Shing Hai Doing v. Genius Knitting Factory Ltd

HCA003382/1977

On Appeal from Registrar's order.

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Coram: Mr. Commissioner Liu, Q.C. in Chambers.

Date of Judgment: 19th June, 1978.

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JUDGMENT

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1. This action was commenced on 23rd November, 1977. The Statement of Claim specially endorsed on the writ was amended on the 10th January, 1978. The Defence was filed on the 31st January, 1978. By a summons dated the 27th April, 1978, the Defendant applied to have the amended Statement of Claim struck out. On the 29th May, 1978, the summons came before an Assistant Registrar of the High Court in Chambers, and on even date the learned Registrar ordered the Plaintiff's Statement of Claim to be struck out with costs and a certificate for counsel. From this order of the learned Registrar, the Plaintiff now appeals.

2. On the said application for striking out the Statement of Claim, one Mr. Hui, the managing director of the Defendant company, deposed to certain facts in his affirmation in support filed on the 27th April 1978: Up to the date of her death, the Plaintiff's wife was the registered owner of the Murine Factory Building erected on Kwun Tong Inland Lots Nos. 550 and 551 at Nos. 320-322 Kwun Tong Road, Kowloon. On the 26th July, 1973, the Plaintiff's wife died intestate. On becoming a widower, by proceedings instituted against the Crown intituled O.J.M.P. 48 of 1975, the Plaintiff claimed to be the beneficiary of the Murine Factory Building said to have been held in trust by his deceased wife. Subsequent to the death of his spouse, on the 1st November, 1975 the Plaintiff granted in his own name two Tenancy Agreements of the 1st floor and the 8th floor of the Murine Factory Building respectively both for a term of one year expiring on the 31st October, 1976 which date coincided with the expiration of another Tenancy Agreement of the 9th floor of the said factory building entered into between the Plaintiff's deceased wife and one Mr. So in 1971. The Tenancy Agreement in respect to the 9th floor was for a term of five years from the 1st November, 1971 expiring also on the 31st October, 1976. All the tenants under these Tenancy Agreements wrongfully held over and refused to quit. So far as the 9th floor is concerned, the Plaintiff was desirous of protecting the estate of the deceased and "his interest as the beneficial owner". For the 1st and the 8th floors, the Plaintiff was advised "that if necessary, (he) should start proceedings for possession .... both in (his) own name and in the name of the deceased". Accordingly, on the 16th May, 1977, the Plaintiff sought and obtained a court order whereby he was appointed administrator of the estate of the deceased limited to the institution of proceedings for the recovery of the Murine Factory Building. It is not without significance to note that this order, obtained over one and a half years after the two 1975 Tenancy Agreements granted by the Plaintiff in his own name, relates to the whole of the factory building and not just the 9th floor thereof.

3. Not only had the Plaintiff asserted his alleged right to a beneficial interest in the Murine Factory Building, he also acted in pursuance thereof by granting in his own name two Tenancy Agreements not long after the death of his wife. Upon the expiration of the Tenancy Agreement of the 1st floor entered into by his deceased wife in 1971 allegedly for his benefit and the two subsequent 1975 Tenancy Agreements of the 1st and 8th floors granted by himself for fear of possible legal entanglement, he took a limited grant to clothe himself with dual capacity with a view to discouraging all subtle opposition to his intended recovery of vacant possession of the Murine Factory Building. With that object in mind, he caused to be obtained a limited grant of Letters of Administration so that he could serve as well himself as the estate of the deceased.

4. For administration of trust, a new trustee may be appointed by the personal representatives of a last surviving trustee⁽¹⁾. Therefore, it would not be impertinent to remark that the Plaintiff made no effort to seek a grant limited to securing an appointment of a new trustee for himself. He has also not requested the court to appoint a new trustee. All this is or may be taken as evidence of his intention to terminate the alleged trust on or after the death of his wife.

5. In the earlier High Court Action No. 1272 of 1977, the Plaintiff's claim against the said Mr. So was for possession of the 9th floor of the Murine Factory Building together with arrears of mesne profits, rates, management fees and costs. In the title and body of that writ, the Plaintiff sued in his personal capacity describing himself as a "retired merchant". It is a basic procedural requirement that the Plaintiff must, if he sues in a representative capacity, explicitly indorse the writ with a statement of the capacity in which he sues⁽²⁾. In Bowler v. John Mowlem & Co. Ltd.⁽³⁾, nowhere in the writ was the Plaintiff described as a representative, and it was held that the endorsement on the writ as to capacity was decisive and could not be modified by the representative capacity averred in the Statement of Claim.

At p. 558A, Denning, L.J., had this to say:

"The whole question in this case is: Was this action brought by the plaintiff in a representative capacity as administratrix of her husband? In the title of the writ she is described as administratrix, but, in my opinion, that does not denote a representative capacity. That is simply a description of her status as it was believed to be. The indorsement on the writ is the crucial matter. .......... In this indorsement it is nowhere said that the plaintiff claims as administratrix. In the previous cases in this court which I have mentioned, the indorsements clearly said that the plaintiff claimed 'as administratrix', but there is no mention here of any representative capacity in the indorsement. The statement of claim does not in law affect the matter one way or the other."

At p. 559F/G, Hodson, L.J., observed:

"(The statement of claim) cannot cure defects in capacity shown on the indorsement (on writ) and similarly ought not be allowed to detract from the indorsement."

Stebbing v. Holst & Co. Ltd.⁽⁴⁾ is another case from which much guidance may be obtained.

6. As in Bowler's case, the Plaintiff, as plaintiff in the earlier High Court Action No. 1272 of 1977, seemed to give only a bare description of his status and not a statement of any representative capacity in paragraph 1 of his then Statement of Claim which reads: "The Plaintiff is the administrator of the estate of Lin Nin Fong, deceased". The Plaintiff never did categorically state that he was suing in a representative capacity as an administrator. Even assuming that the Plaintiff had, in the Statement of Claim in his earlier action, purportedly specified the capacity in which he sued as being representative viz. as the administrator of the estate of his deceased wife, such allegation in the Statement of Claim would not have, on the authorities to which I have alluded, altered the personal character of the Plaintiff's status as indorsed on the writ.

7. Mr. Niamatullah submitted, as he did before the learned Registrar, that since the Plaintiff was only armed with a grant limited to claiming possession of the Murine Factory Building, he had no locus standi in the prosecution of his present action whereby he claimed against the Defendant limited company as a transferee of the business of the said Mr. So in breach of the provisions of the Fraudulent Transfer of Business Ordinance, Cap. 49. It was urged that insofar as the Plaintiff's claim against the Defendant limited company was under the Fraudulent Transfer of Business Ordinance, he had not been vested with any power so to sue as administrator under the limited grant; nor was the Plaintiff entitled to claim in his personal capacity what had accrued from an alleged fraudulent transferor to the deceased's estate. Counsel argued that insofar as the Plaintiff claimed damages for trespass in his own name, he had not begun to show an enforceable right in ejectment. Counsel concluded that the writ and the subsequent proceedings by a limited administrator beyond his restricted grant are a nullity which cannot be cured by any amendment and that Order 15 rules 13 and/or 15, even if applicable and appropriate, could thus offer no comfort or salvation to the Plaintiff. Confining to the sole issue of a limited grant, as it was contested before the learned Registrar, counsel's submissions appear to be unanswerable.

8. It is trite law that being sui juris a cestui que trust may terminate the trust and put an end to it⁽⁵⁾. Mr. Van Buuren, counsel for the Plaintiff, further called in aid the settled principle that even during the subsistence of a trust, a beneficiary thereunder may enjoy such right to immediate possession as would found an action in trespass or detinue. Counsel referred to Healey v. Healey⁽⁶⁾ in which a husband settled certain household furniture and effects in trust for the use of the wife during her life, and the wife's action in detinue without joining the trustee was held maintainable.

9. Turning back to the Plaintiff, in the light of his claim of beneficial ownership and his conduct, it is arguable that even if the trust continued to prosper, the Plaintiff would have a sufficient right to immediate possession of the suit premises to allow him to sue in trespass. By his same claim and subsequent conduct, the Plaintiff may be said to have duly terminated the trust, in which case he is likewise entitled to immediate possession of the premises to found a good cause of action in ejectment. Thus, in either alternative the Plaintiff's personal claim in the former High Court Action No. 1272 of 1977 cannot be said to be plainly unsustainable. On the allegation that the business of the said Mr. So in the premises has been transferred to the present Defendant in breach of the provisions of the Fraudulent Transfer of Business Ordinance, in no way can it be maintained that the Plaintiff's present claim of transmitted liabilities incidental to a fraudulent transfer is wholly devoid of merits. Furthermore, the alternative claim of the Plaintiff in his personal capacity as owner for damages for trespass against the Defendant in the case at bar cannot be condemned as being clearly insupportable whether or not the alleged trust has been terminated.

10. That much hinges on the Plaintiff's allegation of trust of and beneficial interest in the Murine Factory Building needs no emphasis. There are matters of fact and law fit to be investigated. None of the Plaintiff's claims may fairly be described as incontestably bad. The power to bar a Plaintiff from his future judgment seat by striking out his Statement of Claim ought to be exercised sparingly and only in plain and obvious cases. The summary process to strike out pleadings should be invoked only when a claim or answer is on the face of it "obviously unsustainable". See A.G. of Dutchy of Lancaster v. L. & N.W. Railway Co.⁽⁷⁾.

11. With unyielding tenacity, Mr. Niamatullah sought to add a last string to his bow by a submission that no sufficient material facts had been pleaded by the Plaintiff in the amended Statement of Claim. Suffice it for me to say that entitlement to possession as an owner has been alleged. A request for further and better particulars may be readily justified, but the amended Statement of Claim is not so inherently defective that it should be struck out.

12. The amended Statement of Claim standing as a pleading leaves much to academic speculation. The issues canvassed, at the invitation of the court, in this appeal were not advanced to the learned Registrar before whom submissions were confined within a very narrow compass. Tempted as I was at one time to mulct the Appellant in costs or make no order as to costs, having been further assisted by counsel, I order: (1) Appeal allowed, and (2) Costs before the learned Registrar and of this appeal to be costs in the cause and, whenever applicable, with a certificate for counsel.

Representation:

Mr. Van Buuren instructed by Messrs. H.H. LAU & Co. for Plaintiff/Appellant.

Mr. A.M. Niamatullah instructed by Messrs. Helen A. Lo for Defendant.

(1) Vide s. 37(1)(b) Trustee Ordinance, Cap. 29

(2) 0.6 r.3(1)(a) Rules of the Supreme Court. See also Re Royle, (1877) 5 Ch. D. 540

(3) [1954] 3 A.E.R. 556

(4) [1953] 1 A.E.R. 925

(5) See para. 1491 at p. 883 Vol. 38 Halsbury's Laws of England 3rd Ed.; p. 625 Lewin on Trust 16th Ed.

(6) [1915] 1 K.B. 938

(7) [1892] 3 Ch. 274.