LAI MAY HING v. LAI SAI FUK

HCA014170A/1997

HCA14170/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.14170 OF 1997

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BETWEEN
	LAI MAY HING	Plaintiff
	AND
	LAI SAI FUK	Defendant

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Coram: Hon Waung J in Chambers

Date of Hearing: 12 October 2000

Date of Judgment: 12 October 2000

 

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J U D G M E N T

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1. This is an appeal by the defendant from the order of Master Barnes made on 19 September 2000 whereby she dismissed the summons of the plaintiff dated 25 July 2000 pursuant to Order 62, rule 22(HK)(1).

2. What happened was this. On 16 March 1999, by the judgment of Cheung J, a costs order was made in favour of the plaintiff. The defendant, therefore, has an obligation to pay any costs that may be taxed or agreed.

3. The party apparently took some time to discuss the question of the amount of costs to be paid, but by 31 May 2000 the defendant's solicitors were writing to the plaintiff's solicitors demanding the taxation bill. That was followed by another letter of 28 June 2000 from the defendant's solicitors requesting the same. By letter dated 4 July 2000, the plaintiff's solicitors informed the other side that the bill was being prepared and would be available as soon as possible. By summons dated 25 July 2000, the defendant applied to the court. On 10 August 2000, the bill of costs was filed by the plaintiff but no appointment was obtained by the plaintiff for taxation of costs.

4. The statutory scheme in relation to taxation of costs is set out under Order 62. It seems to me that Order 62, rules 21(HK) and 22(HK) are relevant. Rule 21(HK)(1) and (2) reads as follows :

"(HK)(1) A party entitled to require any costs to be taxed shall file in the Court his bill of costs and shall obtain from the taxing master an appointment to tax.

(HK)(2) Not less than 7 days' notice of such appointment to tax together with a copy of the bill of costs shall be served by such person on every person entitled to be heard on taxation."

Rule 22(HK) provides as follows :

"(HK)(1) If, within one month after an order of the Court requiring the payment of any costs to be taxed, the person entitled to payment thereof has neither agreed the amount of such costs with the person liable to pay the same nor served upon such person a notice of appointment to tax in accordance with rule 21, the taxing master, on the application of the person liable to pay such costs and on not less than 7 days' notice to the person entitled to payment thereof, may order that the person entitled to payment of the costs shall proceed to taxation in accordance with rule 21 within such period as the taxing master may order.

(2) If within the period ordered by the taxing master or any extension thereof granted by a taxing master, notice of appointment to tax has not been served in accordance with rule 21 and the amount due has not been agreed between the parties, the order of the Court requiring payment of the costs shall thereupon be wholly discharged."

5. It will be seen that the statutory scheme operates on the basis that if a party who has a costs order in its favour has not filed the bill of costs and, more importantly, has not filed or given notice of the notice of appointment to tax, then the paying party has the right to apply to the court for an appropriate order requiring the winning party to proceed to taxation within a certain number of days. The sanction under such order made is rule 22(HK)(2) because if there is non-compliance with it, then the costs order will become discharged, and that is what gives the teeth to the sanction of the court.

6. On 19 September, when the hearing took place before Master Barnes, there was no appointment made by the plaintiff to tax, although there was already filed the bill of costs. It seems to me that the statutory scheme points forcefully upon the court to exercise its obligation to make an order requiring taxation within a certain number of days. The court might have been told what is going to happen, or that an appointment is going to be made. The court should therefore make an order, and certainly the court should not dismiss the summons in the face of protracted disagreement by the parties on costs. The master, unfortunately, dismissed the application and made no order as to costs. It seems to me that that was the wrong order to make.

7. The defendant, faced with that order, had no choice but to appeal and, by the Notice of Appeal dated two days later, i.e. 21 September, the defendant appealed to the judge in chambers. On 29 September, the plaintiff gave the notice of appointment to tax. So, in a sense, therefore, para.1 of the Notice of Appeal of the defendant becomes redundant because there he was asking for a time limiting the plaintiff to give a notice of appointment to tax. The costs order, however, is still very much alive and that is really the subject of today's appeal.

8. Having regard to what I have said about the correctness of the defendant to take out the summons and to seek the necessary order from the court pursuant to Order 62, rule 22(HK)(1), it seems to me that the proper costs order ought to have been costs in favour of the defendant.

9. In the circumstances, I allow the appeal and the costs of the summons ought to have been awarded to the defendant. Having regard to what had happened, it seems to me that the costs of the appeal must also be given to the defendant. I propose to proceed to assess the costs so ordered by me, both here and below, by way of gross sum assessment under Order 62, rule 9(4)(b) and I will hear the parties on this.

[Submissions on costs]

10. This is my gross sum assessment of the costs order that I made earlier in favour of the defendant covering both the defendant's costs of the summons that was heard by Master Barnes, as well as the appeal to this court, both sets of costs had been awarded by me earlier to the defendant.

11. The summary of the costs that had been given to me by the defendant in respect of both the summons and the appeal shows, to my mind, a gross duplication and exaggeration, and a reasonable cost should reduce considerably what is sought in the defendant's costs summary document. The total costs in that document comes to $155,900, consisting of :

(a)	15 hours of work of the partner Mr Ng at $3,200 for the summons	$48,000
(b)	10 hours of work of Mr Ng, at the same rate, for the appeal	$32,000
(c)	10 hours of work for the assistant solicitor Mr Pang at $2,200 an hour	$22,000
(d)	5 hours of work of legal executives, covering both the summons and the appeal, at $1,200 an hour	$6,000
(e)	Mechanical preparation	$6,000
(f)	Photocopies of 800 pages at $3 per page	$2,400
(g)	Counsel fees	$39,500
	Total :	$155,900

12. In my view, both the unit cost, as well as the hourly rate, should be considerably reduced and I basically accept the submission of Mr Ko for the plaintiff. In my view, the following should be the appropriate costs and time spent :

(a)& (b)	10 hours of work of the partner Mr Ng at $3,000	$30,000
(c)	3 hours of work for the assistant solicitor Mr Pang at $2,000 an hour	$6,000
(d)	2 hours of work of legal executives, covering both the summons and the appeal, at $1,000 an hour	$2,000
(e)	Mechanical preparation (disallowed)	-
(f)	Photocopies of 600 pages at $3 per page	$1,800
(g)	Counsel fees	$20,000
	Total :	$59,800
	(round up to $60,000)

13. The gross sum assessment of the costs order made by me earlier today in relation to the summons of the defendant, as well as the appeal of the defendant, is therefore assessed at the gross sum of $60,000 and that is to be paid immediately.

 

 

 

Representation:

Mr Justin Ko, instructed by Messrs Shamson Zeall & Co, for the plaintiff

Mr Dominic Yeung, instructed by Messrs George Tung, Jimmy Ng & Valent Tse, for the defendant

 

HCA014170/1997

HCA14170/97

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.14170 OF 1997

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BETWEEN
	LAI MAY HING	Plaintiff
	AND
	LAI SAI FUK	Defendant

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Coram : Hon Mr Justice Cheung in Court

Date of hearing : 9 March 1999

Date of handing down judgment : 16 March 1999

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J U D G M E N T

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The facts

The sale

1. The Plaintiff is the purchaser of a flat owned by the Defendant. The flat is at Flat B, 8/F, Lee Wing Building, No.3 Shansi Street, Kowloon, Hong Kong ("the flat"). The Plaintiff on 28th September 1997 entered into a provisional agreement with the Defendant for the purchase of the flat. A formal agreement ("the agreement") was later signed by the parties.

The assignments

2. By a letter dated 4th November 1997, the Defendant's previous solicitors K.P. Lam & Co ("Lam & Co") delivered the title deeds to the Plaintiff's solicitors Shamson Zeall & Co ("Zeall & Co"). The documents were received on 5th November 1997. Among the title deeds delivered to Zeall & Co were two Assignments dated 17th November 1981 (Memorial No.2192947) ("the 1st Assignment") and 18th June 1987 (Memorial No.3430810) ("the 2nd Assignment") respectively. In the 1st Assignment, Kei Keung Development Company Limited assigned the flat to the purchaser, Thung Siua. In the 2nd Assignment, it is stated that Dewi Mirahwati Thung, formerly known as Thung Siua, assigned the flat to Lin Chiang Ping and Lam Ling Fung. There were subsequent sales after the 2nd Assignment and the Defendant eventually became the owner of the flat on 22nd July 1995.

Requisition on title

3. Zeall & Co raised requisitions on title. Its letter of 11th November 1997 to Lam & Co stated that :

" Upon perusal of the title deeds and documents, we notice that the identity of DEWI MIRAHWATI THUNG as appeared in Assignment Memorial No.3430810 was different from that appearing in previous Assignment Memorial No.2192947 in that there was a change of name under a different passport number.

Kindly letters(sic) have acceptable evidence to prove that the two descriptions in fact refer to one and the same person. For your further reference, we enclose herewith copies of the said Assignments for your retention."

The reply came the next day from Lam & Co stated that :

"As to Assignment Memorial No.2192947, the Purchaser is known as THUNG SIUA of Flat B on 8th Floor of Lee Wing Building, No.3 Shansi Street, Kowloon, Hong Kong, Married Woman. As to Assignment Memorial No.3430810, the Vendor is known as DEWI MIRAHWATI THUNG formerly known as THUNG SIUA, Married Woman, of Flat B on the 8th Floor of Lee Wing Building, No.3 Shansi Street, Kowloon, Hong Kong. Further in comparison with the signature of THUNG SIUA in both documents, it appeared to be the same. As the name of THUNG SIUA and her address and marital status were the same. The identity of the said THUNG SIUA is clear and unambiguous, and refers to the same person appearing in both documents."

4. Zeall & Co was not satisfied with the answer and on 13th November 1997 wrote again to Lam & Co stating that :

"We believe it would very unsafe and unsatisfactory to dispel doubts on identity in reliance only on similarity of signatures, address and marital status when the crux of the evidence points strongly to a disparity in names and identification documents and numbers. We cannot accept your reply and look forward to receiving further and better proof."

On 26th November 1997, Lam & Co responded as follows :

"As the Assignment Memorial No.2192947 was executed on the 17th November 1981 and the Assignment Memorial 3430810 was executed on the 18th June 1987, the execution of the two assignments were more than 5 years apart. The signatory to these two assignments were described by different passport numbers where no discrepancy in signatures appeared in these two assignments. No reasonable doubt raised as to the authenticity of the signatures. (Lee Yeung Chun V. Ng Choi Chun (1990) MP No.3349/89 refers)."

Zeall & Co was not satisfied with the answer and thereafter there were further correspondence between the two firms of solicitors on the same topic.

Termination of sale

5. Completion of the sale was to take place on 20th December 1997. On 22nd December 1997, Zeall & Co wrote to Lam & Co terminating the agreement and demanded the return of the deposit of $200,000 by reason of the Defendant's "failure to attend to our requisitions properly and hence to prove your client's title on or before completion."

Duty to answer requisition

6. In Kok Chong Ho & Anr v. Double Value Developments Ltd. [1993] 2 HKLR 423, the Court of Appeal held that if the requisition is not answered satisfactorily then it does not matter whether the vendor in fact has a good title. In Active Keen Industries Ltd. v. Fok Chi Keong [1994] 1 HKLR 396 the Court of Appeal stated that the obligation on the vendor to answer requisitions and objections must be discharged within a reasonable time to enable the purchaser to satisfy himself on the matter, i.e. get the money ready and complete on the date fixed.

Answer by statutory declaration

7. This is not a case where the discrepancies are simply on the signatures or the passport numbers. If the two Assignments were signed at different times, naturally one would expect some difference in the style of the signatures and the passport numbers of the holder might have been changed. The real dispute is whether the names of Thung Siua and Dewi Mirahwati Thung refer to one and the same person.

8. If the matter is to be decided on first principle, I would have thought that if the 2nd Assignment recites that Dewi Mirahwati Thung is formerly known as Thung Siua, then the requisition is to be answered by a deed poll or a statutory declaration by Thung Siua or some other person that Thung Siua and Dewi Mirahwati Thung are the same person. In fact, this is what the decided cases suggested. In Lam Kin I v. Tsui Ming Yee, MP No.361/89, Godfrey J. (as he then was) referred to the proper conveyancing evidence of a statutory declaration by a person stating that the two signatures in two different assignments were one and the same person. In Chudai (H.K.) Development Co. Ltd. v. Portia International Ltd. [1992] 1 HKLR 350 where the name of the owner appeared in an earlier assignment as "Lam Chun" and in a later assignment as "Lam Chun alias Lam Yin-chor", the requisition as to the discrepancy was answered by a statutory declaration from Lam Chun. In Lee Yeung Chun & Anr v. Ng Choi Chun [1991] HKLR 468 where a owner had signed his middle name differently once giving the full name, once with the initial only at the time of his purchase and the subsequent sale, the discrepancy was explained by a statutory declaration.

9. After the present action had commenced, the Defendant's present solicitors managed to obtain from Anthony Au & Co, ("Au & Co") the solicitors who witnessed the signatures of Thung Siua and Dewi Mirahwati Thung in the 1st and 2nd Assignments, a statutory declaration from Dewi Mirahwati Thung. In this declaration, she stated that she was also known as Thung Siua and the two names referred to her.

10. Mr Pun, Counsel for the Plaintiff, accepted that this statutory declaration, if produced before the completion date, would satisfy the requisition. However the document was not produced then.

Available evidence

11. The question is what were the available evidence when the requisition was raised that the two names belonged to the same person? As far as the two assignments are concerned, the same address was used. The address is that of the flat. The signatures are slightly different although one may say that the structure of the signatures is more or less the same. However, these two pieces of evidence are clearly not sufficient to show beyond reasonable doubt that the two names belong to the same person. The requirement of proving title beyond reasonable doubt is well established by the cases : Kan Wing Yau & Anr v. Hong Kong Housing Society [1998] 2 HKLR 187.

12. Delivered together with the title deeds were a letter from Au & Co and copies of the two passports of Thung Siua and Dewi Mirahwati Thung. The letter from Au & Co was dated 6th June 1994 and it stated that :

"According to our file record, Thung Siua was the holder of both passports with Passport Nos.A080098 and A097390. We enclose herewith copy of both Passports for your reference."

13. In respect of the two passports, Ms Li, Counsel for the Defendant, referred to the identical details in the two passports of their holders such as the date of birth; the physical description namely "oval face, dark brown eyes and black hair". The photographs in the two passports showed a bespectacled woman. Ms Li further submits that the features of these two persons in the photographs are the same. As only the photocopies of the passports were produced, it is unsatisfactory to compare them. While there are identical particulars in these two passports, the signature of Dewi Mirahwati Thung in her passport in fact is completely different from the two signatures in the Assignments. I am unable to say that the circumstantial evidence can prove beyond reasonable doubt that the two names belong to the same person. As Godfrey J. held in Lam Kin I :

"A pointer is not evidence. Circumstantial evidence is not sufficient. Proper conveyancing evidence demands more than this. It demands something on the lines of the statutory declaration to which I have referred, or some other evidence which will satisfy this purchaser, and any purchaser from him, that the title is a good one. While this circumstantial evidence may be enough to convince me, I cannot, objectively speaking, take the view that it would be unreasonable for this or a subsequent purchaser to suggest that it is simply not enough. I am not entitled to force a doubtful title upon the purchaser."

To accept the circumstantial evidence in this case is to force a doubtful title upon the purchaser.

14. In Chudai, Bokhary J. (as he then was) stated that :

"Where a name is used in one document in the chain of title, and that name together with an alias is used in another document in that chain, the evidence required to put identity, and accordingly title, beyond reasonable doubt is generally less than the evidence which would be required to do that if unrecognizably different names had been used."

15. It has to be pointed out that the requisition in that case was answered by a statutory declaration from the person herself. In the case of Free Focus Ltd. v. Fels China Ltd. [1989] 2 HKC 568, the signatures of the owner were the same, it was only the passport numbers that were different. Deputy Judge Saied (as he then was) naturally found that the requisition on the discrepancy had been answered.

Requisition not answered

16. In the circumstances, I find that the Plaintiff had properly rescinded the agreement due to the failure of the Defendant to answer the requisition. The Defendant had failed to prove a good title to the flat. The Plaintiff is entitled to the return of the deposit of $200,000.

Agreed sums

17. The parties agreed that the Defendant has to reimburse the Plaintiff $12,235 being the stamp duty paid by the Plaintiff in the transaction, $15,210 being the cost of investigation of title and $13,000 being commission paid by the Plaintiff to the estate agent.

Decoration work

18. After having entered into the formal agreement, the Plaintiff was allowed to enter the flat and carried out decoration work. She spent $48,800 for the decoration. She had initially paid $15,000 to the decorator and the balance of $33,800 was paid subsequently. The payment of $33,800 was evidenced by a receipt. However, she was unable to locate the receipt for the deposit. The Defendant accepts that decoration had been carried out at the flat and does not dispute that the Plaintiff had paid $33,800. The dispute is on the initial payment of $15,000. I accept the Plaintiff had fully paid the $48,800. Although the quotation issued by the decorator was dated September 1997, this was probably a mistake and I find that the Plaintiff is entitled to recover $48,800 from the Defendant.

Furnitures and fittings

19. The flat was sold to the Plaintiff together with three pieces of electrical appliances, namely, a washing machine, a stove and a refrigerator. The Defendant said that the appliances were purchased two years ago and they cost over $10,000. The Plaintiff described the appliances as old and rusty and she caused them to be thrown away because they obstructed the decoration. The Plaintiff now accepts that she has to reimburse the Defendant on these three appliances. The issue is how much. Mr Pun suggested a depreciation of 30%. I accept this to be a reasonable figure and I would allow $7,000 to be deducted from the Plaintiff's claim.

20. When the Plaintiff entered the flat, she found that two beds (which had been dismantled) and mattresses were left behind. They were not included in the list of appliances included in the sale. She had asked the Defendant to remove the beds and mattresses. The Defendant agreed but eventually the Plaintiff had to pay someone to remove them because the Defendant failed to do so. In my view, the beds and mattresses were abandoned by the Defendant and the Plaintiff is no longer liable to reimburse the Defendant the cost of these furnitures.

Counterclaim

21. As it was the Defendant who was in breach of the agreement, he is not entitled to claim any loss allegedly arising from the recission of the agreement. In the circumstances, the counterclaim is dismissed.

Conclusion

22. Accordingly, the Plaintiff is entitled to the following relief :

(1) a declaration that the Plaintiff is entitled to rescind the agreement;

(2) a declaration that good title to the flat had not been shown by the Defendant;

(3) Judgment to the Plaintiff for the sum of $282,245 (i.e. $289,245 less $7,000).

23. There shall be interests on the judgment sums at judgment rate from the date of the service of the writ to date of payment. The Plaintiff is entitled to costs nisi of the action.

	(P. Cheung)
	Judge of the Court of the First Instance, High Court

Representation:

Mr Hectar Pun, inst'd by M/s Shamson Zeall & Co., for the Plaintiff

Ms Cynthia Li, inst'd by M/s George Tung, Jimmy Ng & Valent Tse, for the Defendant