Lau Yue Sum and Others v. Hui Siu Kwong Representing the Estate of Lau Leung Seung, Deceased
Read the full judgment text of DCCJ 1986/2020 on BabelCite. This District Court judgment was delivered on 19 September 2022.
1. In these proceedings, the 1 st and the 2 nd plaintiffs (“Ps”) are suing the defendant (“D”) for the return of a specific sum of HK$2.6 million. Ps claim that the HK$2.6 million is money belonging to Ps, and D ought to return the same to them.
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DCCJ 1986/2020 [2022] HKDC 993 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 1986 OF 2020 ________________________ BETWEEN
(By Original Writ, Order to carry on made my Master M. Wong on 23 April 2015 and Order to carry on made by Master R. Lai on 20 December 2019) ________________________ Before: His Honour Judge MK Liu in Court Date of Hearing: 5 September 2022 Date of Judgment: 19 September 2022 ________________________ J U D G M E N T ________________________ 1.In these proceedings, the 1st and the 2nd plaintiffs (“Ps”) are suing the defendant (“D”) for the return of a specific sum of HK$2.6 million. Ps claim that the HK$2.6 million is money belonging to Ps, and D ought to return the same to them. 2.In the trial, Ps are represented by Mr Leo Wong, and D is represented by Mr Thomas Lai, both of counsel. 3.At the beginning of the trial, both counsel have agreed that this case can be determined by only considering the documents in the trial bundles, the statement of agreed facts dated 26 August 2022 signed by the parties (“the Statement of Agreed Facts”), and the submissions made by counsel. It would not be necessary to hear factual evidence from the witnesses. Accordingly, no oral evidence from the factual witnesses has been heard. Both counsel have also agreed that the witness statements made by these witnesses should not be regarded as evidence in the trial. A. THE FACTS 4.I would first set out the background facts. The facts set out below are the matters in the Statement of Agreed Facts, and matters which are not in dispute or indisputable. 5.Everything originated from the late Lau Wai Chau (“the Ancestor”) who in his lifetime amassed great wealth and bought up, inter alia, Tung Shing Lei in Yuen Long, over which the Route 3 motorway and the West Rail now run. The Ancestor had 5 wives and 8 sons (“the 8 Fongs”) before passing away in 1933. There was in fact a 1930 will, but the Ancestor’s legacy under the will was modified in a 1946 Deed of Family Agreement (“the 1946 DFA”) with the consent of all the 8 Fongs. 6.According to the 1946 DFA, the Ancestor’s estate (“the Estate”) was divided into 8 parcels, one for each Fong and with a 9th part devoted to setting up an ancestral worship trust. 7.In the 1990s, inter-family litigation broke out in two sets of proceedings (HCMP 3924/1995 and HCMP 3209/1996, collectively “the 95/96 Proceedings”). Unless otherwise indicated, the orders mentioned in the below are the orders made by the Court of First Instance in the 95/96 Proceedings. 8.Lau Yue Kui was appointed as the administrator (“the Administrator”) of the Estate on 8 June 1995, and remained as the Administrator until his death on 9 August 2015. Thereafter, Lau Kin Shun Freeman was appointed as the Administrator, and he is still the Administrator. 9.The Estate and the 8 Fongs are the parties in the 95/96 Proceedings. 10.Lands comprising the Estate were resumed by Government. Resumption compensation in total of HK$244,589,649.91 (inclusive of interest) (“the Compensation Money”) was paid into court in the 95/96 Proceedings and form part of the Estate. The Compensation Money represents cash compensation on resumption of about 22% of the total area of the lands in the 1946 DFA. 11.The 8 Fongs agreed that the Fongs’ respective entitlements to the Compensation Money before deduction of costs and subject to the first charge for costs of the Administrator and the 2nd Fong shall be in accordance with the area of lands distributed to them under the 1946 DFA. The Fongs however differed as to how the lands comprising the Estate should be divided among the Fongs, which was the main issue in the 95/96 Proceedings:
12.On 7 January 1998, after trial in the 95/96 Proceedings, Cheung J (as he then was) upheld the validity of the 1946 DFA. The losing camp (i.e. the 3rd, 5th, 6th, 7th, and 8th Fongs) appealed against such judgment to the Court of Appeal and then to the Court of Final Appeal. 13.The 8 Fongs were unable to obtain payment out of the Compensation Money when the validity of the 1946 DFA was under appeal. 14.For the purpose of funding the continuation of the 95/96 Proceedings, by a consent order made by Cheung J dated 20 December 1999 (“the 1999 Payment Out Order”), the Court of First Instance ordered that, without prejudice to the costs orders already made in the 95/96 Proceedings and the contentions of the parties as to the ultimate incidence of the costs and disbursements incurred by the parties in the 95/96 Proceedings, HK$7,990,955.58 were to be paid out of the Compensation Money on account of legal costs and disbursements of the following solicitors’ firms in the 95/96 Proceedings:
15.The appeal in the 95/96 Proceedings was finally determined when the Court of Final Appeal handed down their judgment on 27 March 2000. The Court of Final Appeal confirmed the validity of the 1946 DFA. Hence, the Estate should be distributed in accordance with the 1946 DFA. The losing camp (i.e. the 3rd, 5th, 6th, 7th, and 8th Fongs) were ordered to pay costs of the 95/96 Proceedings (including appeals therefrom) to the prevailing camp (including the 1st, 2nd and 4th Fongs). 16.Based on the 1946 DFA and the calculation done by the surveyors (i.e. Vigers Hong Kong Limited, “Vigers”), the payment of compensation in respect of the resumed lands was calculated as follows: [1]
17.By an order made by Cheung J dated 9 June 2000 (“the 2000 Payment Out Order”), it was ordered by consent that HK$100,952,499.98 were out from the Compensation Money in court to the same 5 Fongs pro rata to their respective gross entitlements as follows:-
18.IN THE SAME ORDER, IT WAS ORDERED BY CONSENT THAT HK$14,236,293.19 FROM THE COMPENSATION MONEY IN COURT WERE PAID ON ACCOUNT OF COSTS AND DISBURSEMENTS TO THE FOLLOWING SOLICITORS’ FIRMS AND THE VIGERS WITH BREAKDOWN AS FOLLOWS:-
19.The 2000 Payment Out Order also contains the following paragraph: “9. IT IS FURTHER ORDERED AND DIRECTED that subject to further order of the Court:- (A) Each of the parties hereto shall at the expiration of 90 days from the date of this Order (time to run during the Court vacation) or the issue of the allocatur upon taxation of all the costs that have been ordered to be paid (save in so far as such costs do not require taxation, or are agreed) whichever is earlier, file and serve on all other parties a statement of their respective case as to the final entitlement, incidence and quantum as to costs and disbursements (save previously finally agreed or finally ordered by the Court); (B) Each of the parties hereto shall within 60 days thereafter file and exchange their affidavit evidence as to facts and expert opinions of one expert for each party; and (C) The hearing for the final determination of the matters aforesaid …… to a date to be fixed not before the expiration of 60 days from the last day of the exchange of affidavit evidence and expert opinions as aforesaid, for a duration to be further directed, in consultation with counsel’s diaries.” 20.By 2 orders both dated 17 January 2001, there were final payment out in full and final satisfaction of each Fong’s respective entitlement:-
21.It has been expressly recorded in one of the orders dated 17 January 2001 that the order was made upon, inter alia, an undertaking offered by Lau Yue Kui (i.e. the Administrator at that time) that he would file his 2nd Affirmation (“the 2nd Affirmation of YK Lau”) within 14 days. Thus, when the court made the two orders dated 17 January 2001, the court would have already read a draft of the 2nd Affirmation of YK Lau. That affirmation was subsequently formally made on 22 January 2001 and filed on 29 January 2001. 22.As on 17 January 2001, whilst it was clear that the losing camp was liable to pay costs to the prevailing camp, the exact quantum of the costs payable was yet to be agreed or taxed. 23.On 27 June 2001, it was agreed by all parties concerned that in respect of the 2nd Fong’s legal costs in 95/96 Proceedings and the appeals therefrom (inclusive of interest):
24.On 29 June 2001, HLLY (on behalf of 3rd, 5th, 6th, 7th, and 8th Fongs) paid SYC (solicitors for the 2nd Fong) HK$2,281,356 by cheque. In the covering letter, HLLY said:
25.The HK$300,000 and the HK$2,300,000 (total of these sums being HK$2.6 million) mentioned in HLLY’s letter dated 29 June 2001 are the HK2.6 million, which is the subject matter in these proceedings. 26.On 29 June 2001, SYC by letter acknowledged receipt of the HK$2,281,356. There was an excess of payment of HK$42,105 which SYC refunded to HLLY since the original sum was adjusted downward to HK$2,239,251. In that letter, SYC said:
27.As to whether the 2nd Fong should refund the HK$2.6 million to the 6th and 8th Fongs, the 2nd Fong on the one hand and the 6th and 8th Fongs on the other hand are of different views. Neither side can persuade the other side. 28.In 2001, Lau Leung Wa and Lau Yue Chiu (who are Ps in this case) commenced proceedings in the Court of First Instance (i.e. HCAP 10/2001) against Lau Yue Kui (who was sued as the Administrator of the Estate and personally) and PC. In that case, Lau Leung Wa and Lau Yue Chiu sought, inter alia, an order to remove Lau Yue Kui from the office of the Administrator of the Estate. The trial of that case took place before Chung J in July and August 2005 and lasted for 12 days. On 10 March 2006, Chung J handed down a written judgment, in which his lordship dismissed the plaintiffs’ claim and ordered them to pay costs to the defendants. There is no appeal against Chung J’s judgment. 29.On 12 April 2007, HLLY wrote to SYC and said:
30.However, shortly after issuing the aforesaid letter, HLLY issued another letter to SYC (letter dated 13 April 2007), the contents of which are as follows:
31.On 23 April 2007, SYC wrote to PC, CSC, and HLLY. In that letter, SYC said:
32.On 24 April 2007, PC wrote to SYC (with copies to CSC and HLLY) and said:
33.On 25 April 2007, SYC wrote to HLLY (with copies to PC and CSC) and said:
34.On 4 May 2007, Ps commenced these proceedings against D in the Court of First Instance. This is HCA 903/2007. On 9 January 2020, by a consent order made in HCA 903/2007, the whole action has been transferred from the Court of First Instance to the District Court. 35.In this case, in substance, Ps are the 6th and 8th Fongs, and D is the 2nd Fong. B. THE PARTIES’ RESPECTIVE CASES 36.Ps’ case is that the HK$2.6 million is from their entitlements in the Estate. After paying the HK$2,239,251 (“the HK$2.2 million”) to D, D is not entitled to keep the HK$2.6 million and must refund the same to Ps. 37.Ps are relying upon the following causes of actions:
38.Regarding the contractual claim, Ps’ case as pleaded in the Statement of Claim is as follows:
39.Mr Wong submits that Ps have an alternative claim. Mr Wong says that if Ps’ claim for the return of the HK$2.6 million fails, as an alternative, Ps would claim for the refund of the HK$2.2 million by relying upon mistake as a cause of action. 40.D denies that there is any liability to return the HK$2.6 million to Ps. In particular, in the Rejoinder dated 5 July 2016, D specifically pleaded the following:
C. DISCUSSION 41.A salient feature in this case which must be borne in mind is that the Estate is not a party in these proceedings, and the Administrator has not expressed any support to Ps’ claim herein. 42.Having considered the documents and the parties’ respective submissions, I am firmly of the view that Ps’ claim cannot succeed. In my view, there is a fundamental problem in Ps’ case. Ps must fail in their claim based upon unjust enrichment, and they must also fail in their claim based upon contract. I am also of the view that Ps are not entitled to pursue an alternative claim for the HK$2.2 million in this case. C1. Fundamental problem 43.It is plain and obvious that the Compensation Money is an asset in the Estate, and the HK$2.6 million is from the Compensation Money and is a part of the Compensation Money. In other words, the HK$2.6 million is also an asset in the Estate. There is no dispute that the administration of the Estate is ongoing and is not yet complete. The Administrator has not given any assent to pass the HK$2.6 million to Ps. 44.In the circumstances, Ps do not have any legal or beneficial interest in the HK$2.6 million. Ps also cannot take possession of the HK$2.6 million. The principles have been summarized in Williams, Mortimer and Sunnucks, Executors, Administrators and Probate (21st Edition), §76- 03:
45.The inchoate right of a beneficiary in an unadministered estate is a chose in action to have the deceased person’s estate properly administered and applied for the beneficiary’s benefit when the administration is complete. As said by Yuen JA in Pacific Harbor Advisors Pte Ltd v Winson Federal Ltd [3]:
46.Assuming that D cannot keep the HK$2.6 million and must return the sum, the money should be returned to the Estate, not to Ps, for the HK$2.6 million is from the Compensation Money. In the absence of an assent from the Administrator passing the HK$2.6 million to Ps, as a matter of law, Ps do not have any legal or beneficial interest in the HK$2.6 million, and Ps cannot take possession of the HK$2.6 million. Ps only has a chose in action to require the Administrator to properly administer the Estate and distribute the assets therein in accordance with the law when the administration is complete. 47.For this reason, with respect, Ps cannot make any claim against D, requiring D to pass the HK$2.6 million directly to Ps. Ps’ claim is misconceived and must fail. 48.This point would be sufficient for disposing the whole case. For the sake of completeness, I would also say that even if I put aside this fundamental point, Ps are still bound to fail on each and every cause of action relied upon by them. C2. Unjust Enrichment 49.Regarding unjust enrichment, the relevant questions are as follows [4]:-
50.In my judgment, Ps have failed to prove that the answers to questions (1) and (2) are in the affirmative. Accordingly, Ps’ claim based upon unjust enrichment cannot succeed. C2.1. Was D enriched? 51.Ps’ claim is based upon the following premises:
52.With respect, in my view, one of the problems in Ps’ argument is that the HK$300,000 released to SYC under the 1999 Payment Out Order, and the HK$2.3 million released to SYC under the 2000 Payment Out Order, are not security for the costs incurred by the 2nd Fong in resisting the 6th and 8th Fongs’ claim in the 95/96 Proceedings, but are payments on account for costs and disbursements of SYC in the 95/96 Proceedings. 53.According to the letter of PC (acting for the Administrator) dated 24 April 2007, as at the date of that letter, SYC would still be involved in a lot of outstanding matters in the 95/96 Proceedings, including making of vesting orders to various Fongs and setting up the Tso by using the assets in the 9th part of the Estate. In other words, PC is saying that further costs and disbursements would be incurred by SYC in the 95/96 Proceedings. There is no evidence refuting what has been said by PC in that letter. 54.The HK$2.6 million is a sum released to SYC on account for costs and disbursements of SYC in the 95/96 Proceedings. Although SYC received the HK$2.2 million from HLLY on 29 June 2001, as said in PC’s letter dated 24 April 2007, further costs and disbursements would be incurred by SYC in the 95/96 Proceedings. In the circumstances, there is no sufficient basis to say that by keeping the HK$2.6 million after receiving the HK$2.2 million, D must have been enriched. C2.2. Was the enrichment at Ps’ expense? 55.Even if D was enriched by keeping the HK$2.6 million, in my view, it cannot be said that the enrichment was at Ps’ expense. 56.Relying upon [3] of the 2nd Affirmation of YK Lau, Mr Wong submits that the HK$2.6 million is from the 6th and 8th Fongs’ entitlements in the Compensation Money. 57.Mr Wong further submits that although Ps do not have a legal or beneficial interest in the HK$2.6 million, the enrichment was still at Ps’ expense, for there is a sufficient causal relationship between the loss to Ps and the benefit received by D. Mr Wong relies upon the Court of Appeal’s decision in Lee Yuk Shing v Dianoor International Limited[5]. In that case, the plaintiff claimed against the defendant for the return of money for seven lots of goods described as “rough diamond stones” sold at a public auction by the defendant, but the items were in fact synthetic cubic zirconia. One of the arguments put forward by the defendant in resisting the claim is that the payment for the stones was not paid by the plaintiff but by a Mr Lo, and hence the plaintiff cannot rely upon unjust enrichment as a cause of action in support of his claim. This argument was rejected by the Court of Appeal. In the judgment, Kwan JA (as she then was) said:
58.With respect, I do not think that Ps may derive any assistance from the Lee Yuk Shing case.
C3. Contract 59.As to Ps’ claim based upon contract as pleaded in [13] and [14] of the Statement of Claim, as submitted by Mr Lai, that claim must also fail. 60.Firstly, in HLLY’s letter dated 29 June 2001, HHLY did not say that the payment of HK$2,281,356 was conditional upon or subject to the return of the HK$2.6 million by SYC. After mentioning the payment of HK$2,281,356, HHLY only mentioned the HK$2.6 million “in passing”. In my view, HHLY did not make an offer in this letter that upon the payment of HK$2,281,356 to SYC, SYC should return the HK$2.6 million to HHLY. 61.Secondly, in SYC’s letter dated 29 June 2001, SYC has not said that after receiving the HK$2.2 million from HHLY, SYC would return the HK$2.6 million to HHLY. SYC only said that “…… upon full reimbursements for all our agreed legal costs, we shall refund the money on account previously awarded by the Court to the entitled parties as soon as possible.” SYC did not say that they would make any refund to HHLY. SYC only said that they would refund to “the entitled parties”. 62.In my judgment, Ps have failed to prove their claim based upon contract as pleaded. C4. Alternative claim – the HK$2.2 million 63.Having considered Ps’ case as pleaded in the Statement of Claim carefully, in my judgment, Ps have only pleaded a case for the return of HK$2.6 million. Ps have not pleaded an alternative case for the return of the HK$2.2 million. I would not allow Ps to run an unpleaded case. The alternative claim for the HK$2.2 million raised by Mr Wong in his submissions must be rejected. D. DISPOSITION 64.With respect, there is no merit in Ps’ case. I dismiss Ps’ claim. There be a costs order nisi that costs of these proceedings (including all costs reserved) be paid by Ps to D, with a certificate for counsel, to be taxed if not agreed. 65.I thank counsel for the assistance provided to the court.
Mr Leo Wong, instructed by Hau, Lau, Li & Yeung, for the 1st and 2nd plaintiffs Mr Thomas Lai, instructed by Tsang, Chan & Woo Solicitors & Notaries, for the defendant [1] Subject to the 1st charge for costs of the Administrator and the 2nd Fong pursuant to §8(b) of order dated 24 January 1998 made by Cheung J and other costs orders made in the 95/96 Proceedings. [2] The 3rd, 5th, 6th, 7th and 8th Fongs undertook to deposit HK$13,500,000 into a joint account of HLLY and PC on account of costs payable to the plaintiff in the 95/96 Proceedings and for the costs of probate and administration, and remuneration to the Administrator. [3] HCMP 1285/2015, 21 August 2015 [4] Shanghai Tongji Science and Technology Industrial Company Limited v Casil Clearing Limited (2004) 7 HKCFAR 79, per Ribeiro PJ at [67] [5] CACV 185/2015, 23 May 2016 [6] Emphasis added |
Cases cited in this judgment