覃美金 v. Hsbc International Trustee Ltd and Others
Read the full judgment text of HCA 510/2013 on BabelCite. This High Court CFI judgment was delivered on 27 April 2015.
1. This is my decision on the Plaintiff’s appeal by way of Notice of Appeal against Master Hui’s Order made on 29 November 2013, striking out the Plaintiff’s Amended Statement of Claim (“ASOC”) and dismissing her action against the 1 st to 3 rd Defendants with costs on an indemnity basis. The parties agreed that this appeal be disposed of on paper.
Cited by 3 cases · Cites 8 cases
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HCA 510/2013 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CIVIL ACTION NO. 510 OF 2013 ____________
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_____________ DECISION Background 1.This is my decision on the Plaintiff’s appeal by way of Notice of Appeal against Master Hui’s Order made on 29 November 2013, striking out the Plaintiff’s Amended Statement of Claim (“ASOC”) and dismissing her action against the 1st to 3rd Defendants with costs on an indemnity basis. The parties agreed that this appeal be disposed of on paper. 2.The Plaintiff is the mother of a well-known singer and actress, Anita Mui (“the deceased”), who died on 30 December 2003. By her last will dated 3 December 2003, the deceased essentially left all her assets to a trust called Karen Trust set up by the deceased. The Plaintiff and her four grandchildren are beneficiaries under the trust with New Horizon Buddhist Association Limited, a charity promulgating the Tibetian Buddhist faith, as the final repository. 3.The 1st Defendant is the sole executor and trustee named in the will and the trustee of Karen Trust. The 2nd Defendant is the agent of the 1st Defendant in its conduct of the administration of the estate of the deceased and of Karen Trust. The 3rd Defendant took over from JSM as the solicitor for the 1st and 2nd Defendants since about June 2012. The 4th Defendant is the Honourable Mr Justice Poon who succeeded Andrew Cheung J (as he then was) in adjudicating on a number of the Plaintiff’s applications for maintenance against the estate in HCMP 2981/2004. 4.The estate consists of very substantial assets, including a house in Shouson Hill Road (“the Shouson Hill Property”) and a flat in Yuk Sau Street (“the Yuk Sau Street Property”). 5.The Plaintiff challenged the validity of the will in Probate Action, HCAP 2/2004, claiming that the deceased died intestate, with the result that she became the sole beneficiary of the estate of the deceased. Her challenge failed. Her appeal was dismissed in the Court of Appeal in CACV 200/2008 and in the Court of Final Appeal in FACV 11/2010. 6.The Plaintiff also commenced parallel proceedings under the Inheritance (Provision for Family and Dependants) Ordinance (CAP 481) in HCMP 2981/2004. Andrew Cheung J (as he then was) and then Poon J made a number of interim payment orders. The payments were suspended in October 2008 due to insufficient cash under the estate, but the suspension was lifted on 21 January 2009 when cash became available. 7.As soon as her challenge under HCAP 2/2004 failed in the Court of First Instance, the Plaintiff and her eldest son, Mui Kai Ming, commenced proceedings in HCA 679/2007 and HCA 742/2007 seeking to take the Yuk Sau Street Property and the Shouson Hill Property out of the estate. They alleged that the deceased had made a gift of the Yuk Sau Street Property to Mui Kai Ming and had given the management and all future rental income of the Shouson Hill Property to the Plaintiff. They registered lis pendens against the properties which prevented them from being sold. On 29 December 2010, I dismissed the Plaintiff’s and Mui Kai Ming’s claims. Their appeals to the Court of Appeal, CACV 14/2011, were dismissed on 9 March 2012. Then, they sought leave to appeal to the Court of Final Appeal. Their application for leave to appeal was abandoned on 4 February 2013: see paragraph 10 below. 8.In February 2012, the 1st Defendant took over administration of the estate of the deceased from Deloitte which was appointed as the administrator of estate pending suit. Having reviewed the financial position of the estate, the 1st Defendant formed the view that the estate had significant liabilities of over $40 million and would not be in a position to discharge such liabilities without selling the Shouson Hill Property. However, the sale was hindered by the Plaintiff and Mui Kai Ming who were still seeking to appeal the order of the Court of Appeal in CACV 14/2011 dismissing their appeals against my order dismissing their claims to the two properties. It was against that background that the 3rd Defendant, who has since replaced JSM as the 1st Defendant’s solicitors, applied on behalf of the 1st Defendant, to Poon J to suspend the monthly payment order and for directions for sale of the deceased’s properties, including the Yuk Sau Street Property. 9.On 26 June 2012, Poon J suspended the monthly payment order. On 31 July 2012, Poon J ordered that the 1st Defendant shall not be required to pay the medical expenses incurred or to be incurred by the Plaintiff until further order of the court. On 10 August 2012, Poon J ordered the sale of the Yuk Sau Street Property. That property was subsequently sold with the bulk of the proceeds being applied for the purpose of settling part of the liabilities of the estate. In the meantime, the Plaintiff made repeated application for resumption of the monthly payment order. But her applications were dismissed by Poon J. 10.At around the same period, the Plaintiff was adjudged bankrupt on 25 April 2012, while Mui Kai Ming was adjudged bankrupt on 17 January 2013. It was until then that the impediment to the sale of the Shouson Hill Property was eventually resolved in favour of the Estate on 4 February 2013 when the Official Receiver as the trustee in bankruptcy of Mui Kai Ming indicated to court that he would not carry on Mui Kai Ming’s appeal to the Court of Final Appeal. The 1st Defendant began to take steps to vacate the lis pendens registered against the Shouson Hill Property and to obtain valuation of the property for the purpose of sale. In the meantime, the suspension of Poon J’s monthly maintenance payment order continued because of lack of cash. 11.It was against the above background that the Plaintiff commenced the present proceedings against the 1st to 4th Defendants on 26 March 2013. Her action is founded on conspiracy. 12.On 3 April 2013, the Plaintiff issued a summons seeking resumption of the monthly maintenance payment, payment of accrued maintenance and reimbursement of her hospital fees etc. On 15 April 2013, the Secretary for Justice also took out an application to strike out the Plaintiff’s claim against Poon J. 13.Both applications were heard before Master Au-Yeung on 19 April 2013. Master Au-Yeung dismissed the Plaintiff’s application for maintenance payments and struck out her claim against Poon J. The Plaintiff appealed, but her appeals were dismissed by Louis Chan J on 14 May 2013. Her appeal against striking out her claim against Poon J was rested on article 85 of the Basic Law under which members of the judiciary in the performance of their judicial functions are immune from legal action. 14.In the meantime, on 9 May 2013, the Plaintiff took out another summons seeking maintenance payment. On 14 May 2013, Louis Chan J allowed this application and ordered payment of a lump sum of $240,000 and a monthly sum of $20,000. 15.On a different front, the Defendants took out a summons on 3 May 2013 seeking to strike out the Plaintiff’s ASOC, pursuant to Order 18 rule 19 of the Rules of the High Court. The 1st to 3rd Defendants advanced three grounds for striking out: (a) res judicata; (b) the plea is bad for want of particulars; and (c) lack of locus standi. On 29 November 2013, Master Hui granted the Defendants’ application, struck out the Plaintiff’s ASOC and dismissed her action with costs on an indemnity basis. Against that order, the Plaintiff now appeals. 16.For completeness, the Shouson Hill Property was sold pursuant to the order of Louis Chan J at a price of $147 million on 23 August 2013 by private sale to a group of companies already owning the other houses in the same estate. On 26 August 2013, the 1st Defendant informed Louis Chan J that it was agreeable to resume making the monthly maintenance payments to the Plaintiff and reimburse the medical expenses incurred by her subject to the direction of the court. However, no direction has been made as of the 2 October 2013, the date of the 2nd Affirmation of Ma Shun Cheong filed on behalf of the 1st and 2nd Defendants. Presumably, this is because the Plaintiff’s trustees in bankruptcy were making an income payment order application under section 43E of the Bankruptcy Ordinance and applying to intervene in HCMP 2981/2004. The conspiracy pleaded 17.Before dealing with the parties’ argument on res judicata, it is important to ascertain what is/are the conspiracy/conspiracies pleaded. The Plaintiff argues that in paragraphs 12, 18 to 20 and 41 to71 of the ASOC, she is pleading a case of collusion among the 1st to 3rd Defendants to mislead or manipulate Poon J; and then with the addition of paragraph 72, she is pleading an alternative case of collusion among all the four defendants. On the other hand, Mr Man, counsel for the 1st to 3rd Defendants, argues that only one conspiracy has been pleaded and it is one among all the four defendants, including Poon J. 18.The usual rule of construction of documents applies equally to construing pleadings. The meaning of the pleading is that meaning which the pleading conveys to an ordinary reader and not that which is in the mind of the pleader. 19.In paragraph 12 of the ASOC, the Plaintiff referred to an application by the Plaintiff for removal expenses and lai-see money for the Chinese New Year. The administrator pending suit objected to the payment of removal expenses but agreed to the payment of lai-see money. On 5 January 2012, Poon J refused the Plaintiff’s application by letter for removal expenses but allowed the application for lai-see money. Then the Plaintiff took out an application by summons. On 19 January 2012, Poon J allowed the application for both items. That incident took place before the 1st and 2nd Defendants took over the estate from the administrator pending suit. There is nothing to suggest the act of Poon J is anything other than neutral. 20.In paragraphs 18 to 20, the Plaintiff averred that upon the 3rd Defendant replacing JSM in mid 2012, the 1st and 2nd Defendants applied to suspend the monthly maintenance payments, despite their earlier assurance of their intention to maintain a quality living standard for the Plaintiff in accordance with the wish of the deceased. She alleged in paragraph 20:
Here, the Plaintiff first referred to Poon J’s suspension of the monthly maintenance payment, contrary to the approach of Cheung J as well as his usual approach. That may be treated as a statement of the factual background. Then, she alleges that from the concerted acts of the various defendants, which must necessarily include Poon J, as set out in the pleading below, their conduct and the evil intention on the part of the 1st Defendant which could be drawn from the documents, it is obvious that the various defendants harbour malicious intention to defraud and an element of dishonesty towards the Plaintiff. Hence, she was forced to sue all defendants. These two averments obviously refer to all defendants, including Poon J. The Plaintiff is expressly pleading that the defendants were acting in concert with malicious intention towards the Plaintiff in furtherance of one conspiracy only. 21.In paragraphs 21 to 26, the Plaintiff pleaded a piece of what she considered to be the most crucial evidence which had not been presented before Cheung J in HCAP 2/2004. That is a handwritten attendance note of Doris Lau, an employee of the 2nd Defendant, which the Plaintiff asserts is evidence of the oral instruction of the deceased reflective of her intention when drafting of her will and which the Plaintiff asserts would overturn the decision in HCAP 2/2004. She further alleges in paragraph 27 that the 1st and 2nd Defendants used dirty and evil means to suspend the monthly maintenance payment order to persecute the Plaintiff in order to muzzle her from bring up this piece of evidence or even to force her to her death so that they could misappropriate the estate. 22.In paragraphs 41 to 70, the Plaintiff pleaded the dishonest and deceitful conduct of the 1st and 2nd Defendants. Paragraph 70 is a summary of her case against the 1st and 2nd Defendants. She alleges that they were “playing games”; acting in deliberate violation of the express wishes and instructions of the deceased; acting in breach of their duties as executors of the deceased’s will and as trustees of Karen Trust; and acting in breach of the court’s order to maintain the Plaintiff by not paying her maintenance and hospital fees and in indefinitely delaying the sale of the Shouson Hill Property. All these were done with the purpose of misappropriating the estate of Anita Mui. 23.In paragraph 71, the Plaintiff pleaded the dishonest and deceitful conduct of the 3rd Defendant. She referred to the 1st and 2nd Defendants’ conduct in paragraphs 44 to 70. She alleges that since the 3rd Defendant replaced JSM as the 1st and 2nd Defendants’ solicitors and within a short time thereafter, they acted oppressively against her. She suggests that such conduct was instigated by the 3rd Defendant. 24.In paragraphs 72 and 73, the Plaintiff pleaded the dishonest and deceitful conduct of Poon J. She also referred to the 1st and 2nd Defendants’ conduct in paragraphs 44 to 70. She alleges that in the various applications under HCMP 2981/2004 the way Poon J acted dishonestly and with intention to defraud. She even described Poon J’s conduct as “cold blooded”. 25.In paragraph 74, the Plaintiff pleads the factual basis on which the allegation of deceit and dishonesty is based. Most of the allegations are levelled against all the defendants. Those allegations revolve around the 1st and 2nd Defendants’ applying for suspension of the monthly maintenance payment to the Plaintiff and Poon J’s conniving in their conduct. Specifically as against Poon J, the Plaintiff pleads in paragraph 74(q) that with knowledge that the 1st and 2nd Defendants could do whatever they wished with the estate if the Plaintiff was forced to collapse (被逼害倒下), Poon J deliberately indulge (畜意縱容) them in breach of his judicial duty to supervise and control them in their performance of their duty as administrators of the estate and trustees of Karen Trust. In paragraph 74(r), the Plaintiff pleads that Poon J knew that his conducts in paragraphs 44 to 70 (insofar as they refer to his conducts) were contrary to the standard he adopted in his decision of 19 January 2012 and were without basis. Further, she pleads in paragraph 74(s) that the only reasonable inference to be drawn from the conducts referred to in paragraphs 44 to 70 is that the intention of the 1st and 2nd Defendants behind those conducts was to muzzle the Plaintiff from making any noise about Doris Lau’s attendance note so that they could misappropriate Anita Mui’s estate; and that the 3rd Defendant instigated, counselled and assisted in that design. As against Poon J, the Plaintiff avers that Poon J dishonestly connived in and approved the 1st and 2nd Defendants’ conduct. 26.I think paragraph 20 is important. Not only does it set the tone of the subsequent paragraphs in which the conducts of the various defendants are pleaded, it identifies and pleads the parties to one common design. The design was to muzzle the Plaintiff from making any noise about the attendance note (impliedly by seeking a review of the decision in HCAP 2/2004, CACV 200/2008 and FACV 11/2010) so that the 1st and 2nd Defendants could misappropriate the deceased’s estate. The 3rd Defendant instigated, counselled and assisted in that design. Poon J with knowledge of that design, connived in and approved the 1st and 2nd Defendants’ conduct by suspending the monthly maintenance order to enable the 1st and 2nd Defendants to put pressure on the Plaintiff. 27.Nowhere in the entire ASOC did the Plaintiff expressly mention about an alternative case involving only the 1st to 3rd Defendants to which Poon J was not a party. In the absence of an express plea of an alternative case, the repeated pleas that what Poon J did was done with full knowledge of the facts asserted negate any suggestion that he was misled by the 1st to 3rd Defendants in the exercise of his judicial functions in relation to the applications under HCMP 2981/2004. The Plaintiff’s assertion of “cold blooded” conduct on the part of Poon J also negates any suggestion that he was being misled. 28.If the subjective intention of the Plaintiff is required, it can be found in paragraph 3 of her 4th Affirmation, in which she said:
29.Read objectively, the Plaintiff pleaded one conspiracy in the ASOC to which all four defendants, including Poon J, were a party. Subjectively, the Plaintiff intended to sue on one conspiracy to which Poon J is a party. I have to agree with Mr Man that the alternative case of a conspiracy among the 1st to 3rd Defendants to misled Poon J is an afterthought. Res judicata – the law 30.There are two aspects under this doctrine. In the narrower sense, the term includes two species: cause of action estoppel and issue estoppel. The first species prevents a party to an action from asserting or denying, as against the other party, the existence of a particular cause of action, the non-existence or existence of which has been determined in a previous judgment. See Thoday v Thoday[1]. A cause of action estoppel can be seen as an estoppel on all the issues which formed conditions of the conclusion on the cause of action. Issue estoppel similarly prevents a party asserting or denying, as against the other party, an issue which has been determined in a previous judgment. 31.In the wider sense or “Henderson v Henderson sense”, it means “where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in context, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case.” See Henderson v Henderson[2]. This estoppel is founded on abuse of process of the court. 32.To give rise to an estoppel, the earlier decision must satisfy the following requirements; (i) it must be judicial in the relevant sense; (ii) it was in fact pronounced; (iii) the tribunal had jurisdiction over the parties and the subject matter; (iv) the decision was – (a) final and (b) on the merits; (v) it determined a question raised in the later litigation; and (vi) the parties are the same or their privies or the earlier decision in rem. See Spencer Bower & Handley Res Judicata [3]. Res Judicata – the arguments 33.I have summarised the conspiratorial agreement which formed the basis of the Plaintiff’s cause of action. In essence, it is an agreement to muzzle the Plaintiff from making any noise about the attendance note, presumably meaning seeking a review of the Court of Final Appeal’s decision in FACV 11/2010, so that the 1st and 2nd Defendants could misappropriate the deceased’s estate. The underlying premise of this conspiratorial agreement is that the decisions in HCAP 2/2004, CACV 200/2008 and FACV 11/2010 in which the various levels of court determined in favour of the validity of the will, the appointment of the 1st Defendant as executor, the validity of the deed setting up Karen Trust, the appointment of the 1st Defendant as trustee of the trust, and that the deceased did not died intestate were all wrong. 34.Mr Man argues that as the decision of the Court of Final Appeal is final, the Plaintiff is barred by the doctrine of res judicata from launching a claim that the Court of Final Appeal is wrong in granting probate to the 1st Defendant. He also argues that there can be no complaint that Poon J’s orders under HCMP 2981/2004 are wrong as the Plaintiff never appealed against them or have them set aside. Those orders stand and are valid. As the 1st to 3rd Defendants conducted themselves in accordance with valid orders of the court, the Plaintiff could not possibly have any cause of action against them. Therefore, Mr Man submits that the ASOC disclosed no reasonable cause of action. 35.The Plaintiff submits that Mr Man’s argument is misconceived as her cause of action is conspiracy and the substantive issues herein have nothing to do with any issues decided in HCAP 2/2004, CACV 200/2008, FACV 11/2010 or HCMP 2981/2004. In my view, for what that pleaded conspiratorial agreement is worth, the Plaintiff’s cause of action is conspiracy which is not the same as the causes of action in the earlier proceedings. She is not seeking to set aside any of judgments in those proceedings, but rather relying on them as evidence of conspiracy, that the judgments would not have been given but for the conspiracy. The focus in this action is not whether the earlier judgments are correct, but on the fraud by reason of which the judgments were obtained. The issues are distinctly different. On this basis, I agree with the Plaintiff that Total Lubricants Hong Kong Limited and others and Christophe De La Cropte De Chanterac and others[4] is indistinguishable from the present case. The outcome on this issue in this case must necessarily be the same. The principle of res judicata does not apply in the present case as the cause of action in conspiracy now relied on by the Plaintiff is wholly distinct from those relied on in the earlier decisions. 36.Furthermore, it is an immutable principle of law that the court will not allow its machinery of justice to be used as an instrument of fraud. This principle is reflected in bankruptcy cases in which a debtor challenges the existence of the petitioning debt awarded in an earlier judgment. As a general rule, the court in the exercise of its bankruptcy jurisdiction will not review the earlier order of another court. It may, however, do so under special circumstances, but such jurisdiction will only be exercised sparingly: see Re Onslow, ex p Kibble[5]; Re Beauchamp, ex p Beauchamp[6] and Re Flatau, ex p Scotch Whisky Distillers Ltd[7]. These English decisions were adopted by the Hong Kong courts: see Re Yu Tat Yum Robert, ex p Fortune Retail Holdings (Beijing) Ltd[8] and Re Chung Kau[9]. The common thread which runs through these successful precedents is that but for the judgment there was no petitioning debt and the judgment was obtained by fraud, collusion or miscarriage of justice: see for example, Re Hawkin[10]; Re Flatau, ex p Scotch Whisky Distillers Ltd[11]; Re Savill[12]; Re Lipsocombe[13]; Re Fraser[14]; Re Howell;[15] Re Turvey[16]; Dawodu v American Express Bank[17]. The party seeking to review the order bears the burden of proof. In the event that the court exercises this jurisdiction, it will not review the earlier decision as if it were conducting an appeal but would only focus on the question whether the earlier judgment was obtained by fraud, collusion or miscarriage of justice. See: Re Hawkins[18]. This principle reinforces the existence of a separate cause of action founded on a conspiratorial agreement as a result of which the earlier judgments were obtained. It also defines the scope within which the later court may review the earlier judgments without infringing the principle of res judicata. 37.I therefore think both species of the doctrine of res judicata in its narrow sense do not apply to an action in conspiracy alleging that the earlier judgment was obtained as result of the conspiracy. Nor do I think res judicata in its wider sense could assist the 1st to 3rd Defendants for the simple reason that not until the conspiracy was implemented could the Plaintiff have a cause of action. Adequacy of the plea 38.The Plaintiff’s cause of action is conspiracy to defraud. The conspiracy was to muzzle the Plaintiff from making noise about the attendance note so that the 1st and 2nd Defendants could misappropriate the deceased’s estate. Order 18 rule 12(1)(a) of the Rules of the High Court requires every pleading must contain the necessary particulars of any claim, defence or other matter pleaded including particulars of any misrepresentation, fraud, breach of trust, wilful default or undue influence on which the party’s pleading relies. When pleading the tort of conspiracy, the pleader must allege at least one overt act which is the act of all the alleged conspirators or, failing that, a number of overt acts which include at least one act on the part of each conspirator. The overt act or overt acts pleaded must be such as to show: (1) that the conspiratorial agreement alleged against the defendants had been entered into by each and every one of them; (2) that the agreement, and not merely the intention of one person alone, was implemented; and (3) that such implementation caused the damage complained of. See Hong Kong Civil Procedure 2015[19]; and Aktieselskabet Dansk Skibsfinansiering v Wheelock Marden & Co Ltd [20]. It is Mr Man’s submission that the Plaintiff’s ASOC falls foul of these principles. 39.The Plaintiff has not pleaded any single overt act which is the act of all the four defendants. In paragraphs 41 to 71, she pleaded the acts of the 1st and 2nd Defendants. She pleaded the assurance by Ma Shun Cheong that the 2nd Defendant would carry out the wishes of the deceased to provide a quality life for the Plaintiff, but despite that assurance the 1st Defendant applied to suspend the monthly maintenance payments and reimbursement of medical expenses, and Poon J approved the applications. She complained that the 1st Defendant applied the proceeds from the sale of the Yuk Sau Street Property to pay non-urgent liabilities of the estate instead of resuming the monthly maintenance payments; and Poon J endorsed their conduct by refusing her application for resuming monthly maintenance payment. She also complained about the delay in the sale of the Shouson Hill Property. These overt acts are not in dispute. They were acts performed by the 1st and 2nd Defendants in the ordinary conduct of the administration of estate. There is a total absence of particulars of any overt act which shows that the alleged conspiratorial agreement has been made and the stated intention. 40.The overt acts pleaded against the 3rd Defendant are that it counselled and instigated the 1st and 2nd Defendants to breach their duty as executor of the will. Though it may be presumed that as the 1st and 2nd Defendants’ solicitors, the 3rd Defendant must have given advice to them on the conduct of the administration of estate, there is a total absence of particulars of any overt act which shows that the alleged conspiratorial agreement has been made and the stated intention. 41.The overt acts pleaded against Poon J are his endorsing the 1st Defendant’s applications to suspend monthly maintenance payments and his refusing the Plaintiff’s applications to resume the payments. The Plaintiff alleges fraud and dishonesty. Again no particulars have been pleaded. 42.On the whole, these particulars fall far short of showing that the conspiratorial agreement alleged had been entered into by each and every one of the defendants. They also fall far short of alleging that the 1st to 3rd Defendants’ applications to suspend the monthly maintenance payments and Poon J’s allowing such applications and dismissing the Plaintiff’s applications for resuming payments were acts done pursuant to anything other than merely the intention of either the 1st and 2nd Defendants in the administration of the estate of the deceased with the advice of the 3rd Defendant as their solicitors or Poon J alone in the execution of his judicial function. These overt acts pleaded are all ordinary incidents of litigation, in which the 1st Defendant advanced arguments and Poon J adjudicated and made orders which the Plaintiff did not like. These acts do not for a moment suggest that there was any conspiratorial agreement among all the four defendants to defraud the Plaintiff. The Plaintiff’s claim must be struck out for want of particulars required under Order 18, rule 12. 43.Further, even if I were to accept the Plaintiff’s argument of an alternative case of conspiracy among only the 1st to 3rd Defendants, the result would be the same. The pleadings would, for the same reasons, be still short of providing the necessary particulars to support a lesser conspiratorial agreement. Frivolous and vexatious 44.Apart from the lack of particulars, the conspiracy pleaded is so incredible that it could not possibly exist and there is a total lack of evidence of the alleged conspiracy. 45.There are two building blocks in the alleged conspiracy: to muzzle the Plaintiff from making noise about the attendance note, and to misappropriate the estate of the deceased. First, on the fact, the 1st and 2nd Defendants had voluntarily disclosed the attendance note to the Plaintiff. Despite all the allegations of muzzling and pressure by the 1st to 3rd Defendants and the dishonesty and blind-eye approach of the Court of Appeal, it was the Plaintiff’s defence in the bankruptcy petition taken out by her solicitors against her in respect of the legal costs incurred in HCAP 2/2004 that her legal team had been negligent for not producing the attendance note at trial. Thus, rightly or wrongly, whether not to use the attendance note was a decision of her legal team, which had nothing to do with the alleged muzzling. Besides, the issue of validity of the will and appointment of executor had been finally decided by the Court of Final Appeal, it could not be reversed by the Plaintiff making any noise about the attendance note. The alleged conspiracy could achieve no purpose. Second, it is an impossibility for the 1st and 2nd Defendants to benefit from the conspiracy as pleaded because New Horizon Buddhist Association Limited is the final repository under Karen Trust. There is no allegation that the association is a party to the conspiracy. Thus, the alleged conspiracy is so incredible that it could not possibly exist. Its existence is plainly negated by the incontrovertible facts. 46.Next, there is absolutely no evidence of the alleged conspiracy. All the alleged overt acts were ordinary acts of administration of estate and usual discharge of judicial function. These acts were carried out consistently with the decision of the Court of Final Appeal. The acts of the 1st and 2nd Defendants in suspending the maintenance payments were fully explained by the financial state of the estate, which was obviously aggravated by the Plaintiff’s and Mui Kai Ming’s obstinate litigations. The orders of Poon J were obviously reasonable orders to make in the circumstances, and there was no appeal against those orders. 47.The Plaintiff contrasted the orders made by Poon J against those made by Andrew Cheung J (as he then was) and those made by Louis Chan J and argues that Poon J “cold bloodedly” made orders against her which no reasonable judge would make. The fact is that even Andrew Cheung J had made an order to suspend the monthly payment between October 2008 and January 2009. The circumstance in which Louis Chan J resumed monthly payment was very different in that massive funds were in sight with the sale of the Shouson Hill Property. In my view, the orders of Poon J were obviously reasonable orders to make in the circumstances. The strong language used by the Plaintiff does not assist her and is utterly unjustified. But in any event, as I have indicated, in such an action for conspiracy the focus is on whether the earlier orders were obtained as result of fraud, collusion or miscarriage of justice. The court will not review the earlier orders as if it were sitting on an appeal. If the Plaintiff is in any way dissatisfied with the orders of Poon J, she should have appealed, but she did not. 48.Lack of particulars and impossibility of the conspiratorial agreement aside, there is a total lack of evidence to support the alleged conspiracy. The alleged conspiracy is nothing but the Plaintiff’s surmise built on some neutral acts by piling one layer of inference on top of another. In the end, even on that model, the end product would be to benefit New Horizon Buddhist Association Limited which is the final repository under Karen Trust. However one looks at the alleged conspiracy, it is doomed to fail. The ASOC cannot be cured by any amendment which is consistent with the incontrovertible evidence. It must be struck out pursuant to Order 18 rule 19(1) on the ground that it is scandalous, frivolous and vexatious or otherwise an abuse of process of the court. Locus standi 49.The issue of locus standi was not canvassed before the master because the Plaintiff’s trustees in bankruptcy adopted a neutral stand and did not attend the hearing. In their letter to the court in answer to Master Ho’s query, the Plaintiff’s trustees in bankruptcy explained that they considered the Plaintiff’s claim under HCMP 2981/2004 for maintenance under Cap 481 personal in nature, and not vested in the trustees. They further took the view that as the Plaintiff is seeking by the present action to enforce or to seek relief relating to HCMP 2981/2004, this action is also personal in nature and hence they have no locus standi to appear. As the master considered that his decision on res judicata and the adequacy of the plea alone sufficient to dispose of the application against the Plaintiff, he did not find it necessary to consider if the Plaintiff has locus standi to sue. 50.Under sections 43 and 58 of the Bankruptcy Ordinance, upon making of a bankruptcy order, the property belonging to the bankrupt shall vest in the Official Receiver. Section 2 defines “property” widely as including “money, goods, things in action, land … and every description of estate, interest and profit, present or future, vested or contingent, arising out of or incident to property as above defined”. The question raised by this issue is whether the relief sought in the ASOC is caught within the meaning of “property” in section 2. 51.Mr Man referred me to Re Hemming[21] in which Deputy High Court Judge Richard Snowden QC held that a residuary legatee’s immediate entitlement to future payment is a right to compel due administration of the estate which is a chose in action and is therefore property vested in the trustee in bankruptcy. He therefore argues that as the relief sought by the Plaintiff in the prayer in the ASOC is related to the administration of the estate, the Plaintiff’s cause of action must therefore be covered by the definition of “property” under section 2 with the result that this chose in action is now vested in the trustees in bankruptcy. 52.I think what Re Hemming decided is that a residuary legatee’s immediate entitlement to future payment is a right to compel due administration of the estate and is therefore a chose in action. However, despite her complaint about concealment of Doris Lau’s attendance note and the Court of Appeal and Court of Final Appeal dishonestly turning a blind eye to that note, the Plaintiff is not seeking to challenge the validity of the will and is not claiming as the residuary legatee or the person entitled upon intestacy of the deceased. She is seeking immediate entitlement to present and accrued payments. It does not appear to me that the Plaintiff is seeking to enforce her entitlement to future payment as a residuary legatee. At least there is no evidence before me to support such a contention. 53.The proper approach to determine whether a bankrupt has locus standi to sue is that adopted by the English Court of Appeal in Ord v Upton[22], which is to look at the true nature of the claim and not the cause of action. The court shall look at the remedy sought and ask if it is solely of a personal nature. If it is, the chose in action is not vested in the trustee in bankruptcy. If it is not or is of a hybrid nature, the chose in action is vested in the trustee in bankruptcy. The bankrupt has no right to pursue such a cause of action. The right to recover damages which are personal and any damages thus recovered are held on a constructive trust for the bankrupt. The hybrid damages recovered have to be split between the bankrupt and the trustee. Ord v Upton was a case concerning a bankrupt’s claim in a personal injury action. The English Court of Appeal held that the trustee held on trust for the bankrupt damages recovered in respect of injury of a personal nature, such as pain and suffering, whereas damages for loss of earning fell into the estate of the bankrupt. The following dicta by Aldous LJ is instructive:
54.In the present case, I have no difficulty in accepting that the Plaintiff’s present action is a chose in action within the meaning of section 2 of the Bankruptcy Ordinance and is vested in the trustees in bankruptcy under section 58. The question is whether the remedy sought by this chose in action is something which, by reason of its personal nature, does not form part of the bankrupt’s estate. The Plaintiff is not challenging the validity of the will but is seeking to remove the 1st and 2nd Defendants as executors and to restrain the 3rd Defendant from acting in relation to matters which have to do with the estate. She seeks to restrain Poon J from handling HCMP 2981/2004 or any matters relating to the estate and the Plaintiff. In paragraph 77(7) of the ASOC, she seeks monthly maintenance payments and medical expenses. Presumably these are payments under HCMP 2981/2004. This part of the claim is clearly of a personal nature. She also seeks a mandatory injunction to require the 1st Defendant to handover its duty as executor to Deloitte or such person as appointed by the court who should follow the deceased’s wish of affording her a quality life. She seeks damages for fraud against the 1st Defendant in respect of loss suffered by the estate. While these reliefs are related to administration of estate, none of these appear to be of a personal nature. I even query if the Plaintiff has the locus standi to sue in respect of loss suffered by the estate, as she is not seeking to set aside the will of the deceased, which she obviously cannot in view of the decision of the Court of Final Appeal which is final. In conclusion, this claim is a hybrid claim which is vested in the trustees in bankruptcy and must therefore be pursued by the trustees. Accordingly, the Plaintiff has no locus standi to sue in this action. Conclusion 55.For the above reasons, I find that this cause of action is vested in the Plaintiff’s trustees in bankruptcy and the Plaintiff has no locus standi to pursue this action. As the cause of action is for conspiracy, the issues raised in this action are distinct from those raised in the earlier actions, namely HCAP 2/2004, CACV 200/2008 and FACV 11/2010. The doctrine of res judicata does not apply. However, the Amended Statement of Claim falls far short of the particulars required under Order 18 rule 12. It is also scandalous, frivolous and vexatious and otherwise abuse of the process of the court within the meaning of Order 18 rule 19. In the light of the facts not in dispute and the factual findings in the earlier action, the defect in the Amended Statement of Claim is not remediable. For any of these reasons, it must be struck out and the Plaintiff’s action be dismissed. Accordingly, I uphold the master’s decision and dismiss the appeal with costs on an indemnity basis against the Plaintiff.
The Plaintiff acted in person Mr Bernard Man, instructed by Messrs Clifford Chance, for the 1st to 3rd Defendants [1] [1964] P181, per Diplock LJ [2] (1843) 3 Hare 100, per Wigram VC [3] (4th edn, 2009) Paragraph 1.02 [4] CACV 37 of 2012 [5] (1875) LR 10 Ch 373 [6] [1904] 1 KB 572 [7] (1888) 22 QBD 83 [8] [1999] 2 HKC 799 [9] HCB 581/2003 [10] [1895] 1 QB 404 [11] (1888) 22 QBD 83 [12] (1887) 4 Morr 277 [13] (1887) 4 Morr 43 [14] [1892] 2 QB 633 [15] (1915) 84 LJKB 1399 [16] (1918‑1919) B & CR 128 [17] [2001] BPIR 983 [18] [1895] 1 QB 404 [19] Paragraph 18/12/8 [20] [1994] 2 HKC 264, at 272B-C, per Bokhary JA (as he then was) [21] [2009] Ch 313 [22] [2000] 1 All ER 193 [23] At 198 d to f [24] At 206 g |
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