Cheung Ting Kau, Vincent v. Koo Siu Ying and Another
Read the full judgment text of CACV 42/2017 on BabelCite. This Court of Appeal judgment was delivered on 1 February 2021.
1.1 The plaintiff is the sole executor of the will of Mr Lim Por Yen (‘the Deceased’) dated 3 December 2004 (‘the 2004 Will’). The Deceased died on 18 February 2005.
Cited by 3 cases · Cites 7 cases
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CACV 42/2017 [2021] HKCA 139 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 42 OF 2017 (ON APPEAL FROM HCAP NO. 4 OF 2011) ________________________
________________________ BETWEEN
________________________ Before: Hon Kwan VP and Cheung JA in Court Date of Hearing: 22 January 2021 Date of Judgment: 1 February 2021 ________________________ J U D G M E N T ________________________ Hon Cheung JA (giving the Judgment of the Court) : I. Background 1.1The plaintiff is the sole executor of the will of Mr Lim Por Yen (‘the Deceased’) dated 3 December 2004 (‘the 2004 Will’). The Deceased died on 18 February 2005. 1.2Madam Koo, the first defendant, is the Deceased’s second concubine and Madam Ling, the second defendant, is her daughter with the Deceased. 1.3Madam Koo and Madam Ling are expressly disinherited under the 2004 Will. They used to be the beneficiaries under the earlier wills of the Deceased made in 1967 (‘the 1967 Will’) and 1973 (‘the 1973 Will’). They entered caveats against the 2004 Will in August 2010. In 2011, the plaintiff commenced the present probate action (HCAP 4/2011) against them seeking an order that the 2004 Will be pronounced in its solemn form. 1.4The defendants denied that the 2004 Will is valid. They denied the claims of the plaintiff to be the executor of the 2004 Will and they raised a counterclaim for their entitlements either upon intestacy or upon probate being granted in respect of the 1973 Will and codicil or the 1967 Will under which they were named beneficiaries. 1.5By summons dated 30 October 2014, the defendants applied for administrators pendente lite (in English language, administrators pending litigation) to replace the plaintiff. Deputy High Court Judge Kent Yee refused the application on 18 February 2016. After an unsuccessful application for leave to appeal from Deputy Judge Kent Yee, the defendants obtained leave from another division of this Court on 15 February 2017. 1.6The notice of appeal was filed on 20 February 2017 and the appeal was set down. However no further steps were taken by the defendants on the appeal until 21 April 2020 when their solicitors Holman Fenwick Willan (‘HFW’) wrote to the plaintiff’s solicitors MinterEllison LLP (‘ME’) enclosing an amended notice of appeal which they intended to file when the Court reopened for business on 3 May 2020. The letter stated :
1.7By a letter dated 7 May 2020, HFW sent to ME the defendants’ amended notice of appeal which was filed the day before and indicated that the defendants now wish to fix a hearing date for the present appeal. No explanation of any kind was given by HFW as to the reasons for the defendants’ delay in applying for a hearing date before 7 May 2020. 1.8On 27 July 2020, the plaintiff issued the present summons seeking the following relief :
II. The defendant’s explanation 2.1The main basis of the defendants’ application for administrator pendente lite was their complaint that the plaintiff lacked neutrality and sided with the beneficiaries of the 2004 Will, namely, Peter Lam and Madam U. Under the 2004 Will, the Deceased bequeathed all of his shares in Wisdoman Limited (‘Wisdoman’) to Peter Lam and Madam U. Wisdoman holds many of the assets of the Deceased. For example, it holds the Deceased’s 480 million shares in Lai Sun Garment (International) Ltd which are of substantial value. At the same time, the Deceased also gave all his shares in Wisdoman to Peter Lam and Madam U by way of an inter vivos gift. 2.2The underlying theme of the defendants’ application is that they contended that the plaintiff should have considered a claim to be made against Peter Lam and Madam U to recover the Wisdoman shares transferred to them as an invalid gift. As the claim may be time-barred, they said urgent steps were needed to be taken by the administrators pendente lite to preserve such a claim. They also said that the inaction of the plaintiff in pursuing the claim against Peter Lam and Madam U was indicative of his alliance with them, particularly given his aggressive conduct in some litigation against Highfit Development Company Limited (‘Highfit’). 2.3The defendants explained that the inactivity after obtaining leave to appeal was due to their intention to commence a derivative action. The following steps were taken by them in respect of that action.
2.4Despite these steps the defendants did not commence the derivative action. Ms Rosie Ng, solicitor for the defendants explained in her affirmation of 10 August 2020 the reason for not pursuing the derivative action.
2.5In HFW’s subsequent letter of 10 June 2020, it further explained why the derivative action was not commenced. It stated, inter alia,
2.6The defendants, however, did not explain why steps were not taken in the present appeal from mid-2018 or end 2018 until April 2020. III. Our view 3.1Although the first limb of the plaintiff’s application is to ask the Court to refuse to fix a date for the appeal, we consider it more appropriate to deal with the strike out application first. 1) Striking out 3.2The Court of Appeal has inherent jurisdiction to strike out a notice of appeal where an appeal is plainly not competent, or where the appeal is frivolous, vexatious or an abuse of process of the Court. In the case of the latter, the inherent jurisdiction would be exercised on precisely the same basis as if Order 18, rule 19 of the Rules of the High Court (‘RHC’) (Cap 4A) applied to notices of appeal: Leung Chung Lan Lorraine v Hang Seng Bank Ltd [2019] HKCA 1408 at [34] and Competition Commission v. W. Hing Construction Company Limited and others (CACV 257/2019) at [16]. 3.3The principles on striking out for want of prosecution have been comprehensively reviewed by Ma CJ in Wing Fai Construction Co Ltd v Yip Kwong Robert (‘Wing Fai’) (2011) 14 HKCFAR 935. It is sufficient to state that the foundation for the jurisdiction to strike out for delay is based on an abuse of the process of the Court by the party whose case is to be struck out. Inordinate and inexcusable delay causing prejudice to a defendant, contumelious conduct or initiating proceedings without any intention to bring them to a conclusion which is commonly referred to as ‘warehousing a claim’, are examples of abuse (Wing Fai [66]). 2) Inordinate and inexcusable delay 3.4In this case the plaintiff first relied on inordinate and inexcusable delay and prejudice to the plaintiff. After the notice of appeal had been served and filed, there was inactivity for three years on the part of the defendants to prosecute the appeal. It can hardly be argued otherwise that this is inordinate delay particularly if the nature of the appeal is to be taken into account. 3.5The defendants wished to replace the plaintiff who is the executor of the 2004 Will of the Deceased by administrators pendente lite. The nature of the application speaks volumes that the appeal should be prosecuted expeditiously in order to enable someone else to be put in charge of the estate. The urgency is highlighted by the fact that the probate action by the plaintiff was commenced in 2011 and yet by 2020 the important issue whether the plaintiff should be replaced has still not been resolved. Furthermore, Order 1A, rule 1(b) of the RHC now expressly requires that a case should be dealt with as expeditiously as possible. The defendants are clearly in breach of this requirement. The delay is inordinate. 3.6Is the delay inexcusable? The defendants put up the excuse that they were then pursuing the possibility of a derivative action. But as it turned out, despite having a writ endorsed with a statement of claim being ready in September 2017, they had chosen not to issue it. More importantly, this could not possibly be a reasonable explanation for the delay because during this period the defendants were not dealing with the present appeal at all. On the contrary, they were dealing with a matter which would have the effect of doing away with the need of administrators pendente lite in order to protect the Wisdoman shares. The defendants were still sitting on the fence even after they had decided not to pursue the derivative action. They could not be allowed to conduct litigation in such a manner particularly after the Civil Justice Reform. In our view, the delay is inexcusable. 3.7The defendants’ approach also amounts to ‘warehousing’ of their claim. They started proceedings and then delayed with no intention to bring the proceedings to a conclusion. This amounts to an abuse. 3.8Even if, for the purpose of argument, the defendants’ pondering whether to pursue the derivative action amounts to a reasonable explanation, this will only carry the matter up to middle or end of 2018. Beyond that there is no excuse for the substantial delay thereafter. 3) Prejudice 3.9Is there prejudice to the plaintiff as a result of the delay? Prejudice takes many forms. Apart from the traditional ones, such as prejudice caused by proceedings hanging over the head of a defendant causing undue anxiety (Wing Fai [75(3)]), the Court recognizes that one should take a broader view and prejudice also includes prejudice to the Court and the administration of justice and other litigants when the Court’s limited resources are abused. Thus in Wong Shui Kee Roger v Victor Chu & Co [2011] 4 HKLRD 594, this Court held :
3.10From July 2017 onwards the plaintiff had repeatedly asked the defendants whether they intended to pursue the appeal. Taking a perspective view, the delay in the prosecution of the appeal clearly causes prejudice to the plaintiff in the administration of the estate. Prejudice in the wider sense of affecting the due administration of civil justice is also established in this case. 4) Sleeping dog 3.11The defendants referred to Clarke: Hong Kong Civil Court Practice (2020) at [paragraph 59.5.4.] and submitted that the plaintiff himself could have applied to list the appeal for hearing. They argued that the jurisdiction to strike out presupposes an obligation on the party against whom the strike out is aimed to take some steps or action such as to apply for a peremptory order against the defendants. The inactivity on the part of the plaintiff suggested a ‘let sleeping dog lie’ approach which was disapproved of by Wing Fai where Ma CJ stated:
3.12It is clear from the correspondence that the plaintiff had repeatedly inquired with the defendants about the progress of the appeal. They stated that the defendants’ inaction was an abuse and suggested that the appeal should be dismissed by consent. The plaintiff had clearly not adopted a ‘let sleeping dog lie’ approach in this litigation. 3.13In RSRB’s letter of 25 July 2017, they asked the defendants to agree to have the appeal dismissed by consent :
3.14RSRB in a further letter dated 9 November 2017 wrote :
3.15In RSRB’s letter of 31 May 2018, they again expressly stated :
3.16Whilst it is true that after HFW’s letter of 19 November 2018 which indicated that the defendants would proceed with the appeal, the plaintiff had not taken steps to apply for a hearing date or a peremptory order notwithstanding the defendants’ continuous inactivity, we do not consider that it can be said that the plaintiff was deliberately refraining from action with the hope that sufficient prejudice would be accumulated so that some sort of prejudice could then be asserted. Each case must be decided on its own facts. We disagree that in the present case the plaintiff is obliged to take such steps. He is entitled to pursue the alternative relief of striking out the appeal. In the present case on 17 June 2020 ME replied to HFW and stated that :
3.17Shortly thereafter ME issued the present summons. 5) Other circumstances 3.18It is not disputed that the Court must consider all the circumstances of the case in a strike out application. One factor is the chance of success of the intended appeal. Deputy Judge Kent Yee refused the application because of the lack of merits and also of the delay in the application. He held at [134] the delay was inexcusable. When this Court granted leave to appeal to the defendants, it had expressly stated that it did not intend to express any view on the merits of the appeal, rather the purpose of granting leave was to provide guidance on the law because the decisions so far on administrators pendente lite are all first instance decisions. On delay, the application was taken out in October 2014 which was more than nine years after the death of the Deceased and three years after the commencement of the probate action by the plaintiff. There is a further delay of three years after the granting of leave. It is uncontroversial that the application by the defendants below could be achieved by other means such as requiring the plaintiff to issue a protective writ in respect of the Wisdoman shares which the defendants had chosen not to pursue. In our view the defendants have not demonstrated that they have a high chance of success in an appeal from a discretionary decision such that the Court should not stifle it by striking out the appeal. 3.19The defendants submitted that the plaintiff had delayed in prosecuting the probate action which was refuted by the plaintiff. But this is not relevant to the delay by the defendants in prosecuting the present appeal. The defendants also referred to the litigation conducted by the plaintiff against them. Again the focus must be on the way the defendants themselves have prosecuted the present appeal. 6) Ample justification 3.20Ma CJ in Wing Fai at [69] stated that resort to a striking out must be a remedy of last resort and at [72] stated that under the Civil Justice Reform regime he would expect to see virtually no application unless peremptory orders have not been complied with, or provisions such as Order 25, rule 1(4), 1(5) or 1C apply. As repeatedly said the context of a case is important and in this case we find ample justification to strike out the appeal. 7) Order 59, rule 5(2) 3.21In the present case the defendant submitted that because of the absence of specific time limit for the appeal to be fixed, there was no obligation on their part to fix a date for their appeal. Accordingly the first limb of the plaintiff’s application should be dismissed. It is clear from the wording of Order 59, rule 5(2) of the RHC both in its old version on 20 February 2017 i.e. the date when the defendants filed their notice of appeal and in its current amended version that there is no requirement for an appellant to apply to fix the appeal within a specific time. 3.22The old version reads :
3.23The part that was underlined above was removed in the current amended version. 3.24In Chan Cheryl v Ngai Po Lun Paul [1990] 1 HKC 148, this Court dealt with the old version of the rule. We held at pages 153-154 that an appellant had to apply for a date to be fixed for the hearing of the appeal notwithstanding the wording in Order 59, rule 5(2).
3.25Yuen JA in Yu Man v Pricewaterhouse Coopers (a firm) HCMP 71/2006 (unrep., 5 June 2006) dealt with an application for extension of time to fix the hearing date for appeal. She held that such an application was unnecessary because of the wording of the old Order 59, rule 5(2). Referring to the words that were underlined as indicated above she held that :
3.26She declined to follow another decision of this Court in Law Siu Hong Albert v Cheung Kin Ping CACV 114/1997 (unrep., 3 August 2000) where extension of time was granted. This Court held at page 4 :
3.27In Wong Shui Kee Roger this Court dealt with an application by the respondent under the current amended version of Order 59, rule 5 and under the Court’s inherent jurisdiction to strike out the notice of appeal on the grounds that the appellant has failed to prosecute the appeal. We held :
3.28As we have already acceded to the application to strike out, it is not necessary for us to consider whether the first limb of the application can also be sustained or not. In respect of the earlier decisions of this Court, Yuen JA in Yu Man was, of course, correct not to make an order extending time because it was not necessary to do so. But it is now only of academic interest to discuss whether there is any conflict between Yu Man and Law Siu Hong Albert because we are of the firm view that after the Civil Justice Reform, notwithstanding the absence of a specific provision for the appellant to apply to fix a date for the hearing of the appeal, such an obligation is indeed imposed on the appellant. The following paragraphs of Practice Direction 4.1, Civil Appeals to the Court of Appeal are relevant :
3.29These requirements clearly impose an obligation on an appellant to apply to fix a date for the appeal. As this Court said in Chan Cheryl at page 154 that there are three separate and distinct stages in the appeal process which should be accomplished in the following order, namely, service of the notice of appeal, setting down and fixing a date. This Court’s view in Chan Cheryl that there may be occasions when an appellant is for good reason not ready to fix a date was of course correct, but an appellant’s underlying obligation to have his case dealt with expeditiously must be emphasised. Whilst there is no specific time limit for him to do so and each case must be judged on its own facts, the words in the Practice Direction ‘as expeditiously as is reasonably practicable’ must surely serve as the guide post. IV. Conclusion 4.Accordingly we will strike out the notice of appeal with costs to the plaintiff together with certificate for two counsel. We will summarily assess the plaintiff’s costs which include counsel fees at $600,000.
Mr Victor Dawes SC and Mr Keith Lam, instructed by MinterEllison, for the plaintiff Mr Jose Maurellet SC and Mr Tom Ng, instructed by Holman Fenwick Willan, for the defendants |
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