Yuen Kwok Leung Eric and Another v. Ming Chor Pao By Her Guardian Ad Litem Chu Kwok Kee Kookie and Another
Read the full judgment text of CACV 36/2020 on BabelCite. This Court of Appeal judgment was delivered on 19 April 2021 before Hon Lam VP and Chu JA.
Civil appeal – striking out – Enduring Power of Attorney – sale and purchase of property – locus standi of donee after donor's death – Order 15 Rule 7 representation of deceased's estate – Order 59 Rule 5(1)(a) requirement to lodge sealed judgment – issue estoppel – whether appeal frivolous, vexatious or abuse of process – sale and purchase agreement dated 27 March 2015 for a Mei Foo Sun Chuen property owned by Madam Ming and signed by her son under an Enduring Power of Attorney dated 15 January 2014 – dispute over EPA by another son, Kookie, who commenced mental health and related proceedings – Plaintiffs' requisitions on title allegedly not properly answered – Plaintiffs sought rescission and return of deposit – Madam Ming died on 21 November 2016, long before trial – Kookie appointed under Order 15 Rule 7 to represent the estate by order of Master Lo dated 2 November 2017 – 2nd Defendant's appeal against that order dismissed by B Chu J on 20 March 2018 and not further appealed – at trial, Plaintiffs' claim against estate settled by consent on second day – 2nd Defendant pursued counterclaim for enforcement of agreement and declaration of validity of EPA – trial judge held 2nd Defendant had no locus to pursue the counterclaim, and requisitions were not adequately answered so no good title was shown – judgment of Deputy High Court Judge Ambrose Ho SC dated 30 December 2019 dismissing counterclaim – 2nd Defendant filed notice of appeal 22 January 2020 but failed to lodge sealed judgment under Order 59 Rule 5(1)(a) despite extensions and permission to lodge by post – Plaintiffs issued summons 12 November 2020 to strike out – whether 2nd Defendant had locus to pursue counterclaim after donor's death – held no: upon demise of donor of EPA, donee ceased to have authority; estate was duly represented by Kookie under Order 15 Rule 7; the 2nd Defendant's attempt to challenge the representation order was barred by issue estoppel and was an abuse of process – whether appeal should be struck out – held yes: failure to comply with directions was not excused by COVID-19 quarantine in the Mainland when other papers had been lodged by post; combined with the plain and obvious lack of merit and the issue estoppel, the appeal was frivolous, vexatious and an abuse of process – whether 2nd Defendant's claim as executor/beneficiary under alleged last will could ground appeal – held no: such matters must be resolved in a probate action and no probate had been granted – whether vendor who failed to show good title was nevertheless in breach – court reaffirmed that a vendor with good title who fails to show good title by answering requisitions is still in breach and the purchaser may rescind, citing Active Keen Industries Ltd v Fok Chi Keong [1994] 1 HKLR 396 – appeal struck out and dismissed – 2nd Defendant ordered to pay costs of the summons fixed at HK$90,000.
Legal issues: Whether the 2nd Defendant had locus to pursue a counterclaim based on the agreement after the donor's death · Whether the appeal should be struck out for failure to comply with procedural rules and lack of merit · Whether the 2nd Defendant's claim as sole executor/beneficiary under the last will can be raised in this action
Outcome: The 2nd Defendant's appeal was struck out and dismissed. The 2nd Defendant was ordered to pay the Plaintiffs' costs of the summons, fixed at HK$90,000.
Cited by 6 cases · Cites 5 cases
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CACV 36/2020 [2021] HKCA 476 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO 36 OF 2020 (ON APPEAL FROM HCA 1637/2015) ____________________
____________________ (BY ORIGINATING WRIT) AND
__________________________ (By Order to Carry On of Master S Lo dated 2 November 2017) Before: Hon Lam VP and Chu JA in Court Dates of the Written Submissions: 10, 24 February 2021, and 3 March 2021 Date of Judgment: 19 April 2021 ________________________ JUDGMENT ________________________ Hon Lam VP (giving the Judgment of the Court): 1.This appeal was brought by the 2nd Defendant against the judgment of Deputy High Court Judge Ambrose Ho SC (“the Judge”) of 30 December 2019 in the trial in HCA 1637 of 2015. The trial concerned a sale and purchase agreement of 27 March 2015 in respect of a property at Mei Foo Sun Chuen owned by Ming Chor Pao (“Madam Ming”). The Plaintiffs were the purchasers under the agreement. The vendor was Madam Ming though the agreement was made by the 2nd Defendant (one of Madam Ming’s son) on her behalf pursuant to an Enduring Power of Attorney (“the EPA”) of 15 January 2014. 2.The EPA was subject to dispute by another son of Madam Ming, Chu Kwok Kee Kookie (“Kookie”) who had commenced legal proceedings, including mental health proceedings, in respect of the management of the estate of Madam Ming. 3.In the conveyancing process, solicitors for the Plaintiffs raised requisitions regarding the development in such legal proceedings. It was the contention of the Plaintiffs that those requisitions were not properly answered and therefore good title had not been shown. They therefore sought to rescind the agreement and asked for the return of the deposit paid under the agreement. The writ was issued on 20 July 2015. 4.Long before the trial, Madam Ming passed away on 21 November 2016. By an order of Master Lo on 2 November 2017, Kookie was appointed to represent the estate of Madam Ming in the action under Order 15 Rule 7 of the Rules of the High Court. The title to the action was amended accordingly. 5.The 2nd Defendant appealed against the order of Master Lo. His appeal was dismissed by B Chu J on 20 March 2018. The 2nd Defendant did not appeal further. Thus, by the time the action came before the Judge, Kookie was the only person who was authorized to conduct the case on behalf of the estate of Madam Ming. 6.The Plaintiffs had an alternative claim in the action against the 2nd Defendant based on warranty of authority. 7.The 2nd Defendant advanced a counterclaim seeking:
8.The 2nd Defendant also referred to himself as the sole and legal and beneficiary of the last Will of Madam Ming. 9.The Defence and Counterclaim was filed on 5 November 2015, before the death of Madam Ming. It can immediately be said that the 2nd Defendant could not seek any determination in the context of HCA 1637 of 2015 on matters which could only be properly canvassed in a probate action commenced after the demise of Madam Ming. It appears that Madam Ming had apparently made 3 wills at different times. There was indeed a probate action commenced by Kookie subsequent to the death of Madam Ming challenging 2 purported wills of Madam Ming. We have not been informed of the progress of the probate action. As explained further below, the development in the probate action could not take the 2nd Defendant’s case in the present appeal any further. 10.On the second day of trial, Kookie and the Plaintiffs reached agreement to settle the Plaintiffs’ claim. The development at the trial was summarized by the Judge at [12] to [13] of the judgment of 30 December 2019:
11.The trial continued to deal with the 2nd Defendant’s counterclaim. In the end, the Judge held that the 2nd Defendant did not have locus to pursue the counterclaim regarding the enforcement of the agreement. Regarding the validity of the EPA, the Judge held at [6]:
12.The Judge also held that the requisitions of the Plaintiffs had not been adequately answered by the solicitors acting for Madam Ming in the conveyancing transaction and no good title had been shown nor could such title be given on the date for completion: see [25] to [52] of the judgment. 13.The Judge gave the following judgment as between the Plaintiffs and the 2nd Defendant at [56],
14.The Notice of Appeal of the 2nd Defendant was filed and served on 22 January 2020. Notwithstanding so, he had so far failed to comply with the requirement in Order 59 Rule 5(1)(a) to file a copy of the sealed judgment within 7 days. 15.According to the evidence, the sealed judgment of the Judge had been served on the 2nd Defendant on 4 May 2020. The Registrar had also directed that he could lodge the sealed judgment by post. Despite repeated directions and extensions of time granted by the Registrar of Civil Appeals, the 2nd Defendant still failed to do so. Such failure precluded the Registrar from setting down the appeal and hampered the progress of the appeal. 16.In light of the long delay of the 2nd Defendant, the Plaintiffs took out a summons on 12 November 2020 seeking to strike out the appeal. From the affirmation of the solicitor for the Plaintiffs in support of the summons and the written submissions lodged, the grounds for the striking out are,
17.Solicitors acting for the Plaintiffs and the 2nd Defendant lodged written submissions on the summons. 18.Having read the papers, we are satisfied that the application is suitable for determination on the papers. 19.In respect of the failure to comply with Order 59 Rule 5(1)(a), the 2nd Defendant said the delay was due to the on-going COVID-19 pandemic and the quarantine in place. According to his emails to the solicitors for the Plaintiffs and his submissions, he has been residing in the Mainland since the outbreak. But he had been following the progress in the appeal and had responded to letters from the solicitors for the Plaintiff and lodged submissions to oppose the summons. 20.However, his residence in the Mainland and the quarantine cannot be sufficient to exonerate him for his failure to comply with the directions of the Registrar of Civil Appeals in light of the permission granted to him to lodge the sealed judgment by post. He was able to comply with the directions for lodging submissions in the summons by sending the same to the court by post. If he has any serious intention to prosecute the appeal, he should have complied with his obligation by lodging the sealed judgment by post. His failure to do so is evidence of his failure to prosecute the appeal with due diligence since, as mentioned, such failure has hampered the progress of the appeal. 21.If this default on the part of the 2nd Defendant were the only ground for striking out, we would have made an unless order to give him a last opportunity to comply. 22.However, this is not the only ground. Parties have fully canvassed their respective case on locus in their written submissions. 23.Though this Court will not lightly entertain a striking out application based on arguments on the merit of an appeal (since this would escalate the costs and delay the resolution of the appeal if the application is not successful), we would do so in plain and obvious cases where the appeals could readily be seen as frivolous, vexatious or an abuse of process: see Lam Pak Cheung v Lin Zhen Lue [2009] 1 HKLRD 35; Competition Commission v W Hing Construction Co Ltd [2020] HKCA 930. 24.The issue of locus is the core issue in this appeal. It is very clear and plain to us that the Judge was correct in holding that the 2nd Defendant had no locus to pursue any counterclaim based on the agreement on behalf of Madam Ming after her demise. 25.It is clear and established law that upon the demise of a donor of a EPA the donee ceased to have authority to act for the deceased donor. In addition to the authorities cited by the Judge at [23] of the judgment, see also the recent judgment of this Court in FNG v BCJ [2021] HKCA 160 at [34]. 26.We also agree with the Judge’s clear explanation at [20] to [21] of the judgment on the effect of the representation order of Master Lo which was upheld by B Chu J. In the absence of any appeal against the judgment of B Chu J, it does not lie in the mouth of the 2nd Defendant to challenge that order. The doctrine of issue estoppel barred him from raising such challenge and his attempt to do so constituted an abuse of process. 27.The procedure under Order 15 Rule 7 is to provide for a mechanism to address the representation of a deceased person’s estate in pending litigation when no probate has been granted. The person so appointed has full authority to act for the estate as far as the conduct of the litigation (including its settlement) is concerned. 28.Thus, the estate of Madam Ming was duly represented by Kookie at the trial and the settlement reached between Kookie and the Plaintiffs bound the estate. The 2nd Defendant had no locus to dispute such settlement with the Plaintiffs. 29.The 2nd Defendant’s claim to be the sole executor and beneficiary under the last will of Madam Ming has to be resolved in the probate action. It cannot be a valid ground of appeal in this action when no probate had been granted at the time of the trial before the Judge. 30.As the Judge rightly pointed out, the dispute in this action between the Plaintiffs and the Defendants should focus on the conveyancing process and whether Madam Ming’s solicitors had answered the requisitions adequately and showed a good title before completion. The resolution of the validity of the EPA depends upon assessment of the evidence of the medical experts which was not before the court. 31.In any event, since the dispute had not been resolved at the conveyancing stage, it could not advance the position of Madam Ming (and the 2nd Defendant) vis-à-vis the Plaintiffs in respect of the rescission of the agreement for failure to answer requisition adequately and failure to show good title. It is trite that a vendor who has a good title but failed to show good title by answering requisitions is still in breach of the agreement. A purchaser can still rescind in such circumstances: see Active Keen Industries Ltd v Fok Chi Keong [1994] 1 HKLR 396. 32.For these reasons, it is plain and obvious to us that the 2nd Defendant’s appeal is frivolous and vexatious and an abuse of process. We order that the appeal be struck out and dismissed accordingly. 33.We also make an order that the 2nd Defendant shall pay the costs of the summons. Having considered the statement of costs of the Plaintiffs, after deducting some items which we consider to be excessive, we fix such costs at $90,000.
The plaintiffs represented by Fred Kan & Co The 2nd defendant acting in person |
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