Wong Kowk Ki Stephen As the Joint and Several Trustee of the Property of Lau Sau Tai and Another v. Lo King Leung and Another

DCCJ 1112/2021

[2026] HKDC 1918

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1112 OF 2021

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DECISION

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INTRODUCTION

1.This is the hearing of an appeal by the 1^st Defendant (“D1”) against the Order made by the Master on 2 August 2023 (“8.2 Order”) ordering, inter alia, that the Defence filed by D1 and the 2^nd Defendant (“D2” or, collectively with D1, “Ds”) be struck out for failing to comply with an ‘unless’ order made on 26 July 2023 (“2023 Unless Order”).

2.Ancillary to this appeal are the following 3 Summonses taken out by D1, all of which were filed on the same date as the Notice of Appeal (“NOA”)[1] and, together with the appeal, were fixed to be heard before me:-

(1)  The Summons (“1^st Summons”) for, inter alia:-

(a)  Leave to apply out of time for relief from sanction in respect of an ‘unless’ Order made on 24 August 2022 (“2022 Unless Order”)[2] and the 2023 Unless Order;[3]

(b)  Relief from sanction imposed by the 2023 Unless Order;

(c)  Relief from sanction imposed by the 2023 Unless Order;

(d)  Leave to amend the Defence filed on 6 August 2021 (“Defence”) and, insofar as necessary, leave to reinstate the same;

(2)  The Summons for a stay of execution of the 8.2 Order and the Final Judgment dated 2 August 2023 entered pursuant thereto (“Final Judgment”), pending determination of this appeal (“2^nd Summons”);

(3)  The Summons for a stay of execution of the Order made on 28 May 2025 (“Possession Order”) and/or the Writ of Possession issued pursuant thereto, pending determination of this appeal (“3^rd Summons”).

3.Both Ps and D1 were represented by counsel at the hearing. Insofar as D2 is concerned, she was not legally represented and her attendance was excused by the Court.

4.At the end of the hearing, I reserved my decision on the appeal and the 1^st to 3^rd Summonses. Below is my decision.

BACKGROUND

5.The background leading to the present appeal is largely undisputed.

6.D1 and D2 are husband and wife. D1 is a retired fireman who worked for the Fire Services Department (“FSD”) from 1974 until his retirement in November 2007 at the age of 55. D2 is also an ex-civil servant who retired in April 2010.

7.On 22 December 2000, D1 and D2 became joint owners of a residential property at Rhythm Garden, No 242 Choi Hung Road, Kowloon (“Property”). The Property was purchased under the Home Purchase Scheme and the purchase price of HK$1,630,900 was partly financed by two legal charges with Nanyang Commercial Bank Limited (“1^st Mortgage”) and Financial Secretary Incorporated, both dated 22 December 2000 (“2^nd Mortgage”). The 1^st and 2^nd Mortgages were later discharged in November 2011 and July 2010 respectively.

8.On 25 November 2003, a bankruptcy order was made against D2 (“Bankruptcy Order”) pursuant to a voluntary bankruptcy petition[4] and Ds’ joint tenancy in the Property became severed and converted into tenancies in common. In 2003 and 2005, the 1^st and 2^nd Plaintiffs (“Ps”) were respectively appointed joint and several trustees of D2’s interest in the Property.[5]

9.Since May 2007, Ps have repeatedly requested D1 either to dispose of the Property together with them or purchase from them the half share of the Property under D2’s bankruptcy estate. None of the proposals has materialized.

10.On 15 March 2021, Ps commenced the present action against Ds for, inter alia, an order for sale of the Property, with the proceeds of sale of D2’s share being applied to satisfy the bankruptcy debt owed by D2 as well as other costs and fees.

11.On 6 August 2021, Ds, through Lee & Yik Lawyers (“L&Y”) (their then solicitors), filed the Defence. Whilst Ds did not admit the outstanding debt owed by D2, the only substantive defence raised thereunder was one of “hardship” as Ds alleged that they had been living in the Property for about 21 years and it would be difficult for their family to find another place to live considering their financial situation (“Hardship Defence”). Ds further admitted that, prior to D2’s bankruptcy, she had contributed to the purchase price[6] and had equal beneficial ownership in the Property with D1.

12.On 29 November 2021, a set of case management directions was given by the Court, including the direction that the parties should take out all interlocutory applications within 56 days, ie on or before 24 January 2022.

13.On 24 August 2022, the Court made the 2022 Unless Order with the following terms (under paragraph 4):-

“Unless by 4:00 p.m. of 2 November 2022 parties take out all outstanding interlocutory applications, the defaulting party/parties be debarred from taking out any further interlocutory applications and it shall be deemed that the defaulting party/parties elected not to take out any further interlocutory applications.” (emphasis added)

14.Pursuant to Ps’ applications, the following Orders were made by the Master on 18 November 2022:-

(1)  Ds shall disclose documents relating to their entitlement, receipt of pension and/or other retirement benefits from the Hong Kong government within 49 days, ie on or before 6 January 2023, through a supplemental list of documents. In addition, Ds should swear an affidavit stating whether the said documents are within their possession, custody or power and if they have been but are not, when Ds parted with them and what have become of them (“Discovery Order”);

(2)  Ds shall answer interrogatories raised by Ps by affidavit within 49 days after service of the interrogatories on them (“Interrogatories Order”).

15.The Discovery and Interrogatories Orders were not complied with within the period specified. On 26 July 2023, the Court granted relief from sanction in respect of the 2022 Unless order, but further imposed another ‘unless’ order (ie the 2023 Unless Order) in the following terms:-

“Unless within 7 days of the order to be made herein [Ds] do comply with the [Discovery and Interrogatories Orders] by:

(a) Filing and serving an affidavit stating whether the documents set out in the Schedule herein are within their possession, custody or power and if the said documents have been but are not now in their possession, custody or power stating when [Ds] parted with the said documents and what have become of the said documents (“2023 Unless Order (a)” or “Order (a)”);

(b) Filing and serving a supplemental list of documents to disclose the documents specified in the Schedule, which are in their possession, custody or power (“2023 Unless Order (b)” or “Order (b)”); and

(c) Answering in writing by affidavit the interrogatories served on [Ds] on 18 November 2022 by [Ps], and filing and serving such affidavit on [Ps] (“2023 Unless Order (c)” or “Order (c)”);

[the Defence] be struck out and [Ps] be at liberty to enter judgment as claimed and costs” (emphasis added)

16.The categories of documents set out in the Schedule to the 2023 Unless Order essentially mirrored those specified in the Discovery Order, namely, documents relating to Ds’ entitlement, receipt of pension and/or other retirement benefits from the Hong Kong government.

17.On 1 August 2023, L&Y filed and served the 3^rd Affirmation of D1 (“Lo 3^rd”) and the Supplemental List of Documents (“SLOD”) on behalf of Ds. In general, D1 disclosed and verified records which were in his possession or custody, but regarding those which were within his power, D1 stated:-

“I may have power to apply for retrieval of further records from the HKSAR Government and HSBC, but that will require more time and efforts, and there is no certainty what (if at all) further records I may obtain. However, if more time is permitted and if it is deemed necessary, I am willing to make further attempts.”

18.In Lo 3^rd, D1 was also silent as to documents which had been but were no longer in his possession, custody or power.

19.It was accepted by the parties at the hearing that the answers provided by D1 in Lo 3^rd and the documents disclosed in the SLOD had complied with the 2023 Unless Order (c) but not Orders (a) and (b).[7]

20.On 2 August 2023, upon hearing submissions from the parties’ legal representatives, the learned Master made the order (ie the 8.2 Order) that the Defence be struck out and Ps be at liberty to enter judgment against Ds as the latter had failed to comply with the 2023 Unless Orders (a) and (b). On the same day, the Final Judgment was also entered against Ds, under which:-

(1)  The Court declared that the beneficial interest in the Property be vested in Ps on the one hand and held by D1 on the other in equal shares as tenants in common;

(2)  The Court ordered Ds to deliver vacant possession of the Property to Ps, and that the Property be sold with consequential directions as to the manner of sale;

(3)  The Court also awarded costs of the action to Ps, to be taxed if not agreed (“Ps’ Legal Costs”).

21.On 12 September 2023, Ps issued the first Notice to Quit (“1^st NTQ”) against the Property. The 1^st NTQ was posted on the door of the Property for 3 consecutive days, stating (in both English and Chinese) that Ps had obtained judgment against Ds and demanding Ds to vacate the Property on or before 21 September 2023, failing which Ps would proceed to recover possession of the Property without further notice.

22.By a letter dated 21 September 2023, L&Y sent to Ps’ solicitors a cheque in the sum of HK$1,637,810.90 being payment for D2’s bankruptcy debts (including post-bankruptcy interest up to 22 September 2023) (“Ds’ Payment”). The same was duly received by Ps.

23.Ds’ Payment, however, did not include Ps’ Legal Costs, which ran up to over HK$1.17 million according to Ps’ bill of costs filed on 12 March 2024. Following a taxation hearing on 11 February 2025, an Allocatur (“Allocatur”) was made on 27 March 2025 under which Ps’ Legal Costs were assessed at HK$983,980.33.

24.On about 1 April 2025, Ps issued another Notice to Quit (“2^nd NTQ”). Similar to the 1^st NTQ, the 2^nd NTQ was also posted on the door of the Property for 3 consecutive days, demanding Ds to vacate the Property on or before 11 April 2025.

25.On 28 May 2025, the Court made the Possession Order, granting leave to Ps to issue a Writ of Possession for recovery of possession of the Property. According to D1, he only found this out on 20 June 2025 when he was informed by L&Y.

26.On 17 July 2025, D1 filed a Notice of Change of Solicitors replacing L&Y with Yung & Au (“Y&A”).

27.On 24 July 2025, Y&A filed with the Court the NOA, the 1^st to 3^rd Summonses and the 5^th Affirmation of D1 (“Lo 5^th”) with a view to support D1’s appeal out of time and the 1^st to 3^rd Summonses.[8] In particular, by the 1^st Summons, D1 sought to amend the Defence by introducing, in essence:-

(1)  A new defence (which also operates as a counterclaim) that D1 should be entitled to 100% of the beneficial interest in the Property under the doctrine of common intention constructive trust, resulting trust and/or proprietary estoppel (“CICT Defence”). In order to put forward the CICT Defence, it is expressly denied under the proposed amendment (and contrary to Ds’ original assertions under the Defence) that Ds have at all material times had equal beneficial ownership of the Property;

(2)  A new defence that Ps have been guilty of inordinate delay of around 18 years in commencing the action after D2’s interest in the Property was vested in Ps following the Bankruptcy Order (“Delay Defence”);

(3)  More particulars to the Hardship Defence, including the financial and family background of Ds, the health of Ds, restrictions on Ds’ eligibility for housing benefits, etc;

(4)  A new defence under the Limitation Ordinance (Cap  347) which Mr Leung acknowledged would not be pursued at the hearing.

28.Further, in an attempt to comply with the 2023 Unless Orders (a) and (b), Y&A filed with the Court, respectively on 24 July 2025 and 21 August 2025, (a) the 4^th Affirmation (“Lo 4^th”) and the 2^nd Supplemental List of Documents (“2^nd SLOD”) of D1 and (b) the 6^th Affirmation (“Lo 6^th”) and the 3^rd Supplemental List of Documents (“3^rd SLOD”) of D1.

29.On 15 September 2025, the Court granted an interim stay of the 8.2 Order and the Possession Order, pending determination of this appeal and the 1^st to 3^rd Summonses.

GROUNDS OF APPEAL/APPLICATIONS UDNER THE 1^ST TO 3^RD SUMMONSES

30.The grounds of D1’s appeal and applications under the 1^st to 3^rd Summonses can be briefly summarized as follows:-

(1)  D1 accepted that the NOA and the application for relief from sanction were substantially out of time (ie almost 2 years after the 8.2 Order). Nevertheless, D1 claimed that the delay was not due to Ds’ deliberate disobedience but the failure of a solicitor of L&Y (“X”) to discharge his professional duty when handling Ds’ case between 21 April 2021 and July 2025. In particular:-

(a)  With regard to the appeal, X had failed to explain the significance of the 8.2 Order and had given incorrect advice that Ds’ Payment would be sufficient to discharge the Bankruptcy Order (thereby nullifying Ps’ basis to pursue the Possession Order);

(b)  With regard to the breach of the 2022 and 2023 Unless Orders, X had failed to explain and advise X the effect of the Discovery Order and its compliance requirements;

(2)  D1 claimed that he only became aware of the true position when he was advised by Y&A (whom he engaged to replace L&Y in July 2025). Thereafter, D1 acted promptly by (a) taking out the NOA and the application for relief from sanctions and (b) filing Lo 4^th, Lo 6^th, 2^nd SLOD and 3^rd SLOD with a view to complying with the 2022 and 2023 Unless Orders;

(3)  On the overall merits of the case, D1 claimed that Ds have a meritorious defence based on the proposed amendments to the Defence under the 1^st Summons (to which the Court should allow despite the 2022 Unless Order). They include the new CICT Defence and Delay Defence, as well as a more particularised Hardship Defence.

31.In support of the above grounds, D1 relied on the evidence contained in Lo 5^th and Lo 7^th, the admissibility of which was disputed by Ps.

SEQUENCE OF HEARING

32.In the appeal hearing, Mr Leung for D1 took the preliminary point that I should determine the 1^st Summons first before the substantive appeal. D1 reasoned that if relief from sanction were to be granted, it necessarily followed that his appeal should be allowed and the 8.2 Order/Final Judgment should be set aside.[9]

33.Mr Wong (appearing with Mr Chow) for Ps objected to the approach and submitted that it violated the common law doctrine of functus officio as there should be finality of litigation once the Final Judgment was entered, especially when taxation had already been completed and enforcement proceedings were underway. Ps further submitted that the only avenue for D1 was to succeed in the appeal before the 1^st Summons could be determined.

34.I am unable to accept D1’s proposition.

35.The 1^st Summons essentially consists of two major applications (which were both made out of time), namely:-

(1)  The application for relief from sanction (“Relief Application”) for failing to comply with the 2023 Unless Orders (a) and (b); and

(2)  The application to reinstate and amend the Defence (which necessitates an application for relief from sanction imposed by the 2022 Unless Order) (“Amendment Application”).

36.To this end, it is important to note that:-

(1)  There is no appeal against the 2022 and 2023 Unless Orders. The validity of their terms is therefore not subject to challenge;

(2)  Following the 2022 and 2023 Unless Orders, the Court has made the 8.2 Order to strike out the Defence and give liberty to Ps to enter the Final Judgment (which Ps did). This has effectively brought the action to an end.

37.It is also pertinent to note that the 8.2 Order was made solely on the basis of Ds’ non-compliance with Orders (a) and (b) – which the parties agreed would have the effect of triggering the sanction under the 2023 Unless Order. In this regard, upon the entering of the Final Judgment, any dispute under the 2022 and 2023 Unless Orders would be “merged” with the Final Judgment: Spencer Bower and Handley: Res Judicata (6^th Ed), para 7.01-7.04, 19.01-19.03.

38.D1 sought to lend support to his proposition by relying on the decision of DHCJ Jonathan Wong in Li Yulong v Liu Jing [2024] HKCFI 3163. With respect, I fail to see how the authority can assist D1’s case:-

(1)  In Li Yulong, the defendant took out a summons to dismiss the plaintiff’s action on the basis that the latter was in breach of an unless order. The Master dismissed the defendant’s summons, but ordered that part of the amended statement of claim be struck out with costs to the defendant. The defendant appealed against the Master’s decision to dismiss the summons and the plaintiff also took out a formal application for relief from sanction. The Judge dismissed the appeal and reduced the scope of pleadings to be struck out. In dismissing the appeal, the Judge found it unnecessary to determine the plaintiff’s application for relief from sanction;

(2)  As clearly illustrated in Li Yulong, it was never the learned Judge’s approach to deal with the plaintiff’s application for relief from sanction before the determination of the defendant’s appeal. Quite to the contrary, the Judge’s approach was the other way round. This was demonstrated by the fact that he considered it unnecessary to deal with the relief from sanction application after he dismissed the defendant’s appeal.

39.I therefore form the view that, as a matter of principle, the 1^st Summons cannot be validly determined without having the 8.2 Order (and the Final Judgment) set aside, and I reject the approach suggested by Mr Leung.

40.Despite my decision above, I am not of the view that the Relief and Amendment Applications must both be heard after the appeal:-

(1)  The Relief Application is in substance overlapping with the appeal and should be considered together. Whilst there are some differences between the terms of the 1^st Summons and NOA, the ultimate relief sought and the net effect of the Relief Application and the appeal are identical, namely, to set aside the 8.2 Order (hence the Final Judgment). In my view, it is only just and fair if the two matters are to be considered together;

(2)  The Amendment Application is notably different from the Relief Application in terms of its nature and should be heard after the appeal/Relief Application. Unless and until the 8.2 Order is set aside, the Defence remains struck out and there is no pleading capable of amendment.[10] On the other hand, reinstatement of the Defence hinges upon the result of the appeal/Relief Application. There is simply no merit in reinstating the Defence if the Court considers that the 8.2 Order shall stand for good reason.

41.With the above in mind, I shall proceed to consider the appeal/Relief Application first.

RELIEF APPLICATION/APPEAL

(A)   Proper Procedure

42.As a preliminary issue, and although the same has not been raised by parties’ counsel, it is incumbent upon me to decide what is the appropriate procedure for the setting aside of the 8.2 Order (ie whether by the Relief Application or by appeal). This is a relevant consideration since the two procedures entail different rules of evidence:-

(1)  For the Relief Application, supporting evidence is a must: O 2, r 5(2) of Rules of District Court (Cap 336) (“RDC”);

(2)  For an appeal against a Master’s decision, the Court may not receive further evidence (other than evidence as to matters which have occurred after the date of the decision appealed against) except on special grounds, namely, that the new evidence: (a) could not have been obtained with reasonable diligence for use at the hearing below; (b) must be such that, if given, would probably have an important influence on the result of the case, though it need not be decisive; and (c) must be such as is presumably to be believed: O 58, r 1(4) of RDC and Hong Kong Civil Procedure 2026 (Vol 1), para 58/1/3.

43.Having considered the evidence and the relevant authorities, I form the view that the Relief Application is the appropriate procedure for the following reasons:-

(1)  The 2023 Unless Order expressly imposes sanction for non-compliance caused by the defaulting party (ie the striking out of the Defence and liberty to enter judgment). In the premises, O 2, r 4 of RDC will be engaged: Hong Kong Civil Procedure 2026 (Vol 1), para 2/4/3;

(2)  Upon non-compliance with Orders (a) and (b), the 2023 Unless Order should take effect automatically, unless Ds apply to the Court for and obtain relief from sanction within 14 days of the failure: O 2, r 4 of RDC; Hong Kong Civil Procedure 2026 (Vol 1), para 2/4/2 and Daimler AG v Leiduck [2012] HKLRD 119, para 47-48;

(3)  I have gone through the transcripts of the hearing before the Master on 2 August 2023. The hearing was originally fixed as a Case Management Conference for the parties to set down the case for trial, and there was no summons before the Master for any specific application. From the transcripts, I gather the view that the primary subject matter in dispute in the hearing is whether Ds have complied with the 2023 Unless Order, which the Master found there was non-compliance with Orders (a) and (b). The 8.2 Order is therefore premised upon a ruling that Ds were in non-compliance with Orders (a) and (b), rather than any determination of relief application from Ds. In reaching this conclusion, I take note of the following facts:-

(i)  The hearing was originally fixed as a Case Management Conference;

(ii)  Lo 3^rd was filed on 1 August 2023, only one day before the hearing. The date of the hearing was also the deadline for Ds to comply with the 2023 Unless Order;

(iii)  The only evidence placed before the Master was Lo 3^rd and the 3^rd affirmation of D2 (“Lau 3^rd”) purportedly showing Ds’ effort to comply with the 2023 Unless Order. No evidence was adduced before the Master to support any relief application;

(iv)  Ds’ position in the hearing throughout was that they had complied with the 2023 Unless Order. The arguments ventilated at the hearing were substantially about the interpretation of the 2023 Unless Order and the content of Lo 3^rd and Lau 3^rd; and

(v)  It was only at the end of the hearing that the then legal representative of Ds (who was not Mr Leung) suggested that, in the event the Master found that there was non-compliance, he would invite the Court not to strike out the Defence. The suggestion was unsubstantiated and purportedly made upon the Court’s indication that Ds could be in non-compliance with the 2023 Unless Order. Despite this suggestion, no formal application had been taken out and no supporting evidence had been filed in accordance with O 2, r 5(2) of RDC.

44.On the other hand, I am of the view that the matter should not be resolved by way of an appeal, and in any event there is no practical reason for me to deal with the appeal together with the Relief Application:-

(1)  Given my findings that the material issue to be determined on 2 August 2023 was whether there was non-compliance with the 2023 Unless Order, the 8.2 Order should be understood in this context. In an appeal against the 8.2 Order, the only issue which I can properly decide (in exercising my appellate jurisdiction) is whether the Master’s finding that there was non-compliance of the 2023 Unless Order on the part of Ds should be overturned. In view of Mr Leung’s concession at the hearing (and in my view quite rightly) that there was indeed non-compliance with the 2023 Unless Order, this appellate issue has become obsolete;

(2)  Mr Leung further argued that, as a ground of appeal, the Master had failed to exercise his inherent jurisdiction to grant relief from sanction at the hearing: Daimler AG v Leiduck CACV 172/2011 (20 September 2012, unreported), para. 7. I find no basis for this suggestion. As stated above, the focus at the hearing  and the Master’s decision has always been whether there was non-compliance with the 2023 Unless Order. In any event, there was no evidence before the Master which was capable of suggesting that he should exercise his discretion or, if discretion was exercised, grant relief from sanction.

45.Assistance can be derived from the decision of Chan Chung Sing v Chan Andy Yuan [2024] 2 HKLRD 828 cited by D1. In that case, the plaintiff’s action was automatically dismissed for failing to comply with an unless order under which he was required to take out interlocutory applications within a time limit, failing which his action would be dismissed without further order. When the matter came before the Judge upon the plaintiff’s appeal, the plaintiff decided to pursue a relief application for the dismissal instead of the appeal. The Judge dismissed the appeal and granted the application on conditions.

46.Chan Chung Sing has provided an illustration that, in similar cases, the appropriate procedure for setting aside the sanction imposed under an unless order upon finding of non-compliance should be by way of an application for relief instead of an appeal. A similar approach was also adopted by the Court in Li Yulong v Liu Jing (supra). I am of the view that the same approach should be adopted in the present case.

47.In the circumstances, I dismiss D1’s appeal. Not only was it brought substantially out of time, but there is simply no substance in the appeal. On the 8.2 Order, the only matter that I have to consider is the Relief Application.

(B)   Application for Relief Out of Time

(i)   Legal framework

48.Under O 2, r 4 of RDC, an application for relief from sanction must be taken out within 14 days from the date of the non-compliance. D1’s Relief Application is almost 2 years out of time. The burden is therefore on D1 to satisfy the Court that an extension of time for relief should be granted.

49.It was held in Bruce James Stinson v Gu Ming Gao [2019] HKCFI 43 (para 144) that, in considering whether to extend time to grant relief from sanction, the Court has to consider all relevant factors, particularly:-

(1)  The length of the delay;

(2)  The reasons for the delay;

(3)  The merits of the proposed application for relief (which will bring into focus the factors set out in O 2 r 5(1) of the Rules of High Court (Cap 4)[11]); and

(4)  The degree of prejudice to the other party.

50.Insofar as merits are concerned, the legal principles on relief from sanction have been set out in Chan Chung Sing (supra), para 27-35. In summary:-

(1)  The primary aim in exercising the power of the Court is to secure the just resolution of disputes in accordance with the parties’ substantive rights: O 1A, r 2(2) of RDC;

(2)  The Court has the power under O 2, r 4 of RDC to grant relief from sanction for failing to comply with the Court’s order. The relevant circumstances for the Court’s consideration have been set out in O 2, r 5(1) of RDC;

(3)  Non-compliance with a peremptory order is contumelious where it is the result of a litigant’s conscious and deliberate decision to ignore or disobey the order in the absence of any extraneous excuse. Such conduct may be contrasted with cases where a litigant has made serious effort to comply in good faith but has been unsuccessful through bad luck or incompetence or circumstances outside his control: Top One International (China) Property Group Co Ltd v Top One Property Group Ltd [2011] 1 HKLRD 606, [34];

(4)  Refusal of relief from sanction is not limited to intentional and contumelious defaults. Depending on circumstances, failure to comply through negligence, incompetence or sheer indolence may warrant a refusal for extension of time, so as to decline relief. Any other conclusion would be to ignore the positive duty placed on parties to assist the Court to further the underlying objectives of O 1A, r 3 and on the Court to do so by actively managing cases: Top One International (supra), [41];

(5)  The burden is on the defaulting party to demonstrate “with cogent and compelling evidence” that the failure was not intentional or contumelious and was caused by circumstances beyond his control: Duracell US Operations Inc v Matsushima Electric (HK) Co Ltd [2018] HKCFI 347, [71];

(6)  A weighty factor in the weighing exercise is the question of proportionality of the sanction in the circumstances of the case, and the Court will generally use striking out as a remedy of last resort and is encouraged to consider other measures that may be more appropriate to be taken. This is because the immediate purpose of an unless order is not to punish misconduct but to secure a fair trial in accordance with the due process of law. The draconian sanction of striking out a claim in its entirety should not be the default consequence of an unless order because it would effectively deprive the litigant of its substantive right on account of procedural default: Daimler AG v Leiduck [2012] 3 HKLRD 118, [57], [66]; Bruce James Stinson v Gu Ming Gao (supra), [165]-[166].

51.Of the factors set out in O 2 r 5(1) of RDC, the Court is enjoined to consider all circumstances including the following 10 factors:-

(a)  The interests of the administration of justice;

(b)  Whether the application for relief has been made promptly;

(c)  Whether the failure to comply was intentional;

(d)  Whether there is good explanation for the failure to comply;

(e)  The extent to which the party in default has complied with other rules and court orders;

(f)  Whether the failure to comply was caused by the party in default or his legal representative;

(g)  Where the party in default is not legally represented, whether he was unaware of the rule or court order, or if he was aware of it, whether he was able to comply with it without legal assistance;

(h)  Whether the trial date or the likely trial date can still be met if relief is granted;

(i)  The effect which the failure to comply had on each party; and

(j)  The effect which the granting of relief would have on each party.

52.The list is not meant to be exhaustive and ultimately it is a multi-faceted balancing exercise with no single factor being conclusive: The IO of Yue Sun Mansion v Lake Side Elderly Centre Ltd HCMP  556/2017 (25 October 2017, unreported), para 12.

53.Pausing here, it can be seen that, quite distinct from an application for appeal out of time, it is a relevant factor in a relief application if the failure to comply with an unless order was caused by a party’s legal representative instead of the party in default. Similar sentiment has also been expressed by the Court in Chan Chung Sing (supra), which remarked that the Court “should not equate default of the lawyers with default of the parties for the purpose of addressing relief from sanctions” (para 41-43).

(ii)   Reasons for the delay

54.D1’s explanation was contained in Lo 5^th and Lo 7^th. In summary, D1 did not dispute the lengthy delay but explained that the delay was caused by: (a) X’s failure to raise with Ds the 2023 Unless Order and the 8.2 Order and to explain their significance, (b) his failure to explain any need to take out application after the 8.2 Order; (c) his incorrect advice that Ds’ Payment would be sufficient to nullify the Possession Order and (d) his unprofessional behaviour in handling his case in general. D1 further claimed that, upon engaging Y&A in July 2025, he acted promptly to take out the Relief Application and comply with the 2023 Unless Orders (a) and (b). At this point, it is pertinent to note that D1’s evidence is plainly admissible under O 2, r 5(2) of RDC in support of the Relief Application. Even if I am wrong and the matter should be dealt with by way of an appeal, the relevant evidence is admissible under O 58 r 1(4) of RDC, being evidence relating to matters occurring after the 8.2 Order.

55.On the solicitor’s default, D1 placed particular reliance on various WhatsApp messages between X and D1’s elder son (“Ds’ Son”), who liaised with X on D1’s behalf, between November 2021 and February 2025 (“WhatsApp Messages”). Among these messages, I find the following to be of particular significance to D1’s complaint:-

(1)  On 12 September 2023, Ds’ Son forwarded a message from D1 to X in which D1 complained that X did not explain to him the 8.2 Order (上次[X]叫我哋去律師樓簽名係8月1號，然後8月2號開庭，但[X]乜都冇講，單案件輸咗都冇同我哋傾) (“9.12 Message”). I believe this message relates to D1’s complaint of failure to raise with him the 8.2 Order;

(2)  On 5 October 2023, X sent a message to Ds’ Son purportedly advising that upon payment of “bankruptcy debt”, Ps would have no basis to pursue the Possession Order (但我哋已經滿足左bankruptcy debt金額，一方面佢無基礎再要求收樓 … 另一方面適當時候，輪到我地反而有權催促受託人唔好拖) (“10.5 Message”). This message relates to D1’s complaint of the incorrect advice given by X on the effect of Ds’ Payment.

56.Further, D1 referred to various messages between January 2022 and June 2024 to show that X had repeatedly failed to advise D1 and Ds’ Son properly on the significance of various judicial acts and ignored their requests for instructions or updates.

57.Having considered the evidence and the parties’ submissions, I am not satisfied that D1 has discharged his burden in showing that the lengthy delay was caused by the default of X.

58.First, whilst X might not have explained the cause and effect of the 8.2 Order to D1 immediately after it was made, it would appear that D1 subsequently became aware of the 8.2 Order (and by 15 September 2023 at the latest):-

(1)  According to the 9.12 Message, D1 was apparently aware of the 8.2 Order and the result of the case, since he was able to tell that there was a hearing on 2 August 2023 and he “lost” in the hearing (單案件輸咗). For this reason, even if X did fail to inform him of the result of the hearing on 2 August 2023, D1 must have been aware of the same by 12 September 2023, if not earlier;

(2)  Also on the same day (ie 12 September 2023), D1 became aware of the 1^st NTQ which was served by posting on the door of the Property. In particular, Ds’ Son sent a screenshot of the second page of the 1^st NTQ to X which contained the following statement in Chinese:-

“請注意：2023年8月2日在區域法院，法庭就上述案件判第一及第二原告人勝訴，第一及第二被告人敗訴，並判令第一及第二原告人可以收回Flat C on 21^st Floor of Block 10, Rhythm Garden, No. 242 Choi Hung Road, Kowloon, Hong Kong。現特此通知 閣下，需於2023年9月21日或之前遷出該處，逾令不遷或不向法庭提出寬免或其他申請者，第一及第二原告人將無需另行通知而直接根據法庭命令採取行動收回該處地方”

(3)  The terms of the 1^st NTQ were designed for laymen. The relevant statement in the 1^st NTQ sets out in clear terms the entirety of the 8.2 Order and the legal consequences which would flow from the 8.2 Order. I am not of the view that the significance of the 8.2 Order should be specifically brought to D1’s attention by X;

(4)  The 1^st NTQ also expressly informed D1 that if he did not want to vacate the Property, relief or other application had to be made to the Court (向法庭提出寬免或其他申請). D1 was clearly aware of this avenue as demonstrated in his message forwarded by Ds’ Son on 15 September 2023 at 10:11 am;

(5)  As a matter of fact, X also explained to Ds’ Son on the same day that Ps had sought possession of the Property and the steps forward, including the payment of bankruptcy debt.

59.For the above reasons, I find that D1 must have been aware of the 8.2 Order and the legal consequences of it by 15 September 2023 at the latest. One would therefore expect that D1 would take steps to appeal or seek relief of the 8.2 Order if he was not prepared to surrender possession of the Property. The appeal and Relief Application were only taken out in July 2025, around 1 year and 10 months later.

60.To answer this question, D1 suggested that he had urged X to apply for relief or other application on 15 September 2023 but no step had been taken by the latter. Regrettably, the information before me is limited and insufficient for me to conclude that X had deliberately ignored D1’s requests and instructions:-

(1)  As a matter of general understanding of the legal profession, it is common for a legal representative to receive instructions from client on a particular matter but eventually decide not to proceed in accordance with them. There is, on the face of it, nothing wrong with this practice. The crucial issue is the reason behind;

(2)  In the present case, there is no evidence from the WhatsApp Messages as to whether there was any discussion or advice being given on this matter between X and D1. D1 invited me to draw the inference that no discussion or advice had taken place from the absence of any evidence from the WhatsApp Messages. I find this to be a risky course for the following reasons:-

(a)  There were no disciplinary findings by the Law Society against X on professional misconduct on this particular matter, contrary to the situation in Chan Chung Sing (supra). In this regard, the draft writ produced by D1 (which has not been filed) is neither here nor there;

(b)  X is not a party to this action, nor apparently has he been informed of D1’s complaint.[12] In any event, there was no express admission by X about his default, contrary to the situation in Jose Miranda Da Costa Junior & Anor v Lorenzo Yih [2013] 6 HKC 582 (cited in Chan Chung Sing (supra), para. 42(3));

(c)  Absent any findings in disciplinary action and/or express admission by X himself, the Court will require cogent evidence to show that he had been in default in acting for Ds and the default has caused the delay;

(d)  The WhatsApp Messages were apparently not the only communication channel between X and D1. For example, there was no message exchanged between X and Ds’ Son between 27 June 2023 and 2 August 2023, nonetheless X was able to arrange for D1 to affirm and sign the Lo 3^rd on 1 August 2023. Similarly, D1 was able to disclose in Lo 3^rd a payment advice dated 31 July 2023 but there was no record in the WhatsApp Messages showing that this document had been sent to X before 2 August 2023. I am therefore of the view that there should exist other communication channel between X and Ds’ Son/D1 which D1 had not disclosed in Lo 5^th and Lo 7^th;

(e)  Another significant aspect of the WhatsApp Messages is that many of the conversations between X and Ds’ Son had been redacted on the ground of privilege. Indeed, there were multiple redactions in the WhatsApp Messages both regarding the content of their conversations and the nature of the documents sent, in particular during the critical period of 2 August to 3 August 2023. This seriously impedes the Court’s ability to properly and fairly assess the adequacy of advice given by X in respect of the 8.2 Order, his response to D1’s instructions and his professional conduct;

(f)  I find it unusual for D1 to disclose the WhatsApp Messages to attribute fault to X while claiming privilege on certain conversations. In my view, a party who deploys privileged correspondence to establish fault to his lawyer should ordinarily be deemed to have waived the privilege over the deployed material. D1 has not provided any specific explanation as to why he would disclose the vast of the WhatsApp Messages but saw fit to redact certain messages and documents, save for a general explanation that he did not waive his privilege on those parts. I do not consider this explanation satisfactory;[13]

(g)  In any event, it is unfair for a party to claim default of his former lawyer in support of his application while withholding, in a selective manner, part of the communications necessary to test the allegation by claiming privilege: Goldlion Properties Ltd v Regent National Enterprises Ltd [2006] 1 HKLRD 793, para. 35;

(h)  I am not aware that X has been asked to file any affirmation in these proceedings. Obviously, Ps are not in any position to rebut the truthfulness and accuracy of the WhatsApp Messages. There is also no affirmation made by Ds’ Son to verify the WhatsApp Messages. The evidence in Lo 5^th and Lo 7^th regarding the conduct of X was therefore not subject to severe testing. In my view, it would be unsafe for me to rely on the WhatsApp Messages to understand the conduct of X in handling the matter, when I cannot fully comprehend the context of the communication due to the multiple redactions made pursuant to a claim of “partial” privilege. I therefore find the WhatsApp Messages neither concrete nor compelling evidence of D1’s complaint.

61.For the above reasons, I also find that D1 has failed to establish that X’s default for failing to respond to his instructions to apply for relief or other applications was the cause of the delay.

62.Lastly, regarding D1’s complaint that X had given incorrect advice on the effect of Ds’ Payment under the 10.5 Message:-

(1)  I refer to my analysis above as to whether the WhatsApp Messages were the only communication channel and the implication of the various redactions to the WhatsApp Messages. It suffices to say that in general I am cautious about taking them at their face value insofar as D1 sought to rely on them to show that incorrect advice was given by X which caused the delay;

(2)  Reading the history of the WhatsApp Messages in its entirety, there are various occasions in which X has pointed out to Ds’ Son that the bankruptcy debt requested by Ps would also include “fees” (費用) and Ds’ Son/D1 understood that mere repayment of principal and interest would not resolve the entire legal battle. A similar position was also stated in the letter of Ps’ solicitors dated 1 August 2023, which Ds’ Son apparently received on 2 August 2023 through the WhatsApp Messages;

(3)  In any event, when D1’s complaint is properly understood, it appears that the attitude he adopts is that he has no intention to pay for Ps’ Legal Costs (even if the same had been duly assessed by the Court) as long as, or especially when, the non-payment would not cost him possession of the Property. Indeed, as the matter now stands, the costs taxed under the Allocatur remained unpaid even after D1 had engaged Y&A to replace L&Y. From this aspect, D1 is simply using X’s fault (if there was any) to advance his own delaying tactic. In other words, it cannot be the “cause” of the delay. It is only an excuse.

63.As for the evidence relating to the overall conduct of X, I find it to be overly generic for the same to be considered as evidence attributing the delay to take out the Relief Application to X. In coming to this conclusion, I also remind myself of my observations above regarding the completeness and implication brought by the redaction of the WhatsApp Messages.

64.In the circumstances, I find that D1 has failed to establish that X’s default in handling and advising him has caused the delay in making the Relief Application.

(iii)   Merits of Relief Application

65.Given that D1 has failed to provide sufficient reason for the lengthy delay, I shall now consider whether the lack of a satisfactory explanation can be outweighed by the merits of the Relief Application and (as will be discussed in the next section) the prejudice which Ps may suffer.

66.I refer to the 10 non-exhaustive factors under O 2, r 5(1) of RDC set out above which the Court is required to consider for the Relief Application.

67.With regard to the factor under r 5(1)(a):-

(1)  It is in the interests of the administration of justice that orders are to be obeyed, particularly when an unless order is a final opportunity for a party to carry out an act ordered by the Court. The sanction should take effect and the innocent party should not lightly be deprived of the fruits of the unless order, unless the defaulting party is able to satisfy the Court that discretion should be exercised in its favour: Chan Chung Sing (supra), para. 52;

(2)  D1 has not provided any evidence showing Ds’ attempt to comply with the 2023 Unless Order. In fact, D1 claimed that X had never raised with him the 2023 Unless Order between 26 July and 4 August 2023, “let alone explain its significance, the need to comply the same, or how to comply with it”.[14] This explanation must be directly contradicted by D1 swearing the Lo 3^rd on 1 August 2023 pursuant to the Discovery and Interrogatories Orders;

(3)  Furthermore, by reason of my analysis above, I cannot accept the WhatsApp Messages, coupled with D1’s own assertions, as any “cogent and compelling evidence” of X’s fault in handling and advising the legal action.

68.With regard to the factor under r 5(1)(b), the Relief Application was only made on 24 July 2025, almost 2 years after the 8.2 Order. As I observed above, D1 had failed to show that the delay was caused by the default of X. The delay is therefore inexcusable. However, I shall bear in mind the fact that D1 did take out the Relief Application soon after he engaged Y&A in July 2025.

69.With regard to the factor under r 5(1)(c), I accept that there is no evidence, at least from what was presented before me, that the non-compliance with the 2023 Unless Orders (a) and (b) was intentional or contumelious.

70.With regard to the factors under rr 5(1)(d) and (f), given that the only reason for Ds’ failure to comply with the 2023 Unless Orders (a) and (b) was the default of X, I find that D1 has failed to show any good reason for Ds’ non-compliance.

71.With regard to the factor under r 5(1)(e), I note that this is the first time D1 sought relief from sanction for failing to comply with the unless order of the Court. However, Ds had a history of being dilatory in complying with court orders, notably:-

(1)  Ds failed to comply with the Court’s order to file the Defence by 10 May 2021. On 30 June 2021, Ps issued a summons to obtain default judgment against Ds, with the matter fixed for hearing on 13 August 2021. Ds eventually filed the Defence on 6 August 2021 (one week before the hearing) and applied for retrospective leave to treat the Defence filed as being filed in time. The Court acceded to Ds’ request on that occasion;

(2)  Ds only filed their 1^st List of Documents (“LOD”) on 19 April 2022 upon an unless order, despite direction for filing of LOD had been given on 29 November 2021.

72.With regard to the factor under r 5(1)(h), I am aware that no trial date has been fixed and in theory any relief granted will not cause disruption to trial. However, the Court is not entitled to disregard the long delay between the 2023 Unless Order and the Relief Application. In this respect, I agree with Mr Wong that had the 2023 Unless Order been complied with, the matter should now have gone to trial or might even have been disposed of after trial. The granting of relief will no doubt affect the putative trial date. To say that the trial will not be disrupted in the circumstances is tantamount to allowing D1 to take advantage of his own fault.

73.With regard to the factors under r 5(1)(i) and (j):-

(1)  Ps will be prejudiced by Ds’ failure to comply with the 2023 Unless Orders (a) and (b). As observed above, the only substantive defence run by Ds in their original pleading was the Hardship Defence, and Ps would not be able to fully test the case if not all documents relating to the financial situation of Ds’ family have been disclosed. This was particularly the case when Ps had no knowledge of their financial situation and could only assess it based on documents supplied by Ds. On the other hand, Ds would enjoy the unfair advantage of the non-disclosure;

(2)  Ps will be prejudiced if Ds are allowed to defend the action. The Bankruptcy Order was made in November 2003. With a review to recovering the bankruptcy debts, rounds of discussions with Ds were held and Ps eventually commenced the present action in March 2021, with Final Judgment granted in favour of Ps on 2 August 2023. Subsequently, Ps also obtained the Allocatur and Possession Order in 2025. In my view, Ps are entitled to assume that the action has come to finality after they obtained the Final Judgment. If relief is granted, it would mean that a very substantial part of Ps’ efforts and costs in this action will be wasted, through no fault of Ps. While one may argue that Ps’ costs can be compensated by an appropriate costs order, it is apparent from the evidence that Ds had no intention to pay despite the Allocatur. On the other hand, Ds will be able to recoup their right to defend the claim, particularly when D1 has provided further evidence on his financial situation by his 2^nd and 3^rd SLODs (verified by Lo 4^th and Lo 6^th) and sought to put in further defences under the Amendment Application (on which I will express my view below). This right will be lost if relief is refused. However, I bear in mind that the delay in the filing of the 2^nd and 3^rd SLODs and the Amendment Application was solely attributable to D1 but not Ps.

74.The above analysis will also address the factor of prejudice to the parties laid down under Bruce James Stinson (supra).

75.Further, O 2, r 5 of RDC requires the Court to consider “all the circumstances” of the case, which would definitely include the terms of the unless order: Chan Chung Sing (supra), para 49. On this point, I do not consider that the sanction under 2023 Unless Order is a disproportionate sanction for the following reasons:-

(1)  Ps’ claim is a straightforward claim for an order for sale of the Property in order to satisfy outstanding bankruptcy debts incurred by D2;

(2)  Under the original Defence, Ds admitted that D2 had contributed to the purchase price of, and had equal beneficial ownership as D1 in, the Property prior to bankruptcy. The Hardship Defence was the only substantive defence raised by Ds in their original pleadings;

(3)  The Hardship Defence required Ds to show that they would have difficulty finding another place to live by reason of their financial situation. There was no or minimal evidence in Ds’ LOD showing the current financial situation of Ds’ family;

(4)  In order for Ds to meaningfully defend their case, documentary evidence on the financial situation of Ds’ family has to be produced, as the Court is unlikely to accept bare assertions from Ds and/or their witnesses for the Hardship Defence. Absent any documentary evidence on the issue of Ds’ financial situation, the Hardship Defence has no prospect of success;

(5)  Given that the availability of documentary evidence is decisive to the prospect of success of Ds’ defence, it was sensible for the Court to impose the sanction by striking out the Defence if the relevant documentary evidence could not be produced. It was simply pointless for the parties (which also include Ds) to incur further time and costs to pursue the matter to trial if there was no prospect of success in the Hardship Defence;

(6)  Furthermore, given that the factual issue of the Discovery Order related to the financial situation of Ds’ family, the documentary evidence produced must be complete and full, otherwise the Court would not be in a fair position to assess the issue. It was therefore necessary for Ds to produce documents not only in their possession and/or custody but also within their power. This was especially important to ensure fairness since Ps were in a totally passive role with little knowledge about the financial situation of Ds’ family;

(7)  In any event, O 24 r 16(1) of RDC empowers the Court to make such order as it thinks just, including an order that the action be dismissed or the defence be struck out and judgment be entered, if any party who is required to make discovery of documents fails to comply with that order.

76.Taking a balancing exercise of the above factors, and given that the sanction under the 2023 Unless Order is not disproportionate, I refuse to grant D1 an extension of time to make the Relief Application; and even if I grant leave to extend time for D1 to take out the said application, I would refuse to exercise my discretion to grant the relief sought.

AMENDMENT APPLICATION

77.In light of my decision above on the sequence of hearing, and given that the Relief Application is refused (both as being out of time and on the merits), it is not necessary for me to consider the Amendment Application. The said application shall be dismissed.

78.In any event, even if I were to consider the Amendment Application, I would likewise dismiss the said application as the same is bound to fail.

(A)   Late Application

79.The Amendment Application was made almost 3 years after the 2022 Unless Order and almost 2 years after the Final Judgment was entered. In this regard, D1 submitted that:-

(1)  Under O 20 rr 5 & 8 of RDC, the Court may at any stage of the proceedings allow any party to amend pleadings;

(2)  In Hsu Ming Chi v Lam Shu Chit HCCL 8/2013 (22 October 2014, unreported), para. 13-15, the Court set out the legal principle that leave to amend pleadings would be readily granted before trial, unless it could be shown that the new claim based on the proposed amendment is bound to fail. In assessing the merits, the court will take the applicant’s proposed pleaded case to the highest.

80.In my view, the principle set out in Hsu Ming Chi concerns the general situation when a party seeks to amend its pleadings before the commencement of the trial. Indeed, as observed by the Court, the action in Hsu Ming Chi was still at an early stage at the time when the application was made.[15] This is contrasted with the present case, where the Final Judgment has already been entered almost 2 years before the present application.

81.For this reason, whilst it is trite that the Court may allow an application to amend pleadings at any stage of the proceedings, I do not accept the submission that Hsu Ming Chi is applicable to the present case, since it cannot be fairly said that the Amendment Application was taken out “before trial”.

82.In this respect, I agree with Mr Wong that the correct test should be the one observed by the Court in Nam Kwong Medicines & Health Product Co Ltd v China Insurance Co Ltd & Anor [2003] HKLRD 345, p 348B-H. In that case, the defendant sought to amend its defence by adding a counterclaim some 4 months after the handing down of the judgment in which the Court dismissed the plaintiff’s claim. In dismissing the defendant’s application, the Court remarked that there was a public interest in the finality of litigation, and the Court would require an exceptional case before acceding to the said application. Similar observations were also made by the Court in Chan Chi Wai v Chan Sau Wah [2019] 3 HKLRD 330, para 25-28.

83.D1 did not provide any evidence in support of the exceptional case. Whilst D1 has raised complaints regarding the unprofessional behaviour of X under Lo 5^th and Lo 7^th, there was no specific complaint that X has not followed Ds’ instructions or been negligent in drafting the original Defence. In fact, there are certain specific averments and/or admissions in the original Defence (e.g. D2’s beneficial interest in the Property) the veracity of which has been expressly acknowledged by Ds through Statements of Truth. It is astonishing to suggest that, on those matters, Ds have given contrary instructions to X while at the same time they would agree with the pleadings drafted by X.

84.Further, the late application would also mean that certain classes of documents which were previously irrelevant would become relevant after the amendment, e.g. bank statements showing D1’s contribution to the purchase price. It is inherently likely that many of these documents will now become unavailable due to banking practice and a fair trial will likely become impossible. In this regard, I agree with Mr Wong that the undesirable situation was caused solely by the delay on the part of D1 in taking out the Amendment Application. Justice requires that this should be resolved in Ps’ favour.

85.The Amendment Application can be dismissed on this ground alone. For the purpose of completeness, however, I shall proceed to state my other reasons below as to why the Amendment Application ought not be allowed.

(B)   Contradictory Pleadings (CICT Defence)

86.As stated above, the only substantive defence under the original Defence was the Hardship Defence. In relation to D2’s beneficial interest in the Property, by admission made by Ds in paragraph 8 of the Defence:-

(1)  D2 was regarded as having contributed to the purchase price of the Property (although she was not involved in repaying any mortgage since bankruptcy and has never contributed to the repayment of the 2^nd Mortgage); and

(2)  Prior to D2’s bankruptcy, Ds had had equal beneficial interest in the Property at all material times.

87.D1 now proposes a drastic change to Ds’ case. In particular:-

(1)  Ds resiled from their admissions above;

(2)  Ds denied that they have at all material times had equal beneficial ownership in the Property;

(3)  D1 was responsible for paying: (a) the initial deposit, (b) down payment and (c) mortgage repayments.

(4)  D1 is and was entitled to 100% of the beneficial ownership in the Property;

(5)  In or around 2000, there was an oral agreement between Ds and/or common intention between them that D1 would be wholly entitled to the Property, while the Property was held in Ds’ joint names for estate-planning reason (“Oral Agreement” or “Common Intention”).

88.Needless to say (and Mr Leung did not dispute), the above proposed amendments are contradicted by the original Defence. Indeed, they are also inconsistent with the stances previously taken by D2 in her Statement of Affairs (Debtor’s Petition) dated 26 September 2003 in her bankruptcy proceedings, letters from D1 between 13 February 2003 and 28 November 2009 and Ds’ witness statements made in this action.

89.It is established principle that a party who wishes to resile from an express admission is generally required to show good reason, in particular, a credible or convincing explanation so as to show that the application was made in good faith: Hong Kong Civil Procedure 2026 (Vol  1), para 18/13/3.

90.In this regard, I have been referred by Mr Leung to, among other documents, a letter issued by D1 to P1 on 20 November 2007 with a view to demonstrating that the newly proposed amendments are not recent fabrication. The relevant part of the letter reads:-

“破產人雖然有半分業權，但卻未有履行業權的義務（供樓款），該物業是由我獨力承擔，我只是因工作上的危險性，為了照顧家人而加入她的名字。”[16]

91.I agree with Mr Leung that similar allegation was made by D1 as early as 2007. However, this does not explain why the Amendment Application was not taken out until July 2025 and most importantly – why it was not so pleaded in the original Defence in August 2021, but instead a contrary assertion was made and confirmed by Ds on that occasion through Statements of Truth. In my view, D1 has failed to show any credible or convincing explanation as to why he should now be permitted to resile from his previous admissions.

92.In any event, the Oral Agreement or Common Intention has never been expressly mentioned in any of Ds’ letters, pleadings or witness statements. It would be unusual for Ds to omit this important aspect of their case in any of their previous correspondence and legal documents, but instead put forward a totally inconsistent case that D2 had contributed to the purchase price and was a 50% owner of the beneficial interest in the Property. In my view, there is little chance that Ds will succeed as the onus is vested upon him to show that the beneficial ownership is different from the legal ownership by reason of the common intention that it would be so differed: Lam Kwok Hing (as administrator of the Estate of Lam Ping Sang, deceased) v Lau Ha also known as Lau Ha Lily & Ors [2025] 4 HKC 267, para 42. Similar requirement applies to proprietary estoppel, where the party relying on the defence must show a representation or assurance made to him: Cheung Lai Mui v Cheung Wai Shing (2021) HKCFAR 116, para  23.

(C)   Delay Defence

93.D1 also sought to plead that Ps’ delay in taking steps to realize D2’s interest in the Property has caused severe prejudice to D1. It was said that had D1 been aware of Ps’ power to apply for an order for sale, he would not have retired and would have sought continued employment to maintain his income or refinanced or secured D2’s interest whilst gainfully employed.

94.First, given that all the particulars of the Delay Defence relate to Ps’ conduct before the commencement of the action, there is no credible explanation as to why the Delay Defence was not pleaded in the original Defence.

95.Second, D2 was adjudged bankrupt in 2003 and D1 retired in 2007. Regardless of the reasonableness of the steps taken by Ps for recovery of bankruptcy debt during this period, D1’s allegation that he was not aware of Ps’ power to apply for order for sale is akin to the suggestion that he was ignorant of the law. In my view, this is not a valid excuse: Chan Chung Sing (supra), para 45(1).

96.Third, whilst I should refrain from conducting a detailed assessment of the merits of the defence, it would appear that D1 has failed to produce any credible evidence as to how he could be gainfully employed after his retirement age apart from the sheer belief that he would be re-employed under the Non-Civil Service Scheme. In any event, it is D1’s evidence that he had taken up alternative employment as a bus driver after retirement. There is a serious doubt as to whether D1 can show that he has suffered any prejudice even if Ps have been guilty of delay: Re Lo Yau Shing [2018] HKCFI 1574, para 16-40.

(D)   Conclusion

97.For the reasons given above, even if I were to consider the Amendment Application, I would have dismissed the same.

98.Further, my decision above is only premised upon the ordinary scenario where the amendment application is taken out after judgment, but has not taken into account the first hurdle that the application was also made in breach of an unless order. However, given it is my decision that the Amendment Application in the present case will not be entertained, I will also dismiss D1’s application for relief from sanction imposed by the 2022 Unless Order, which obviously was sought solely for the purpose of pursuing the Amendment Application.

THE 2^ND AND 3^RD SUMMONSES

99.Given that I have dismissed the appeal and the applications under the 1^st Summons, the 2^nd and 3^rd Summonses (which seek to stay the execution of the 8.2 Order and the Possession Order pending determination of D1’s appeal) must also be dismissed.

CONCLUSION

100.For the above reasons, I dismiss D1’s appeal and the 1^st to 3^rd Summonses.

COSTS

101.There is no reason why costs should not follow the event. I order that costs of the 1^st to 3^rd Summonses and the appeal, including costs of the hearing, be paid by D1 to Ps, with certificate for one counsel.

102.Ps ask for costs to be taxed on indemnity basis. Ps claim that the applications and the appeal are plainly without merit, and no proper basis has been shown for the egregious delay. Ps also alleged that D1 had been playing delaying tactics.

103.I am not of the view that the applications are plainly without merit. It suffices to say that if D1 had been able to provide sufficiently cogent and compelling evidence to show that the delay in the Relief Application was caused by the fault of X, the result might well have been different, since O 2 r 5(1) of RDC expressly requires the Court to take into account whether the non-compliance with the unless order was caused by the applicant’s legal representative.

104.As for the NOA, one will need to decipher the arguments and rulings at the hearing on 2 August 2023 to know that it is not the appropriate procedure to challenge the 8.2 Order. I therefore do not consider the taking out of the NOA entirely wrong.

105.Having considered the circumstances of the case, I am of the view that it is fair and just for Ps’ costs to be taxed on party-and-party basis. 

ORDER

106.The Court will therefore make the following Orders:-

(1)  The 1^st, 2^nd and 3^rd Summonses be dismissed;

(2)  D1’s appeal under the NOA be dismissed;

(3)  The interim stay granted under paragraph 6 of the Order made by Deputy District Judge Walker Sham on 15 September 2025 be lifted;

(4)  Costs of the 1^st, 2^nd and 3^rd Summonses and the appeal, including costs of the hearing on 17 July 2026, be paid by D1 to Ps on party-and-party basis, with certificate for one counsel, to be summarily assessed;

(5)  It is further directed that:-

(a)  Ps do lodge and serve their Statement of Costs within 14 days from the date of this decision; and

(b)  D1 do lodge and serve his Statement of Objections within 14 days of receiving the Statement of Costs from Ps.

107.Lastly, I thank Mr Wong, Mr Leung and Mr Chow for their assistance in this matter.

Mr Adrian CK Wong & Mr Paul Chow, instructed by Tsang, Chan & Wong, for the 1^st and 2^nd plaintiffs

Mr Raphel Leung, instructed by Yung & Au, for the 1^st defendant

Attendance of the 2^nd defendant was excused