Super Keep Investment Ltd and Another v. Wong Kwok Wa and Others

HCMP 1760/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1760 OF 2009

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(By the Order of Madam Registrar Au-Yeung made on 7 October 2009)

Before: Deputy High Court Judge L. Chan in Chambers

Date of Hearing: 2 and 4 August 2010

Date of Decision: 13 August 2010

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D E C I S I O N

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1.There are applications by the 1st to 18th defendants to strike out parts of the plaintiff’s statement of claim and to vacate the registration of some documents from the Land Registry and by the 2nd to 18th defendants for summary judgment on their counterclaim. There are also applications by the plaintiffs to amend their statement of claim and to join a Tso as a defendant herein.

Background

2.These proceedings started off on 9 September 2009 as interpleader proceedings whereby Messrs Hau, Lau, Li & Yeung (“HLLY”) sought judgment of the court on who should be entitled to possession and custody of certain title deeds and documents.  HLLY are still keeping these title deeds and documents pending the decision of this court. 

3.These deeds and documents relate to 17 lots of land as listed in the two schedules hereto.  There are 6 lots in the first schedule and are collectively called the 1st Land. They are registered in the names of the 2nd to 7th defendants respectively. There are 11 lots in the second schedule and are collectively called the 2nd Land. They are registered in the names of the 8th to 18th defendants respectively.

The claim of Wong Shau Wo Tso

4.The 1st Land used to be owned by a Lau Shau Wo Tso whose manager is Mr Lau Muk Fat (“the Tso”).  The Tso claims that it had transferred certain lands to the 1st defendant on 31 August 1995 for the purpose of development pursuant to certain arrangement.  The 6 lots which constitute the 1st Land that are registered in the names of the 2nd to 7th defendants were created out of some of the said lands of the Tso.  The 2nd to 7th defendants are holding the 1stLand as agents and/or trustees and/or nominees of the Tso.

5.The Tso further claims that the development of the 1st Land has been completed and the 1st Land together with the 6 houses thereon (“the 1st Houses”) should be transferred back to the Tso. 

6.The 1st defendant and the 2nd to 18th defendants have no objection to the Tso’s claim.  The 1st defendant and the 2nd to 7th defendants have also undertaken to the court to take all steps to vest the title and interests of and in the 1st Land and Houses to the Tso or to whom the Tso may direct.  I understand that the 1st defendant will also be responsible for the costs for the vesting.  These undertakings and their performance are without prejudice to the Tso’s rights vis-à-vis the defendants herein or other entities or to the 1st defendant’s rights vis-à-vis the Tso in respect of land owned or used to be owned by the Tso.  However, the vesting cannot be done free of encumbrance as there are registered at the Land Registry a joint venture agreement, the writ of summons and the amended writ of summons in HCA 1902/2009 (“Action 1902”) against the 1st Land and Houses and the 2nd Land and Houses.

The joint venture agreement of the 1st plaintiff and the 1st defendant

7.The joint venture agreement was made on 31 January 2005 between the 1st plaintiff and the 1st defendant (“the JV Agreement”). It was for the purpose of developing the 1st and 2nd Lands.  The recitals and the relevant clauses of the JV Agreement are:

“WHEREAS :-

1. 6 indigenous villagers (hereinafter called ‘1st Villagers’) (the 2nd to 7th Defendants) whose particulars are set out in the 1st column in Table 1 in Schedule 1 hereto as shown in the Land Register as owners of the respective pieces and parcels of land (hereinafter called ‘1st Land’) set out in the 2nd column in the same row of his name in Table 1 in Schedule 1 hereto.

2. 11 indigenous villagers (hereinafter called ‘2nd Villagers’) (the 8th to 18^th Defendants) whose particulars are set out in the 1st column in Table 2 in Schedule 1 hereto as shown in the Land Register as owners of the respective pieces and parcels of land (hereinafter called ‘2nd Land’) set out in the 2nd column in the same row of his name in Table 2 in Schedule 1 hereto.

3. Wong (the 1st Defendant) has entered into agreements with the 1st Villagers and 2nd Villagers for considerations paid to :-

(a) develop at Wong’s costs of village type houses (hereinafter called ‘1st Houses’) on the 1st Land and village type houses (hereinafter called ‘2nd Houses’) on the 2nd Land, and

(b) pay all necessary premium to the Government of Hong Kong SAR to obtain the consent for selling to non-indigenous villagers the 2nd Houses.

in return for 2nd Houses.

4. Wong has obtained from the 2nd Villagers all documents necessary for safeguarding the rights of Wong in the 1st Land, and 2nd Land and the 1st Houses, and 2nd Houses to be developed thereon that are binding upon the 2nd Villagers. Such documents may however be in breach of the restriction against alienation before completion of the development and payment of premium contained in the respective Government Grants for the 2nd Land.

5. Wong has obtained from the District Lands Department all necessary consents and certificates of exemptions for the construction of the 1st Houses and 2nd Houses.

6. Wong has requested the Financier (the 1st Plaintiff) to participate in the venture and the Financier has agreed upon the terms and conditions hereinafter set out.

WHERE IT IS AGREED as follows:-

1. JOINT ACQUISITION OF COMPANY

1.01. The Financier and Wong shall :-

(a) together acquire all the issued capital Golden Choice Enterprises Limited (高彩企業有限公司), a newly incorporated company (hereinafter called ‘JV Company’) (the 2nd Plaintiff) …, and

…

(c) notwithstanding anything to the contrary in the memorandum and articles of association of the JV Company exercise their respective voting rights to maintain that:-

(i) they are the only shareholders of the JV Company,

(ii) they are the only two directors of the JV Company;

(d) co-operate with each other to reach a consensus over all issues.

1.02. The Financier and Wong shall cause the JV Company to enter into the 1st Land and 2nd Land to take possession thereof within 3 weeks from the signing hereof,

1.03. The Financier shall cause the JV Company to :-

(a) commence within 3 months, and

(b) complete within 18 calendar months,

from the date of possession of the 1st Land and 2nd Land or such longer time as the Financier and Wong may agree:-

(a) constructing thereon the 1st Houses and 2nd Houses, and obtaining from the District Lands Department all necessary letters of compliance for permitting the occupation of the 1st Houses and 2nd Houses; and

(b) within 21 days after obtaining the letters of compliance:-

(i) applying to the District Lands Department for assessments of the premiums payable on the 2nd Land for removing the restriction against alienation of the 2nd Houses save to other indigenous villagers within 5 years from the date of completion of the 2nd Houses, and

(ii) paying the assessed premiums within one month after issuance of the demand note by the District Lands Office,

1.04. The Financier and Wong shall cause the JV Company to market and sell the 2nd Houses in such way i.e. whether as a house or divided units, in the open market at a price of not less than HK$6,000,000.00 for each house as Wong and the Financier may by mutual agreement fix.

…

1.06 All proceeds of sale of the 2nd Houses shall applied [sic] towards repayment of the shareholder’s loan set out in Clause 2.02 before payment of any dividend.

2. RIGHTS AND OBLIGATIONS OF THE FINANCIER

2.01. Relying upon the accuracy and truth of the representations and warranties set out in Clause 4 hereinafter given by Wong, the Financier shall cause Million Link International Holdings Limited (hereinafter called ‘the Lender’) to advance to Wong a loan of HK$7,000,000.00 (hereinafter called ‘Advance’) upon the following terms :-

(a) repayment upon a demand in writing :-

(i) after the declaration of dividend by the JV company but if the quantum of the dividend receivable by Wong is less than $7 million, only the amount receivable by Wong can be demanded.

…

(b) Wong shall assign to the lender the first HK$7 million of the dividends to be declared on his shares as security, …

2.02. The Financier shall advance an interest free shareholder’s loan to the JV Company that will be sufficient for payment of the construction costs of the 1st and 2nd Houses and premiums for the removal of non-alienation restriction of the 2nd Houses upon the following terms :-

(a) drawing of the loan shall be made by the JV company in accordance with the schedule for payment of the construction costs, and

(b) this shareholder loan shall only be repayable upon a demand in writing after the JV company has received an equivalent amount of proceeds of sale but otherwise shall be repaid as decided by the board of directors of the JV Company.

2.03. The Financier shall market the 2nd Houses at such costs and commissions as agreed between the Financier and Wong.

2.04. The Financier shall … :-

…

(b) divide equally between Wong and the Financier the after tax profits of the JV Company (if any) …

…

2.06. The Financier shall cause the JV Company to deliver vacant possession of the 1st Houses to Wong within 14 days after obtaining letters of compliance therefore from the District Lands Department or after completion of erection thereof as Wong may decide in his absolute discretion.

…

2.08 If the Financier is in default in advancing the JV Company the shareholder’s loan in payment of … premium for the removal of non-alienation restriction imposed upon the 2nd Houses, Wong shall be entitled to,

(a) have the rights to have the 1st and 2nd Land and 1st and 2nd Houses transferred back to him at nil consideration and be entitled to execute such documents for and behalf of the JV Company to that effect;

(b) taking over the sites and continue on the constructions and erection of the 1st and 2nd Houses without payment of any consideration to the JV Company or to Financier, it subsidiary, contractors or sub-contractors;

(c) The Financier shall be responsible to repay the Advance for Wong to the lender. The Financier shall have no recourse against Wong for the said $7 million. In the essence, the $7 million shall be forfeited by Wong as and for liquidated damages.

3. RIGHTS AND OBLIGATIONS OF WONG

3.01. Wong shall sign and cause the 2nd Villagers to sign all documents that Messrs. Hau, Lau, Li and Yeung require for perfecting :-

(a) the rights and interests of Wong in the 2nd Land and

(b) the rights of the JV Company to sell the 2nd Houses and receive the proceeds of such sale.

…

4. REPRESENTATIONS AND WARRANTIES OF WONG

Wong acknowledging that the Financier has entered into this Agreement solely replying upon the truth and accuracy of the representations and warranties set out herein warrants and represents as follows :-

4.01. Wong represents and warrants to the Financier that all the facts set out in the recitals herein are true and correct.

4.02. Wong represents and warrants to the Financier that subject to Wong’s interests in the 1st Land and 2nd Land, the 1st Villagers and 2nd Villagers are the beneficial owners of the respective pieces and parcels of land set out in the same row but 2nd column in Table 1 and Table2 in Schedule 1 hereto.

4.03. Wong has full right to enter into this Agreement with the Financier without the need of any prior approval from any other person or body corporate or government authority.

4.04. The representations and warranties of Wong are deemed to be repeated from time to time until completion of this Agreement.

…

6. MISCELLANNEOUS

6.01. All representations and warranties made in Clause 4 hereof shall be deemed to have been relied on by the Financier, notwithstanding any investigation made by or on behalf of the Financier. Wong shall indemnify defend and keep indemnified the Financier from and against any and all damages incurred by the Financier in any capacity and resulting from or relating to the breach by Wong of any representations and warranties contained in Clause 4.

…

6.11. This Agreement, together with all exhibits and schedules hereto, constitutes the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements, understandings duties or obligations between the parties with respect to the subject matter hereof. Any representation, if made by any of the parties prior to but has not been expressly set out in this Agreement as a representation by that party is hereby excluded and cannot be relied upon.

…

6.13. This Agreement is personal to the parties hereto and each party’s rights, obligations and benefits cannot be assigned to any person or body corporate unless with the prior written consent of the other party …”

8.Pursuant to the JV Agreement, the 2nd plaintiff constructed the 1st and 2nd Houses on the 1st and 2nd Lands respectively.  It claimed that it had incurred HK$24.4 million for the work and the sum was advanced to it by the 1st plaintiff.  However, the 1st plaintiff and the 1st defendant then fell into a dispute. 

9.The conditions of grants of the lots that constitute the 2nd Land contain a prohibition against their alienation to non-indigenous villagers within five years after the issue of a certificate of compliance. The prohibition could be removed by payment of a premium as assessed by the District Land Officer (“DLO”).  Under clauses 1.03(b)(ii) and 2.02 of the JV Agreement, the 1st plaintiff was obliged to pay the premium within one month of the issue of the demand note.  Clause 2.08 stipulated that if the 1st plaintiff should fail to pay, the 1st defendant could take over the whole project to the exclusion of the 1st plaintiff and also did not have to pay the 1st plaintiff any of the loan or expenses advanced by it pursuant to the JV Agreement. 

10.The DLO issued the demand notes for the premiums in respect of the 2nd Houses in about September to November 2008.  But the 1st plaintiff did not advance the money to the 2nd plaintiff to pay the same. 

11.On 9 February 2009, the 1st defendant’s solicitors gave notice to the 1st plaintiff that the 1st defendant would terminate the JV Agreement pursuant to the clause 2.08.  The 1st defendant also applied to the DLO for reassessment of the premiums and later paid them without consulting the 1st plaintiff.  He also sought the title deeds and documents from HLLY and attempted to sell the 2nd Houses to non-indigenous villagers.

Action 1902

12.The 1st plaintiff issued a writ of summons in Action 1902 on 7 September 2009 against the 1st to 18th defendants.  That was two days before HLLY started the interpleader proceedings.  The 1st plaintiff is the only plaintiff in Action 1902.  The writ in this action was later amended to change the addresses of the 2nd to 18th defendants.

13.The 1st plaintiff pleaded in the statement of claim of Action 1902 that the 1st defendant had made a number of representations which were relied on by the 1st plaintiff in entering into the JV Agreement.  One of the representations was that the 1st defendant had secured the right to build over lands owned by other villagers a carpark and a vehicular access road for connecting the development of the 1st and 2nd Houses to the public road for the use of the owners and/or residents of the 2nd Houses (“the access road representation”).

14.The 1st plaintiff further pleaded that the 1st defendant had represented to it that each of the 2nd to 18th defendants had given him a power of attorney and the 1st defendant entered into the JV Agreement either in his own capacity or as attorney of the 2nd to 18th defendants.  The 1st plaintiff then pleaded that as a result of the 1st defendant’s representations, there was an implied term of the JV Agreement that each of the 2nd to 18th defendants was holding his respective lot and building thereon as a constructive trustee of the 1st plaintiff and 1st defendant as joint beneficiaries.

15.The plaintiff then alleged that in about September 2008 the 1st defendant, contrary to his access road representation, told the 1st plaintiff that this road could not be built and that the 1st plaintiff had to pay an extra sum of HK$2.2 million to the villagers who owned the land before it could be built.  The 1st plaintiff disagreed and was still negotiating with the 1st defendant on the matter.

16.The next pleaded issue was that the 1st plaintiff did not agree to the amounts of the premiums assessed by the DLO in September to November 2008 for removing the prohibition against alienation of the 2nd Houses.  The 1st plaintiff alleged that it could not reach a consensus with the 1st defendant pursuant to clause 1.01(d) of the JV Agreement on these amounts.  Since there was no consensus, the 1st plaintiff therefore did not pay the premiums.

17.However, the 1st defendant’s solicitors by a letter of 9 February 2009 gave notice to the 1st plaintiff that the 1st defendant would terminate the JV agreement pursuant to clause 2.08.  The 1st plaintiff had since been excluded from the site of the development.  The 1st defendant then paid the premiums and removed the prohibition against alienation of the 2nd Houses.  The 1st defendant further requested HLLY to release the title deeds and documents of the 1st and 2nd Lands and Houses to him. 

18.The 1st plaintiff then alleged that the 1st defendant had thereby evinced an intention to dispose of the 1st and 2nd Lands and Houses even without the access road.  It then pleaded that such disposal was to its detriment as the houses without the access road were cheaper than with the road.

19.The 1st plaintiff therefore claims an injunction against the 1st defendant from dealing with any of the 1st and 2nd Lands and Houses.  It further claims a declaration that each of the 2nd to 18th defendants is holding his respective lot and house as a constructive trustee of the 1st plaintiff and the 1st defendant.  It thus seeks an injunction against the defendants from dealing with any of the lots and houses.  The joint venture agreement, the writ and amended writ in Action 1902 have been registered by the 1st plaintiff against the 1st and 2nd Lands at the Land Registry.

Stay of Action 1902 and these proceedings to continue

20.There was then an application by the 2nd plaintiff herein for consolidation of these proceedings with Action 1902.  HLLY also sought interpleader relief.  The 2nd to 18th defendants also applied to intervene in these interpleader proceedings. 

21.All these matters went before the Registrar on 7 October 2009.  The Registrar ordered HLLY to cease to be a party herein, but to continue to hold on to the title deeds and documents pending the decision of this court.  She also stayed Action 1902 pending the outcome of these proceedings and ordered that the parties to Action 1902 are to be bound by the outcome herein.  She then joined the 2nd to 18th defendants to these proceedings and ordered pleadings to be served.  The disputes between the 1st plaintiff and the defendants in Action 1902 were supposed to be ventilated and resolved in these proceedings.  The Registrar made a further order herein on 31 October 2009 to rearrange the parties to as they are now.

The issues pleaded in these proceedings

22.The 1st and 2nd plaintiffs duly filed their statement of claim on 20 November 2009.  The 1st defendant filed his defence and counterclaim on 12 December 2009 and the 2nd to 18th defendants filed their defence and counterclaim on 16 December 2009.  The plaintiffs then filed their reply and defence to counterclaim to the 1st defendant on 22 January 2010.  They further filed their reply and defence to counterclaim to the 2nd to 18th defendants on 10 February 2010.

23.The plaintiffs repeated in the statement of claim herein the 1st defendant’s representations as recorded in the recitals of the JV Agreement and quoted above.  They further asserted that the representation in recital 4 of the 1st defendant’s rights in the 1st and 2nd Lands and Houses to be built thereon included the right to build the carpark and access road on other land.  The 1st plaintiff then claimed that this representation was untrue by reason of the demand of HK$2.2 million by the villagers who own the land for building the access road.  The plaintiffs then asserted that pending the resolution of the dispute with the villagers, the value of the 2nd Houses without the access road had depreciated.

24.The plaintiffs further claimed that the representation in recital 5 was also untrue as the 1st defendant had not had all the necessary consents and certificates of exemption for building the 1st and 2nd Houses as some certificates were invalid or had expired.  The obtaining of valid certificates delayed the construction and resulted in the incurring of more expenses.  For this reason, the 1st plaintiff seeks damages from the 1st defendant.

25.Regarding the payment of premiums, the plaintiffs, instead of pleading the lack of agreement pursuant to clause 1.01(d) of the JV Agreement on the amounts to be paid as it did in Action 1902, pleaded that there was a verbal agreement made in a telephone conversation between a Mr Tan of the 1st plaintiff and the 1st defendant at sometime between late September to early October 2008 that the premiums were not to be paid yet.  The plaintiffs alleged that the parties had in that conversation agreed that the payment of the premiums would be withheld until market conditions had improved or until there was an opportunity to negotiate with the District Land Officer to reduce the same by some 30%.  This new averment is supported by an affirmation of Mr Tan, but denied by the 1st defendant.

26.The plaintiffs further pleaded that it was pursuant to this verbal agreement that the 1st plaintiff did not procure the 2nd plaintiff to pay the premiums within one month of the issue of the notices for payment as per clause 1.03(b)(ii) of the JV Agreement.  Hence, there was no ground for the 1st defendant to terminate the JV Agreement on the alleged ground of the 1st plaintiff’s breach of clause 1.03 or pursuant to clause 2.08.  The 1st plaintiff then referred to the 1st defendant’s purported termination of the JV Agreement on 9 February 2009, his payment of the premiums for the 2nd Houses and his attempt to sell the 2nd Houses.  The 1st plaintiff alleged that the purported termination of the JV Agreement by the 1st defendant was a repudiation of the JV Agreement which the 1st plaintiff had accepted.  The 1st plaintiff is now suing the 1st defendant for loss of dividends to be declared by the 2nd plaintiff from the proceeds of the 2nd Houses.

27.The plaintiffs further pleaded that the 1st defendant, as a director of the 2nd plaintiff, owed the 2nd plaintiff various fiduciary and common law duties, but had breached the same by purportedly repudiating the JV Agreement, seeking to evict the 2nd plaintiff from the 1st and 2nd Lands, applying for reassessment of and paying he premiums for the 2nd Houses, attempting to obtain the title deeds and documents of the 2nd Houses from HLLY and to sell the 2nd Houses for his own benefit and attempting to make a secret profit by procuring the 2nd plaintiff to pay for the land for building the access road.  The 2nd plaintiff therefore claims damages from the 1st defendant.  The 2nd plaintiff also claims from the 1st defendant the HK$24.4 million that it had incurred for building the 1st and 2nd Houses.

28.The 2nd plaintiff also has also made claims against the 2nd to 18th defendants.  It pleaded that the 2nd to 18th defendants were aware of the JV Agreement as they were also represented by HLLY on the building of the 1st and 2nd Houses.  They had given the 1st Defendant powers of attorney.  They knew that the 2nd plaintiff was entering the 1st and 2nd Lands to build the 1st and 2nd Houses.  They knew that the 2nd plaintiff only built the 1st Houses in return for the proceeds of the 2nd Houses.  They however never raised any objection to the 2nd plaintiff spending money for the construction.

29.The 2^nd plaintiff further pleaded that it spent the money for the construction solely in reliance on the belief that it had acquired a proprietary interest in the 1st and 2nd Lands to the extent of the proceeds of the 2nd Houses.  It therefore claims that the 2nd to 18th defendants are estopped from denying its proprietary interest.

30.The 1st defendant filed a defence and counterclaim.  He seeks an order to vacate from the Land Registry the registration of the JV Agreement, the writ and the amended writ in Action 1902.  He also seeks a declaration that he is entitled to the possession of the title deeds and documents of the 1st and 2nd Lands and Houses and a further declaration that he was entitled to forfeit the HK$7 million advanced to him under clause 2.01 of the JV Agreement. 

31.The 2nd to 18th defendants also filed a defence and counterclaim.  They seek declarations that they are entitled to the title deeds and documents of the 1st and 2nd Houses and that neither the 1st nor the 2nd plaintiff has any interest in these houses or their title deeds and documents.

The Applications

32.The 2nd to 18th defendants issued a summons on 3 March 2010 to strike out parts of the statement of claim and the reply to their defence.  The attacks are made on the ground of no reasonable cause of action. The 2nd to 18th defendants further ask in this summons for summary judgment on their counterclaim as against both plaintiffs for want of a reasonable defence.

33.The 1st defendant issued a summons on 4 April 2010 also for striking out parts of the statement of claim.  The ground is that these averments are frivolous, vexatious or otherwise an abuse of the legal process.  The 1st defendant further seeks to strike out the 1st plaintiff’s claim as based on the access road representation for want of reasonable cause of action and/or frivolous, vexatious or otherwise an abuse of the legal process.

34.Apart from the two summonses herein, the defendants also issued summonses in Action 1902 despite it having been stayed by the Registrar on 7 October 2009.

35.The 2nd to 18th defendants issued a summons in that action also on 3 March 2010 seeking to strike out the 1st plaintiff’s claim for a declaration that the 2nd to 18th defendants are holding the 1st and 2nd Lands and Houses as constructive trustees of the 1st plaintiff and the 1st defendant.  This claim is pleaded in paragraphs 1, 4(a), 13(b) and 13(c) of the statement of claim.  The 2nd to 18th defendants sought to strike it out for want of a reasonable cause of action or that it is an abuse of the process of the court.  They wanted this summons to be heard with the striking out summonses in these proceedings, but they did not pray for a lifting of the stay on Action 1902 for the striking out to proceed. 

36.The 1st defendant also issued a summons on 4 March 2010 in Action 1902.  He prayed that consequential to any order in these proceedings, the registration of the JV Agreement, the writ and amended writ in Action 1902 be vacated from the Land Registry.  Alternatively, the registration of these documents be vacated on the ground that the action has been stayed by the Registrar on 7 October 2009. The 1st defendant also sought to have this summons to be dealt with together with the striking out summonses, but also did not seek the lifting of the stay at least for the purpose of this application.

37.However, the 1st defendant and the 2nd to 18th defendants then sought leave from the Registrar to withdraw these two summonses under Action 1902 and the Registrar granted them leave on 12 March 2010.

38.Nonetheless, the 1st defendant on 21 July 2010 issued another summons in these proceedings to vacate the registration of the three documents aforesaid from the Land Registry.  The 2nd to 18th defendants also issued a summons on 22 July 2010 in these proceedings for the same relief. 

39.There is also a summons by the plaintiffs issued on 30 April 2010 seeking leave to amend the statement of claim. 

40.Finally, there is a summons issued by the plaintiffs and dated 29 July 2010 to join the Tso as the 19th defendant and for leave to amend the statement of claim.  But there is no proposed amendment shown in the summons.

Legal Principles for Striking out

41.Counsel reminded me the legal principles governing striking out applications (Hong Kong Civil Procedure 2010, paragraphs 18/19/4, 18/19/8 and 18/19/10).  It is only in plain and obvious cases that the court should exercise the power to strike out.  Disputed facts are taken in favour of the respondent to the application.  Difficult points of law should not be decided in such applications and only claims that are obviously unsustainable and pleadings unarguably bad that they should be struck out.

Analysis and decision on the summons to strike out by D2 to D18

42.The 2nd to 18th defendants want to strike out paragraph 1 of the statement of claim which only describes the parties herein. I see no reason to strike out this paragraph.

43.The next attack is on paragraphs 20 and 21. These paragraphs claim damages and account of profit from the 1st defendant for breach of his alleged duties to the 2nd plaintiff.  They do not concern the 2nd to 18th defendants who have no locus standi to seek to strike them out. I dismiss this part of the application. 

44.Before considering the striking out of the 2nd plaintiff’s claim for a proprietary interest in the 1st and 2nd Lands and Houses as pleaded in paragraphs 22 to 30 of the statement of claim, I have to consider the undisputed facts in relation to these Lands and Houses and who are entitled to them now.   

45.The 2nd to 7th defendants are the registered owners of the 1st Land.  The 8th to 18th defendants are the registered owners of the 2nd Land.  The recitals to the JV Agreement say that these defendants had entered into agreements with the 1st defendant for consideration paid for the 1st defendant to build at his costs the 1st and 2nd Houses thereon.  The 1st defendant also had to pay the premiums to the Government to remove the prohibition against alienation of the 2nd Houses.  In return, the 1st defendant will get the 2nd Houses for his own benefit. 

46.The JV Agreement then provided in clause 2.02 that the 1st plaintiff should advance to the 2nd plaintiff the costs for building the 1st and 2nd Houses and the premiums for the 2nd Houses. Clauses 2.03 and 2.04 further provided that the 1st plaintiff should market the 2nd Houses at prices to be agreed with the 1st defendant and then procure the 2nd plaintiff to divide the after tax profit equally for the 1st plaintiff and the 1st defendant. 

47.Clause 2.06 further provided that the 1st plaintiff should procure the 2nd plaintiff to deliver vacant possession of the 1st Houses to the 1st defendant within 14 days after obtaining letters of compliance from the District Lands Department for them or after their erection as the 1st defendant may decide in his absolute discretion.

48.All parties agree that the letters of compliance have been issued by the District Lands Department for all the 1st Houses.  The time for the 1st Plaintiff to procure the 2nd plaintiff to deliver vacant possession of the 1st Houses to the 2nd to 7th defendants has already arrived and the obligation of the 2nd plaintiff to deliver vacant possession of these houses has matured.

49.The plaintiffs and the 1st defendant are now in dispute.  The 1st plaintiff alleged that the 1st defendant’s access road representation and his representation on the availability of the necessary consents and certificates of exemption were untrue.  It also alleged an agreement to withhold payment of premiums for the 2nd Houses so that the 1st defendant could not hold it in breach of the JV Agreement for not paying the same.  The 1st plaintiff now claims against the 1st defendant for having repudiated the JV Agreement which repudiation the 1st plaintiff has accepted.  This is a claim for damages and is directed to the 1st defendant.

50.The 2nd plaintiff alleged that the 1st defendant had breached his duties to the 2nd plaintiff and is liable to pay damages and account of profit to the 2nd plaintiff. 

51.There is however no allegation that the 2nd to 18th defendants had committed any wrong or done anything to affect adversely the performance of the JV Agreement.  They are innocent bystanders.  If the JV Agreement should have been performed to the satisfaction of the 1st plaintiff and the 1st defendant, then the 2nd to 7th defendants would just keep the 1st Land and Houses together with all the rights and title thereto to the exclusion of the plaintiffs and the 1st defendant.  Regarding the 2nd Land and the Houses, the 8th to 18th defendants should vest them and all the rights and title therein to the 1st defendant in accordance with their agreements with the 1st defendant as stated in the recitals of the JV Agreement.  If the JV Agreement is still effective and that the 2nd to 18th defendants are aware of its terms, then the 1st plaintiff can argue that the 8th to 18th defendants should vest the 2nd Land and Houses to the 2nd plaintiff. 

52.Now that there is a dispute between the 1st plaintiff and the 1st defendant on who should be entitled to the 2nd Land and Houses, then the 8th to 18th defendants should hold on to them as bare trustees pending the court’s adjudication of the dispute.  However, the 2nd to 7th defendants would not and should not, as a result of the dispute between the 1stplaintiff and 1st defendant, lose any right or interest of and in the 1st Land and Houses.  The reason being that there is no allegation that the 2nd to 18th defendants have breached their agreements with the 1st defendant or any other reason why they should not get the fruits of their bargain with the 1st defendant.  There is also no reason why the 1st and/or 2nd plaintiff should have as a result of the dispute acquired any interest in the 1st Land and Houses which they otherwise would not have.

53.The dispute between the 1st plaintiff and the 1st defendant also would not create any beneficial interest on the part of the 8th to 18th defendants in the 2nd Land and Houses.  They remain bare trustees thereof. 

54.On this analysis, the 1st Land and Houses together with their title deeds and documents should be given to the 2nd to 7th defendants whilst the 8th to 18th defendants should continue to hold the rights, title and interest in the 2nd Land and Houses pending the decision of the court on the dispute between the plaintiffs and the 1st defendant. 

55.However, there is also the 2nd plaintiff’s claim against the 2nd to 18th defendants for an interest in proprietary estoppel in the 1st and 2nd Houses to the extent of the proceeds of the 2nd Land and Houses.  On my analysis above, I do not think the 2nd plaintiff need to rely on proprietary estoppel in relation to the 2nd Land and Houses as against the 8th to 18th defendants.  These defendants are just bare trustees and have no beneficial interest in the 2nd Land and Houses.  If the 2nd plaintiff wants to claim any right or interest in the 2nd Land and Houses, its claim should be directed to the 1st defendant.  It can only claim that the the 8th to 18th defendants should vest the 2nd Land and Houses as may be directed by the court.  Hence, the position of the 8th to 18th defendants in relation to the 2nd Land and Houses is similar to that of HLLY in relation to the title deeds and documents.

56.However, the 2nd plaintiff also claims interest in proprietary estoppel in the 1st Land and Houses.  Leading counsel submitted that this claim is based on the JV Agreement.  Counsel referred to recital 4 and submitted that the 1st defendant had represented to the 1st plaintiff that the 8th to 18th defendants had given the 1st defendant all documents necessary for safeguarding the 1st defendant’s rights to the 1st and 2nd Houses and the title deeds of the 1st and 2nd Lands were with HLLY.  If everything should have proceeded smoothly, the 2nd Houses would be sold and the 1st Houses would be given to the 2nd to 8th defendants.  But in the meantime, HLLY was holding the title deeds to the 1st and 2nd Houses to ensure the smooth progress of the project as per plan.  Otherwise, there would be no purpose for HLLY to keep the title deeds of the 1st Land and Houses.  The clear intention was that until the project was completed with the selling of the 2nd Houses and the distribution of profit, HLLY was to hold on to the title deeds.  It was on this basis that the 1st plaintiff had incurred HK$24.4 million in the project. It is because both parties had agreed that until final completion, HLLY is to keep the title deeds of the 1st and 2nd Houses to safeguard the interest of the financier.

57.I do not agree with leading counsel’s submissions.  Recital 4 only said that the 8th to 18th defendants (not the 2nd to 7th defendants) had given the 1st defendant all the documents necessary for safeguarding the rights of the 1st defendant in the 1st and 2nd Lands and Houses that are binding upon the 8th to 18th defendants (but not upon the 2nd to 7th defendants).  There is no indication whatsoever either in the recitals or in the terms of the JV Agreement that the title deeds of the 1st Land and Houses and/or any interest therein should be withheld from the 2nd to 7th defendants to ensure that the project would proceed as per plan or to secure the interest of the 1st and/or 2nd plaintiff in the project.  There is also no agreement in such term that can be inferred from any part of the JV Agreement.  There is instead in clause 2.06 a clear and unqualified obligation on the part of the plaintiffs to allow the 2nd to 7th defendants to assume the full rights of ownership on the 1st Land and Houses.  The time for discharge of that obligation has also arrived.

58.I therefore hold in favour of the 2nd to 7th defendants on their claim for the 1st Land and Houses.  I order that any reference to the 2nd to 7th defendants and to the 1st Land and Houses in paragraphs 22 to 30 and in the 2nd plaintiff’s prayer for relief against the 2nd to 7th defendants be struck out so that there will be no claim by the 2nd plaintiff for any relief over the 1st Land and Houses.  I make a similar order in relation to the plaintiff’s reply to the defence of the 2nd to 18th defendants.

59.Although I have indicated above that the 2nd plaintiff’s claim for proprietary estoppel over the 2nd Land and Houses is problematic as the 8th to 18th defendants have no beneficial interest therein for the 2nd plaintiff to claim, I would not strike out this claim and would leave the 2nd plaintiff to consider how to put its house in order.  That disposes of the application to strike out by the 2nd to 18th defendants. 

Summary judgment for the counterclaim of D2 to D18

60.The 2nd to 18th defendants are also seeking summary judgment on their counterclaim.  They are counterclaiming for declarations that they are entitled to the title deeds and documents in the 1st and 2nd Lands and Houses and that neither the 1st nor the 2nd plaintiff had any interest therein.

61.The 1st defendant and the 2nd to 7th defendants have now undertaken to the court to take all steps to vest the title and interest of and in the 1st Lands and Houses to the Tso or to whom the Tso may direct.  The counterclaim for the 1st Land and Houses therefore appears otiose.  Though neither the 1st nor the 2nd plaintiff can claim any interest in the 1st Land and Houses, I still would not enter judgment on the 1stLand and Houses for the 2nd to 7th defendants as such judgment is unnecessary and contradictory to their undertaking.  Regarding their counterclaim for the 2nd Land and Houses, the 8th to 18th defendants are bare trustees of the same.  The identity of the beneficial owner of these properties is a matter to be determined by the court.  The 8th to 18th defendants therefore have no locus standi to make their counterclaim.  I therefore give no judgment on this part of the counterclaim as well.

Analysis and decision on the plaintiff’s summons to amend

62.Regarding the plaintiff’s application to amend the statement of claim, I would allow the amendment to paragraph 3(c) as it only clarifies that the access road is also for vehicular purpose.

63.The next part of the proposed amendment is to plead that the 2nd to 18th defendants had given powers of attorney to the 1st defendant and the 1st defendant entered into the JV Agreement on behalf of himself and also for the 2nd to 18th defendants.  The only matter relied on by the plaintiffs to make this amendment is the powers of the attorney given to the 1st defendant.  However, the recitals and the terms of the JV Agreement made it clear that the 1st defendant entered into the JV Agreement with the 1st plaintiff for the purpose of discharging the 1st defendant’s obligations to the 1st to 18th defendants.  The 1st defendant’s obligations were to build the 1st and 2nd Houses at his own costs and to return the 1st Houses to the 2nd to 7th defendants and keep the proceeds of the 2nd Houses to himself. 

64.The plaintiffs are not alleging that the 2nd to 18th defendants have entered into the JV Agreement through the 1st defendant for discharge of their obligations to the 1st plaintiff.  They owe no obligation to the 1st plaintiff. I cannot see how or why the 2nd to 18th defendants could have entered into the JV Agreement with the 1st plaintiff for discharge of obligations owed to them by the 1st defendant.  This is illogical.  Furthermore, clause 6.13 of the JV Agreement also stipulated that the agreement is personal to the parties thereto.  I therefore would not allow this proposed amendment in the proposed paragraphs 22 to 26 and in the 2nd plaintiff’s proposed new prayer for damages pursuant to the proposed paragraph 26.

65.The proposed amendment in the proposed paragraphs 29 to 32 (originally paragraphs 25 to 27) and in the corresponding prayer for proprietary estoppel are for improving the claim of proprietary estoppel. Since I have allowed this claim in relation to the 2nd Land and Houses to continue, I would also allow this amendment but restrict it to the 2nd Land and Houses.

66.The proposed amendment in paragraphs 36 and 37 and in a new prayer for relief for payment of HK$24.4 million by the 2nd to 18th defendants is a claim based on unjust enrichment.  It also seeks to hold the 2nd to 18th defendants personally liable for the money that the 1st plaintiff has spent on the project.  In the light of my decision on the entitlement of the 2nd to 7th defendants to the 1st Land and Houses and that the 8th to 18th defendants are only bare trustees of the 2nd Land and Houses, none of the 2nd to 18th defendants has been unjustly enriched.  I disallow this proposed amendment.

67.Finally, there is the proposed amendment in paragraph 38 for a lien over the 1st and 2nd Lands and Houses in favour of the 2nd plaintiff together with a corresponding prayer for relief.  Since I have allowed the claim of proprietary estoppel to continue as against the 2nd Land and Houses, I would also allow this amendment, but restricting it to the 2nd Land and Houses.  That disposes of the plaintiffs’ summons to amend.

Analysis and decision on the summons to strike out by D1

68.I now deal with the 1st defendant’s application to strike out.  The first attack is against the 2nd plaintiff’s claim against the 1st defendant for breaches of fiduciary and common law duties as pleaded in paragraphs 18 to 21 of the statement of claim.  The second attack is the 2nd plaintiff’s claim against the 2nd to 18th defendants for an estoppel to bar these defendants from denying the 2nd plaintiff’s alleged proprietary estoppel interest in the 1st and 2nd Lands and Houses as pleaded in paragraphs 29 and 30.  If these attacks should be successful, then the reference to the 2nd plaintiff and its expenditure of HK$24.4 million pleaded in paragraphs 1(b) and 7(b) should also be struck out as they would become irrelevant.  The third attack is against the 1st plaintiff’s claim based on the access road representation as pleaded in paragraphs 3, 4, 8(a), 10, 11(b) and 20(c) of the statement of claim.

69.For the striking out of the 2nd plaintiff’s claim of breach of fiduciary duties, the 1st defendant referred to the joint venture agreement and submitted that the 2nd plaintiff was merely a corporate conduit through which the 1st plaintiff and the 1st defendant could perform their contractual obligations.  The 1st defendant further submitted that since the 2nd plaintiff was formed by the 1st plaintiff and the 1st defendant to carry out their duties and the 2nd plaintiff was not privy to the JV Agreement, then the 2nd plaintiff would have no substantial rights pursuant to the JV Agreement.  The 1st defendant then argued that the 2nd plaintiff’s claim was effectively the 1st plaintiff’s claim for the 1st defendant’s breaches of the JV Agreement.  The HK$24.4 million construction costs claimed by the 2nd plaintiff were in fact loaned by the 1st plaintiff to the 2nd plaintiff under the JV Agreement.  For the claim for loss of profit from the sale of the 2nd Houses, the net profit was to be divided between the 1st plaintiff and the 1st defendant.  If there was loss due to lack of the access road, it was a loss to the 1st plaintiff and the 1st defendant.  The 1st defendant also submitted that the 1st plaintiff’s claim against the 1st defendant for damages for breach of the JV Agreement duplicated with the 2nd plaintiff’s claims.

70.Though the 2nd plaintiff was set up as a corporate vehicle to carry out the obligations of the 1st plaintiff and the 1st defendant in the JV Agreement, it does not mean that the 2nd plaintiff’s existence as an independent legal entity can be ignored.

71.In constructing the houses, the 2nd plaintiff has attracted liabilities to certain contractor and the material suppliers. The 1st plaintiff and the 1st defendant did not personally shoulder such liabilities.  Subject to the 1st defendant’s argument of the 1st plaintiff having repudiated the JV Agreement, the 2nd plaintiff is entitled to sell the 2nd Houses and collect the proceeds.  It has the right to collect what is due to it and the obligation to pay what is due from it.  The 1st plaintiff and the 1st defendant are only entitled to divide the net profit after tax.  Though the 2nd plaintiff was set up by the 1st plaintiff and the 1st defendant pursuant to the JV Agreement, when the 1st plaintiff and the 1st defendant serve as members of the 2nd plaintiff’s board, they must observe their fiduciary duties to the 2nd plaintiff.  If either of them should commit a breach of such duties, the 2nd plaintiff has the right to sue for adequate recompense.  It is not for either party to the JV Agreement to claim compensation for the breach by the other party of duties owed to the 2nd plaintiff.  I therefore dismiss the application to strike out paragraphs 1(b), 7(b) and 18 to 21 of the statement of claim.

72.Regarding the attack on paragraphs 29 and 30, the claim in these two paragraphs is directed at the 2nd to 18th defendants and the 1st defendant has no locus standi to attack it. I therefore dismiss this part of the application to strike out.  I have in fact dealt with this claim above in the context of the striking out application of the 2nd to 18th defendants.

73.Regarding the argument of duplication of claims, I think if the 2nd plaintiff should indeed have been wronged, it would be awarded the adequate recompense.  In that event, the 1st plaintiff may or may not still suffer any loss.  But that is a matter which should be left to the trial judge.

74.The 1st defendant’s third attack is on the 1st plaintiff’s claim based on the 1st defendant’s alleged representation on the access road.  The 1st defendant’s first argument is that it is a claim for loss of potential profit and is therefore a claim for damages to be sustained in future upon further performance of the JV Agreement.  The 1st defendant further argues that the 1st plaintiff has claimed that the JV Agreement had already come to an end.  There is therefore no further performance of it and hence no loss of profit by its continuous performance.  I think this argument by the 1st defendant is based on a misunderstanding of the 1st plaintiff’s claim.  If the 1st plaintiff can establish the merits of the access road representation, then the loss is already sustained in the dividend to be distributed as the current market value of the 2nd Houses is already suppressed for want of the access road.

75.The 1st defendant’s second ground is that the 1st plaintiff has not pleaded that the 1st defendant had in the negotiation made any representation that the 1st defendant had acquired an access road, hence no actionable representation has been made out by the 1st plaintiff.  I think this argument is not valid.  The 1st plaintiff has pleaded this oral representation in paragraph 3(c) of the statement of claim and supported it by the affirmation of Benny Tan filed on 20 April 2010 (paragraph 8).

76.The 1st defendant’s third ground is that clause 6.11 of the JV Agreement states that the agreement is an entire agreement and any representation made, if not expressly set out therein, is excluded and cannot be relied upon.

77.The 1st plaintiff refers to recital 4 which states that the 1st defendant has obtained from the 8th to 18th defendants all documents necessary for safeguarding the 1st defendant’s rights in the 1st and 2nd Lands and Houses that are binding upon the 8th to 18th defendants.  The 1st plaintiff has pleaded that the 1st defendant’s rights in the 1st and 2nd Lands and Houses encompasses the right to build the carpark and access road.  It is for the trial judge to decide whether to accept this interpretation having regard to all the surrounding circumstances and matrix of facts existing at the time when the JV Agreement was made (see Investors Compensation Scheme v West Bromich Building Society [1998] 1 WLR 896 at 912H – 913A).

78.Though the terms of recital 4 may be too brief to accommodate the access road representation, I think this matter should be left to the trial judge who would have the advantage of hearing all the evidence before deciding whether the 1st plaintiff’s interpretation of recital 4 is correct or whether clause 6.11—the entire agreement clause—would prevent the it from relying on the access road representation.  I therefore dismiss this part of the 1st defendant’s striking out application as well.

Analysis and decision on the summonses to vacate registration from the Land Registry by D1 to D18

79.I now deal with the summonses by the 1st defendant and the 2nd to 18th defendants to vacate the registration of documents from the Land Registry.  The 1st plaintiff has registered the JV Agreement, the writ and the amended writ of Action 1902 at the Land Registry against the 1st and 2nd Lands and Houses.  Since it is the 1st plaintiff’s case that it has accepted the 1st defendant’s repudiation of the JV Agreement, the JV Agreement on its case has been discharged by the 1st defendant’s breach.  It can no longer seek performance of the agreement.  The 1st plaintiff’s claim against the 1st defendant is also for damages only.  The 1st plaintiff is not relying on the JV Agreement to claim any interest in the 1st or 2nd Land or Houses.  Even if the 1st plaintiff should succeed in its claims, it will not be awarded any interest in the 1st or 2nd Land or Houses.  The JV Agreement therefore does not affect the 1st or 2nd Land or Houses in so far as the 1st plaintiff is concerned.  It’s registration by the 1st plaintiff against the 1st and 2nd Lands and Houses should therefore be vacated from the Land Registry and I so order.

80.Regarding Action 1902, the 1st plaintiff has pleaded in paragraph 4(a) of the statement of claim therein that as a result of the representations by the 1st defendant as recorded in the recitals including the access road representation, it is implied in the JV Agreement that the 2nd to 18th defendants are holding the 1st and 2nd Lands and Houses as constructive trustees for the 1st plaintiff and the 1st defendant as joint beneficiaries.  I think it is open to the 1st plaintiff to argue that if the representations are true, then the 8th to 18th defendants are holding the 2nd Land and Houses as bare trustees for the 1st plaintiff and the 1st defendant as joint beneficiaries or for the 2nd plaintiff alone.  The 1st defendant may of course argue that because the JV Agreement has been terminated by the 1st plaintiff’s breach, therefore the 8th to 18th defendants are now holding the 2nd Land and Houses for his benefit only. 

81.Since the 1st plaintiff can argue for some beneficial interest in the 2nd Land and Houses, I will not order the registration of the writ and the amended writ against the 2nd Land and Houses to be vacated.  However, for reasons given above, I see no basis for their registration against the 1st Land and Houses.  I therefore order the registration of the writ and the amended writ in Action 1902 against the 1st Land and Houses at the Land Registry be vacated. 

Summonses to lift the stay by D2 to D18

82.The 2nd to 7th defendants shall pursuant to their undertakings to the court issue a summons in Action 1902 for lifting the stay ordered by the Registrar on 7 October 2009 for the purpose of their application to vacate the registration of the three documents. The 8th to 18th defendants shall pursuant to their undertakings to the court also issue a summons in Action 1902 for lifting the stay for the purpose of their application to vacate the registration of the JV Agreement. 

Non-joinder of D2 to D7

83.Since there is no more purpose for the 2nd to 7th defendants to remain as parties in these proceedings or in Action 1902, I also order under Order 15 rule 6 of the Rules of the High Court that after the issue of their summons to lift the stay, they do cease to be defendants herein or in Action 1902. 

Hau, Lau Li & Yeung to deliver title deeds of the 1st Houses to D2 to D7

84.Regarding the title deeds and documents of the 1st Land and Houses, I order HLLY to deliver them to the solicitors for the 2nd to 7th defendants strictly for the purpose of vesting the 1st Land and Houses by the 2nd to 8th defendants unto the Tso or to whom the Tso may direct. 

Plaintiffs to confirm whether to further amend the statement of claim

85.I also direct the plaintiffs to confirm by letter to me and copied to the 1st and 8th to 18th defendants within the next 7 days on whether they intend to further amend the statement of claim herein so as to accurately reflect the nature and extent of their claims, if any, on the 2nd Land and Houses.  If they intend to do so, I will not at this stage grant leave to the 1st and 8th to 18th defendants to amend their defence and counterclaim in response to the amendments allowed above, but will await the next amendment exercise so that these defendants can respond to all amendments at one go.  If the plaintiffs do not intend to further amend, I will then grant leave to the 1st and 8th to 18th defendants to amend their pleadings to respond to the amendments allowed above.

Analysis and decision on the plaintiffs’ summons to join the Tso

86.Since the Tso’s claim for the 1^st Land and Houses have been disposed of by the undertakings of the 1st and 2nd to 7th defendants, the Tso need not be a party to these proceedings.  I also do not see any basis for the plaintiffs to join the Tso as a defendant herein.  I therefore dismiss the plaintiffs’ summons dated 29 July 2010 for joining the Tso.

Costs

87.I make the following cost orders nisi.

88.The 2nd to 7th defendants have succeeded in their striking out application in relation to the 1st Land and Houses, but the 8th to 18th defendants have not in relation to the 2nd Land and Houses.  The 2nd to 7th defendants have in a way succeeded in their counterclaim though no judgment is given for reasons already given, but the 8th to 18th defendants have lost their application for judgment on their counterclaim.  I have in effect ruled against their counterclaim too.  Since the 2nd to 18th defendants have pursued the application in a unified front and have advanced the same arguments, I think it is fair for me to make no order as to costs for this summons.

89.Regarding the summons of the 2nd to 18th defendants for vacating the registration of documents from the Land Registry, I also make no order as to costs for the same reasons.

90.The 1st defendant has lost its summons to strike out the claims of the 1st and 2nd plaintiffs.  I order the 1st defendant to pay the costs of this application to the plaintiffs.

91.For the 1st defendant’s summons to vacate the registration at the Land Registry, he has succeeded in respect of the JV Agreement.  For the writ and amended writ in Action 1902, he has succeeded in relation to the 1st Land and Houses which he has to vest unto the Tso, but not the 2nd Land and Houses for which he still claims beneficial interest.  I therefore order the 1st plaintiff to pay the 1st defendant half of the costs of this summons.

92.Regarding the plaintiff’s summons to amend, the 2nd to 18th defendants have achieved substantial success in their opposition and I order the plaintiffs to pay them 80% of their costs in opposing this summons.  This summons has minimal effect on the 1st defendant and I make no order as to costs as between the plaintiffs and the 1st defendant on this summons.

93.The plaintiffs have been opposing the Tso’s claim and seeking to withhold the 1st Land and Houses from being vested unto the Tso.  They have failed.  I order them to pay the Tso’s costs of and incidental to attending to their application to join the Tso and the hearings.

Mr. Ambrose Ho, SC and Mr. Norman Nip, instructed by Messrs Fried, Frank, Harris, Shriver & Jacobson, for the 1st and 2nd Plaintiffs.

Mr. K M Chong instructed by Messrs Cheung, Chan & Chung, for the 1st Defendant. 

Mr. Lee Yee Hung,instructed by Messrs Leo Cheng & Co.,for the 2nd to 18th Defendants.

Mr. Lee Tung Ming, instructed by Messrs Tam, Pun & Yipp, for Lau Shau Wo Tso with manager Lau Muk Fat.