Ma Mui Chi Omei v. Ho Ka Fai
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HCA 1363/2021 [2024] HKCFI 1332 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 1363 OF 2021 ______________
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____________________ DECISION ____________________ A. Introduction 1.By summons of 22 December 2021 (the “Default Judgment Summons”), the plaintiff (“P”) sought against the defendant (“D”) judgment in default of acknowledgment of service and defence. For reasons set out in my decision of 31 January 2022 (the “Decision”)[1], this Court on that same day granted P default judgment (the “Default Judgment”). 2.By summons filed on 19 September 2023 (the “Setting Aside Summons”), D seeks an order that the Default Judgment be set aside. 3.This is the hearing of the Setting Aside Summons. Ms Jenny Lok appeared for D. Mr Hatten Kong together with Mr Vincent Wan appeared for P. B. The relevant affirmations 4.As Ms Lok has confirmed in her written submissions, there is no dispute that the Default Judgment is a regular one. As put by Ms Lok[2], D “seeks the Court’s indulgence in setting aside the Default Judgment on the basis that [D] has a real prospect of success in his defence.” I add that D also relies on alleged material non-disclosure on P’s part when seeking the Default Judgment. 5.Given the basis of D’s application, the several affirmations of service filed in support of the application for the Default Judgment are not relevant. What are relevant are the following affirmations which deal with the merits of parties’ respective cases:
C. P’s claim as pleaded 6.I have summarised P’s pleaded case in the Decision. I reproduce the summary here for ease of reference. 7.The claim concerns Flat A on 31/F of Tower 1, Hanley Villa, No.18 Yau Lai Road, Ting Kau, Tsuen Wan, New Territories, and Car Parking Space No.21 on 2nd Carport of Area A of Hanley Villa (the “Properties”). 8.According to the specifically indorsed Writ of 9 September 2021, P and D used to be lovers. The Properties were originally acquired by them in June 2009 as joint tenants. Prior to its acquisition, they orally agreed, or formed the mutual understanding, or had the common intention, that their shares in the Properties to be acquired would be in accordance with their respective financial contributions towards the acquisition. Subsequently and as things turned out, P paid 90.92% of the totality of the purchase price, all duties, costs, expenses and mortgage repayments involved. Her contributions came from funds of their joint bank account (the “Joint A/C”, which funds represented the sale proceeds (the “Sui Wo Court Property Sale Proceeds”) of a property they used to own as joint tenants (the “Sui Wo Court Property”)) and other contributions out of her own resources. All mortgage repayments were paid off in June 2011. 9.Since acquisition, the Properties have been used and occupied by D. In 2020, P discovered that D got married without her knowledge. D’s wife moved in the Properties. P has been denied possession or use of the same. P’s request to buy out D’s share in the Properties has been refused. D has changed the lock to the Properties. P’s request for rent has been refused. P’s further requests to D to vacate the same have also been refused. On the other hand, D asked his wife’s name to be added as an owner. P refused. P in May 2021 discovered that D and his wife had been trying to sell the Properties back in late 2019. 10.In July 2021, P through her solicitors served a notice of severance upon D, thereby severing the joint tenancy between them. 11.P seeks therefore, on the bases of constructive trust, resulting trust, and estoppel, a declaration that D out of the 50% he holds as joint tenant holds 40.92% of the total beneficial interest in the Properties on trust for P (the “Declaration”), an order that D do assign, transfer and convey the legal title of the Properties to P in such shares, and mesne profit to be assessed[3]. D. P’s application for default judgment 12.D has not filed any Acknowledgment of Service or Defence. 13.The Default Judgment Summons was issued pursuant to O.19 r.7. That rule provides that upon hearing of an application made thereunder, “the Court shall give such judgment as the plaintiff appears entitled to on his statement of claim”. Evidence on merits cannot be received – see Hong Kong Civil Procedure 2024 §19/7/11. When a declaration is sought as part of the relief prayed for, the court’s usual practice of not making a declaration without a trial however applies, though as has been explained in numerous decisions, that is a rule of practice and not of law and will give way to the paramount duty of the court to do the fullest justice to the plaintiff to which they are entitled – see Hong Kong Civil Procedure 2024 §19/7/20. 14.As I have set out and explained in the Decision, this Court was aware of the Court’s duty under O.19 r.7, was aware of the practice concerning granting declaration, and had considered and scrutinized the contents of the Statement of Claim carefully. This Court was satisfied that P appeared to be entitled on the Statement of Claim to the judgment she was seeking. This Court also as explained in the Decision noted D’s previous attempts in selling the Properties, and that the declaration was necessary for the purpose of clarifying P’s beneficial interest in the Properties, in the absence of which she might face genuine difficulties in selling her interests in the Properties in the future. In the end, I accepted Mr Kong’s submission (he also appeared for P during that hearing) that the Declaration was necessary to give fullest justice to P. I granted P the Default Judgment. E. Whether the Default Judgment a regular one 15.The principles and considerations applicable to an application to set aside a default judgment differ depending on whether the default judgment concerned is a regular or irregular one. 16.The first question to be answered is hence whether the Default Judgment is a regular one. 17.As stated above, Mr Lok accepts that the Default Judgment is a regular one. As also recorded above, Ms Lok relies on the merits of D’s proposed defence, and in addition alleged material non-material on P’s part when seeking the Default Judgment. 18.Despite Ms Lok’s concession, Mr Kong, on the basis of Deng Minghui v Chau Shuk Ling [2007] 1 HKLRD 905 §9, and given D’s reliance on alleged material non-disclosure, indicates in his written submissions[4] his preparedness to accept that material non-disclosure could render a default judgment irregular. 19.I have no doubt that Mr Kong adopts that stance out of fairness, but this Court is not prepared to accept as a general proposition that material non-disclosure could render a default judgment irregular, irrespective of the nature of the material non-disclosure. 20.As discussed by Coleman J in Alan Chung Wah Tang and Kan Lap Kee v Chung Chung Keung & Ors [2021] HKCFI 369 at §41, agreeing with counsel’s submissions, that in the context of an application to set aside a default judgment, the test for regularity or irregularity is concerned with process. I respectfully agree. 21.Deng Minghui is different from the present case. There, the plaintiff invoked O.10 r.1(2)(b) as the mode of service. The validity of that mode is prerequisite upon the defendant being within jurisdiction at the time of service. The plaintiff had in fact received a letter from the defendant’s solicitor to the effect that the defendant had been living in the United States, and that “if the proceedings have sent to her by post, they have not been properly served.” That letter was not disclosed when default judgment was sought. The material non-disclosure hence related to the service process. It had nothing to do with the merits of parties’ case. 22.D does not dispute service. He does not dispute knowledge of P’s commencement of the present action[5]. He said he ignored “legal letters” which he received[6]. He chose not to participate in the action due to, as summarised by Ms Lok[7] “(1) his treasure of the relationship that he shared with [P] for over 30 years and did not want it to get worse by any further argument … and (2) him trying avoid exposing to the public … their embarrassing private matters.” 23.I will deal with D’s complaint of material non-disclosure. But as shall be seen, put highest, the alleged non-disclosure goes to merits, but not process. 24.In my view, the Default Judgment is clearly a regular one. F. Applicable legal principles on setting aside a regular default judgment 25.I have considered the authorities cited to me, which include Hong Kong Civil Procedure 2023 §§13/9/13-14 (as cited to this Court by Ms Lok, though in fact I refreshed my memory from the 2024 edition) and Wong Ling Pan v Team Building Limited [2021] HKCFI 336 §§18-22 (as cited by Mr Kong). I refer in particular to the summary by Deputy Judge William Wong SC at §§18-22 of Wong Ling Pan (with reference to Young Bing Ching (deceased) v Chow Yung Fong & Another [2001] 2 HKLRD 394 at §§12, 24-26, Maryo Development Ltd v Tsang Yau May (CACV 101 of 2015, 11 January 2016 at §§11-14), Cheung Chi Po v Ke Jun Xiang (CACV 170 of 2011, 22 May 2012 at §§11, 16 and 17), and Menfond Electronic Art & Computer Design Co Ltd v Wong Wang Tat Victor [2013] 2 HKC 259 at §61). 26.The applicable principles are not in dispute. I do not repeat them, save highlighting the following considerations core to the present application (in the context of the Default Judgment being a regular one):
G. Alleged material non-disclosure 27.I have considered Alan Chung Wah Tang, and in particular §22 thereof which Ms Lok relies on. 28.I note the section of D/Aff1 under the heading “Material Non-disclosure/Merits of my Defence”. I note also Section D of Ms Lok’s submissions, which bears the heading of “The Plaintiff’s Material Non-disclosure/False Claim”. Under those headings, a number of complaints have been made. I have considered their contents. They include allegations of P seeking to leave a misleading impression of P and D having a 50/50 share in the Properties as the starting point by serving the notice of severance shortly before commencement of the present action, and that aspects of P’s case were false and misleading (e.g. P’s case basing on the existence of an oral agreement/mutual understanding/common intention that their shares in the Properties would be in accordance with their respective financial contributions, of P having solely responsible for the mortgage repayments, the circumstances in which P became a joint owner of the Sui Wo Court Property, and in relation to the amount out of the Sui Wo Court Property Sale Proceeds which had been used towards the purchase of the Properties). D further complains that P’s case is inconsistent with certain of the documents he produces in D/Aff1. 29.In my view, those complaints are not really in the nature of material non-disclosure, but rather go to factual disputes in support of D’s case that his proposed case has merits (and P’s lacks any). The headings under which they were set out are also telling. In the course of the hearing, Ms Lok in fact acknowledged this. 30.Nor are any alleged inconsistencies between P’s pleaded case and the documents produced by D as clear-cut as D says they are. As I will explain below, the converse is in fact the case. 31.Further, many of the matters complained of have in fact been pleaded on the face of the Statement of Claim (in particular the facts that the Sui Wo Court Property had been in their joint names, that the Property was assigned to them jointly, and that notice of severance was only served in July 2021). 32.I will consider the factual disputes which underlie the complaints of material non-disclosure when I come to consider the primary and dominant factor of the merits of D’s proposed defence below. But having considered their nature, I am of the view that there has been no material non-disclosure on P’s part when seeking the Default Judgment. H. Merits of D’s proposed defence 33.D’s proposed defence may first be identified. 34.At §§3 and 46 of D/Aff1, D says as follows:
35.Ms Lok summarises D’s proposed defence as follows[8]:
36.Whilst certain other concepts (of equitable accounting, and D’s interest having allegedly been derived from the joint liability under the mortgaged loan) have been mentioned in D/Aff1, they have not been developed by Ms Lok in her written submissions. No authority has been placed before me in support. In the course of the hearing, when this Court invited Ms Lok to assist as to how the concept of equitable account would factually arise, she informed this Court that she would stand by the proposed by common intention constructive trust. Those other concepts have not been further pursued. 37.I will hence focus upon D’s proposed defence based on common intention constructive trust, as summarised by Ms Lok at §8 of her written submission. 38.Ms Lok, relying on Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985, at §5.15, submits that in inferring common intention, the Court adopts a “holistic approach” and considers the “whole course of conduct”. Mr Kong does not dispute that. I accept that that is the correct approach. 39.This Court does not hold a mini-trial. But this Court is required to form a provisional view as to whether D has discharged his burden by potentially credible evidence showing that his proposed defence has any real prospect of success. 40.I have considered all the relevant matters referred to me. I have specifically considered those matters set out in §9 of Ms Lok’s written submissions which she highlights for this Court’s attention as part of the holistic consideration. Having undertaken this process, and for reasons and matters highlighted below, I find that D has failed to discharge the onus on him to establish any defence with any real prospect of success:
41.For the above reasons, I conclude that in respect of D’s proposed defence based on the existence of the alleged Common Intention, he has failed to discharge the onus on him to establish any defence with any real prospect of success. For that same reasons, and in particular those set out above in §§40(n) and 40(o), no defence with any real prospect of success on equitable accounting has been established, even if it remains being pursued. I. Conclusion and disposition 42.For the above reason, I dismiss D’s Setting Aside Summons. 43.On costs, I order on a nisi basis that D shall bear the costs of the Setting Aside Summons, with certificate for one counsel, to be summarily assessed. Any application for variation may be made by letter to this Court within 7 days from the date of this Decision, upon receipt of which this Court will hand down further directions, with the view of dealing with the same on the papers. In the absence of any application for variation, P shall within 14 days from the date of this decision lodge her statement of costs, D to lodge his statement of objection 7 days afterwards, and P to lodge their reply within 7 days afterwards.
Mr Kong Sau Fung, Hatten and Mr Vincent WS Wan, instructed by C P Cheung & Co, for the Plaintiff Ms Jenny Lok, instructed by C M Chow & Co, for the Defendant [2] §5 of her written submissions. [3] Both in respect of the period for which mesne profit is payable and the quantum thereof. [4] §7. [5] §37 of D/Aff1. [6] §35 of D/Aff1. [7] §5 of her written submissions. [8] §8 of her written submissions. [9] Which I will for ease of reference referred to as the “alleged Common Intention”. [10] Those of 5 May 2021 [90] and 15 May 2021 [99]. [11] §9(2) of her written submissions. [12] See in particular those text messages in [80], [90], [91], [92], [95], [100], [102] and [106]. [13] [95]. She also pointed to [80] and [99], which I have considered, but are in my view hardly relevant. [14] §19(1). [15] §17. [16] §3. | ||||||||||||||||||||||||
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