Lee Lai Kuen v. Rarela Ronald S.

HCMP 1587/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1587 OF 2004

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BETWEEN

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Before: Hon A Cheung J in Court

Date of Hearing: 11 October 2004

Date of Judgment: 11 October 2004

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J U D G M E N T

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1.The plaintiff is a widow; she has inherited from her late husband entitlements for compensation regarding various pieces of land previously owned by her late husband that had been surrendered to or resumed by the government.   Amongst those pieces of land were Lot No. 580 and Lot No. 583 in Demarcation District 281.   The entitlements are generally known as letter B entitlements and, in the course of the hearing today, I have been provided with and examined the originals of the relevant letter B entitlements that have been kept by the plaintiff throughout.  The entitlements are very valuable rights as can be seen from the facts of the present case. 

2.It is the case of the plaintiff that she has never sold the entitlements in respect of the two lots in question to anybody and, in particular, she has never instructed a firm of solicitors to sell on her behalf her entitlements to the defendant in this action, a certain gentleman by the name of Ronald S Rarela.  She says she has never known him nor has she known the firm of solicitors in question. 

3.In any event, according to the evidence, there have been two purported assignments of her entitlements in respect of the two lots.  On the face of the assignments prepared by the solicitors in question, the plaintiff has assigned to the defendant her respective entitlements for the sums of $15 million and $18 million respectively. 

4.Again, on the face of the documents that have subsequently been dug up – apparently by the police – the defendant has written two cheques for those two sums in favour of the plaintiff in payment of the purchase prices.  But the plaintiff has never received the cheques or any payments.

5.To complete the story, the defendant, armed with the two assignments, has since applied to the Director of Lands to encash the entitlements.  He has been partially successful in that the Director has paid out to the defendant a sum of over $24 million in respect of one of the entitlements.

6.Subsequently, the Director became suspicious about the situation and contacted the plaintiff who denied ever having sold the entitlements to the defendant.  The Director stopped processing the application for payment in respect of the other entitlement by the defendant who has since disappeared.

7.The present proceedings have been taken out by the plaintiff for declaratory relief to the effect that she has never sold the entitlements to the defendant and the assignments, which purport to contain her signatures, are in fact sham documents containing her forged signatures.  She asks the court to grant the appropriate relief in her favour.

8.Service of proceedings has been attempted on the defendant, which has not turned out to be successful in the sense that the defendant has not appeared to defend the present proceedings. 

9.Notice of the proceedings has been given to the Director of Lands who is of course to a great extent interested in the proceedings, at least financially.  The Director of Lands has written to those representing the plaintiff that he does not wish to apply to join in as a party in the proceedings and does not wish to attend the hearing today. 

10.I should add that those instructing the plaintiff have written to the firm of solicitors in question which purported to act for the plaintiff in the two transactions, asking for all pertinent particulars relating to the purported transactions and the supporting documents.  The solicitors have given no response or reply whatsoever to the plaintiff’s solicitors.

11.I have got affirmation evidence from the plaintiff.  I have also heard orally the plaintiff in evidence in view of the rather exceptional and special circumstances of the present case. 

12.I have also got reports from a handwriting expert who has confirmed in his reports that very likely the purported signatures appearing in the two assignments or purported assignments are forged signatures.  I have looked at the signatures and compared them with, to the extent I am able to, the genuine signatures of the plaintiff.  I have been able to observe some differences, even for an untrained person like me.

13.Having considered the whole of the evidence that has been placed before me and bearing in mind the civil burden and standard of proof, I am satisfied that the plaintiff has established her case, the essence of which is that she has never sold the entitlements in question to the defendant. 

14.I will accordingly grant the plaintiff relief. 

15.I have carefully considered the declarations and orders sought in the originating summons:  Paragraph 1 seeks a declaration to the effect that the plaintiff has never sold the entitlements to the defendant, whether by the two purported assignments or otherwise; paragraph 2 seeks a declaration that the plaintiff has never executed the assignments and the purported signatures of hers in the assignments were forged signatures; paragraph 3 seeks a declaration that the assignments are void and of no legal effect; paragraph 4 asks for an order that the assignments be set aside; paragraph 5 seeks an order that the registration of the two assignments in the Land Registry be vacated; and paragraph 6 asks for damages to be assessed.

16.On the facts as I have found them, I am satisfied that the plaintiff is entitled to the relief sought.  I therefore make an order in terms of paragraphs 1 to 6 of the originating summons. 

17.I am not concerned with what legal consequences that the relief that I have just granted would lead to, particularly in relation to the money that has been paid out by the Director of Lands to the defendant.  That is not a subject that concerns me. 

18.I am only concerned with an action between the plaintiff and the defendant and, as I said, on the evidence that the plaintiff has adduced before me, I am satisfied that the plaintiff has proven her case and is entitled to the relief described above.

19.As regards the costs of the present proceedings, on the authority that has been referred to me by learned counsel (Choy Yee Chun v. Bond Star Development Ltd [1997] HKLRD 1327), I am satisfied that the court does have the jurisdiction to order costs on an indemnity basis against the defendant in a case of the present type and, having borne the facts of the case in mind, I make an order that the costs of the present proceedings be paid by the defendant to the plaintiff on an indemnity basis, such costs are to be taxed if not agreed.

20.I would record that the above orders have been made upon the undertaking given by Messrs Ho & Wong, solicitors for the plaintiff, through counsel, that they will file an affirmation within three days from the date hereof confirming the sending of their letter dated 7 September 2004 to the solicitors in question and that up to the date hereof no reply or response has been received from that firm of solicitors.

Mr Kenny Lin, instructed by Messrs Ho & Wong, for the plaintiff

The defendant, unrepresented, absent