Choi Yat Fan Yildiz, Administratrix of the Estate of Ng Ket Chiew, Deceased v. The Occupier(S) and Another

DCMP 22/2019

[2024] HKDC 628

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 22 OF 2019

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D E C I S I O N

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1.The plaintiff’s summons filed on 28 March 2024 for leave to amend the re-re-amended reply and defence to counterclaim came before me at the pre-trial review. The trial is due to commence on 12 June 2024, with 7 days reserved.

A.  Background

2.These proceedings relate to a property situated at Unit N, 3^rd Floor, Central House, Nos. 270-276 Queen’s Road Central, Hong Kong (“Property”), in respect of which the plaintiff claims vacant possession and mesne profits, whereas the 2^nd defendant counterclaims for a possessory title to the Property on the ground of adverse possession and for equitable relief on the grounds of proprietary estoppel and part performance.

3.According to the plaintiff’s case, she is the lawful attorney of the executors of the estate of the late Ng Ket Chiew (“Deceased”), who became the registered owner of the Property in 1988. In November 2018, the Deceased’s son, Mr Ng Kong Seng, allegedly discovered that the Property was being occupied by some unknown person. The plaintiff therefore commenced these proceedings to recover possession of the Property and claim mesne profits thereof.

4.The 2^nd defendant, a nephew of the Deceased, claims that the Deceased had purchased the Property through his corporate vehicle in 1983. In 1985 and 1986 respectively, the Deceased executed two declarations stating that the Property was in fact owned by the Deceased and the 2^nd defendant, thereby inducing him to believe that he had some benefit over the Property. Since around August 1991, he and his family, either by themselves or through their tenants, have been in adverse possession of the Property. In 2007, it was agreed that in consideration of a payment of $1,000,000, the Deceased’s estate would transfer the Property to the 2^nd defendant (“Alleged 2007 Agreement”). However, despite receiving the sum of $1,000,000, the plaintiff and/or the Deceased’s estate failed to transfer the Property to the 2^nd defendant.

B.  Procedural history

5.The plaintiff commenced these proceedings by an originating summons dated 2 January 2019.

6.By the order of Master S H Lee dated 14 October 2019, these proceedings were ordered to continue as if begun by writ.

7.Thereafter, the parties exchanged their respective pleadings. The last round of pleadings was the plaintiff’s re-re-amended reply and defence to counterclaim dated 16 January 2023.

8.On 18 January 2023, the plaintiff’s solicitors filed a listing questionnaire, in which they confirmed that the plaintiff’s pleadings are in order and require no amendment.

9.On 1 February 2023, Master B Mak granted leave for the case to be set down for trial, and fixed the trial to take place on 12 June 2024, with 7 days reserved.

10.By letter dated 4 March 2024, the plaintiff’s solicitors sought the 2^nd defendant’s consent for the plaintiff to amend her re-re-amended reply and defence to counterclaim, on the ground that the proposed amendments were made upon counsel’s advice.

11.By letter dated 12 March 2024, the 2^nd defendant’s solicitors objected to the plaintiff’s proposed amendments on the ground that any amendment of pleadings at a late stage would risk disrupting the trial dates, and would cause serious prejudice to the 2^nd defendant.

C.  The plaintiff’s proposed amendments

12.In the draft re-re-re-amended reply and defence to counterclaim (“Draft”) attached to the plaintiff’s summons, the plaintiff proposes to make a total of 12 amendments.

13.Mr Pun, counsel for the 2^nd defendant, indicated in his written submissions that the 2^nd defendant does not object to the proposed amendments at §§2, 3, 21(g), (p), (r), 23, 27(d), 28A, 35 and 36 of the Draft, which are largely cosmetic amendments. The only objections are in relation to §§21(l) and 28 of the Draft, in which the plaintiff sought to aver that:

(1)  the sale of the Property between the Deceased’s widow and the 2^nd defendant’s family did not complete due to the reasons as particularised in §21(m) to (s) of the re-re-amended reply and defence to counterclaim; and

(2)  the 2^nd defendant’s plea of part performance of the Alleged 2007 Agreement was and is barred by section 4 of the Limitation Ordinance (Cap 347) (“LO”).

D.  The relevant legal principles

14.It is well established that, generally speaking, amendments should be allowed if they are necessary to enable real questions and controversy between the parties to be decided or to correct any defect or error in any proceedings, provided that they will not prejudice the other party and if any prejudice can be compensated by an appropriate order as to costs: Ketteman v Hansel Properties Limited [1987] 1 AC 189, 212F-H, per Lord Brandon; Natamon Protpakorn v Citibank NA [2009] 1 HKLRD 455, §25, per Cheung JA.

15.In exercising its discretion, the court must have regard to the underlying objectives in Order 1A of the Rules of the District Court (Cap 336H) (“RDC”), so it cannot be assumed that once the principles in Ketteman (supra) are satisfied, the amendment would be allowed: cf. Circuitronix, LLC v Kingboard Chemicals Holdings Limited and Others [2023] HKCFI 3359, §19, per Cheng J. The court needs to balance all relevant factors to decide how its discretion should be exercised. In giving effect to the underlying objectives, the court must always recognise that the primary aim in exercising the powers of the court is to secure the just resolution of disputes in accordance with the substantive rights of the parties: Topwell Corp Ltd v Kwan Kam Kee [2014] 5 HKLRD 1, §39, per Kwan JA (as she then was).

16.In the case of a late application for amendment, absent any real prejudice, the application must be decided upon the general principle that the court seeks to adjudicate on the real issues and disputes between the parties and, if possible, technical and procedural rules should not stand in the way of allowing the parties to raise their real claims or defences before the court for adjudication: VSC Building Products Co Ltd v Kono Insurance Ltd, HCA 947 of 2005 (9 September 2009), §22, per A Cheung J (as the Chief Justice then was).

17.Therefore, leave is readily granted to amend before the trial unless it can be demonstrated that the new claim based on the proposed amendment is bound to fail: Natamon Protpakorn (supra), §25. If the proposed amendments are bound to fail, no leave to amend should be granted. In this regard, the court would take the applicant’s proposed pleaded case at its highest: Bank of China v Leigh Hardwick, HCA 1110 of 2006 (28 August 2023), §2, per Anthony Chan J.

E.  Discussion

E1.  §21(l) of the Draft

18.At §21(l) of the Draft, the plaintiff proposes to add the following underlined passage:

“the transaction between Madam Kok and the 2^nd Defendant’s family did not materialize subsequently due to the demise of Madam Kok in 2008. Further, the sale of the Premises between Madam Kok and the 2^nd Defendant’s family did not complete due to the reason to be averred in more particulars below:”

19.The purported particulars are §21(m) to (s) of the existing re-re-amended reply and defence to counterclaim, in which the plaintiff made averments to events since 2010, including the following:

(1)  in around 2010, the parties re-discussed about the sale of the Property and it was agreed between the parties that the Property and the adjacent Unit P would be sold by the Deceased’s family to the 2^nd defendant’s family at a consideration of about RMB 3 million together (at §21(m));

(2)  subsequently, upon further negotiation and discussion, the total consideration for the Property and Unit P was agreed at $2.6 million, out of which the consideration for the Property was agreed at about $920,000 (at §21(n));

(3)  the conveyance for the Property finally did not go through between the Deceased’s family and the 2^nd defendant’s family as the beneficiaries of Madam Kok’s estate discovered in about 2010 that the 2^nd defendant’s younger brother might have planned to sell the Deceased’s family’s interest in a piece of land in Fujian (“Land”) without the prior knowledge and approval of the beneficiaries of Madam Kok’s estate (at §21(p));

(4)  since the 2^nd defendant has been holding the Land via Kong Cheung, the non-transfer of title from Kong Cheung by the 2^nd defendant back to the Deceased’s family members at the material time also added to the lapse of the transaction for the Property between the beneficiaries of the Deceased’s estate and the 2^nd defendant’s family (at §21(r)).

20.In my view, even taking the plaintiff’s case at its highest, the proposed averment at §21(l) of the Draft, which seeks to provide additional reasons for the non-completion of the sale of the Property between Madam Kok on the one hand and the 2^nd defendant’s family on the other hand, does not correlate with, and thus cannot be supported by, the purported reasons given at §21(m) to (s) of the existing re-re-amended reply and defence to counterclaim.

(1)  §21(l) concerns the sale of the Property between Madam Kok and the 2^nd defendant’s family, as referred to at §21(j) and (k) of the re-re-amended reply and defence to counterclaim, in which the plaintiff pleads that Madam Kok agreed to sell the Property to the 2^nd defendant’s family at a total consideration of $850,000 in 2007.

(2)  On the other hand, at §21(m) of the re-re-amended reply and defence to counterclaim, the plaintiff avers that, after the parties “re-discussed” about the sale of the Property, an agreement was reached between the Deceased’s family and the 2^nd defendant’s family in around 2010 for the Property and Unit P to be sold by the Deceased’s family to the 2^nd defendant’s family at a consideration of about RMB 3 million.

(3)  The plaintiff also avers that, upon further negotiation and discussion, the total consideration for the Property and Unit P was ultimately agreed at $2,600,000, out of which the consideration for the Property was agreed at about $920,000: §21(n) of the re-re-amended reply and defence to counterclaim.

21.In the light of the plaintiff’s pleading as a whole, I am of the view that §21(m) to (s) of the re-re-amended reply and defence to counterclaim relate to a different transaction for the sale and purchase of the Property in 2010 from the one referred to in the proposed averment at §21(l) of the Draft, viz. the sale and purchase of the Property in 2007. Therefore, the particulars at §21(m) to (s) cannot be said to constitute reasons for the non-completion of the sale and purchase of the Property in 2007.

22.First, the parties are not the same: the 2007 sale was said to be entered into by Madam Kok, whereas the 2010 sale was said to be entered into by the Deceased’s family after Madam Kok’s demise.

23.Secondly, the subject matter in the 2007 sale was said to be the Property only, whereas the subject matters in the 2010 sale were said to be the Property and Unit P.

24.Thirdly, the consideration is also different: the price for the Property under the 2007 sale was said to be $850,000, whereas the price for the Property under the 2010 sale was said to be about $920,000.

25.Mr Lun, counsel for the plaintiff, submitted that the 2007 sale and the 2010 sale are “interrelated” transactions. Whilst I accept that there are some common features in both transactions, in that the 2^nd defendant’s family is said to have agreed to purchase the Property on both occasions, it remains, in my view, that they are two separate and distinct transactions even on the plaintiff’s own case because of the different parties, subject matter and consideration as pleaded.

26.Further, according to Mr Lun’s submissions, Madam Kok, in her capacity as the sole beneficiary of the Deceased’s estate, could not have sold the Property alone without joining Kong Seng and Sook Peng, the executors of the Deceased’s estate, in the purported sale. However, at §21(l) of the Draft, Madam Kok was stated to be the only counterparty who had entered into the 2007 sale with the 2^nd defendant’s family, without any mention of Kong Seng and Sook Peng being parties thereto. Therefore, even on the plaintiff’s own case, the purported sale as referred to at §21(l) of the Draft is not a valid one, and the proposed amendment could not, in my view, be necessary either for disposing fairly of the cause or matter, or for saving costs: cf. RDC Order 20, rule 8(1A).

27.For the above reasons, I am not prepared to allow the plaintiff’s proposed amendment as per §21(l) of the Draft.

E2.  §28 of the Draft

28.As indicated by Mr Lun at the hearing, he would no longer pursue the proposed amendment at §28 of the Draft. This is a sensible approach. In my view, the plaintiff’s proposed reliance of a limitation defence to the 2^nd defendant’s plea of part performance would be precluded by section 4(7) of the LO, which relevantly provides:

“This section shall not apply to any claim for specific performance of a contract or for an injunction or for other equitable relief, except in so far as any provision thereof may be applied by the court by analogy in like manner as the corresponding enactment contained in the Limitation Act 1980 (1980 c 58 UK) is applied in the English Courts.”

29.It is well established that part performance is an equitable doctrine by which equity prevents injustice resulting from permitting a statute to be used as an engine of fraud: Ng Yuk Pui Kelly v Ng Lai Ling Winnie (2021) 24 HKCFAR 401, §15, per Ribeiro PJ; Steadman v Steadman [1976] AC 536, 540G (Lord Reid), 558E-G (Lord Simon). As Ribeiro PJ explained in Ng Yuk Pui Kelly (supra), §§14, 16, in deciding whether the doctrine of part performance applies, the court would be required to look at all the acts done – the res gestae (viz. things done) – subsequent to and arising out of the alleged contract to decide whether the alleged contract is reasonably to be inferred from such acts.

30.In the premises, on the facts of Ng Yuk Pui Kelly (supra), the court was prepared to examine the parties’ relevant acts since 1985 (viz. 26 years before the commencement of the proceedings) and to give effect to an agreement in 1985 on the ground of part performance, without any time limitation as the plaintiff herein purported to argue: cf. [2019] HKCFI 210, §188.

F.  Disposition

31.For the foregoing reasons, I would make the following orders:

(1)  Leave be granted to the plaintiff to amend §§2, 3, 21(g), (p), (r), 23, 27(d), 28A, 35 and 36 of the re-re-amended reply and defence to counterclaim as per the Draft, save that the word “reply” at §35 of the Draft should read “rely”.

(2)  The plaintiff do file and serve the re-re-re-amended reply and defence to counterclaim on or before 22 April 2024.

(3)  Costs of the plaintiff’s summons, including the costs of and occasioned by the plaintiff’s amendment and the costs of this hearing, shall be paid by the plaintiff to the 2^nd defendant in any event, with certificate for counsel, to be taxed if not agreed.

(4)  The 2^nd defendant’s own costs be taxed in accordance with the Legal Aid Regulations.

32.I thank Mr Lun and Mr Pun for their assistance.

Mr Edward Lun, instructed by Darin Leung & Partners, for the plaintiff

The 1^st defendant, unrepresented, did not appear

Mr Chase Pun, instructed by Cheng & Wong, assigned by the Director of Legal Aid, for the 2^nd defendant