Lydia Moo Yun Fung Memorial Foundation Ltd v. The Secretary for Justice

HCMP 2187/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2187 OF 2014

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D E C I S I O N

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1.I have before me a summons issued by Nice Beauty Limited (“Nice Beauty”) dated 27 November 2014 seeking leave to be joined as a defendant in the Beddoe application taken out by Lydia Moo Yun Fung Memorial Foundation Limited (“the Foundation”) by way of originating summons dated 2 September 2014.

2.The Foundation is, admittedly, a trustee of the properly known as Unit 4B, 4^th Floor, Tai Chi Court, No 134 Austin Road, Kowloon, Hong Kong (“the Property”).  There is, however, a dispute as to who is the beneficial owner of the Property.  The question of beneficial ownership is currently the subject matter of an action brought by Nice Beauty as plaintiff against the Foundation as defendant in HCA 827/2013 (“the High Court Action”).  In that action, Nice Beauty claims to be the sole beneficial owner of the Property and seeks an order that the Foundation do transfer the Property to Nice Beauty.  As can be seen from the Defence of the Foundation filed in the High Court Action on 24 June 2013, the Foundation disputes Nice Beauty’s claim that it is the beneficial owner of the Property.

3.In order to protect its costs position in relation to the High Court Action, the Foundation applied for a Beddoe order on 2 September 2014.  The Foundation is a charitable organization and, on that basis, has joined the Secretary for Justice as the defendant in the Beddoe application.  It is not entirely clear whether the Foundation has joined the Secretary for Justice also on the basis that it is holding the Property upon a charitable trust.  It is not necessary, however, for the purpose of disposing of the present application by Nice Beauty, for me to consider whether the Secretary for Justice has been properly joined as a party to the Beddoe application.

4.The Foundation objects to Nice Beauty’s application to be joined as a defendant in the Beddoe application on the basis that it is not a beneficiary under the trust and should not be joined, that Nice Beauty would not suffer any prejudice even if it is not joined as defendant in the Beddoe application, and that there is no necessity of joining Nice Beauty.  Finally, the Foundation says that it would not be fair for Nice Beauty to be joined as a defendant because it will, presumably, oppose the Beddoe order sought by the Foundation and it is said that this would result in a situation where “a plaintiff is suing a defendant and denying at the same time the financial ability of the defendant to properly defend itself”.

5.This is not the occasion for the court to determine whether Nice Beauty is the sole beneficial owner of the Property. However, if Nice Beauty’s claim in the High Court Action is ultimately upheld by the court, it would be clear that Nice Beauty does have an interest in the current Beddoe application because one possible order which the court may make is that the Foundation be indemnified as to the costs that it has incurred or may incur in the High Court Action out of the property that it is holding on trust, ie the Property.  In the circumstances, I consider that fairness demands that Nice Beauty be given an opportunity to make submissions to the court on whether it should accede to the Foundation’s Beddoe application.  I do not accept that allowing Nice Beauty’s application to be heard on the Beddoe application would cause any unfairness to the Foundation as submitted on its behalf.  Whether a Beddoe order should be made in favour of the Foundation remains to be considered at the substantive hearing of the Beddoe application.

6.In all, I make an order in terms of paragraphs 1 to 4 of Nice Beauty’s summons dated 27 November 2014.  I shall hear the parties on whether any further directions are required, and on the question of costs.

Mr Timothy Y H Wong, instructed by Raymond T Y Chan, Victoria Chan & Co, for the plaintiff

Mr Gordon Chung In Hing, Government Counsel, for the defendant

Ms Barbara Kwok of Vincent T K Cheung, Yap & Co, for the applicant