.  She argued that there is no reasonable possibility the state of the evidence relevant to the contractual licence would have been materially more favourable to the plaintiffs if the point had been taken at the trial, since the factual finding of contractual licence “was already completed by the trial judge”.

If the judge had made factual finding of a contractual licence

20.The judge was keenly aware that contractual licence was not pleaded in the defence, and that to the contrary, it was conceded by the defendants’ counsel that the defendants occupied House 13 under bare licences which had been validly revoked.  The meagre facts recited in §15 (that each brother chose a flat to live in one of the two houses according to seniority as directed by the Grandmother, or the Mother) are insufficient to support the case of contractual licence as the defendants now seek to advance.  No evidence was led as to the terms or basis upon which a contractual licence to occupy was given and the circumstances in which any such licence might be revoked, and no findings were made in that regard.

21.We are given to understand by Ms Sabrina Ho, who appeared for the plaintiffs at the trial and in this application, that the concepts of “contractual licence” and “implied cross-licence” were not raised by any one at the trial and were only alluded to by the judge for the first time in his judgment.

22.The selection of a flat by each brother was briefly canvassed by the defendants’ counsel in the cross-examination of the 1^st and 2^nd plaintiffs[14], and it was solely on the basis that the selection was pursuant to the alleged understanding that the 1^st and 3^rd defendants were also beneficial owners of House 13 under the 1959 Trust (an allegation denied by both plaintiffs).

23.Further, according to the evidence of the 1^st plaintiff, there was not even a firm selection by each brother of a flat to be occupied by each and the living arrangements were not fixed[15].  The Re‑amended Statement of Claim also pleaded how each of the three storeys in House 13 was occupied by different family members at various times[16], and this was largely admitted by the defendants[17].

24.As correctly submitted by Ms Ho, the judge did not make any factual finding of a contractual licence.  In §22 of the judgment, he only went as far to say that it is “strongly arguable” that the defendants’ licence to occupy House 13 was not a bare licence.  What he said in §§23 and 52 was by way of comment to encourage the parties to come to a global settlement of all their differences.  Hence, the judge expressly said had the concession of bare licence not been made, the defendants “would most probably succeed” in their defence.  He did not invite submissions from counsel on this and the trial was conducted on an entirely different basis.  Plainly, he had not made a ruling on the factual or legal basis for a contractual licence, which remained an unpleaded issue before him and was contrary to the defendants’ concession of bare licence.

Whether the amendments should be allowed

25.There are three reasons why the amendments should not be allowed.

26.First, the application to amend the defence is made after judgment has been given in favour of the plaintiffs and this must be subject to a stringent scrutiny than is the usual case of amending a pleading before judgment (Mak Shiu Tong v Yue Kwok Ying & Anr, CACV 199/2002, 30 September 2004, §20).  Moreover, as stated by Neuberger J (as he then was) in Charlesworth v Relay Roads Ltd [2000] 1 WLR 230 at 238G to H:

“… because it is inherently contrary to the public interest and unfair on the other side that an unsuccessful party should be able to raise new points or call fresh evidence after a full and final judgment has been given against him, it would generally require an exceptional case before the court was prepared to accede to an application where the applicant could not satisfy the three requirements in Ladd v Marshall”.

27.These quotations in Charlesworth v Relay Roads Ltd at 237H to 238A apply aptly to the present situation:

“When a litigant has obtained a judgment … he is by law entitled not to be deprived of that judgment without very solid grounds”: Brown v Dean [1910] AC 373 at 374.

“It is a duty of every litigant ‘to bring forward his whole case at once and not to bring it forward piecemeal as he found out the objections in his way’ ”: In re New York Exchange Ltd (1888) 39 Ch D 415 at 420.

28.The three conditions for the admission of new evidence on appeal in Ladd v Marshall [1954] 1 WLR 1489 at 1491 are plainly not satisfied in this instance.  There is no suggestion that the evidence that might have been adduced to support the new case of contractual licence could not have been obtained with reasonable diligence for use at the trial.  There must be a strong presumption against letting the defendants have a second chance, particularly when the new case is contrary to their express concession of bare licence.  The fact that “justice requires the parties’ rights to House 13 and 14 should be resolved together”[18] but were not resolved in this action was due to the defendants’ litigation strategy.  They could have brought forth the counterclaim they now seek to bring to enforce their rights as co‑owners in House 14 but did not.  There are no exceptional circumstances to warrant the exercise of discretion in the defendants’ favour.

29.Second, the amendments involve the withdrawal of an express concession on appeal.  The relevant principles are as stated by Mann J in BT Pension Scheme Trustees Ltd v British Telecommunications PLC & Anr [2011] EWHC 2017 (Ch) at §44:

“i) The resiling party has the burden of establishing that the previous forgone point should be raised.

ii) It will be harder to raise a point which has been expressly conceded.

iii) If taking the point would risk causing prejudice to the other party, in the sense that it might have been deprived of the opportunity of dealing with the case differently in the court below, then it is unlikely that the resiling will be allowed. The greater the risk, the less likely it is that it will be allowed.

iv) There is a low threshold of risk for these purposes. …

v) The burden of establishing no risk is on the party who wishes to withdraw the concession, and the other party should have the benefit of any doubt in this area.”

30.Applying the above principles, the defendants would bear the burden of establishing that no risk would be caused to the plaintiffs in allowing the defendants to withdraw the concession that their occupation was pursuant to bare licences which had been validly revoked.  There is a low threshold of risk for such purposes and the benefit of any doubt in this regard would go to the plaintiffs.  If the defendants were allowed to withdraw the concession and raise instead a new case of contractual licence, the plaintiffs would suffer prejudice in that they would be deprived of the opportunity of dealing with the case differently in the court below, such as by putting forward legal arguments to counter arguments that might be advanced on the irrevocability of the licences and adducing evidence to dispute the existence, the alleged terms and alleged irrevocability of any contractual licence concerning the occupation of House 13.  As submitted by Ms Ho, the oral discussions and circumstances leading to the five brothers’ selection of the flats in the two houses would become highly relevant and contentious.

31.Furthermore, as the five brothers are beneficially holding House 14 as tenants-in-common, each of them has an equal right to possession of the entire property but not a right to exclusive possession of any part.  In order to prove the existence of any licence to occupy a particular part of House 14 to the exclusion of the other co‑owners, it is necessary to show that all the co‑owners, i.e. the five brothers, have agreed to give exclusive possession of the 2^nd floor to the 1^st plaintiff and the 1^st floor to the 2^nd plaintiff (Kung Ming Tak Tong Co Ltd v Park Solid Enterprises Ltd (2008) 11 HKCFAR 403 at §§32, 34).  Sau Fat is not a party in this action, nor has he given evidence at the trial.  New evidence would have to be led to address the issue whether Sau Fat had agreed to grant a licence of exclusive occupation to each plaintiff of the respective floors occupied by them.

32.Ms Wong sought to rely on Deng Minghui v Chau Shuk Ling [2007] 1 HKLRD 905, in which the Court of Appeal allowed a concession wrongly made by the defendant’s counsel to be withdrawn (that the service of the writ on the defendant was good as she had actual notice, notwithstanding she was outside the jurisdiction and no leave of the court was obtained).  The concession in that case was not one on factual issues and the evidence was by way of affidavits, and the court was satisfied there was no question of prejudice to the plaintiff which could not be compensated by costs (§17).  Ms Wong submitted an analogy can be drawn with that case in that the defendants’ concession in relation to the bare licence was perhaps a misapprehension of the law.  She contended that the concession of a bare licence is a legal issue and the factual basis of the licence has been determined by the judge.

33.The present situation is clearly distinguishable from Deng Minghui where there was no or little dispute as to the relevant circumstances of the service of the writ and the concession was in relation to the issue whether the service was good service at law.  For the reasons already given, the judge has not made a factual finding that the defendants occupied House 13 pursuant to contractual licences given by the plaintiffs.  The plaintiffs had no opportunity to adduce such evidence as they might wish to dispute the existence, the alleged terms and alleged irrevocability of any contractual licence.  The factual basis for a contractual licence has yet to be established.  It is not solely a legal issue as contended by counsel. It could not be wholly explained that this was a “technical error” (as alleged in the 1^st defendant’s affirmation) or a “misapprehension of the law” (as suggested by Ms Wong).  If the concession was made on the basis of facts that would constitute support for a bare licence, it has not been satisfactorily explained why the defendants should be permitted to resile from their concession.  The Court of Appeal will almost invariably expect an explanation to be given why new points raised on appeal (whether of fact or law) were not raised in the court below, this is an important facet of the court’s discretion (Cathay Pacific Airways Flight Attendants Union v Director-General of Civil Aviation [2007] 2 HKLRD 668 at §45; Re Qin Jun, ex parte Win Wind Resources Ltd [2018] 4 HKLRD 379 at §28).

34.In view of the risk of prejudice to the plaintiffs which cannot be compensated by costs and the absence of good reason to resile from the concession, it would not be appropriate to allow the defendants to withdraw the concession.

35.Third, the amendments raise new points and new evidence which will cause unfairness to the plaintiffs.  For the reasons explained above, the state of the evidence bar under the Flywin principles has not been met, as the new point of contractual licence is fact-sensitive, and would affect the course of the evidence and the conduct of the case below.  The principles have been further explained in Lehmanbrown Ltd v Union Trade Holdings Inc & Ors, HCMP 977/2015, 17 June 2015 at §10:

“Whilst the Court of Appeal obviously has power to entertain new points in an appeal, it is also clearly and firmly established that new points which are fact sensitive or otherwise affect the course of evidence or conduct of the case at the hearing below should not be allowed. Though this principle is usually applied in situations where the new points necessitate further evidence to be adduced, it is not confined to such scenarios. Very often, the raising of new point by one party may lead to the other party raising counter arguments and the consideration of such counter arguments may involve factual assessment in a different light from that undertaken by the court below. Sometimes, it may involve a different weighing of factors in the exercise of discretion. Alternatively, the other party may embark on a different course of forensic conduct if the new point were taken earlier. The appellate court, in considering whether the new point would be entertained, is entitled to take these matters into account in order to avoid unfairness to the other party.”

36.Applying the above principles, it would not be fair to allow the new point of contractual licence to be raised on appeal by the amendments.  The considerations of saving time and costs urged by Ms Wong are insufficient to counterbalance the risk of prejudice to the plaintiffs such that the proceedings would be fairly disposed of.

37.The judge ordered a stay of execution of his judgment for eight months to give time to the defendants to bring partition proceedings separately to recover their interest in House 14.  Ms Wong submitted that this will create potential difficulties in the event that the new proceedings should lead to “different factual findings”, when the same set of background facts have been relied upon as in the present proceedings.  Other than the fact that the legal and beneficial ownership of House 14 have never been in dispute, and that the plaintiffs have occupied two storeys in House 14 to the exclusion of the other co‑owners, no evidence has been led in this action as to the nature and terms of the licence by which they have occupied the premises.  Ms Wong’s complaint is “different factual findings”, not inconsistent factual findings.  Different factual findings in the fresh proceedings might be expected in view of different and additional evidence that may be adduced, even though the background facts are similar in both proceedings.  I fail to see why this should constitute potential difficulties.

Conclusion and costs

38.For the above reasons, the defendants’ summons to amend the Re‑Amended Defence and Counterclaim is dismissed.  Costs of the application should follow the event.

39.Ms Ho submitted that costs should be awarded to the plaintiffs on an indemnity basis as the application to amend the defence after judgment is an attempt to re-open a lost fight in the guise of an appeal and an abuse of process.

40.The judge was concerned about the “unfairness and unconscionable nature of the plaintiffs’ claim” and threw the defendants a lifeline in granting them a stay of execution to bring partition proceedings.  Instead of bringing fresh proceedings as envisaged by the judge, the defendants took another chance in making this application to amend the defence.  They latched onto the judge’s comments about contractual licence as their best hope, as (on the face of it, and without expressing any final views at this stage) it does not appear from the notice of appeal there are any other substantial grounds for challenging the judgment.  The defendants’ course of action, though not justified, is understandable.  This is not a bad case of abuse of process to warrant indemnity costs.  We order the defendants to pay costs to the plaintiffs on a party and party basis.

41.We have considered the plaintiffs’ statement of costs for summary assessment.  We will allow costs in the sum of $142,813.90.

Ms Sabrina Ho, instructed by T C Foo & Co, for the 1^st and 2^nd Plaintiffs (by original action) and the 1^st and 2^nd Defendants (by counterclaim) (Respondents)

Ms Carol Wong, instructed by Li & Partners, for the 1^st and 3^rd Defendants (by original action) and the 1^st and 2^nd Plaintiffs (by counterclaim) (Appellants)