Lam Sik Ying v. Lam Sik Shi and Another
Read the full judgment text of HCA 4713/2001 on BabelCite. This High Court CFI judgment was delivered on 13 March 2013.
1. This is an application by the 1 st and 2 nd defendants by summonses dated 9 March 2012 and 28 March 2012 respectively to strike out the plaintiff’s claims against them on the grounds of:
Cites 5 cases
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HCA 4713/2001 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 4713 OF 2001 ____________ BETWEEN
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_____________ D E C I S I O N _____________ 1.This is an application by the 1st and 2nd defendants by summonses dated 9 March 2012 and 28 March 2012 respectively to strike out the plaintiff’s claims against them on the grounds of:
History and background of plaintiff’s claim 2.The plaintiff and the 1st defendant are half brothers having the same father. Their father (“the Deceased”) passed away on 6 January 1983. 3.The Deceased’s estate included the following properties:-
4.“Stan Company A Tim” was established by the Deceased in 1952 and before his death, the Deceased carried on the business of refrigeration and air-conditioning repairs, servicing and sale of spare parts and that business was conducted at the Ground floor of Nos 4 and 6 Sharp Street East. 5.The Deceased died intestate and Letters of Administration were only granted to the plaintiff and Madam Lam Wong Kwan Ying, the widow of the Deceased, on 24 March 1999. 6.Madam Lam Wong Kwan Ying passed away on 7 June 1999 leaving the plaintiff as the sole surviving administrator of the estate of the Deceased. 7.The plaintiff’s claim against the defendants in a nutshell is that the 1st defendant had intermeddled with the estate of the Deceased without lawful authority causing substantial loss and damage to the estate and that the 2nd defendant, being the wife of the 1st defendant until their divorce in 1994, had knowingly assisted the 1st defendant in the intermeddling. 8.It is the plaintiff’s case that the 1st defendant took over the running of Stan Company A Tim after the death of the Deceased, carried on running that business assisted by the 2nd defendant, and that both the defendants had converted cash and other assets of Stan Company A Tim to their own use. 9.It is also the plaintiff’s case that the 1st defendant had, as sole proprietor, commenced and registered a firm by the name of “Stan Company” in January 1983 carrying on a business of refrigeration and air-conditioning repairs and sale of spare parts at the Ground floor of No 6 Sharp Street East and thereby passing off Stan Company as the business of Stan Company A Tim thus injuring the goodwill of Stan Company A Tim and wrongfully profiting from such passing off. The 2nd defendant had assisted the 1st defendant and was a party to such passing off. 10.The plaintiff further claims that the 1st defendant had, after the death of the Deceased, trespassed upon the Ground floor and First floor of No 6 Sharp Street East using and occupying both floors for his own business without authority and had failed to pay the estate for such unauthorized use and occupation. 11.It is also the plaintiff’s claim that the 1st and 2nd defendants had trespassed upon the 1st floor of No 15 Li Kwan Avenue without authority by using and occupying same as their family residence after the death of the Deceased and had failed to pay the estate of the Deceased for the unauthorized use and occupation thereof. 12.In respect of the Rental Properties which were mortgaged to the Hang Seng Bank and let out for rental income, it is the plaintiff’s claim that the 1st defendant had collected or received the rent from the Rental Properties but failed to account for or pay over the same to the estate of the Deceased but had converted such rent therefrom for his own use. Furthermore, the 1st defendant had caused or allowed the Rental Properties to be sold by the Hang Seng Bank by failing to pay the mortgage payments of the Rental Properties thereby causing loss and damage to the estate of the Deceased. Chronology 13.As already stated above, the Deceased died on 6 January 1983. 14.Letters of Administration was granted to the plaintiff and Madam Lam Wong Kwan Ying on 24 March 1999. 15.Madam Lam Wong Kwan Ying died on 7 June 1999. 16.The Writ herein was issued by the plaintiff on 1 November 2001 against both defendants. 17.On 13 June 2002, the 2nd defendant applied by summons to strike out the plaintiff’s claim against the 2nd defendant on the grounds of no reasonable cause of action. That application was ultimately dismissed. 18.On 12 February 2003 the 2nd defendant filed a Defence. 19.On 18 June 2004 witness statements of the plaintiff, the 1st and the 2nd defendants were exchanged. 20.By September 2004 the checklists of all parties were filed. 21.On 23 November 2004, an Order by consent was made between all parties that the Checklist hearing be adjourned sine die with liberty to restore. 22.Thereafter, no further steps were taken until 12 December 2008 when the plaintiff filed a Notice of Intention to Proceed. However, despite such notice of intention to proceed, again no steps were taken until 15 December 2009 when the plaintiff filed a second Notice of Intention to Proceed. 23.On 25 March 2010 the plaintiff filed Particulars of Damage. 24.On 16 July 2010 the plaintiff applied by summons for a Mareva injunction against the 1st defendant in respect of the sale proceeds of No 4 Sharp Street East and filed an affirmation in support of the injunction application. 25.The application for Mareva injunction was heard by Recorder Yu who granted the Mareva injunction against the 1st defendant. 26.That Mareva injunction was varied by Deputy Judge Lok by increasing the amount of the injunction. 27.The present summons was taken out by the 1st defendant to strike out the plaintiff’s claim for want of prosecution on 8 March 2012. On 28 March 2012 the 2nd defendant made a similar application by summons. These are the two summonses being dealt with in this Decision. 1st defendant’s application to strike out for want of prosecution 28.Mr Grossman SC who appeared for the 1st defendant basically points to and relies, in this application, on two periods of delay, namely, (a) the pre-Writ period of over 18 years between the death of the Deceased in January 1983 and the issue of the Writ in November 2001when, says Mr Grossman, nothing was done by the plaintiff to pursue his claim against the defendants until the Writ was eventually issued, and (b) the post-Writ period of some 5 years between November 2004 and the second Notice of Intention to Proceed in December 2009. 29.Insofar as the pre-Writ period of delay is concerned, Mr Grossman submits that the delay in granting the Letters of Administration in March 1999 is no more than an excuse since it was open to the plaintiff to proceed under the doctrine of relation back relying on the judgment of Sir Alan Huggins VP in the case of Chan Pak Man v Chan Pang Fee & Anr [1981] HKLR 483. 30.Mr Grossman further alluded to the fact that even after Letters of Administration were granted in 1999, there was a further period of delay of some two and a half years before the Writ was issued herein. 31.After the Writ was issued, as to post-Writ delay, Mr Grossman submits that progress was slow and marked by an ever increasing impatience by the court up to the end of 2004. Thereafter matters came to a complete halt and there was a period of some five years delay between November 2004 and December 2009 despite the fact that the first Notice of Intention to Proceed was given by the plaintiff in December 2008 and still nothing was done for a further one year until the second Notice of Intention to Proceed. 32.From 2010 onwards, the claim was proceeded with reluctance by the plaintiff and much of the steps taken by the plaintiff had been forced by the court to do so on penalty of being struck out. 33.Much of that time had been taken up by the plaintiff’s application for a Mereva Injunction and with application thereto for variation by increasing the amounts sought to be restrained. In these applications, the judges before whom those applications had been heard had commented adversely on the delays on the part of the plaintiff in those proceedings. 34.It was also submitted by Mr Grossman that the plaintiff’s aim appears to have been directed at causing financial embarrassment to the 1st defendant rather than to pursuing the claim. 35.In so far as prejudice goes, Mr Grossman points to the plaintiff’s own affirmation in a related action, being, HCA 1605/2004 (which was brought by the 1st defendant herein against the plaintiff herein) in which the plaintiff says that he would now be seriously prejudiced by the length of time that has passed. 36.Mr Grossman says that the same is applicable to the 1st defendant in the present case. 37.Lastly, Mr Grossman points to the plaintiff’s listing questionnaire for the CMC dated 21 March 2012 in which every single box bears a cross indicating a complete inability to proceed to trial. Moreover, there is also indication by the plaintiff that they intend to amend the Statement of Claim. 38.Relying on the decision of the Court of Final Appeal in The Liquidator of Wing Fai Construction Co Ltd v Yip Kwong Robert and Ors [2012] 1 HKLRD 589 and the case of Tang Ping Kwan v Tang Kai Tung (CACV 162/2011) Mr Grossman sums up his submission by saying that given the inexcusable delays, the clear abuses of the court’s process by the plaintiff, the plaintiff’s own admitted inability to proceed with the dispute because of the death or incapacity of so many people since 1983, the similar problems faced by the 1st defendant, and the fact that some 29 years after the death of the Deceased and over 10 years after the Writ had been issued, the plaintiff is nowhere near ready for trial, the claim of the plaintiff should be struck out with indemnity costs to the 1st defendant. 2nd defendant’s application to strike out for want of prosecution 39.By way of background, the 2nd defendant says that the dispute between the plaintiff and the 1st defendant, being half-brothers, over the administration of the estate of their late father started almost immediately after the Deceased’s death. 40.The animosity between the plaintiff and the 1st defendant is clearly shown by the fact that apart from the present action, the 1st defendant has also commenced 3 actions against the plaintiff to remove the plaintiff as the Administrator of the estate of the Deceased, to injunct the plaintiff from selling the property at No 6 Sharp Street East and to seek an order for the sale of the shop at No 4 Sharp Street East (which was gifted to the plaintiff and the 1st defendant by the Deceased). 41.The 2nd defendant was only dragged into the dispute between the two half brothers by reason only of being the divorced spouse of the 1st defendant. 42.The 2nd defendant further submits that from the plaintiff’s Particulars of Damage it would appear that the only claim against the 2nd defendant by the plaintiff was the claim that the 2nd defendant was jointly liable with the 1st defendant for “wrongful occupation” of the Li Kwan Avenue Property from January 1983 to December 1989 as their “family residence” and for which the plaintiff has claimed on behalf of the estate of the Deceased loss of income in the amount of $442,800 for that period. There is also a claim in respect of rates for that period in the sum of $4,642.60. 43.These two amounts when compared with the plaintiff’s claim for over $32 million against the 1st defendant as being the proceeds for the sale of the shop at No 4 Sharp Street East and the Mareva Injunction, demonstrates that the main thrust of the plaintiff’s claim is against the 1st defendant and not the 2nd defendant since the 2nd defendant was not even a party to the Mareva Injunction application. 44.The 2nd defendant concentrated on the post-Writ delay saying that in November 2004, there was a Consent Order to adjourn the Checklist hearing sine die and which was basically for the plaintiff and the 1st defendant to file supplemental list of documents. At that time the 2nd defendant was ready for trial, but nothing was done for almost 6 years after that until the filing of the Particulars of Damage by the plaintiff in March 2010. That says the 2nd defendant was inordinate and inexcusable delay on the part of the plaintiff. 45.It was submitted by the 2nd defendant that after the 1st Notice of Intention to Proceed in December 2008, nothing was done by the plaintiff and that the sole purpose of that 1st Notice to Proceed was for the plaintiff to “warehouse” his claim. Likewise for the 2nd Notice to Proceed. 46.While the plaintiff may have some intention to proceed against the 1st defendant, it is submitted by the 2nd defendant that the plaintiff has no intention of proceeding in this action against the 2nd defendant and that the 2nd defendant had no part to play during July 2010 and December 2011 when the Mareva Injunction application was being dealt with which was a matter only between the plaintiff and the 1st defendant. 47.The 2nd defendant further submitted that the litigation anxiety upon the 2nd defendant amounting to abuse comes in the following form. 48.The 2nd defendant left Hong Kong to live in Canada in 1996 to take care of her dying brother. After the death of her brother, the 2nd defendant remained in Canada to take care of her elderly mother. 49.The 2nd defendant was already under stress attempting to enforce her ancillary relief against the 1st defendant. She was diagnosed with cancer in 2008 and was advised by her physicians to avoid stress as much as possible. Her doctors also certified that the present action has had a significant adverse impact on her emotional well-being causing her anxiety and sleep disruption which may also affect her cancer recovery. 50.Apart from her own problems, the 2nd defendant still needs to take care of her mother who is now in her nineties. 51.The 2nd defendant submits that for the plaintiff to keep her as a party to these proceedings without the intention to genuinely proceed against the 2nd defendant clearly amounts to abuse on the part of the plaintiff. 52.Quite apart from the abuse stated above, it is also the submission of the 2nd defendant that there is further prejudice to the 2nd defendant by not being able to have a fair trial due to the lengthy delays leading to the fact that Lam Bor, who would have been a key witness in this case, had passed away and that the 2nd defendant would not be able to recall other employees or locate them as witnesses due to the long lapse of time. 53.All her efforts in trying to mediate between the plaintiff and the 1st defendant hoping to resolve the dispute between the two of them has been to no avail due to their deep seated animosity against each other and with the 2nd defendant being caught in the middle and being a victim of their vendetta. Decision 54.In so far as the application by the 1st defendant is concerned, it was submitted by Mr Grossman on behalf of the 1st defendant that in relation to the pre-Writ delay, the doctrine of relation back can apply in the present case, so that it is not open to the plaintiff to say that he could not have issued proceedings earlier by reason of the fact that Letters of Administration were only granted in March 1999. 55.I do not accept that contention by the 1st defendant based on the doctrine of relation back. 56.It is trite law that for an administrator, the general rule is that a party entitled to administration can do nothing as administrator before letters of administration are granted to him and that he has no right to commence proceedings as an administrator before letters of administration have issued for until such time, he has no right of action. 57.That general rule is subject to a number of exceptions which apply by statute or common law where it is for the benefit of the estate. The test is objective, ie the grant will “relate back” to acts done but only if such acts benefit the estate and that the test of “benefit” must be as at the date of the act in question regardless of supervening events. 58.Therefore the doctrine of relation back, being an exception to the general rule, relates to “acts” done by an intending administrator such as entering into a contract on behalf of the estate and for its benefit before letters of administration are granted. 59.What it does not cover is the entitlement of an intending administrator to start proceedings before the grant of letters of administration as it has been held by the English courts that proceedings brought by a person supposedly as administrator, but before obtaining a grant, are a nullity and cannot be validated by a later grant of administration. (see Hilton v Sutton Steam Laundry [1946] K B 65 and Burns v Campbell [1952] 1 K B 15) 60.In the present case, the 1st defendant did not recognize the status of Madam Lam Wong Kwan Ying’s as the concubine of the Deceased and disputed her entitlement to apply for grant of letters of administration in respect of the estate of the Deceased. This gave rise to an administration action, namely, HCA 1885 of 1987. That action was finally settled by a Tomlin Order made on 13 April 1992 whereupon the application for letters of administration went ahead and resulted in the grant of Letters of Administration in March 1999 to the plaintiff and Madam Lam Wong Kwan Ying. 61.Given the above circumstances, it is not open to the 1st defendant now to base this application on the footing of pre-Writ delay. 62.I therefore hold that the doctrine of relation back cannot found a basis for the 1st defendant to say there has been pre-Writ delay in the present case and cannot assist the 1st defendant in that limited reuse in this application to strike out. Having said that, it does not follow that I must totally ignore the fact that this present dispute springs up from the death of the Deceased in 1983 and the length of time from the death of the Deceased until the present will be one of the factors that I will have to bear in mind generally. 63.After Letters of Administration were granted to the plaintiff and Madam Lam Wong Kwan Ying in March 1999, the Writ herein was issued in November 2001 which is within the period of limitation. 64.As for post Writ delay, there can be no doubt that from December 2004 there was a period of some five years where there was total inaction in so far as procedural steps being taken were concerned in this present action, and it was not until after the second Notice of Intention to Proceed in December 2009 that anything was done procedurally. 65.That delay I find to be inordinate and inexcusable. The excuse put forward by the plaintiff that he had to deal with the other actions brought by the 1st defendant cannot justify such delay. 66.However, the fact that there is delay, even delay of some five years, is not sufficient to warrant a claim to be struck out. It was held by the Court of Final Appeal in the case of Wing Fai Construction Co Ltd (in liq) v Yip Kwong Robert and ors [2012] 1 HKLRD 589 that the only one foundation for the jurisdiction to strike out for delay must be predicated on “an abuse of the process of the court” by the plaintiff and that mere lengthy delay is not sufficient for such an order. 67.It is therefore necessary to see what is the abuse of process complained of by the 1st defendant relating to this application to strike out the plaintiff’s claim. 68.In this respect, the 1st defendant points to a statement by the plaintiff contained in an affidavit of the plaintiff affirmed by him in a related action in which the plaintiff says he would now be seriously prejudiced by the length of time that has passed. On that basis, it is submitted that the same would apply to the 1st defendant in this present action. 69.The prejudice to the 1st defendant, as submitted by Mr Grossman, is therefore of a very general nature. Although no specific instances has been submitted by Mr Grossman, the 1st defendant, in his 4th affirmation did refer to two specific instances of potential witness having passed away. The first is Lam Bor, a cousin of the 1st defendant who worked with the 1st defendant in Stan Company A Tim and the second potential witness being Lam Mo Chun, a sibling of the 1st defendant. It was said by the 1st defendant that Lam Bor could have certified to the state of affairs of the business and its debts towards the end and also of the fact that it was the Deceased’s desire that the 1st defendant take over the business and fill the shoes of the Deceased. As for Lam Mo Chun, the 1st defendant says that she could have certified to the true nature of the Li Kwan Avenue property in that the 1st defendant had a proprietary interest therein in that the Li Kwan Avenue property had always been considered the family home where the 1st defendant started his own family whilst living with the Deceased when the Deceased was still alive. 70.I am not greatly impressed by the ‘evidence’ which the 1st defendant believed he could have obtained from Lam Bor and Lam Mo Chun due to the fact that the Deceased died intestate. Whatever they could say about the Deceased intention as to the business or the Li Kwan Avenue property cannot in any way change the fact that the Deceased left no Will or other testamentary document when he died. 71.Moreover, witness statements had been exchanged between the parties in June 2004 and no attempt had been made to obtain any statements for Lam Bor at that time, nor any explanation given as to why. Lam Bor only passed away in “the last few years” counting from March 2012. (see para 41 of the 4th affirmation of the 1st defendant dated 8 March 2012) 72.Although Lam Mo Chun passed away in January 2003, there are still other full-blood siblings of the 1st defendant, namely, Lam Mo Lin and Lam Mo Chu, who could give the evidence which Lam Mo Chun would have given. Even so, no witness statements have been taken from them. 73.I therefore take a very dim view of the prejudice submitted on behalf of the 1st defendant. 74.It cannot be denied that after such a long lapse of time counting from the death of the Deceased, memories of events may have dimmed and that potential witnesses may have passed away, however, in my view, the more important consideration in so far as the dispute between the plaintiff and the 1st defendant is concerned is the fact that the present action is not the only action between them in so far as their dispute goes. There are other actions commenced by the 1st defendant against the plaintiff and which are intrinsically linked with their dispute over the estate of the Deceased. 75.If those other actions relating to their dispute over the estate of the Deceased is to go to trial and be heard and determined by the courts, then it is only fair and just that this present action is also to be heard and determined by the courts in the same way despite the possibility of any imperfections to the evidence caused by the long lapse of time. Such potential prejudice arising from the delay would apply to the other actions as well. 76.After all, the striking out of an action for delay should only be as a last resort. 77.For the reason given, I am not convinced given all the circumstances of this case that the plaintiff’s claim herein against the 1st defendant should be struck out and dismissed. 78.Turning now to deal with the 2nd defendant, her case is different from that of the 1st defendant. 79.Once again, it cannot be denied that there has been inordinate and inexcusable delay of no less than 5 years by the plaintiff in the present action between November 2004 and December 2009 when no procedural steps have been taken in the action (discounting the 1st Notice of Intention to Proceed given in December 2008). 80.In so far as prejudice to the 2nd defendant is concerned, I accept the submission made by her counsel that the 2nd defendant had divorced the 1st defendant in 1994 and had emigrated to Canada in 1996 and that she was caught up in this dispute between the two half brothers only because she was married to the 1st defendant at the material time period giving rise to their dispute. I also accept that the 2nd defendant now suffers from Cancer since 2008 and that this litigation has put her under unnecessary anxiety. Being dragged into this litigation has also put an unnecessary strain on her finances in engaging lawyers to deal with the matter when she herself is residing in Canada. 81.I also accept that the 2nd defendant has tried to mediate in the dispute between the two half brothers but without success, and has tried to get the plaintiff to withdraw his claim against the 2nd defendant, also without success. 82.Unlike the case of the 1st defendant, the prejudice caused to the 2nd defendant pertains only to the 2nd defendant in the present action, since the 2nd defendant is not a party to any of the other claims brought by the 1st defendant against the plaintiff and that the 2nd defendant has not commenced any other action against the plaintiff in so far as this dispute is concerned. 83.Moreover, even if the claim against the 2nd defendant is struck out and dismissed, the prejudice to the plaintiff is minimal since the plaintiff can still obtain full redress sought from the 1st defendant if the plaintiff’s claim can be substantiated against the 1st defendant. 84.For these reasons given above, it is only just and fair that the plaintiff’s claim against the 2nd defendant be struck out and dismissed for want of prosecution. Conclusion 85.For the reasons given above, the application by the 1st defendant by summons to strike out and dismiss the plaintiff’s claim against the 1st defendant is refused. 86.The plaintiff’s claim against the 2nd defendant is hereby struck out and dismissed. Costs 87.There will be a costs order nisi as follows:
Mr Kenneth C L Chan and Ms Annie Lai, instructed by Fan Wong & Tso, for the plaintiff Mr Clive Grossman, SC and Mr Navin Babani, instructed by Tang & Associates, for the 1st defendant Ms Jennifer Tsui, instructed by Chaine Chow & Barbara Hung, for the 2nd defendant | |||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under HCA 4713/2001