LAU MO CHOI v. LAU MUK FAT (as the Manager of Lau Shau Wo Tso ‘劉壽和祖’)

HCA 1263/2012

[2025] HKCFI 4748

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1263 OF 2012

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BETWEEN

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DECISION

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I. INTRODUCTION

1.  After hearing on 17 June 2025 (the “Hearing”), on 2 July 2025, I handed down my decision (the “Decision”) ([2025] HKCFI 2656), whereby I allowed the appeal against Master Ebony Ling of the High Court (the “Master”)’s Order dated 9 January 2025 and ordered that the Defendant shall disclose the today the global settlement agreement between the Defendant and Mr Wong Kwok Wah (“WKW”) in relation to all or any of HCA 1879/2011, HCA 896/2012 and HCA 897/2012. This is the Defendant’s Summons filed on 15 July 2025 (the “Summons”) for leave to appeal against the Decision. I shall analyse below the grounds set out in the draft Notice of Appeal attached to the Summons to see if there are any reasonable prospects of success in the grounds.

II. GROUND 1

2.  Ground 1 is in essence a repetition of the Defendant’s argument, with much elaboration however, that the Agreement for Sharing Liabilities should only be concerned with payment of costs and expenses even if the settlement sum would go direct to such costs and expenses, and that the settlement sum, even if meant to go direct to such costs and expenses, should be a matter for the Agreement for Distribution of Assets. At §§7-10 of the Decision, I explained why I disagreed with the Defendant’s such argument and why I though such settlement sums should be considered under the Agreement for Sharing Liabilities. I have reviewed the reasoning and see nothing wrong.

3.  In his written submissions in support of the Defendant’s application for leave to appeal, Mr Billy Ma, counsel for the Defendant, submits that the concept of set-off is distinct from the concept of liability arising from a running account, referring to Loren Enterprises Pty Ltd v Shell Co of Australia Ltd (2001) 108 FCR 496 and Derham on the Law of Set-off (5^th ed) §1.01. Such submissions and authorities were not cited to me during the Hearing. In any event, Mr Ma’s submissions, with respect, are barking at the wrong tree. Those authorities concern running accounts. In a running account, there are ins and outs of different nature and that is why there cannot be any true set-off. In the present case, any settlement sum in relation to the litigation concerning the expenses in question would be attributable to the expenses because the litigation concerns the very expenses under the Agreement for Sharing Liabilities.

4.  Mr Ma also submits that counting the settlement sums towards the expenses would deprive trustees of their costs charges and expenses, citing Byrnes& Anotherv Kendle (2011) 279 ALR 212 and Sin Hua Bank Trustee Ltd.v Ip Cheung-kwok (appointed to represent the estate of Ip Koo-chi, deceased) & Others [1992] 1 HKLR 211. Again, such submissions and authorities were not cited to me during the Hearing. In any event, such submissions are alarming – it seems to me that such submissions suggest that even though the settlement sum would be directly made to reduce the expenses in question, the trustees would have the priority to deduct for their own sake first. I do not accept such submissions, subject to a caveat that it would depend on the nature of the settlement sum. But in the absence of any evidence to the contrary (for example, the settlement sum is specifically labelled for expenses or costs outside the Agreement for Sharing Liabilities), the settlement sum in respect of the litigation would be related to the matters underlying the litigation, namely, the expenses.

5.  Lastly, Mr Ma, referring to the Plaintiff’s own plea that the Plaintiff does not want to be “dragged into” HCA 1879/2011, HCA 896/2012 and HCA 897/2012, submits that such plea means that on the Plaintiff’s own case, HCA 1879/2011, HCA 896/2012 and HCA 897/2012 are irrelevant. I am unable to accept such submissions. The Plaintiff’s disagreement to be dragged into the litigation does not logically mean that the Plaintiff thinks that the litigation is irrelevant.

6.  In the circumstances, I am not satisfied that there is any reasonable prospect of success in this Ground.

III. GROUND 2

7.  Ground 2 complains that I erred in failing to appreciate that (1) there was no or no sufficient basis for me to find that there were payments made under the Settlement Agreement and (2) any payments made under the Settlement Agreement were related to the items under the Agreement for Sharing Liabilities.

8.  As I pointed out in §11 of the Decision, against the Plaintiff’s evidence that there was the Settlement Agreement, the Defendant made no denial. There was a prima facie case of the existence of the Settlement Agreement.

9.  There is no positive case from the Defendant about the Settlement Agreement at all. The Settlement Agreement was a global settlement between the Defendant WKW and in relation to their dispute, and logically, or at least inherently probably, the Settlement Agreement would cover HCA 1879/2011, HCA 896/2012 and HCA 897/2012.

10.  As against the Plaintiff’s evidence that WKW had paid the Defendant HK$21 million under the Settlement Agreement, again, there was no denial from the Defendant.

11.  Mr Ma’s complaint is in essence that the Plaintiff’s evidence is only qualified by words such as “may”, “strong possibility”, “cannot confirm”, “zero knowledge”, “could not know”. However, one must consider the evidence in context, and bear in mind that the standard of proof is on balance of probabilities only. All this qualification has to be considered in the light of the Plaintiff’s evidence at §10 of his Affirmation filed on 16 September 2024, which I mentioned in §11 of my Decision. For convenience, I quote §10 of his Affirmation:-

“In mid-August 2024, I had a conversation with WKW. He told me that there was a global settlement of the litigations between the Tso/Defendant and WKW in some months ago whereby he would compensate the Tso/Defendant in the amount of approximately HK$21 million. WKW refused to tell me any specifics about the global settlement because he is bound by a non-disclosure term therein.”

12.  This piece of evidence is clear and firm, stating the source of the hearsay evidence of the Settlement Agreement. As I said at §11 of my Decision, there was no denial of the Settlement Agreement.

13.  In the circumstances, I was satisfied that there was the Settlement Agreement under which payments were made in relation to HCA 1879/2011, HCA 896/2012 and HCA 897/2012, which covered some of the items under the Agreement for Sharing Liabilities (as explained in §§7-9 of the Decision). I see nothing wrong in that.

14.  I find no reasonable prospect of success in Ground 2.

IV. GROUND 3

15.  Ground 3 complains that I erred in not giving sufficient regard to the Master’s reasoning and decision. This ground is, with respect, stated to be rejected. A hearing of an appeal against a Master is a de novo hearing. While I could consider the reasoning of the Master’s decision, it was after all my decision to decide the matters afresh.

16.  I see no reasonable prospect of success in Ground 3.

V. GROUND 4

17.  Ground 4 complains that I failed to appreciate delay. Contrary to that, I considered delay in §§16-17 of the Decision. I also pointed out, and it is worth pointing out here again, that the Summons was taken out before the scheduled trial for assessment and as a result of the trial was adjourned sine dine. Before me, there was no appeal or even any criticism against the adjournment. As a result, there was no milestone date, and any delay had to be considered against this context.

18.  How much weight should be accorded to such delay was within my purview in making the Decision. I accorded little weight to it, but it does not mean that I did not consider this factor at all, as submitted by Mr Ma in his reply skeleton submissions §18. I see no reasonable prospect of success in Ground 4.

VI. GROUND 5

19.  Ground 5 complains that the discovery order I made cover all terms of the Settlement Agreement and it was too wide.

20.  Consistent with the Defendant’s non-denial and non-admission of the existence of the Settlement Agreement, there was (and still is) no evidence before me as to what terms there were in the Settlement Agreement, what terms were relevant and what not. In other words, the Defendant had no positive case about the Settlement Agreement but a bare denial. It is trite that an agreement has to be construed against its context and background. The starting point must be that the whole agreement has to be read before one can construe a specific term. Against this starting point, without any positive case from the Defendant on the Settlement Agreement, I fail to see anything in the Defendant’s complaint.

21.  I add that even in the written skeleton submissions in support of the Defendant’s application for leave to appeal, Mr Ma, understandably bound by the evidence of non-denial and non-admission of the Settlement Agreement, does not inform the Court how the order should be narrowed down or what part of the documents to be discovered should be redacted.

22.  I see no reasonable prospect of success in Ground 5.

VII. CONCLUSION

23.  In the circumstances, I dismiss the Summons, and order that the Defendant shall pay the Plaintiff costs of the Summons be summarily assessed at HK$75,000.

Mr Michael MH Leung, instructed by Huen & Partners, for the Plaintiff

Mr Billy N. P. Ma, instructed by Hong Lee & Co., for the Defendant

HCA 1263/2012

[2025] HKCFI 2656

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1263 OF 2012

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D E C I S I O N

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I. INTRODUCTION

1.  This is the Plaintiff’s appeal against Master’s decision of 9 January 2025 dismissing the Plaintiff’s Summons (the “Summons”)  filed on 16 September 2024 for:-

(1)  a final (or the latest draft copy)  of a global settlement agreement between the Defendant and Mr Wong Kwok Wah (“WKW”)  in relation to all litigations and/or disputes between Lau Shau Wo Tso (the “Tso”)/Defendant and WKW (the “Settlement Agreement”); and

(2)  the details of all previous offers made by the Tso/Defendant to WKW in relation to all litigations and/or disputes between the Tso/Defendant and WKW inclusive of the date of such offer, the terms of such offer, and the response of WKW to such offer.

2.  In the Notice of Appeal, the Plaintiff does not seek (2)  anymore.  So, the only issue in this de novo appeal is whether a discovery order should be made for the Settlement Agreement.

II.  BACKGROUND

3.  The main action was tried before Wilson Chan J in October and November 2018, and the Judgment was handed down on 22 February 2019 ([2019] HKCFI 380).  I shall not repeat the background of the case.  Suffice to say, for the present purposes, that:-

(1)  The Plaintiff is a member of Branch A of the Tso;

(2)  The Defendant is a member of Branch B of the Tso;

(3)  The Defendant is the manager of the Tso;

(4)  In 1994 and 1995, the Tso entered into an agreement (the “Development Agreement”)  with WKW, a land developer, whereby the Tso’s lands were assigned to WKW and some other individuals for building small houses thereon;

(5)  The small houses were built;

(6)  The small houses were assigned back to the Tso; and

(7)  The present action concerns six of the small houses (the “Houses”).

4.  The remaining dispute upon the Judgment is his Lordship’s order made in §56(2)  of the Judgment in terms of paragraph (1)  of the prayer for relief in the Re-Re-Amended Defence and Counterclaim, namely, “[t]he expenses to be borne by the Plaintiff under paragraphs 21 and 22 hereof to be assessed”.  To appreciate what this relief is about, the following pleas in the Re-Re-Amended Defence and Counterclaim are pertinent:-

“6. The Defendant avers that:

(3)  Notwithstanding the Order dated 13.08.2010 made by the Deputy High Court Judge L Chan… in HCMP 1760/2009, at the material time [WKW] was not able to have the 6 Houses assigned to the Tso free from encumbrances. It was only after a series of litigations including HCA 1902/2009 and CACV 195/2010 (on appeal from HCMP 1760/2009)  that the encumbrances were cleared by the Court of Appeal in the judgment of CACV 195/2010 dated 15.04.2011.

(5)  Well before the 6 Houses were assigned to the Tso and since about October 2010,

(a)  Members of the two Branches of the Tso have agreed a general formula for the division of assets belonging to the Tso that regardless of the number of members in an individual Branch, the assets will be equally shared between the two Branches so that each Branch will get 50% of the total value (“the Agreement for Distribution of Assets”).

(b)  In a similar vein, any liabilities and expenses incurred for and on behalf of the Tso will be equally borne between the two Branches regardless of the number of members in either Branch so that each Branch will bear 50% of the total expenses (“the Agreement for Sharing Liabilities”).

…

(10)  Pursuant to the Agreement between Lau Ping, and the Defendant and acting in the interest of the Tso as a whole, the Defendant in the capacity of the manager of the Tso has instituted three actions against [WKW] and other relevant defendants for inter alia breaches of the Development Agreement.

Particulars

HCA 1879/2011, HCA 896/2012 and HCA 897/2012

(11)  The claims in HCA 1879/2011 include, inter alia:-

(a)  a claim on delay in assigning the 6 Houses free from encumbrances to the Tso by [WKW];

(b)  a claim on defects in the fixtures and fittings of the 6 Houses under the Fitting-out Agreement; and

(c)  a claim against [WKW] and the relevant defendants therein to reassign to the Tso some of the Re-granted / Sub-divided Lots and other relevant lots of land not yet developed into small houses.

(12)  The claims in HCA 896/2012 include, inter alia:-

(a)  a claim against [WKW] for specific performance of the said written agreement dated 15.12.1994 or damages for breach of the same; and

(b)  a claim against the 2^nd Defendant therein to assign a lot of land back to the Tso.

(13)  The claims in HCA 897/2012 include, inter alia:-

(a)  a claim against [WKW] in relation to a denial of an easement which provides access road(s)  to connect the 6 Houses to the public roads including Tai Mong Tsai Road; and

(b)  a claim in relation to [WKW]’s failing to construct a box sewage system for the benefits of the Houses.

(14)  By reason of the claims in HCA 1879/2011 and HCA 897/2012, alienation of the ownership of any of the 6 Houses from the Tso to individual members will be impossible or unworkable (as a matter of conveyancing), and/or will jeopardize the interests of the Tso under these actions. The following claims are particularly adversely affected.

Particulars

(a)  The claim based on defects in the fixtures and fittings of the 6 Houses under the Fitting-out Agreement in HCA 1879/2011. The 6 Houses were finished 6 years ago and must be properly refurbished before they can be sold for a competitive price.

(b)  The claims based on the denial of the easement and failure to construct a box sewage system by [WKW] in HCA 897/2012. The claim for easement is particularly important on the ground that without the access way to Tai Mong Tsai Road, none of the Houses can be sold for a good price.

…

20. The Defendant repeats paragraphs 1 to 19 hereof.

21. By reason of all the aforesaid, the Defendant as manager of the Tso incurred expenses as particularised below to be assessed:-

(1)  legal costs incurred by the Tso in the action referred to in paragraph 6(3)  above [(“Item 1”)];

(2)  government rents paid for the 6 Houses [(“Item 2”)];

(3)  land premium for the 6 House to be assigned to the Tso payable to [WKW] [(“Item 3”)];

(4)  stamp duties paid for the assignments of the 6 Houses to the Tso[(“Item 4”)];

(5)  professional charges for inspection and valuation reports in relation to the Houses [(“Item 5”)];

(6)  expenses incurred [(“Item 6”)] in:-

(a)  changing the locks of the 6 Houses;

(b)  constructing footpaths to connect the 6 Houses located in Section D of Lot 85, Lot 286 and Lot 284 in D.D. 258 to public roads;

(c)  renovating the house on Section D of Lot 85 in D.D. 258; and

(7)  future expenses for completion for the 6 Houses [(“Item 7”)].

5.  Effectively, the Plaintiff admitted to the above.  Therefore, in §52 of the Judgment, Wilson Chan J said that “the plaintiff cannot deny his liability to share the ‘total expenses already paid or payable to be assessed’”.  In his Lordship’s sealed Order, the assessment of the expenses is also expressly confined to these 7 items.

III.  THE AGREEMENT FOR SHARING LIABILITIES

6.  The Agreement for Sharing Liabilities, pleaded in §6(5)(b)  of the Re-Re-Amended Defence and Counterclaim and subject to the reasonableness of the liabilities and expenses (see Judgment §53), was an agreement whereby the two Branches would share the “total expenses”.  The total expenses were identified in §21 of the Re-Re-Amended Defence and Counterclaim.  §21(7)  is in my view a catch-all expenses to ensure that any further or future expenses for completion of the 6 Houses would be equally shared between the two Branches.

IV.  RELEVANCE OF SETTLEMENT AGREEMENT BETWEEN DEFENDANT AND WKW

7.  Mr Billy Ma, counsel for the Defendant, submits that whatever the Settlement Agreement was about would not affect the liabilities to be shared under the Agreement for Sharing Liabilities.  In his submissions, any settlement sum received under the Settlement Agreement would be assets under the Agreement for Distribution of Assets and thus would be completely irrelevant to the expenses.  With respect, I disagree because:-

(1)  The dispute between the Tso and WKW is at least partly concerning the expenses.  Any settlement sum to settle the litigation would be attributable to the expenses.

(2)  The settlement sum could not be said to enhance the value of the 6 Houses, about which the Agreement for Sharing Assets was solely concerning.  In this regard, Mr Ma also suggests that the Tso would have to account to its members any income it receives in any event, and thus there would be no unfairness to the Plaintiff.  That the end result may be the same is one matter (and thus it is unfortunate in my view that parties have to argue over the present Summons and the appeal), but my concern is whether the settlement sum has any effect on the quantum of the liabilities.  Therefore, Mr Ma’s such suggestion takes him nowhere for the present purposes.

(3)  In a hypothetical example in the exchange I had with Mr Ma in order to test his position, I suggested that the expenses for the construction of footpath, being a dispute under HCA 897/2012 and Item 6, were invoiced for HK$500,000, and the Tso paid it, but later disputed it because of the defects of the work.  Eventually, the Tso and WKW agreed to pay back the Tso HK$250,000 in a settlement agreement without admission to liability.  Mr Ma submits that in such a hypothetical example, the expenses to be shares would still be HK$500,000, and the Tso would account for this receipt of HK$250,000 separately as assets.  This, in my view, cannot be right.  The sum paid in this context, even on a non-admission basis, clearly goes to the expenses of the construction of the footpath (under Item 6), or to the expenses incurred in litigation in relation to the construction of the footpath, which would still be part of the expenses to complete the 6 Houses (under Item 7). 

(4)  Mr Ma also submits that if one has to work out by how much the expenses would be deducted, then the assessment of expenses would become a very complicated exercise.  That may be so, but if that was the agreement, one cannot rewrite it simply because it turns out that the performance of the agreement would be very complicated.  In any event, if the expenses for litigation in relation to completion of the 6 Houses can be regarded as Item 7, then one may readily put any settlement sum under Item 7.

(5)  There also seems to be a concern that the settlement sum may be so large to offset any liabilities that the Plaintiff would not have to share any liabilities.  This, Mr Ma apparently suggests, would go contrary to the Plaintiff’s admission to the Agreement for Sharing Liabilities.  I disagree.  The Plaintiff would still be liable, just that there would no more liability to share after the set-off.  If the fact is that there is no more liability to share, so be it.  I cannot see why this would become a reason to say that any reduction or off-set of liabilities would become irrelevant.

8.  In my view, the litigation between the Defendant and WKW pleaded in §6(10)  and explained in §6(11)  – (14)  of the Re-Re-Amended Defence and Counterclaim is reasonably clearly litigation to ensure that the 6 Houses would be completed for the Tso. In particular, the litigation covered Items 5 and 6, and that the expenses of the litigation itself were part of Item 7.

9.  According to the Plaintiff, WKW told him that a global settlement agreement was reached with respect to all the litigation between him and the Defendant, whereby WKW had to pay the Defendant HK$21 million.  This, by definition, must include the litigation pleaded in §6(10)  of the Re-Re-Amended Defence and Counterclaim, and so is relevant at least to Item 7.  It may also be relevant to Items 5 and 6 given that the litigation pleaded in §6(10)  covered arguably Items 5 and 6. 

10.  It is, however, not entirely clear whether there was any other litigation than that pleaded in §6(10)  of the Re-Re-amended Defence and Counterclaim covered under this global settlement agreement.  But even assuming there was other litigation, it would be a matter for the trial court to see whether, and if so, how the reduction of the expenses could be apportioned.  The relevance would not be undermined even upon such assumption.

V.  EXISTENCE OF THE SETTLEMENT AGREEMENT

11.  Of the Plaintiff’s evidence that WKW informed him of such a Settlement Agreement, the Defendant has not made any denial.  I am satisfied that there is a prima facie case of the existence of the Settlement Agreement.

VI.  WITHOUT PREJUDICE PRIVILEGE?

12.  The Defendant contends that the Settlement Agreement was without prejudice materials and so discovery order should not be made.

13.  The legal principles in relation to without prejudice privilege are well-established:-

(1)  “[A]s a general rule the ‘without prejudice’ rule renders inadmissible in any subsequent litigation connected with the same subject matter proof of any admissions made in a genuine attempt to reach a settlement” (emphasis added): see Rush & Tompkins Ltd v Greater London Council and Another [1989] AC 1280 at 1301C-D per Lord Griffiths. 

(2)  The reason is “because it would discourage settlement if he believed that the admissions might be held against him.  But it would surely be equally discouraging if the [party making admissions or concessions] knew that if he achieved a settlement those admissions [or concessions] could then be used against him by any other [party related to the same subject matter] with whom he might also be in dispute”: see Rush & Tompkins Ltd v Greater London Council and Another, supra at 1301B.

14.  The present assessment of expenses concerns the amount of the expenses which the Plaintiff should pay the Defendant under the Agreement for Sharing Liabilities.  The Settlement Agreement concerns the rights and liability as between the Defendant and WKW. They are not the same subject matters.  Therefore, the without prejudice privilege does not attach here. 

VII.  SCOPE OF THE ORDER

15.  Because the relevance of the Settlement Agreement arises from the litigation pleaded in §6(10)  of the Re-Re-Amended Defence and Counterclaim, the Settlement Agreement or any other settlement agreements should be related to the litigation pleaded in §6(10). They are not necessarily only related to the litigation, but have to cover the litigation.  For any settlement agreement completely not related to the litigation pleaded in §6(10), they should not be included in the Order. For the sake of completeness, I do not see why “latest draft”, as framed in the Summons, would be necessary.

VIII.   DELAY

16.  The Summons was issued late on 16 September 2024, when the original assessment had scheduled to take place before Master on 23 September 2024 with 3 days reserved.  The reason for the delay was that the Plaintiff came to know the Settlement Agreement only in mid-August 2024, when the Plaintiff happened to talk to WKW.

17.  Howsoever late it was, the Master adjourned the assessment sine dine as a result of the Summons.  No dates have been fixed yet.  Little prejudice would arise in the absence of any milestone dates.

IX.  CONCLUSION

18.  Having considered the above, I am satisfied to make the following discovery order:-

(1)  Master Order of 9 January 2025 shall be set aside;

(2)  The Defendant do disclose by affirmation to be filed within 14 days from today the global settlement agreement between the Defendant and WKW in relation to all or any of HCA 1879/2011, HCA 896/2012 and HCA 897/2012; and

(3)  If the settlement agreement is not in the Defendant’s possession, custody or power, the Defendants shall make an affirmation within 14 days from today stating (a)  whether the settlement agreement was at any time in his possession, custody or power, and (b)  if so, when he (i)  parted with it and (ii)  what has become of it.

19.  As regards costs, although the scope of the discovery order I made is not as wide as the Plaintiff sought by the Summons, I think the Plaintiff has obtained an order in terms of most of the Summons.  By a broad-brush approach, I order that the Defendant shall forthwith pay the Plaintiff 70% of the costs of the appeal and 45% of the costs of the Summons before the Master below (which the Master has already assessed), the difference of 25% due to the Plaintiff’s abandonment of discovery of the communications of offer mentioned in §2 above, which was in my view rightly dismissed by the Master below.  For the costs of the appeal before me, I summarily assessed the whole costs of the appeal at HK$88,000, with a discount factored in to reflect the Plaintiff’s failure to comply with paragraph 8 of Practice Directions 14.3.

20.  Lastly, I thank counsel for their assistance.

Mr Michael MH Leung, instructed by Huen & Partners, for the Plaintiff

Mr Billy Ma, instructed by Hong Lee & Co., for the Defendant

HCA 1263/2012

[2019] HKCFI 380

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1263 OF 2012

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J U D G M E N T

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A. Introduction

1. The defendant is the manager of the Lau Shau Wo Tso (the “Tso”).  He has been appointed pursuant to section 15 of the New Territories Ordinance, Cap 97.

2. The Tso consists of two branches.  The plaintiff is a member of what has been referred to in the pleadings as Branch A.  The defendant is a member of Branch B.

3. The Tso was the registered owner of various pieces of land in the New Territories (the “Tso’s Lots”).

4. In 1994 to 1995, the Tso entered into an agreement (the “Development Agreement”) with a land developer, Mr Wong Kwok Wa (“WKW”), whereby the Tso’s Lots were assigned to WKW and later various individuals.  Applications were made for the building of houses on the Tso’s Lots, and houses were indeed built thereon.

5. Various litigation relating to the development of the Tso’s Lots arose.

6. In one such litigation (action number HCMP 1760/2009 heard before Deputy High Court Judge L Chan, as he then was, as shown in his Decision dated 13 August 2010) undertakings were given by various parties to take all steps to vest the title and interests of 6 houses that had been built out of the Development Agreement to the Tso or to whom the Tso may direct.  Subsequently, these 6 houses were assigned to the Tso with the defendant as manager (the “6 Houses”).

7. The present proceedings concern an alleged agreement or agreements as to the division of the 6 Houses among the two branches or members of the Tso.

8. A summary of the description of the 6 Houses is as follows: –

(1) Lot No 281 in DD 258, Sai Kung, New Territories (also known as No 285 Wong Chuk Wan, Sai Kung, New Territories) defined as House 1.

(2) Lot No 283 in DD 258, Sai Kung, New Territories (also known as No 282 Wong Chuk Wan, Sai Kung, New Territories) defined as House 2.

(3) Lot No 284 in DD 258, Sai Kung, New Territories (also known as No 280 Wong Chuk Wan, Sai Kung, New Territories) defined as House 3.

(4) Lot No 285 in DD 258, Sai Kung, New Territories (also known as No 281 Wong Chuk Wan, Sai Kung, New Territories) defined as House 4.

(5) Lot No 286 in DD 258, Sai Kung, New Territories (also known as No 279 Wong Chuk Wan, Sai Kung, New Territories) defined as House 5.

(6) Lot No 85 in DD 258, Sai Kung, New Territories (also known as No 271 Wong Chuk Wan, Sai Kung, New Territories) defined as House 6.

B. Main Issues at trial

B1.  The alleged 1994 Agreement

9. Whether there existed the alleged “1994 Agreement” (in which the plaintiff, Lau Ping (“Ping”), being the brother of the plaintiff, and the defendant agreed that the houses to be built on the Tso’s Lots would be divided and shared amongst the members by way of transfer?

10. The plaintiff’s case is that in or about 1994, a series of discussions took place between the plaintiff, the defendant and Ping about developing the Tso’s Lots.

11. As a result, it was unanimously agreed that:

(1) The Tso’s Lots were to be developed by building residential houses thereon;

(2) WKW was to be engaged to build the houses;

(3) After building the houses, there would be a division or sharing of the land and houses by way of transfer or conveyance to the members and/or beneficiaries of the Tso;

(4) The division or sharing would be 50% per Branch of the Tso.

B2.  The alleged 2010 Agreement

12. The plaintiff’s case is that, on 6 August 2010, there was an oral agreement (the “2010 Agreement”) between the plaintiff acting for and on behalf of the members/beneficiaries of Branch A and the defendant acting as the Manager of the Tso and for and on behalf of Branch B that the 6 Houses would be shared and divided equally between the two branches in the following way:

(1) House 2, House 4 and House 5 are to be assigned to Branch A (collectively, the “3 Houses”); and

(2) House 1, House 3 and House 6 are to be assigned to Branch B.

13. The 2010 Agreement was made in the presence of one Wong Shui Sang, and was evidenced by handwritten markings on a sketch plan signed by the defendant and handed to the plaintiff.

14. The defendant denies the existence of the 2010 Agreement and avers, inter alia, that: –

(1) In August 2010 the defendant was informed that the 6 Houses were ready to be vested to the Tso or its nominees.

(2) The defendant intended to consult the plaintiff for his view on how the 6 Houses should be dealt with.

(3) The defendant gave a sketch plan to Wong Shui Sang to pass to the plaintiff.  The defendant denies that the 2010 Agreement as alleged was made in the presence of Wong Shui Sang.

(4) Even if the sketch constitutes an offer, neither the plaintiff nor any member of Branch A signed to indicate acceptance.

B3.  Whether the plaintiff’s claim against the defendant/the relief sought by the plaintiff are sustainable

15. Whether the plaintiff alone (as a member of the Tso) can claim against the defendant, and in any event, whether the plaintiff is entitled to the relief now sought under the pleadings?

B4. The plaintiff’s share of the liability for expenses

16. Whether the plaintiff should be responsible for the sharing of the expenses and legal costs incurred in the development of the 6 Houses.

C. No Agreement in 1994

17. It is the plaintiff’s case that back in 1994 (during the discussion for the Tso to enter into the Development Agreement with the developer WKW), there existed the alleged 1994 Agreement in which: –

(1) The plaintiff, Ping, and the defendant unanimously agreed that the Tso’s houses to be built would be divided and shared amongst the members by way of transfer or conveyancing.

(2) In reliance on the alleged 1994 Agreement and acting to his “detriment”, the plaintiff consented to the development by allowing the Tso to transfer the Tso’s Lots to the developer.

(3) It’s also the plaintiff’s case (as contained in his witness statement) that the plaintiff’s branch would only want the houses divided, and did not want to sell the houses to outsiders.  The plaintiff’s Branch A only wanted to keep the 3 Houses for the use of the descendants, and had no intention to sell them.

18. As submitted by the defendant, I agree that clearly, even based on the plaintiff’s own evidence, there was no 1994 Agreement at all.  First, it is the plaintiff’s testimony, inter alia, that: –

(1) Back in 1994, he well knew about the terms of the Development Agreement with the developer WKW, for example, the Tso’s Lots would be transferred to the developer for building new houses on it, and the developer and the Tso would be entitled to a 60% and 40% profit share.

(2) There was clear understanding that Branch A and Branch B would in turn be entitled to 50% for each branch.

(3) At that time, the relationship between the plaintiff, Ping, and the defendant was still good, and given the above clear understanding, there was no discussion regarding whether the Tso’s houses must be divided in specie between the 2 branches, or whether the houses must be (or must not be) sold for profits.

C1.   Tso’s previous practice

19. Further, it was established at trial that the Tso’s practice had been that the Tso would sell the land that its members no longer required for profit.  The plaintiff testified to the effect that: –

(1) Since the defendant became the Manager in 1984, the Tso has sold its land for profit and distributed the net proceeds to the 2 branches.

(2) The relevant assignment(s) for the sale were dated 16 May 1989 (for Lot 29, 30, 50 and 61 in Sai Kung DD No 221) and dated 22 December 1994 (for Lot 101 and 104 in Sai Kung DD No 221).

(3) At all material times, the Tso has not distributed or divided any houses or land amongst the members (無試過分屋分地).  The development with the developer WKW had been the first occasion for the Tso to co-operate with a developer, and to apply and build houses on the Tso’s Lots.

C2.  Contemporaneous correspondence

20. Further still, none of the contemporaneous correspondence has ever mentioned that the plaintiff, Ping, and the defendant agreed on the alleged 1994 Agreement for the houses to be divided by members by way of transfer.  To the contrary, the following letters stated to the opposite effect: –

(1) The plaintiff’s solicitors, Messrs Kenneth C C Man & Co (“KCCM”) by their letter dated 16 July 2007 expressly stated that the object of the development of the 6 Houses was “to realize their profits in this project” (as opposed to keeping the houses for own use).

(2) The plaintiff (by KCCM’s letter dated 20 November 2009) stated that he agreed to accept the developer’s “options as set out in the proposals written in Chinese”, ie “分賬方案(2); 支出計算方案(2); 未建屋地段方案一”.  The gist of the said proposals in Chinese was that each of the houses would be sold, and after deducting the cost, expenses, commissions and tax, etc, the net proceeds of sale would be distributed between the developer WKW and the Tso (on a 60% and 40% basis).

(3) The above contemporaneous documents are clearly against the plaintiff’s pleaded case and witness statement evidence that the plaintiff would only want to keep the Houses for the benefit of the descendants; and that the plaintiff definitely disagreed with the defendant’s proposal to sell the houses and then distribute all the net proceeds.

C3.  The plaintiff’s concession that the houses can be sold for profit

21. When being cross-examined as to why the above was so contradictory to his witness statement, the plaintiff frankly admitted that the evidence at both paragraph 9 and paragraph 13 of his witness statement was incorrect (saying that he had not read them carefully).

22. After being further cross-examined more specifically, the plaintiff went so far as to completely changed his original stance (that he only wanted to keep the houses, which was also the Tso’s custom), and he unequivocally admitted that he would agree that all the Tso’s 6 Houses be sold and the net proceeds of sale be distributed between Branch A and Branch B on a 50:50 basis provided that all the “cost and expenses, etc” are well-supported by evidence (“所有使費有證有據”).

23. I agree that this “change of stance” is significant in that: –

(1) All along, the main thrust of the plaintiff’s complaint in this action is that he only wanted to keep the houses (for self-use and for the benefits of the descendants), and he definitely did not want to sell them.  According to the plaintiff, this thinking led to the alleged 1994 Agreement and the 2010 Agreement for the distribution/transfer of the houses to the plaintiff’s branch (as opposed to selling and distribution of sale proceeds), but now the plaintiff has testified the otherwise.

(2) Further, the plaintiff has been discredited in this matter, and his “change of stance” has cast doubt on the “overall credibility” of the plaintiff on other issues.

24. For the reasons stated above, I reject the plaintiff’s case on the alleged 1994 agreement and find that it does not exist.

D. No Oral Agreement in 2010

25. In this regard, the existence of the alleged 2010 Agreement in turn depends on: –

(1) What the parties/witness(es) had actually canvassed and communicated to one another, and hence whether or not an “agreement” had been concluded at the material times.

(2) Whether the plaintiff (and Wong Shui Sang (“WSS”)) had the necessary “authority” to act for Ping.

D1.  Background

26. To determine whether the 2010 Agreement exists, it is the unchallenged background that: –

(1) From around 2005 to 2008, 17 small village houses had been built on the Tso’s Lots (with certificates of compliance issued), and the Tso had selected 6 Houses (as part of its entitlement).

(2) WKW had disputes with his joint venture partners and as a result, WKW was sued in proceedings entitled HCMP 1760/2009; in which lis pendens had been registered against the 6 Houses.

(3) Hence, at the material time, the 6 Houses had not been assigned or transferred to the Tso yet.

(4) The said HCMP 1760/2009 proceedings were heard before Deputy High Court Judge L Chan on 2 and 4 August 2010 (and during the hearing, WKW and others gave the undertaking that they would transfer the 6 houses to the Tso).

27. It is the defendant’s case (which is supported by his testimony) that inter alia: –

May 2010 Meeting with WSS

(1) In around April/May 2010, WSS said he was the lawful attorney of Ping who had asked him to look after his assets in Hong Kong and China.  WSS said both the plaintiff and Ping wanted the 6 Houses divided.  WSS and the defendant then met up.

(2) During the meeting, WSS gave the defendant a plan (“WSS’s Plan”) to show the proposed split.

(3) It is the defendant’s evidence that he told WSS that it was “premature”, as the developer WKW had not allocated the 6 Houses to the Tso yet; and such matter should be discussed later (“都未轉得住”….“之後再傾”…. “等黃國華轉咗之後再算”). 

(4) It is the defendant’s clear testimony that WSS then took away the WSS’s Plan.

The 6 Houses were later ready to be transferred to the Tso

(5) In light of the hearing of HCMP 1760/2009 on 2 and 4 August 2010, it is the defendant’s evidence that on 4 August 2010, the defendant went to the High Court with his then lawyer, namely Mr Norman Yeung of Messrs Norman MK Yeung & Co and his assistant. And they waited at the cafeteria, whilst the assistant was sent upstairs to listen to the proceedings. 

(6) According to the assistant, WKW’s lawyer related that the 6 Houses could be transferred to the Tso soon, and could be transferred to the Tso or its nominees directly.

(7) It was then thought that if the Houses were assigned to its members directly, the Tso could save on tax.

(8) The defendant then quickly called WSS on 5 August 2010, and set up the meeting with WSS on 6 August 2010. 

The August 2010 Meeting with WSS

(9) During the meeting on 6 August 2010, the defendant gave WSS the Sketch Plan (on which the defendant had already written down all the words, the date (ie 6 August 2010) and signature, and coloured it beforehand on 5 August 2010) to inform the plaintiff and Ping about the location of the 6 Houses and to obtain their views on such proposal/suggestion.

(10) The defendant expressly told WSS that if the plaintiff and Ping were interested to have three of the 6 Houses assigned to them, they needed to reply by 13 August 2010 with “signatures”.

(11) Otherwise, the 6 Houses would be transferred to the Tso.

(12) WSS said he needed to discuss the matter with the plaintiff first, and stated that he understood the urgency.

No Reply from WSS / No Knowledge & Authority from Ping

(13) However, WSS failed to respond (within time or at all), and when the defendant called to chase him on the matter, he could not be reached.

(14) The defendant then on 17 August 2010 contacted Ping’s ex-wife Lau Yau Mui and was told that (i) Ping knew nothing about the 6 Houses being distributed; (ii) he would prefer selling the 6 Houses and sharing the net proceeds; and (iii) he had never asked WSS to represent him on the Tso’s affairs at all.

(15) Subsequently, the 6 Houses were transferred to the Tso in August 2010.

28. In light of the above, it is the defendant’s case that no agreement had been reached (whether as alleged or at all) between Branch A and Branch B in relation to the distribution of the 6 Houses; and the defendant would never have arranged the meeting with WSS and made the proposal if he had known Ping’s actual wishes (and also the fact that WSS had no authority to act for Ping). 

29. In light of the unchallenged background, I agree that the defendant’s case is credible and should be preferred.

30. Now the plaintiff alleges that: –

(1) As early as back in May 2010, he called the defendant to propose that the land (with the 6 Houses built on it) would be divided into 2 parts, and the defendant would have the right to make selection first, and the defendant had agreed.

(2) The plaintiff testified that he and the defendant had prior consensus for the defendant to make the selection (“之前已經傾好咗”).

31. I agree that this is simply incredible: –

(1) First, it is not the plaintiff’s pleaded case that prior to the August 2010 meeting, the plaintiff had already made an offer for the defendant to accept (or that the plaintiff and the defendant already had prior consensus).

(2) Such assertion does not make sense in the circumstances.  If the plaintiff and the defendant still had communication(s) back then, and did have such “prior consensus” that the defendant would make the selection first, there was no reason why the plaintiff did not meet the defendant directly (or at least the plaintiff should also come with WSS to meet the defendant) in the May 2010 meeting and the August 2010 meeting.

(3) To the contrary, it is the defendant’s evidence that the relationship between the plaintiff and the defendant had broken down in 2006, and since mid-2006 onwards, they were not on talking terms (with correspondence mainly through lawyers and third parties).

(4) WSS’s testimony also confirmed that the relationship between the plaintiff and the defendant had broken down at some point (“冇計傾”).

32. The plaintiff tried to argue that as the plaintiff and the defendant had already reached the “prior consensus” through WSS, the defendant was only required to consider and accept the same.  I agree that the plaintiff’s contention has no basis: –

(1) First, in the May 2010 meeting with WSS, it is common ground that WSS gave the WSS’s Plan to the defendant.

(2) It is the defendant’s clear and unshaken evidence, which I accept, that he told WSS that it was “premature”, and the developer WKW had not allocated the 6 Houses to the Tso yet; and such matter be discussed later (“都未轉得住”….“之後再傾”…. “等黃國華轉咗之後再算”), bearing in mind that it was a fact that the Tso did not have the titles of the 6 Houses at that time.

(3) Hence, by uttering those words to WSS, the effect was that the defendant had already rejected the proposal or offer (or any of the plaintiff’s purported proposal in relation to the distribution of the 6 Houses).

(4) Second, even based on the plaintiff’s case, at the material time, the defendant was only asked to make the selection first (out of the proposed split of the 6 Houses).  I agree that in law, such only amounted to an “invitation to treat” or an “invitation to make an offer” (but not “an offer” itself).  As stated in Halsbury’s Laws of Hong Kong, 2^nd Edn, Vol 18 Contract at [115.040]: –

“[115.040] Invitation to treat An invitation to treat is a mere declaration of willingness to enter into negotiations; it is not an offer, and cannot be accepted so as to form a binding contract.

In practice, the formation of a contract is frequently preceded by preliminary negotiations.  Some of the exchanges in these negotiations contain no declaration at all, as where one party simply asks for information.  Others may amount to invitations to the recipient to make an offer, these being invitations to treat.”

D2.  Inherently Improbable features of the plaintiff’s case

33. I agree that the plaintiff’s case has the following inherently improbable features.  

34. First, if as contended by the plaintiff, the parties had reached the “oral agreement” on the selection of 6 Houses between the 2 Branches (such that the defendant would transfer the 3 Houses to the plaintiff’s branch), then: –

(1) There was no plausible reason why the plaintiff or WSS did not sign on the Sketch Planto confirm the acceptance (or to put on record that an agreement had been reached), and in particular, it was relatively easy and straightforward for any counter-party to sign to confirm.

(2) When being cross-examined, the plaintiff could only say that he expected the defendant to submit the Sketch Plan to the Lands Department for registration.

(3) Further, there was also no plausible reason why the plaintiff did not write to confirm or to seek to enforce the alleged “2010 Agreement” reached on 6 August 2010.

No mention of the 2010 Agreement in the Contemporaneous solicitors’ correspondence

35. Back then in August 2010, the plaintiff had the legal assistance of KCCM.  It is also WSS’s evidence that he gave the Sketch Plan to the plaintiff, and was told by the plaintiff that the plaintiff had instructed lawyer to issue letter to the defendant to confirm and enforce the 2010 Agreement.

36. Despite the above, and as pointed out in detail at paragraph 24 of the defendant’s Closing Submissions, the plaintiff’s case on the 2010 Agreement was not at all set out in the contemporaneous solicitors’ correspondence.

D3.  Lack of Authority from Ping

37. The plaintiff bears the burden of establishing that the alleged agreement was entered into with the requisite authority.

38. To begin with, it is not in dispute that there is no document to show the alleged “authority” for WSS to represent Ping.  Relating to the alleged 2010 Agreement: –

(1) During cross-examination, it is WSS’s clear evidence that he was not authorised by Ping in relation to the August 2010 meeting with the defendant.

(2) Even though during re-examination, he somehow stated that Lau Yee Wah (Eva), Ping’s daughter, “authorised” him, I agree that: –

(a) It is not the plaintiff’s pleaded case that WSS was authorised through Eva.

(b) It is not WSS’s witness statement evidence that he was authorised through Eva.

(c) It is also not the plaintiff’s witness statement evidence, and Eva’s witness statement evidence that WSS was authorised through Eva.

(d) Hence, WSS’s concession during cross-examination should prevail.

D4.  Visit on 7 February 2017

39. It is also the defendant’s evidence, which I accept, that the defendant and others visited Ping in his care home (in Northern Ireland) on 7 February 2017, and Ping confirmed to him that: –

(1) He had not made the alleged 1994 agreement with the plaintiff.

(2) He had not given any Power of Attorney to, or asked the plaintiff (or WSS) to deal with the Tso’s assets on his behalf.

40. Indeed, it is common ground (and also the firm testimony of the plaintiff and WSS) that Branch A is represented by both the plaintiff and Ping.  In the absence of authority from Ping, the plaintiff alone simply has no authority to enter into the alleged 2010 Agreement.  On this ground alone, the alleged 2010 Agreement must be void for want of authority.

D5.  Pleading Point

41. I agree with the defendant that the defendant has sufficiently pleaded and raised the “lack of authority” issue in his pleadings.  As held in Lee Yuk Shing v Dianoor International Ltd (in Liquidation), CACV 185/2015 (Judgment dated 23/05/06): –

“78. Mr Wong relied on Suen Shu Tai v Tam Fung Tai [2014] 4 HKLRD 436 at §§9.2 to 9.4, which cited this statement of Lord Denning in Re Vandervell’s Trust (No 2) [1974] Ch 269 at 321 to 322: “It is sufficient for the pleader to state the material facts. He need not state the legal result.”

79. I am inclined to agree with Mr Wong that material facts sufficient to support a claim for the return of the purchase price have been pleaded.  Breach of contract is a possible legal consequence arising from these material facts pleaded… But as Cheung JA said in Suen Shu Tai at §9.4, “the extent of the pleading, which serves to identify the issues, must depend on the context of an individual case.”  In this instance, I am not persuaded there was any unfairness to the defendant.

….

81. …There is no suggestion that the parties were unable to focus on the issues that required consideration at the trial, and no suggestion that the evidence might have taken a different course.”

42. As submitted by the defendant, the same principles apply here, the issue of lack of authority has been fully canvassed by the parties at the trial.  I am satisfied that the “lack of authority” issue has been sufficiently raised in paragraph 9 of the Re-Re-Amended Defence and Counterclaim of the defendant.

E. The plaintiff’s claim against the defendant/ the relief sought by the plaintiff are unsustainable

E1.  Ping being a necessary party

43. In any event, I agree with the defendant that Ping is a necessary party in this action (both as one of the joint parties to the alleged 1994 Agreement and the alleged 2010 Agreement, and as the Co-head of Branch A with the plaintiff).  In the absence of Ping, the present action is not properly constituted and is liable to be struck out.  

E2.  1.5 Houses?

44. It is crystal clear that: (i) in the plaintiff’s pleadings, witness statement, and testimony, there is no evidence or assertion whatsoever as to which 1.5 Houses that the plaintiff is entitled to; and (ii) there is no evidence or assertion that as between the plaintiff and Ping, who is entitled to which 1.5 Houses (out of the 3 Houses).

45. Hence, the plaintiff’s claim for an “Order of transfer” must fail.

E3.  No Declaration should be granted

46. I further agree that even taking the plaintiff’s case to the highest, the court should not grant the “declaration” sought (in the absence of Ping as a party).

47. In 曾婉玲v兆隆苑業主立案法團, LDBM 199/2001 (Judgment dated 18 September 2001), HH Judge Lam (as he then was) at paragraph 22 cited the principle as follows: –

“If it can be shown that a declaration would not serve any practical purpose, this will weigh heavily in the scales against the grant of declaratory relief. If, on the other hand the grant of declaratory relief will be likely to achieve a useful objective, the court will be favourably disposed to granting relief. The question of whether or not any useful purpose would be served by granting declaratory relief is therefore of prime importance in determining how discretion should be exercised.” (emphasis supplied)

48. As the learned editors of Zamir and Woolf, The Declaratory Judgment (4th ed)stated at §§6-01 and 6-02: –

“The general rule is that it is desirable that all persons who appear to have a real interest in objecting to the grant of a declaration claimed in legal proceedings should be made defendants. As Viscount Maugham said:

‘The persons really interested were not before the court. It is true that in their absence they were not strictly bound by the declaration, but the courts have always recognised that persons interested are or may be indirectly prejudiced by a declaration made by the court in their absence, and that, except in very special circumstances, all persons interested should be made parties, whether by representation orders or otherwise, before a declaration by its terms affecting their rights is made.’

This is a sensible approach: first, as the court can take into account the interests of anyone who would be affected in reaching its decision as to whether or not to grant a declaration, it is only just that those who may be affected should be given an opportunity to present any argument which they want the court to take into account; secondly, a declaration will only bind the parties to the proceedings. If, therefore, someone who should have been joined as a defendant is not joined, there will be a danger of having to bring fresh proceedings in which he is joined, involving the expense and delay simply to re-determine a question already decided in the previous proceedings and thirdly, it is important that there is someone before the court who will properly contest the issue. …” (emphasis supplied)

49. Applying the above principles, I agree that the declaration sought by the plaintiff should not be granted in any event in that: –

(1) There is no dispute that in principle, the plaintiff (and his 2 sons being members of the Tso) would be entitled to 25% beneficial interest out of the 6 Houses (as a whole) and also to any of the Tso’s assets.

(2) Given the plaintiff is not entitled to an Order for transfer, the grant of the mere “declaration” (that the plaintiff is entitled to half of the interest in the 3 Houses) will not serve much useful purpose, and the declaratory relief shall not entitle him to right of exclusive possession either.

(3) On the other hand, each of the 6 Houses is unique in nature, and/or having different views and location etc (which the plaintiff also accepted in his testimony), any transfer (or declaration of beneficial interest) of 1.5 houses in favour of the plaintiff would be unfair and cause prejudice.

(4) Ping as a necessary party clearly has an interest over the said Houses.  If the declaration is granted in the plaintiff’s favour, Ping’s interest shall be prejudiced and affected.

50. The above has further demonstrated that the present action is not properly constituted for want of a necessary party (ie Ping). 

F. The defendant’s counterclaim: plaintiff’s sharing of the expenses

51. The defendant (as the Tso’s Manager) had incurred expenses in connection with the 6 Houses as pleaded at paragraph 21 of the Counterclaim.

52. By reason of the plaintiff’s admission to the “Agreement for Distribution of Assets” and the “Agreement for Sharing of Liabilities” at paragraph 5(3) and 5(4) of the Re-re-amended Reply and Defence to Counterclaim, the plaintiff cannot deny his liability to share the “total expenses already paid or payable to be assessed”.

53. During his cross-examination, the plaintiff agreed that he had to pay his portion of such expenses and costs (subject to the question of reasonableness), and he had no objection to damages being assessed.  Indeed, in the plaintiff’s Closing Submissions, the plaintiff has raised no objection to such damages being assessed.

54. Clearly, such liability is separate from and regardless of the question whether the defendant is required to assign the houses to the plaintiff.

55. In particular, the plaintiff also accepted that the Tso all along did not and does not have any reserve fund.

G. Conclusion

56. For the reasons set out above, I order that: –

(1) The plaintiff’s claim against the defendant be dismissed.

(2) Judgment be entered in favour of the defendant against the plaintiff in terms of paragraph (1) of the prayer for relief in the Re-Re-Amended Defence and Counterclaim.

(3) The plaintiff do pay all costs of the action to the defendant, such costs are to be taxed if not agreed.

57. The above order as to costs is nisi and shall become absolute in the absence of any application within 14 days to vary the same.

58. Lastly, I express my gratitude to counsel on both sides for their helpful assistance in this matter.