Chui Oi Ying, Suing By Her Next Friend and Son Cheung Sai Man v. Cheung Shung Ping and Another
Read the full judgment text of HCMP 1229/2023 on BabelCite. This High Court CFI judgment was delivered on 10 October 2024.
1.1. On 2 August 2023, an Originating Summons was issued in HCMP1229/2023 ( OS ). The plaintiff is Chui Oi Ying ( Madam Chui ) suing by her next friend and son Cheung Sai Man ( CSM ).
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HCMP 1229/2023 [2024] HKCFI 2728 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO. 1229 OF 2023 ________________________
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________________________ J U D G M E N T ________________________ DHCJ Yuen: 1.1.On 2 August 2023, an Originating Summons was issued in HCMP1229/2023 (OS). The plaintiff is Chui Oi Ying (Madam Chui) suing by her next friend and son Cheung Sai Man (CSM). 1.2.Madam Chui is in her 90's. In October 2017 she was certified as a mentally incapacitated person. She has five children, including:
CSP and CSF were defendants in HCA1710/2016 (Previous Proceedings). I shall refer to these proceedings later in this Judgment. 2.1.The following relief (among other things) was sought in the OS (emphasis added):
2.2.On 3 January 2024, CSP issued a summons for an order that the OS be struck out on the grounds that the claim is an abuse of process, and is frivolous and/or vexatious, and/or the court should exercise its inherent jurisdiction to strike out the same. 2.3.Both matters were fixed to be heard on 21 August 2024. Background 3.The following background facts, including events in the Previous Proceedings, are relevant to this Judgment. 4.1.Madam Chui’s assets include some flats and bank deposits. 4.2.On 6 October 2015, joint accounts at BOC and Standard Chartered Bank (SCB) were opened by Madam Chui, CSP and CSF. The banks’ terms and conditions under which the funds in these joint accounts were held were not in the evidence before me. These accounts are referred to for convenience as the “Old Joint Accounts”. 4.3.On 8 October 2015, Madam Chui gave an enduring power of attorney (EPOA) to CSM, and around this time, she started to stay with him. HCA1710/2016 (Previous Proceedings) 5.1.In 2016, Madam Chui issued a writ in the Previous Proceedings against CSP and CSF. 5.2.It was pleaded in the Statement of Claim (SOC) filed on 29 June 2016 that in or around 2015, Madam Chui “started to suffer from dementia” [§3]. 5.3.The SOC referred to transactions concerning two flats, as well as the transfer of funds into the Old Joint Accounts (referred to in the SOC as “BOC Transactions” and “SCB Transactions”). 5.4.In relation to these bank transactions, it was alleged in the SOC that:
5.5.In addition to claims against CSP relating to two flats, the relief claimed against CSP and CSF included:
6.1.In CSP’s Defence filed on 26 September 2016, she pleaded (among other things) that:
6.2.On the same day, CSF filed a defence, which was similar, but not identical, to that of CSP[4]. 7.1.As mentioned above, Madam Chui was certified as a mentally incapacitated person in October 2017. 7.2.On 28 September 2019, a master appointed CSM as Madam Chui’s next friend for the purposes of Order 80 rule 3(5) Rules of the High Court (RHC), on the basis that Madam Chui has since action[5] brought become a mentally incapacitated person incapable of managing and administering her affairs, and ordered that the Previous Proceedings may be continued by CSM as next friend of Madam Chui. 7.3.On 4 December 2019, the application for registration of the EPOA was granted, and registration was effected on the same date. 8.1.On 21 May 2020, a Re-Amended SOC with CSM as Madam Chui’s next friend was filed, which retained the allegations and relief summarized in §§5.4-5.5 above. 8.2.On 22 May 2020, an Amended Defence of CSP was filed, which retained the allegations and defences summarized in §6.1 above. 8.3.CSF did not file an amended defence. Consent Orders in Previous Proceedings 9.Of significance in these matters before me are two Consent Orders made in the Previous Proceedings. 1st Consent Order (22.10.2020) 10.1.First, on 22 October 2020, an order (“1st Consent Order”) was made by a master pursuant to a consent summons filed by all the parties (ie Madam Chui suing by her next friend CSM as plaintiff, and the 1st defendant CSP and the 2nd defendant CSF) on 21 September 2020. 10.2.The 1st Consent Order stated:
10.3.Pausing there, it is clear that the 1st Consent Order was made in contemplation that the Previous Proceedings would continue, and that if CSM (as Madam Chui’s next friend) and CSP could not jointly consent on any dealing with the funds in the New Joint Account, an application could be made to the court. 10.4.On 25 June 2021, the New Joint Account was opened at BOC. The bank’s terms and conditions under which the funds in this joint account were held were not in the evidence before me. 2nd Consent Order 11.On 6 December 2021, another consent order was made in the Previous Proceedings. A joint application was made by the Plaintiff and the 1st Defendant by way of consent summons filed on 3 December 2021. This order stated:
Costs in the Previous Proceedings 12.Subsequently, a master taxed the costs payable by the plaintiff to CSP at $533,608. Events before HCMP1229/2023 13.1.CSM wished to pay the said costs from the New Joint Account, but CSP objected on the basis that she was entitled to half the funds therein before any payments could be made from it[6]. 13.2.On 4 January 2023, solicitors acting for Madam Chui “whose financial affairs were managed by [CSM] under the [EPOA]” wrote to solicitors for CSP. They said:
13.3.As CSP did not comply, the OS was filed on 2 August 2023. As mentioned above, on 3 January 2024, CSP issued a summons to strike out the OS on the primary basis that the plaintiff’s claim was in respect of the same subject matter as the Previous Proceedings and thus was in breach of §1 of the 2nd Consent Order, and an abuse of the process of the court. Legal Principles 14.1.It is not disputed that the Court in the Previous Proceedings had power to impose a condition barring re-litigation of the same subject matter in subsequent proceedings. Order 21 rule 3 RHC provides:
14.2.In Fong Meng Sung John v Luk Man Lok Rocky and others[7], Recorder Lisa KY Wong SC (as she then was) traced the legislative history of Order 21 and concluded [§39]:
14.3.It is clear from the 2nd Consent Order that the plaintiff was only allowed to discontinue[8] the Previous Proceedings on terms that no subsequent proceedings on the same subject matter may be brought. It is not an answer for the plaintiff to say simply that the Previous Proceedings did not result in a judgment or ruling on any issue. As was well-established by the Henderson v Henderson principle, abuse of process lies in vexing the other party twice in the same matter, as there is an underlying public interest in finality in litigation[9], quite apart from the underlying objective of the rules of court that proceedings should be dealt with as expeditiously as is reasonably practicable (Order 1A rule 1(b) RHC). Plaintiff’s submissions 15.In the present case, the plaintiff submitted that “on 6 December 2021, since the Plaintiff was no longer able to give evidence in court or by any other ways, upon consent, she was granted leave to withdraw the whole HCA1710/2016, with costs to the 1st Defendant”[10]. It is then submitted that Madam Chui is the sole beneficial owner of the New Joint Account because CSP and CSF had pleaded in the Previous Proceedings that Madam Chui was the source of the funds, and that CSP was only “free to utilize the funds whether for the purpose of taking care of Mother or otherwise”, and a right of utilization did not prove beneficial ownership. It is submitted that as the plaintiff is still one of the legal owners of the New Joint Account, she (through CSM) is entitled to utilize them. Discussion 16.In my view, the crux of the case is that in the Previous Proceedings, the plaintiff had consented to the condition that she be barred from claiming against CSP in respect of the same subject matter. There is no suggestion that she is entitled to renege from that condition. 17.Clearly, the Previous Proceedings and the OS are in respect of the same subject matter. It is common ground that the funds in the New Joint Account are the same as those in the Old Joint Accounts.
18.Counsel for the plaintiff submitted that the Previous Proceedings had been brought on the basis of misrepresentation and/or undue influence, and that those proceedings had to be discontinued because Madam Chui was not in a condition to give evidence. He submitted that the OS is now brought on the basis of CSP’s own pleadings and/or witness statement in the Previous Proceedings in which she admitted that Madam Chui was the source of the funds. 19.1.I do not accept that submission. CSP’s pleadings were filed in the Previous Proceedings. If, as counsel for the plaintiff now submits, CSP had made any admission in the pleadings and/or witness statement, the plaintiff could have applied for judgment on the trust claim in the Previous Proceedings on that basis. That was not done. 19.2.In any event, it is not correct for counsel for the plaintiff to submit that CSP had admitted that Madam Chui was the sole beneficial owner of the funds in the New Joint Account. Paragraph 23 of the RASOC (pleading that CSP held the funds as trustee for and on behalf of Madam Chui) was denied in §22 and reference was specifically made to §10(vii) of the Amended Defence. 19.3.It is well-established that the beneficial ownership of funds in a joint account is a question of intention of the joint account holders. Apart from the fact that the banks’ terms and conditions under which the funds were held were not before me, in the Amended Defence, CSP had pleaded that Madam Chui had told her that since she and CSF “helped her earn much of her assets by way of proper and gainful investment”, they were entitled to utilize the funds in the joint accounts to be opened” [§10(vii)]. At §75 of CSP’s witness statement in the Previous Proceedings, she said that Madam Chui told her that she was entitled to her assets as she had helped her earn them. 19.4.The fact that Madam Chui was the source of funds in the first place is not conclusive. It is well-established that presumptions of resulting trust and advancement arise as a matter of default, where there is otherwise insufficient evidence of the actual subjective intention of the parties at the time of the transactions[11]. 20.As for the plaintiff’s submission that either party could utilize the funds, quite apart from the fact that the terms and conditions under which the funds are held are not before me, there is the added provision of the 1st Consent Order in the Previous Proceedings which provided that neither account holder should deal with the funds without written joint consent or court order[12]. 21.Finally, it was also submitted on behalf of the plaintiff as a “fallback position” that even if there is no trust, the plaintiff is entitled to “at least” half the funds as one of the two legal owners of the New Joint Account. This was not sought in the OS, and as mentioned, BOC’s terms and conditions under which the funds are held were not before me. Accordingly, it is not appropriate for me to make any ruling on this new submission. 22.For the above reasons, it is clear that the OS is an abuse of the process of the court as it is a claim in respect of the same subject matter as the Previous Proceedings. I would give an order in terms of §1 of the summons filed on 3 January 2024 and dismiss the OS with costs. Costs 23.There are two additional matters in respect of costs. First, CSP has asked that costs should be taxed on the indemnity basis on the ground (among others) that the proceedings are entirely devoid of merit and should never have been brought[13]. Secondly, CSP has asked that CSM be ordered to pay the costs under Order 62 r.6A RHC[14]. 24.As for the first matter, in light of the possibility that CSM may be ordered to pay costs under Order 62 rule 6A RHC, I would reserve my decision on the basis of costs. 25.1.As for the second matter, prior to the hearing, I had made inquiries of the parties as to whether a committee had been appointed for Madam Chui under Part II of the Mental Health Ordinance Cap. 136, and if so, whether the committee had received authorisation to commence the OS. 25.2.The reply from the plaintiff’s solicitors was that no committee had been appointed, and the OS was brought on the basis that the EPOA authorised CSM to “collect any capital” due to the plaintiff. 26.At the hearing, I drew the parties’ attention to the judgment in C v B (Mrs A) where it was held that a Part II committee may co-exist with an EPOA[15]. If a Part II committee is appointed, it may apply to the court for authorisation to issue proceedings, and the court then would consider a number of factors (including the merits of the intended claim, and the exposure of the estate of the mentally incapacitated person to liability for costs in case the proceedings failed)[16]. In contrast, an attorney under an EPOA does not have a general power to act on behalf of the donor[17]. I do not think the EPOA provision for “collecting any capital” provided the same sort of authorisation to CSM to issue the OS as an authorisation from the court to a Part II committee. CSM as next friend does not therefore have the same protection against costs liability as a Part II committee. 27.For the purposes of joining CSM as a party for the purpose of costs, I consider that the first stage in Sun Focus Investment Ltd v Tang Shing Bor and another[18]has been satisfied. For the second stage, I would give the following directions:
The matter will then be fixed for hearing.
Mr Ricky K.Y. Li instructed by W.H. Chik & Co. for the Plaintiff Mr Edward Tang instructed by Sun Lawyers LLP for the 1st Defendant The attendance of the 2nd Defendant was excused [1] See §10.2 below. [2] BOC is the 2nd defendant. It has adopted a neutral stand and did not appear. [3] i.e. the allegation that CSP, CSF and Madam Chui hold the said moneys as trustees for and on behalf of Madam Chui. [4] The differences are that CSF alleged that another daughter also gave care to Madam Chui, and made no admissions in relation to the allegations against CSP regarding dealings with Madam Chui’s flats. [5] i.e. the Previous Proceedings. [6] CSM affirmation filed 8.12.2023 exh CSM -1 [7] HCMP1959/2009, 7.9.2015. [8] Although §1 of the 2nd Consent Order used the term “withdraw”, which is the appropriate term for a plaintiff withdrawing one or more claims in the action, it is clear from the Order that the plaintiff was bringing the entire action to a halt, and the term “discontinued” should have been used. However, nothing turns on this. [9] Johnson v Gore Wood & Co [2002] 2 AC 1, at 31. [10] The Plaintiff’s Skeleton Submissions §4(f). [11] Leung Wing Yi Aster v Kwok Yu Wah (2015) 18 HKCFAR 605, §53. [12] In the Previous Proceedings. [13] Huge Dragon Corp Ltd v Lung Mun Oasis (IO) [2014] 3 HKLRD 286, §13. [14] Costs orders against non-parties. [15] [2018] 5 HKC 1, §§100-106. [16] Re YPC [2008] 2 HKC 359, §§9- 13, 19. [17] C v B (Re Mrs A) §§103-4. [18] [2012] 5 HKLRD 853, §19. |
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