CHEUNG MAN YUEN v. CHAU WAN KAI JONAS

DCCJ 3353/2018

[2019] HKDC 1315

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3353 OF 2018

________________

________________

_________________________

DECISION

_________________________

1.  This is an application for leave for appeal and for stay of execution of the Writ of Possession.

Background

2.  The factual background of the case has been stated in details in the Reasons of Decision handed down on 25 July 2019 (the “Reasons of Decision”) so I need not repeat it here.

3.  From the defendant’s supporting affirmation dated 2 May 2019, the draft grounds of appeal appeared to be, as translated, “Judge Leong did not have enough time to read the defendant’s documents and submissions” (“First Ground”) and “Judge Leong only accepted documents provided by the Plaintiff’s solicitors and did not accept the documents and submissions of the defendant” (“Second Ground”).

4.  Such draft grounds of appeal, as so appeared to be, are clearly lacking in particulars and inappropriate. During the call-over hearing on 30 July 2019, the Court ordered, inter alia, that the defendant should take out an application to amend his draft grounds of appeal if necessary no later than 14 days prior to the present hearing.

5.  The defendant failed to do so. The court would therefore proceed on the basis that the First Ground and the Second Ground were the only draft grounds of appeal.

The legal principle

6.  The legal principle is trite (District Court Ordinance (Cap.336) Section 63A(2)) and needs not be repeated here.

The grounds of appeal

7.  On the morning of the date of the hearing, the defendant submitted a letter (which was dated 10 September 2019, that is, the day before the hearing). The plaintiff argued that this letter was raising new grounds of appeal and objected. The defendant claimed that there were no new grounds of appeal, but that it was merely a written submission.

8.  The court noted that the letter contained 6 paragraphs under the title “Reference is made to items of Reasons For Decision dated 25 July 2019”. Whilst paragraph 1 is more or less a repeat of the first ground of appeal, paragraphs 2 to 6 now provide particulars to the second ground of the appeal in that it now referred to specific paragraphs in the Reasons of Decision and the reasons why the defendant did not agree with the courts’ finding.

9.  Having perused these paragraphs (and also the 3 paragraphs under the title “Conclusion for Permit to Appeal”), the courts would observe that, on one hand, it was clearly undesirable that the defendant appeared to be considerably expanding his Second Ground by giving particulars in 5 paragraphs, on the other hand, one must consider whether, in reality, there was prejudice to the plaintiff.

10.  The court found that the defendant was disputing the factual findings of the court without raising new (or indeed any) arguments as to why the court has erred in its findings of facts. This was merely a rehashing of evidence and submissions already given by the defendant in the previous hearing.

11.  Indeed, the defendant had repeatedly confirmed to the court that the basis of his appeal, in summary, was simply that the court should have accepted his evidence and submissions instead of the plaintiff’s at the previous hearing.

12.  In such case, the argument of whether the defendant was raising new draft grounds of appeal or merely making a written submission would be largely irrelevant in that, either way, the plaintiff’s position would not be prejudiced since he was not caught out by any new arguments or submissions supporting the appeal.

13.  I agree with the submission of Mr. Tam, counsel for the plaintiff: the First Ground is simply a bare assertion: there was no particulars specifying which part of defendant’s evidence or argument that the court did not have enough time to read, and how that had caused “misinterpretations” in the any specific factual findings. The Second Ground, whether in its “original” form or after its “expansion” to some 5 paragraphs, is no more than a display of a lack of understanding of the adversarial legal system: in any particular case, the court may be bound to accept certain evidence and submissions and reject others. The fact that the court has rejected one party’s evidence or submission per se cannot be a ground of appeal of that party.

14.  As such, I see no reasonable prospect of success of an appeal and I also see no reason in the interest of justice for an appeal to be heard.

15.  I would order that the defendant’s applications for leave to appeal and for stay of execution be dismissed with costs to the plaintiff to be taxed if not agreed, with certificate for counsel.

DCCJ 3353/2018

[2019] HKDC 991

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 3353 OF 2018

________________

________________

_________________________

REASONS FOR DECISION

_________________________

1.  This is an appeal against the Master’s decision in refusing to set aside a default judgment. It is, therefore, a hearing de novo under O.19 r.9 The Rules of the District Court (Cap. 336H).

2.  After the hearing on 21 June 2019, I have already made the order that the appeal be dismissed with costs of and occasioned by the application be to the plaintiff with certificate for counsel. I have also given orders regarding the summary assessment of costs.

3.  I would give the reasons for my decision as follows.

Background of the proceedings

4.  On 31 July 2018, the plaintiff commenced the present action by writ to recover vacant possession against the defendant of a property known as Flat C, 18^th Floor, Block 2, Wah Yuen Chuen, No.8 Wah King Hill Road, Kwai Chung, New Territories (the “Property”).

5.  The defendant filed a Notice of Intention to Defend but failed to file any defence.

6.  Default judgment was therefore entered on 12 October 2018.

7.  On 26 April 2019, Master Simon Ho refused to set aside the judgment. The defendant is appealing against this decision.

The legal principle

8.  There is no submission before me that the judgment was irregular.

9.  The legal principle is trite: in order for the court to set aside a regular default judgment, the defendant needs to show that his defence has a realistic prospect of success.

Background of the case

10.  There is no dispute that the defendant had defaulted on various loans and, to cut a long story short, signed an Assignment of the Property to the Plaintiff on or around 4 August 2017 to sell the Property for a sum of HK$4.3M (the “Assignment”) in order to use the proceeds to repay various outstanding loans.

11.  It is also not in dispute that the defendant was represented by Messrs. Gallant for the assignment of the Property and that the purchase price was fully paid for. The defendant, at the end, only received a sum of HK$281.12 as the remaining balance.

12.  It is also not in dispute that he is still residing at the Property up until now.

The plaintiff’s case

13.  The plaintiff’s case is that after the Assignment was completed, the Property was leased back to the defendant for a monthly rent of HK$17,000 for the term between 4 August 2017 and 18 February 2019 under a written tenancy agreement (the “Tenancy Agreement”).

14.  There was also a re-purchase agreement between the parties which allowed the defendant to buy back the Property for no less than HK$5.16M on or before 4 February 2019 (the “Repurchase Agreement”).

15.  However, the defendant had only paid the deposit of HK$68,000 under the Tenancy Agreement and had failed to pay further rent due.

16.  In February 2018, the parties entered into a termination agreement stating that the defendant would deliver vacant possession on 17 March 2018 unless he paid HK$85,000 (being the rental arrears) on or before 28 February 2018 (the “Termination Agreement”).

17.  The defendant failed to do so. Therefore, the plaintiff commenced the current proceedings.

The defendant’s case

18.  The defendant’s case, as stated in the affirmation in support of the appeal, is that “the plaintiff did not complete the sale and purchase agreement dated 22 June 2017 and the assignment dated 4 August 2017” and that “there is a missing of HK$430,000 in the transaction” which was owed to him by the plaintiff.

19.  I need not go into much details of the circumstances leading up to the Assignment which are largely relevant to the current case. Suffice to say that if the defendant genuinely had any suspicion of any illegal scam or criminal activities, it would be a matter for him to report to the relevant authorities, which, of course, he has failed to do all along.

20.  In support of the first limb of his defence, the defendant told the court that he had all along been unclear about the exact sums of outstanding loans that he owed to various institutes. He said that he had demanded that he should be given a clear list and was promised that this would be made available to him on the day of the signing of the Assignment. In fact, this was not made available to him (he claimed that even now, he was unclear as to how much he owed at the time). Yet, he had signed the Assignment.

21.  I cannot see how this line of defence has any chance of success. The defendant was represented at the time. He could have instructed his lawyers to ascertain such, and he could have simply refused to sign the Assignment if he has any doubt as to the loans he owed, or indeed, any suspicion of criminal activities involved.

22.  As for the alleged missing sum of HK$430,000. This, as explained by the plaintiff’s counsel, Mr. Tasman Tam, was the deposit for the sale of the Property. The defendant did not provide any particulars as to how he thought there was a “missing sum” save that he claimed he was not clear how the sale proceeds was paid out.

23.  In fact, the plaintiff has exhibited various correspondence between his lawyers, Messrs. Liu, Chan and Lam, and Messrs. Gallant regarding the payment of the deposit and the balance of the purchase price which were split up for payments to various parties involved (letters from Liu, Chan and Lam dated 3 July 2017 and 4 August 2017).

24.  Suffice to say that if the defendant was actually unsure about how the various sums were paid out, he should instruct Messrs. Gallant to clarify at that time.

25.   Again, the defendant did not provide any evidence that he has taken any such action besides informing the court that he had called Messrs. Gallant only a few days before the hearing and was told that “they were unclear about the basis of how the sale proceeds was split.”

26.  This clearly does not support the allegation that the defendant was genuinely concerned as his inquiry to Messrs. Gallant (even if it is true) was made almost 2 years after the sale.

27.  In any case, if there was any allegation of improper handling of these payments, his cause of action would be against Messrs. Gallant but not the plaintiff, and none such would support the defendant’s claim that the assignment was not complete.

28.  Further, the defendant also disputed the authenticity of the remaining documents (including the Tenancy Agreement, the Re-purchase Agreement and the Termination Agreement).

29.  The defendant alleged that he was asked by the plaintiff to sign on pieces of blank paper and that he did so because he trusted the plaintiff. He also claimed that he had never seen the documents, implying that the contents of the documents were later added on.

30.  The court notes that, for the contents of the documents to fit, the plaintiff would have to ask the defendant to “initial” on the corners of some blanks whilst signing full signatures in the middle of other blank pieces of paper. And, having complied with all that, the defendant never gave evidence that he asked the plaintiff to see the “final product”. This is clearly a highly improbable scenario, not to mention the inherent improbability that the defendant would have complied with such a request from the plaintiff in the first place.

31.  One would also question that, without any tenancy agreement, why would the defendant still be occupying the Property almost 2 years after the assignment, and why would he issue a cheque of HK$68,000 to the plaintiff on 18 August 2017 (which coincides with the rental deposit stated in the Tenancy Agreement)? And, after having purchased the Property, why would the plaintiff decide to forge the documents when these would only benefit the defendant to continue to live in the Property?

32.  The defendant’s case is clearly illogical and his evidence are totally unconvincing. This is nothing but an attempt to delay delivering up vacant possession of the Property for as long as possible. There is no real prospect of success of the defence.