MOK MEI LING REKEI v. LAU MUK FAT

HCA 1006/2017, HCA 1879/2011,
HCA 896/2012, HCA 897/2012 &
[HCA 802/2019 and HCMP 944/2018 (Consolidated)]
(Heard together)

[2023] HKCFI 135

HCA 1006/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1006 OF 2017

_____________

_____________

AND

HCA 1879/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1879 OF 2011

_____________

_____________

AND

HCA 896/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 896 OF 2012

_____________

_____________

AND

HCA 897/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 897 OF 2012

_____________

_____________

AND

HCA 802/2019

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 802 OF 2019

_____________

_____________

AND

HCMP 944/2018

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 944 OF 2018

_____________

_____________

(HCA 802/2019 and HCMP 944/2018 Consolidated by the Order of

Madam Recorder Rachel Lam SC dated the 18^th day of October 2022)

_____________

(Heard Together)

________________________________

DECISION  ON  COSTS

________________________________

1.  On 18 October 2022, I handed down a decision in these matters concerning various case management issues [2022] HKCFI 3166 (“18 October Decision”). This decision on costs is to be read together with that decision. Abbreviations and defined terms are adopted from the 18 October Decision.

2.  This costs decision deals with the costs in respect of:

(1)  WKW’s Application;

(2)  Madam Mok’s Application; and

(3)  The Strike Out Application.

WKW’S APPLICATION

3.  WKW’s Application for global consolidation of the various proceedings was dismissed.

4.  Counsel Mr Tony H. H. Chow, who appeared for WKW, referred the Court to various cases where the Court had made neutral costs orders where applications for consolidation were rejected (Mass Ocean International Limited v Trinity Holdings (Hong Kong) Limited & Ors[2019] HKCFI 2323; Komal Patel & Ors v Chris Au & Ors, HCA 183/2014, unreported judgment dated 14 January 2016) and also where consolidation had been granted despite unsuccessful opposition (Wong To Yick Wood Lock Ointment Limited v Merika Medicine Factory Limited & Ors, HCA 562/2014, unreported judgment dated 10 March 2017). In each of these cases, the costs that were ordered after substantial argument was still “costs in the cause”.

5.  The rationale underlying this approach appears to be that consolidation is often a complex and difficult case management issue (see for example paragraph 53 of Mass Ocean). Where any party does not act in a culpable way, the Court will be slow to impose costs consequences on any side if such issue of consolidation needs to be considered in due course.

6.  Mr Chow further pointed to the fact that the Tso had not succeeded in persuading the Court to stay the Subsequent Actions, and as such, the overall stance taken in opposition had also failed.

7.  Counsel Mr Billy Ma, who appeared for the Tso, sought to persuade the Court that the usual approach of costs following the event should apply (citing Kinetics Medical and Health Group Company Ltd & Ors v Dr Tse Ivan Cheong Yau, HCA 1115/2010, unreported judgment dated 7 April 2014).

8.  At the hearing on costs, Mr Ma further submitted that there had been “culpable conduct” on the part of WKW in his conduct of the actions thus far, citing in particular his alleged fraudulent arrangement with Madam Mok (which core complaint is the subject of the Subsequent Actions), and also the sharp practice of WKW in seeking to further delay matters by raising the possibility of amending his defence if he were unsuccessful in his consolidation application (as had been foreshadowed in paragraph 49 of the 18 October Decision).

9.  On the first point, I pointed out to Mr Ma that this Court would not consider this complaint of fraud as an established fact as yet, given this is the very subject matter of the consolidated action (as ordered in paragraph 62 of the 18 October Decision) and is yet to be determined. On the latter point, I was informed by Mr Chow that although at the subsequent case management hearing before the master, his client had sought leave to amend if so advised, such application was ultimately not made. There has thus not been any step taken which would further delay the trial of the Main Actions, which I understand will be set down shortly.

10.  Considering matters in the round, and taking into account the case management steps taken to date in the lengthy history of this matter falls on the shoulders of all parties rather than any particular party being more culpable than the others (paragraph 47 of the 18 October Decision refers), I shall adopt the approach as customarily taken. The costs of and occasioned by WKW’s Application, including the costs of the hearing on costs, are thus to be costs in the cause of the respective actions (wherein the various summonses were issued).

MADAM MOK’S APPLICATION

11.  Insofar as Madam Mok’s application is concerned, she was successful in her application to consolidate the Subsequent Actions. At the hearing, she had also argued that she was supportive of WKW’s Application, and her own application was an integral aspect of this “global consolidation” position.

12.  Counsel Mr Raymond Tsang, who appeared for Madam Mok, also prayed in aid of Komal Patel (above) to suggest that the usual starting point was costs in the cause. He then cited Ling Man Yiu Raymond t/a Build Tech Engineering Co v Yau Luen Metal Works Ltd[2022] HKDC 18, to argue that the court will depart from the usual order if the application is unreasonably opposed. He submitted that the Tso had unreasonably opposed Madam Mok’s Application in seeking to stay the Subsequent Actions, and/or (as a fallback) in opposing consolidation and instead proposing that they should only be heard together.

13.  Considering matters in the round, I similarly do not think that the Tso’s position was altogether unreasonable. Insofar as the Tso’s predominant stance (in answer to the proposal for global consolidation) was to proceed to trial for the Main Actions, this aspect was successful. Madam Mok’s stance as to her own application for consolidation was not entirely straightforward, in that it was not confined to her application alone. Both in her written submissions and at the substantive hearing, she had tied her fortunes together with WKW’s Application in supporting the “global consolidation” proposed by WKW, of which her own application was a crucial piece. In the circumstances, the parties had had to argue the various options, in order to enable the Court came to the determination in the 18 October Decision.

14.  Taking into account the above circumstances, I order that the costs of Madam Mok’s Application, including the costs of the hearing on costs, shall be costs in the cause of the consolidated action (which consolidation has been ordered at paragraph 60 of the 18 October Decision).

15.  Parties were also agreed that the costs of the amendments to pleadings (ordered at paragraph 60 of the 18 October Decision) shall be costs in the cause of the consolidated action, and this I order accordingly.

16.  I would also note that I had considered whether Madam Mok and/or the 1006 Dings should be made liable in costs together with WKW for the approach taken in terms of the “global consolidation”. However, at the end of the day I did not consider this necessary or appropriate. First, I have accepted that the overall picture was complex and necessitated by the developments over the long history of the case, thus making costs in the cause a fairer outcome. Secondly and in any event, I accept the submissions that Madam Mok’s and the 1006 Dings’ stance at the substantive hearing did not substantially add to the arguments to be canvassed. This is particularly so in the case of the 1006 Dings, who had remained essentially neutral to the question of global consolidation. Their respective approaches thus did not cause much by way of additional costs.

THE STRIKE OUT APPLICATION

17.  Insofar as the Strike Out Application was concerned, the 1006 Dings were not successful in striking out, but the action was stayed.

18.  Ms Evelyn Cheng by her written submissions proposed that:

(1)  Costs up to the call-over hearing on 16 December 2021 for the Strike Out Summons should be to the 1006 Dings, to be taxed if not agreed, with certificate for counsel; and

(2)  Thereafter, there should be no order as to costs. This applies to the hearing on costs as well.

19.  Mr Ma proposed that the 1006 Dings should pay all costs of and occasioned by the Strike Out Application on the grounds that the application was unreasonably taken out, and unreasonably maintained (despite the Tso having indicated that it was amenable to a stay).

20.  On balance, I consider Ms Cheng’s proposal to be the fairest in the circumstances where:

(1)  The Strike Out Application was partially successful in that the HCA 1006/2017 Action has been stayed. This was a necessary outcome insofar as case management was concerned.

(2)  However, the parties had all proceeded to argue the strike out and, as I had alluded to in paragraphs 56 and 57 of the 18 October Decision, neither side had followed up on the possibility of the stay after the events of late 2021.

21.  I thank counsel for their assistance.

Mr Billy Ma instructed by Messrs Hong Lee & Co for the Plaintiff in HCA 1879/2011, HCA 896/2012, HCA 897/2012, HCA 1006/2017 & the consolidated action of HCA 802/2019 and HCMP 944/2018

Mr Ho Hin Chow Tony instructed by Messrs Cheung, Chan & Chung for the 1^st Defendant in HCA 1006/2017, HCA 1879/2011, HCA 896/2012, HCA 897/2012 & the consolidated action of HCA 802/2019 and HCMP 944/2018

Wriiten Submissions from Ms Evelyn Cheng instructed by Messrs S H Chou & Co, and hearing attended by Mr Chou Sing Hong of Messrs S H Chou & Co for the 2^nd - 12^th Defendants in HCA 1006/2017, the 2^nd Defendant in HCA 896/2012 and the 2^nd - 13^th Defendants in HCA 1879/2011 & the consolidated action of HCA 802/2019 and HCMP 944/2018

Mr Raymond Tsang instructed by Messrs K B Chau & Co for the 14^th Defendant in the consolidated action of HCA 802/2019 and HCMP 944/2018

HCA 1006/2017, HCA 1879/2011, HCA 802/2019,
HCA 896/2012, HCA 897/2012 & HCMP 944/2018
(Heard together)

[2022] HKCFI 3166

HCA 1006/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1006 OF 2017

________________________

________________________

AND

HCA 1879/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1879 OF 2011

________________________

________________________

AND

HCA 802/2019

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 802 OF 2019

________________________

________________________

AND

HCA 896/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 896 OF 2012

________________________

________________________

AND

HCA 897/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 897 OF 2012

________________________

________________________

AND

HCMP 944/2018

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 944 OF 2018

________________________

________________________

(Heard Together)

________________________

DECISION

________________________

A.  INTRODUCTION

1.  These matters have a long and somewhat tortuous history.  At issue before the Court at the present hearing was how to best case manage the 6 sets of proceedings going forward.

2.  There are, in essence, three proposals before the Court, which can be summarized as follows:

(1)  The application of Mr Wong Kwok Wa (“WKW”)[1]: to effectively consolidate all but one of the proceedings (namely, HCA 1006/2017), with a full recast of pleadings, but adopting the evidence and discovery that had already been filed to date.  At the hearing, this was further developed into a fallback option of consolidating HCA 1879/2011 with HCA 802/2019 and HCMP 944/2018, whilst leaving HCA 896/2012 and HCA 897/2012 undisturbed. (“WKW’s Application”)

(2)  The application by Madam Mok Mei Ling Rekei (“Madam Mok”)[2]: to consolidate HCA 802/2019 and HCMP 944/2018, with consequential directions to be given in respect of pleadings and further conduct thereof (“Madam Mok’s Application”).

(3)  The position put forward in answer to the above applications by Lau Muk Fat (“LMF”, suing as manager of Lau Shau Wo Tso)  (“the Tso”): to proceed to trial of HCA 1879/2011, HCA 896/2012 and HCA 897/2012 (collectively, “the Main Actions”, for which directions had already been given on 13 September 2013 that they should be heard together),without further consolidating the Main Actions with the subsequent sets of proceedings. It was further suggested that those subsequent proceedings ought to be stayed pending the resolution of the Main Actions.

3.  There was also before the Court a strike out application by the 2^nd to 12^th Defendants in HCA 1006/2017 (“the 1006 Dings”)[3] to strike out the action against them (“the Strike Out Application”).

4.  At the hearing, WKW was represented by Counsel Mr Tony H H Chow, Madam Mok was represented by Counsel Mr Raymond Tsang, the Tso was represented by Counsel Mr Billy N P Ma, and the 1006 Dings were represented by Ms Evelyn L C Cheng.

B.  BACKGROUND

5.  Given the various issues that arise for consideration in contemplating which course to adopt, it is necessary to set out the background and procedural history in some detail. What follows is not intended to be an exhaustive summary of the background or all the issues in the cases, but only what is essential for the purposes of the present decision.

B1.  The Development Agreement

6.  By a development agreement originally dated 15 December 1994 between the Tso and WKW, as varied by supplemental agreement dated 31 August 1995, LMF as manager of the Tso was to provide various lands to WKW as developer to coordinate and develop small houses with the involvement of various indigenous villagers (“Dings”)  (“the Development Agreement”).  In consideration for the provision of the lands, the Tso would obtain a share of the houses to be constructed thereon.

7.  Pursuant to the Development Agreement, WKW eventually procured 17 small village houses to be constructed on 17 building lots.  The houses were to be split between the Tso and WKW at a ratio of 4 to 6 (the Tso being entitled to 6 houses, WKW being entitled to 9 houses, and the parties to split the interest for the remaining 2 houses at 4:6 interest).

8.  There is some dispute as to the precise mechanism for selection and allocation, but what is not disputed is that the Tso had been allocated and conveyed 6 houses/lots in around June 2011 (“the Tso’s 6 Houses / Lots”).  There thus remained 11 houses/lots which were unallocated (“the 11 Unallocated Houses / Lots”), and which are the subject of the various actions now before the Court.

B2.  The Main Actions

9.  The first action to be initiated was HCA 1879/2011.  In a lengthy Amended Statement of Claim dated 23 March 2012 (“1879 ASOC”), the Tso makes various claims against inter alia that WKW.  It is unnecessary to set out each and every aspect of the claim, but for present purposes, the following are most pertinent. In essence, the Tso claims that:

(1)  WKW is in breach of and/or liable for delay in various aspects of the Development Agreement, such that the Tso has suffered loss and damage;

(2)  WKW misrepresented various matters to the Tso, leading to the Tso selecting the 6 houses in June 2011, which were inferior in quality, and in consequence the Tso has suffered loss and damage;

(3)  WKW is liable to specifically perform the Development Agreement in that he should: (i)  select 9 houses/lots out of the 11 Unallocated Houses / Lots and (ii)  assign and transfer 40% interest and benefit in the remaining 2 houses/lots to the Plaintiff; and in addition thereto, he is liable for damages owing to his breaches and/or delay in performing the Development Agreement.

(4)  Alternatively to the relief for specific performance, the Tso seeks declaratory relief that it is entitled to 2/11 of the rights and interest in the other 11 Unallocated Houses/Lots; and yet further or alternatively, damages in lieu of or in addition to specific performance.

10.  The HCA 1879/2011 action also involves the 2^nd to 13^th Defendants therein (“the 1879 Dings”), who are certain other of the Dings (not the same as the 1006 Dings)  whose involvement in the arrangements were necessary in order to render the Development Agreement workable.  The Tso seeks inter alia declaratory relief against them that their Lots are held on trust for the Tso, damages for breach of trust, and orders that they do transfer or assign their Lots to the Tso or other persons nominated by the Tso.  Save for filing defences wherein they largely indicate that they have “no knowledge” of the various matters in the 1879 ASOC, they have not taken an active part in the proceedings.  

11.  HCA 896/2012 and HCA 897/2012 were commenced on 28 May 2012 by the Tso.

12.  In HCA 896/2012, the Tso alleges again various breaches and/or delay in performance of the Development Agreement and seeks inter alia relief against WKW for:

(1)  Specific performance of the Development Agreement to the effect that he is liable to procure and transfer assignment of a lot in the name of the 2^nd Defendant in HCA 896/2012 (Tsang Hon Lung, a Ding involved in the arrangement who has similarly taken a non-active stance)  to the Tso; and

(2)  Alternatively to the above, damages for breach of the Development Agreement in addition to or in lieu of specific performance.

13.  In HCA 897/2012, the Tso alleges various breaches of the Development Agreement, makes an allegation that there had been an express grant of easement whereby the Tso would be afforded access to the Tso’s 6 Houses / Lots, and makes a further claim that there had been misrepresentation in respect of a box sewerage system for the Tso’s 6 Houses / Lots (which was promised, but not built). The Tso seeks relief against WKW for inter alia:

(1)  A declaration that WKW had expressly granted the easement;

(2)  Specific performance of the agreement for the grant of the said easement;

(3)  Damages for breach of the said agreement for grant of the easement;

(4)  Damages for misrepresentation in respect of the box sewerage system, or alternatively specific performance to construct the same.

14.  WKW filed defences and counterclaims in the respective actions on 15 November 2012[4]. He makes various denials and factual averments regarding the allegations in the various actions. By way of the Counterclaims in each of the actions, WKW seeks inter alia:

(1)  Declaratory relief that the Development Agreement is “unlawful, illegal, contrary to public policies and hence unenforceable and void”;

(2)  Injunctive relief restraining the Tso from executing, performing or carrying out the Development Agreement;

(3)  Declaratory relief that the Tso is estopped from alleging any breach of the Development Agreement on the basis of WKW’s delay in its performance; and

(4)  Declaratory relief that the Tso is estopped from asserting any interest in the 11 Unallocated Houses / Lots.

15.  As can be seen from the above, the Main Actions concern various disputes centering around the performance and alleged breaches of the Development Agreement. The matters pleaded by both sides concern events from the time of the origination of the Development Agreement up to around 2012 at the latest.  To state the obvious, Madam Mok is not a party to the Main Actions.

16.  As mentioned above, a direction had been given relatively early on in September 2013 that the Main Actions were to be heard together (and quite properly so).  I confirmed with the parties at the hearing that essentially all relevant steps had been taken in the Main Actions to bring the matters to trial (viz. discovery, filing of witness statements and expert reports, etc.).  The only outstanding question was whether the Main Actions should be somehow consolidated or heard together with the subsequent actions (discussed below).  If not, then the Main Actions are ready to be set down for trial.

B3.  Subsequent Developments

17.  Because of subsequent developments, the material particulars of which are outlined below, the Main Actions have been languishing in somewhat of a procedural no-man’s land for a number of years now.

18.  The first event of note is the initiation of HCA 1006/2017 by the Tso on 26 April 2017.  The action is brought against WKW as 1^st Defendant, with the 2^nd to 12^th Defendants being other Dings involved in the arrangements for the Development Agreement, who had not been made parties in the original HCA 1879/2011.  The pleading largely repeats the pleading in HCA 1879/2011, except there is additional relief sought as directed against the 1006 Dings (essentially mirroring the relief sought against the 1879 Dings, see paragraph 10 above).   The Tso readily admits that this action has served as a “protective writ” to prevent the 1006 Dings from dissipating the subject Lots or the Unallocated Houses, and thus the sealed copy of the writ had been registered in the Land Registry on 28 April 2017 against the relevant lots / houses.

19.  On 12 February 2018, WKW sent a letter to the Tso through his legal representatives (“Selection Letter”)  purporting to select 9 Houses / Lots per the selection mechanism in the Development Agreement.

20.  Subsequently, on 25 June 2018, Madam Mok initiated HCMP 944/2018 (“the 944 OS”).  By the 944 OS and evidence filed in support thereof, she alleges that she is the registered owner of 9 of the 11 Unallocated Houses, having allegedly been assigned the relevant legal titles by various registered owners solicited by WKW under the Development Agreement by way of a sale and purchase agreement dated 21 April 2017 (i.e. allegedly a few days prior to the initiation of HCA 1006/2017)  (“the Mok SPA”).  By reason thereof, she seeks declaratory and injunctive relief, the effect of which is to inter alia withdraw or vacate the registration of the various instruments in the Land Registry in respect of those 9 houses / lots.

21.  The Tso’s case is that the Mok SPA is plainly a sham. There is presently no dispute between the parties that Madam Mok is WKW’s wife, nor is there any dispute that no money actually changed hands pursuant to the Mok SPA.  There is also no dispute that the Mok SPA was only registered in the Land Registry on 25 July 2017, some three months after the initiation of HCA 1006/2017.  There are various other unusual features of the transaction which need not be fully set out herein.

22.  In view of the above, the Tso commenced HCA 802/2019 on 7 May 2019, which names WKW, Madam Mok and 12 of the Dings as Defendants (these Dings overlapping substantially with those in HCA 1006/2017). The Statement of Claim repeats much of what is set out in HCA 1879/2011 and HCA 1006/2017, but then importantly and substantively adds claims and causes of action specifically in relation to Madam Mok and the Mok SPA.  In particular, there is a plea of conspiracy to defraud, followed by pleas of dishonest assistance and knowing receipt.  To summarise the prayer for relief, it seeks inter alia:

(1)  Declarations that the Mok SPA (and subsequent assignments based thereon)  is/are unlawful and/or invalid and should be voided;

(2)  A declaration that Madam Mok does not have legal title or interest in the 9 Unallocated Houses / Lots;

(3)  A declaration that Madam Mok (or alternatively Madam Mok and the 3^rd and 4^th Defendants)  is/are holding the legal titles of the Unallocated Houses / Lots on trust for the Tso and WKW (at the 4 to 6 ratio);

(4)  A declaration that the Selection Letter was not a valid or binding selection by WKW;

(5)  A declaration that WKW had breached the Development Agreement by disposing of the 9 Unallocated Houses before proper selection;

(6)  Various consequential orders premised upon WKW being required to specifically perform the Development Agreement;

(7)  Pleas for return of the unused land; and

(8)  Various pleas for damages and/or accounts.

23.  HCA 802/2019 and the 944 OS are hereinafter referred to as “the Subsequent Actions”.  Neither of the Subsequent Actions has progressed beyond the initial pleadings. This is similarly so for HCA 1006/2017.

24.  As is evident from the above summary, a key point of dispute and the main complaints in the Subsequent Actions concern the events surrounding the Mok SPA and the impact thereof on the title to the 9 Houses / Lots.  These events occurred well after the events complained of in the Main Actions.

25.  Notwithstanding the above, Madam Mok pressed ahead with the hearing of the 944 OS, and was initially successful in obtaining relief thereunder before Recorder Linda Chan SC (as she then was)  on 28 June 2019.  This was, however, subsequently set aside by the Court of Appeal on 14 May 2021.  The full reasoning of the Court can be found at [2021] HKCA 706.  Suffice to say for present purposes that the Court of Appeal considered there were triable issues, in view of the various unusual features of the Mok SPA (paragraph 21 above)  and other features as discussed more particularly at paragraphs 38 to 50 of the Court of Appeal decision.  The Court of Appeal concluded at paragraph 43 that:

“43. In this respect, we should add that, given that there is a triable issue as to whether the SPA and the Assignment are sham transactions, there is also a triable issue as to whether Wong has made any selection of 9 Houses/Lots out of the 11 Unallocated Houses/Lots in accordance with the Development Agreement.”

26.  Directions were then given by the Court of Appeal that the 944 OS was to continue as if begun by writ, and that further directions should be sought from the Court of First Instance on the future conduct of the proceedings, including (a)  directions on the filing of pleadings and evidence as appropriate and (b)  directions on whether, and if so how, the proceedings should be tried together with HCA 802/2019.

27.  The parties then attended before Master Ho on 31 August 2021, who directed that the present summonses be taken out. The applications thus came before this Court, over a year later.

C.  RELEVANT LEGAL PRINCIPLES - CONSOLIDATION

28.  There is no great dispute between the parties as to the principles on consolidation.

29.  O.4, r.9(1), Rules of the High Court provides:

(1)   Where two or more causes or matters are pending, then, if it appears to the Court -

(a)   that some common question of law or fact arises in both or all of them, or

(b)   that the rights to relief claimed therein are in respect of or arise out of the same transaction or series of transactions, or

(c)  that for some other reason it is desirable to make an order under this rule, the Court may order those causes or matters to be consolidated on such terms as it thinks just or may order them to be tried at the same time, or one immediately after another, or may order any of them to be stayed until after the determination of any other of them.

30.  On the relevant principles, I would gratefully adopt the summary by Deputy High Court Judge MK Liu in China Health Group Ltd (formerly China Healthcare Holdings Ltd)  & Ors v Li Zhong Yuan & Ors [2021] HKCFI 3806 at paragraphs 13 to 14:

“13. As explained by Zervos J (as he then was)  in Komal Patel v Chris Au(HCA 183/2014, 2063/2015, 14 January 2016), [12] – [17]:

(1)  In deciding whether to order consolidation, the court has an unfettered discretion. The power is to be exercised in a flexible way with regard to the particular circumstances of the situation. The objective of such an order is to save time and costs. There is no hard and fast rule that just because the parties are identical and some common question of fact or law is involved in both actions, it would be expedient and proper to order consolidation.

(2)  The court has an unfettered discretion in deciding whether to order consolidation of two or more causes or matters. Even though the power is to be exercised with some degree of flexibility, a court must nevertheless be satisfied that it would be proper and expedient to make such an order, having regard to the particular circumstances of the situation, including, amongst other things, that the objective of such an order is to save time and costs, and that where there is a substantial overlapping of issues and parties, it is desirable to resolve the disputes in the different actions on one occasion by the same judge.

(3)  Where there was “substantial overlapping of issues and parties” it was desirable that the disputes in the different actions to be resolved on one occasion and by the same judge.

(4)  The question of whether actions should be tried together or one after another had to be approached from the perspective of case management rather than principles of law; the Court is primarily concerned with savings of time and costs, and also with the avoidance of unnecessary delay, undue complexity and overloading of issues. In considering “the practical implications of trying the actions together”, relevant factors include, inter alia, the additional time needed to address further issues, the adoption or admission of the evidence of witnesses in subsequent trials, the risk of losing reserved trial dates and the different stages the actions had reached before going to trial.

(5)  The emphasis is on the efficient and just resolution of disputes before the courts. The court should take a practical and common-sense approach to meet the justice of the situation.

14. See also Chan Shing Lam v Winscore International Ltd [2021] HKCFI 3563 in which Recorder Dawes SC said:

‘12. The principles under [Order 4 rule 9(1)] are trite:

(1)  The Court has a wide and unfettered discretion under Order 4, rule 9. There is no hard and fast rule on how this discretion ought to be exercised, but the Court should take a practical and common sense approach to ensure justice is best served.

(2)  Even though the Court’s discretion should be exercised flexibly, it must be satisfied that it would be proper and expedient to make such an order, having regard to the all the circumstances. It should consider, amongst other things, that the objective of the rule is to save time and costs, and where there is a substantial overlapping of issues and parties, it is desirable to resolve the disputes in different actions on one occasion before the same judge.

(3)  Following the Civil Justice Reform, the emphasis is on ensuring the efficient and just resolution of disputes before the courts.’

See Komal Patel and Ors v Chris Au and Ors, HCA 183/2014 and HCA 2063/2015 (14 January 2016)  at §§11-17; Yong Li Investments Ltd v Lee Sing Leung Robin [2018] HKCFI 1711 at §§16-17, 22, and 25-27.”

31.  Whilst there were various other cases cited by the parties, those citations largely served to illustrate certain aspects of similarities in the facts.  I have borne the above principles in mind when considering the arguments raised by all parties as to the way forward.

D.  CONSOLIDATION – WKW’S APPLICATION

32.  Having considered the parties’ submissions and the relevant papers in the hearing bundles, I would exercise my discretion against WKW’s application and disallow the application to consolidate the Main Actions with the Subsequent Actions. This is the case whether for the application as originally made, or in relation to the fallback argument developed by Mr Chow at the hearing.

33.  First, I am conscious of the very different stages where the actions find themselves. Whilst the Main Actions are essentially ready for trial, the Subsequent Actions are very much at a nascent stage, the 944 OS having gone through the process of the appellate procedure and only just having been ordered to continue as if begun by writ (per paragraph 26 above).

34.  It is unfortunate that the setting down of the Main Actions had been held up by the appeal process in the 944 OS, and then by the applications presently before the Court. It would be even more unfortunate that they should be further held up or delayed to allow time for the consolidation process to run its course.

35.  Second, as mentioned at paragraphs 15 and 24 above, the key complaints or matters raised in the Main Actions and the Subsequent Actions concern different time periods. The options presented to the Court are twofold in this regard.  Either those disputes regarding the events earlier in time could be determined first (in the Main Actions), or everything could be determined in the proposed consolidated action:

(1)  Factually and logically, there should be little dispute that it is necessary to determine the disputes in the Main Actions prior to considering what happened afterwards, since whatever findings there are in that respect will impact on how the Court approaches the issues and the events in the Subsequent Actions.  The only question is whether this should take place separately or whether it ought to be consolidated to be coherently considered.

(2)  This also includes, in particular, consideration of what aspects of the findings against WKW in the Main Actions will flow into and impact the position in the Subsequent Actions.  In this regard, whilst I do not consider the disposal of the Main Actions would (contrary to the Tso’s submissions)  naturally cause the Subsequent Actions to be settled or fall away, there is at least some clear overlap insofar as WKW is concerned. He would be bound by issue estoppel insofar as the “background” to the Subsequent Actions is concerned.  This would then hopefully crystalize or narrow down those aspects of the dispute to be dealt with in the Subsequent Actions.  In this regard, there is some apparent benefit in having the Main Actions heard first.

(3)  Whilst there is a degree of attraction in everything being consolidated and determined together (as to which, see the discussion below on the matters which had given me some pause), on balance, I did not think that this outweighed the overall prejudice to be suffered by the Tso if the matters were to be consolidated.

36.  Third, WKW’s proposal for consolidation entails entirely recasting the pleadings and joining together a total of 27 defendants.  It does not seem to me that such a course of action would save costs at all when the Main Actions are at such a progressed stage:

(1)  Across the two groups of actions, there are 27 defendants in total, the majority of whom are the Dings.  Whilst it is true that many of the Dings have taken no active part in the process to date, at least some of them have filed defences in HCA 1879/2011.

(2)  I also bear in mind that the HCA 802/2019 action includes not only pleas regarding the events pre-dating 2012, but also serious allegations of conspiracy to defraud against quite a number of the Dings (together with WKW and Madam Mok).   As such, one cannot assume that the Dings in HCA 802/2019 can or would necessarily continue to adopt a neutral stance throughout.

(3)  On the other hand, there are no allegations of conspiracy to defraud, dishonest assistance or knowing receipt levelled against the 1879 Dings.  It would similarly be unwieldy, time consuming and costly to have to subject the 1879 Dings to the time and expense of being involved with these subsequent allegations when they do not concern them at all.

(4)  The recasting exercise would thus likely not just involve the limited participation of the Tso, WKW and Madam Mok, but could well entail quite a number of defendants incurring additional time and costs.

(5)  There would, presumably, also need to be further evidence filed to deal with the events subsequent to the matters complained of in the Main Actions.  The events in question concern Madam Mok and the circumstances surrounding the Mok SPA. These matters occurred long after the original breaches complained of and are, by and large, evidentially separate from what is in issue in the Main Actions.  It would similarly not make sense to incur these later costs in a consolidated action involving all 27 defendants.

37.  The above are relatively straightforward and, in the circumstances of this case, what I consider to be rather self-evident points against the proposal for consolidation.

38.  There were, however, two issues which have given me some pause, and which I explored at length with parties during the course of the hearing.

39.  First, I had some concerns over how the relief sought by the Tso in the Main Actions could be maintained in view of the prima facie transfer of the 9 Houses / Lots to Madam Mok as currently reflected on the register.  In essence, I queried whether the specific performance aspects prayed for in the statements of claim in the Main Actions against WKW could be ordered by the Court given the current disputed status of the 9 Houses / Lots.  I also queried what impact this potential difficulty would have on the conduct of the Subsequent Actions, particularly since the relief in HCA 802/2019 is partially premised upon WKW being ordered to specifically perform the Development Agreement (paragraph 22 above).

40.  Second, and relatedly, I queried with Mr Ma what impact and bearing the findings in the Main Actions might have on the issues raised in the Subsequent Actions, and more particularly, whether Madam Mok would be bound by any of the findings.  This query was raised in the context of the argument put forward by the Tso that if the Tso were successful and the Development Agreement were enforceable “it would follow that [Madam] Mok would have no interest in the subject Houses”.  This was further developed by Mr Ma during the hearing that Madam Mok might be bound by res judicata and/or some form of estoppel.

41.  Both of the above issues arise because of the subsequent involvement of Madam Mok, the fact that she is not party to the Main Actions, and the fact that the Main Actions as currently pleaded do not deal with or mention the Mok SPA events at all.

42.  On the first query, Mr Ma impressed upon the Court the submission that the Tso and WKW are the key parties to the dispute surrounding the Development Agreement, and that any orders to be made would be made against WKW personally.  That may well be the case.  However, there remains a concern that the Court will be hesitant to order specific performance when there is an apparent impediment to it being effectively carried out.  The only fallback position for the Tso that I could see from the papers was the fact that the Tso has sought damages in addition to or in lieu of specific performance - an option that is undoubtedly open to the judge if the Tso is in fact successful.

43.  As to the second query, despite Mr Ma’s best efforts to persuade me otherwise, I cannot presently see how Madam Mok, not being party to the Main Actions and indeed not even being a witness to be called in the Main Actions, (i) would herself be bound by the result of the Main Actions; and (ii)  could be compelled to comply with any order made in the Main Actions.  There certainly could not be any res judicata insofar as she is concerned.  And indeed, I do not consider from the evidence before me that there would be issue estoppel vis à vis Madam Mok. At best, one might say that WKW would be bound by the findings in the Main Action, and Madam Mok’s case that could be run would necessarily be limited insofar as she relies on WKW as the key protagonist involved in the execution of the Development Agreement.

44.  I would note that this is not the occasion to pre-judge or finally determine questions of scope of relief, or res judicata or any form of estoppel, issues that are best fully argued and left to the trial judge(s)  who will have full grasp of the facts and evidence.  The pertinent question for the Court is whether on the possibility of there being such limitations if the matters are to proceed separately, it is still nonetheless viable and appropriate in the particular circumstances of this case to allow the Main Actions to proceed without consolidating the actions.

45.  The above queries would be essentially solved, of course, if the matters were consolidated. The issues surrounding the Mok SPA would be determined in addition to those already set out in the Main Actions.  Consequently, the relief to be ordered could be fashioned in a way which takes into account the involvement and position of all actors in this drama.  This would also negate the possibility of there being old ground traversed in the Subsequent Actions, and the danger of there being inconsistent findings by a different court if the Subsequent Actions are heard by a different judge.

46.  I must confess that this has not been an easy decision to weigh, but on balance, I consider that despite the limitations and possible complications that could arise, they do not render it impossible for the Main Actions to proceed first. Whatever potential concerns there are in the circumstances of this case, I consider that such concerns are outweighed by the factors discussed above at paragraphs 32 to 36.

47.  Finally, I note that the Tso had pointed to prior correspondence where WKW himself had suggested that the Main Actions should proceed and HCA 802/2019 should be stayed pending the resolution of the Main Actions.  Various other points had also been made concerning WKW’s deployment of delaying tactics, circumvention of procedural rules concerning pleadings and the like.  These are peripheral points at best.  Certainly, one might observe that WKW has changed his stance and been somewhat intransigent in the case management of the matters thus far.  Indeed, the case management steps taken by all parties to date leave much to be desired.  However, the more relevant question for this Court remains whether it is proper and expedient on the present set of circumstances to order consolidation.  For the reasons above, I consider that it is not.

48.  As such, WKW’s Application is dismissed.

49.  I would note at this juncture that in the course of submissions, Mr Chow had indicated that if WKW’s Application was unsuccessful, there was a possibility of WKW seeking to amend the defence in the Main Actions in order to bring in the subsequent developments relating to the Selection Letter and the Mok SPA.  This Court has not been asked to consider such an application and no draft had been produced at the hearing.  As indicated to the parties at the hearing, it would be incumbent upon WKW to apply and justify such a late amendment if he really considers it necessary and appropriate to bring these matters in via such a channel.

E.  HCA 1006/2017 – STRIKE OUT APPLICATION

50.  The background to the Strike Out Application is found in the decision of Hon Keith Yeung J in [2020] HKCFI 2789, where he found against the Tso in its default judgment application against WKW.  In essence, the judge found that the Writ had not been served on WKW, which meant that its validity had expired.  HCA 1006/2017 is thus an action which no longer concerns WKW. Following Hon Keith Yeung J’s decision, the remaining defendants (the 1006 Dings)  have applied to strike out the action against them.

51.  There is little dispute on the relevant principles for strike out applications. O.18, r.19, RHC states as follows:

“(1)  The Court may, either of its own motion or on application, at anystage of the proceedings order to be struck out or amended any pleading or the indorsement of any writ in the action, or anything in any pleading or in the indorsement, on the ground that - … (L.N. 152 of 2008)

(b)  it is scandalous, frivolous or vexatious; or

(c)  it may prejudice, embarrass or delay the fair trial of the action; or

(d)  it is otherwise an abuse of the process of the court;

and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.”

52.  I would also gratefully adopt the following trite principles on striking-out as recently summarised by DHCJ Douglas Lam SC in Chan Kai Yan v Leung Chi Kit [2019] HKCFI 1828 at §8 as follows: -

“(1)  Striking out is for plain and obvious cases. The question for the court is whether the allegations as pleaded in the statement of claim disclose some cause of action or raise some question that ought to be tried. It is not concerned with an assessment of the strength or weakness of the case. The mere fact that the case is weak and not likely to succeed is no ground for striking it out. The court would only strike out when it is impossible, and not just improbable, for the case to succeed:§8(1), (emphasis added)

(2)  A reasonable cause of action means a cause of action with some chance of success when only the allegations in the pleading are considered. The court will therefore assume the facts as pleaded in the statement of claim to be proved and determine, on that basis, whether the pleading discloses a reasonable cause of action: §8(2), (emphasis added)

(3)  Where a statement of claim does not disclose the cause of action relied upon but there is reason to believe that the case can be improved by amendment, the court may give an opportunity to amend, even though the formulation of the amendment is not before the court: §8(3).[5]

(4)  A proceeding is frivolous when it is not capable of reasoned argument, without foundation or where it cannot possibly succeed. A proceeding is vexatious where it is oppressive and/or lacks bona fide. To strike out a litigant's claim on the grounds that it is frivolous or vexatious and he has thus abused the process of the court is a serious finding to make, and one would expect the discretion to be sparingly exercised”: §8(4).”

53.  The 1006 Dings rely on the limbs in O.18, r.19(1)(b)  to (d), RHC. As developed by Ms Cheng at the hearing, the arguments are in essence:

(1)  To maintain HCA 1006/2017 would be an abuse of process considering the great degree of overlap with HCA 802/2019 (the pleadings are largely similar, save that HCA 802/2019 adds the matters concerning Madam Mok and the Mok SPA)  (citing inter alia Lam Pak Cheung v Lin Zhen Lue [2009] 1 HKLRD 35 at §§37-58).

(2)  HCA 1006/2017 is frivolous and/or vexatious because it discloses no independent cause of action against the 1006 Dings in the absence of WKW being a party, and the action is bound to fail.

(3)  Relatedly, it is suggested that the absence of WKW would prejudice, embarrass or delay the fair trial of the matter given the centrality of his role as set out in the pleading and the fact that he would not be a party to the eventual trial.

54.  In answer, the Tso refers to the following matters:

(1)  It was rational and reasonable for HCA 802/2019 to have been taken out, as they had not discovered or been made aware of the events concerning Madam Mok and the Mok SPA until after HCA 1006/2017 was commenced. Given their case is that the Mok SPA was a sham created after the date of initiation of HCA 1006/2017, this was not something which could have properly been amended or pleaded into the earlier case.

(2)  It is, however, necessary to maintain HCA 1006/2017 given the registration on the land register as a “protective writ” in relation to the 1006 Dings.

(3)  There were and are thus sensible reasons for bringing successive actions and advancing both the claims in HCA 1006/2017 and HCA 802/2019 (citing Yifung Developments Ltd v Liu Chi Keung Ricky & Ors, HCA 3020/2015, unreported judgment dated 29 August 2016 at §§36-43; as applied in Cheung Ping Sum v Wong Chi Hang [2018] HKCFI 70 at §§21-26).

55.  I accept the Tso’s submission that the initiation of HCA 802/2019 was necessary in light of the developments as to the Mok SPA and the events which transpired after HCA 1006/2017 had been initiated.  They could not have known or anticipated the subsequent developments as at the date of initiation of HCA 1006/2017.  I do note, however, that there is a great degree of overlap in the two actions, and further, it makes much more sense for HCA 802/2019 to proceed given WKW is still a party to the later action.  As such, it would be prudent to stay HCA 1006/2017 as there is no purpose in maintaining the actions in tandem.  A stay rather than a striking out is more appropriate given the writ has been registered in the Land Registry.

56.  There were also two other points made by the Tso:

(1)  First that there had been a breach of Practice Direction 19.1 by the 1006 Dings in that they had not spelt out the grounds upon which they relied for striking out at least 5 clear working days before the hearing. In this regard, Ms Cheng referred me to correspondence dated 31 August 2021 from those instructing her where there was reference to HCA 802/2019 “render[ing] [HCA 1006/2017] unnecessary.  It would be a waste of costs and Court’s time, and thus, an abuse of process to let [HCA 1006/2017] hang in the air any longer” and thus proposing the option of strike out (or alternatively staying HCA 1006/2017).

(2)  Second that the Tso had indicated in the affirmation evidence filed on 13 December 2021 that HCA 1006/2017 should be stayed, but that this proposal was not taken up by the 1006 Dings.

57.  The above are not dispositive points, but will have some bearing on costs.  Suffice to say that:

(1)  I consider that whilst the pre-action correspondence was not particularly detailed, in the circumstances of this strike out where the primary complaint is abuse of process, the broad reasons previously given suffice to comply with Practice Direction 19.1.

(2)  As I had observed at the hearing, despite the indications from both sides suggesting the possibility of staying HCA 1006/2017, it would appear neither side followed up after the filing of evidence by the Tso in December 2021.  The matter then proceeded to the present hearing where both sides argued on the strike out in addition to stay.

58.  In the circumstances, HCA 1006/2017 is ordered to be stayed.

F.  CONSOLIDATION – MADAM MOK’S APPLICATION

59.  This aspect is relatively less controversial.  I consider it right and appropriate that the Subsequent Actions should be consolidated.  They concern aspects of the same events (mainly centering around the Mok SPA), and involve overlapping parties.  Given both actions are at a nascent stage, and the fact that the 944 OS has already been ordered to continue as if begun by writ, it makes sense that the two matters should be consolidated.

60.  Accordingly, I give the directions that:

(1)  The two sets of proceedings, namely HCA 802/2019 and the 944 OS, be consolidated, with HCA 802/2019 as the lead action (“the Consolidated Action”).

(2)  Madam Mok’s claim in the 944 OS shall continue as per Paragraphs 3 and 4 of the Order of the Court of Appeal dated 14 May 2021 in the 944 OS, as a counterclaim in the Consolidated Action.

(3)  The Tso, as the plaintiff in the Consolidated Action, do file and serve its Consolidated Statement of Claim within 42 days of the date of this Order.

(4)  The Defendants in the Consolidated Action do file and serve their respective Consolidated Defence(s)  (and Counterclaim(s), if any)  within 42 days therafter.

(5)  The Plaintiff in the Consolidated Action do file and serve its Consolidated Reply(ies)  (and Defence(s)  to Counterclaim, if any)  within 28 days thereafter.

(6)  There be liberty to apply.

61.  As part of the proposals by the parties, it had been suggested that the Subsequent Actions ought to be stayed pending the determination of the Main Actions. (As indicated above, WKW had previously suggested this but resiled from it by the time of the hearing, instead preferring the option of global consolidation; conversely, the Tso had put forward a suggestion for stay at the hearing).

62.  Having considered matters in the round, I do not consider it appropriate to stay the Subsequent Actions.  This is for the following reasons:

(1)  Assuming the Main Actions are not further held up by any other interlocutory applications, they should proceed to setting down. Given the complexity of the issues involved, one can assume that the trial date eventually fixed will not be for some time, being at least months if not over a year away.

(2)  If the Subsequent Actions were to be stayed at such a nascent stage, by the time the Main Actions are determined (and perhaps any appeal processes are dealt with), it will likely be years before the Subsequent Actions are restarted. To only then go through the exercise of preparing pleadings, witness statements and the like, will not be conducive to parties recalling the relevant events and being able to give coherent instructions. It is better that these steps leading towards trial are taken sooner rather than later.

(3)  Further, there is a possibility that if the parties are diligent in their case management, the Subsequent Actions will be able to ‘catch up’ somewhat in timetabling to the Main Actions.  It would be far better for this suite of disputes to be dealt with efficiently and closer in time than for there to be yet further years where the remainder of the disputes are left languishing in abeyance.

(4)  Despite the Tso’s optimism, it is not necessarily the case that the Subsequent Actions will fall away or be settled upon the conclusion of the Main Actions. Certainly if WKW’s defence succeeds in the Main Actions, then such an outcome is more likely.  However, if the Tso succeeds, then one would presume that they would wish to further pursue the reliefs sought in the Subsequent Actions (paragraph 22 above).  In order to do so, they would need to establish the causes of action specifically pleaded in HCA 802/2019 as those matters would not have been dealt with in the Main Actions.

(5)  Considering matters in the round, and bearing in mind one cannot presume that WKW would be successful in his defence in the Main Actions, it is better that the parties press ahead with the Subsequent Actions.

63.  In the circumstances, the Subsequent Actions will be consolidated per the directions above, and will not be stayed.

G.  COSTS

64.  As there are quite a few different aspects and considerations to deal with, parties are directed to fix a date (in consultation with counsel’s diaries)  for a 1 hour hearing to address the Court on costs. Submissions, no longer than 5 pages, are to be filed 7 days prior to the hearing.

65.  I thank counsel for their assistance.

Mr Billy Ma instructed by Messrs Hong Lee & Co for the Plaintiff in HCA 1879/2011, HCA 896/2012, HCA 897/2012, HCA 802/2019 & HCA 1006/2017 and the Defendant in HCMP 944/2018

Mr Ho Hin Chow Tony instructed by Messrs Cheung, Chan & Chung for the 1^st Defendant in HCA 1006/2017, HCA 1879/2011, HCA 896/2012, 897/2012 & HCA 802/2019

Ms Evelyn Cheng instructed by Messrs S H Chou & Co for the 2^nd - 12^th Defendants in HCA 1006/2017, the 2^nd Defendant in HCA 896/2012 and the 2^nd - 13^th Defendants in HCA 802/2019 & HCA 1879/2011

Mr Raymond Tsang instructed by Messrs K B Chau & Co for the 14^th Defendant in HCA 802/2019 and the Plaintiff in HCMP 944/2018

HCMP 944/2018

[2019] HKCFI 1647

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 944 OF 2018

________________________

________________________

________________________

________________________

D E C I S I O N

________________________

1.  By Originating Summons issued on 25 June 2018 the plaintiff, Mok Mei Ling Rekei, applies for relief to vacate the registration of three documents lodged by the defendant, Lau Muk Fat, with the Land Registry against the nine lots of land currently registered in her name.

2.  The nine lots of land are Section A of Lot No 85, Lot No 273,Lot No 274, Lot No 275, Lot No 276, Lot No 277, Lot No 278, Lot No 279and Lot No 280, all in Demarcation District No 258 (collectively “9 Lots”).  

3.  The three documents lodged with the Land Registry for registration against the 9 Lots are:

(1)  a Memorandum of Notice dated 16 May 2013 (“2013 Memorandum”) submitted on 23 May 2013, which has been withheld by the Land Registrar from registration;

(2)  a sealed copy of Amended Writ of Summons in HCA 1879/2011 dated 23 March 2012 (“2011 Writ”) submitted on 24 October 2016, which has been withheld by the Land Registrar from registration; and

(3)  a sealed copy of the Writ of Summons in HCA 1006/2017 dated 26 April 2017 (“2017 Writ”) submitted on 28 April 2017, which has been registered in the Land Registry against the 9 Lots.

Background fact

4.  The following fact relevant to the application is not in dispute.  

5.  The defendant is the manager of Lau Shau Wo Tso(劉壽和祖) (“Tso”) which, until 31 August 1995, owned various plots of land in Demarcation District 258 including the 9 Lots.

6.  The plaintiff is the wife of Wong Kwok Wa (黃國華) (“Wong”).

7.  By a joint venture agreement dated 15 December 1994 made between Tso (with the defendant as manager) and Wong as developer (“Development Agreement”), as varied by a supplemental agreement dated 31 August 1995, the parties agreed, inter alia, to jointly develop various plots of land into small village houses on the following terms:

(1)  Tso would transfer various plots of land to Wong (clause 3);

(2)  Wong would identify indigenous villagers who could apply for building lots from the Government to build small village houses by surrendering Tso’s land for new grants of building lots;

(3)  The building lots would then be conveyed to the indigenous villagers (clause 5);

(4)  Wong would build small village houses on the building lots (clauses 8 – 10);

(5)  The completed houses built on the lots would be split between Wong and Tso in the ratio of 60:40 (clause 17(a)); and

(6)  For every 5 completed houses built on the lots, Wong would first select his lot, followed by Tso, such that 3 lots would be selected by Wong and 2 lots by Tso (clause 17(b) as varied) (“Selection Mechanism”).

8.  Pursuant to the Development Agreement:

(1)  On 31 August 1995, Tso conveyed various lots of land to Wong at no consideration;

(2)  Wong caused some of Tso’s lots to be surrendered to the Government, and obtained various re-granted/‌sub-divided building lots;

(3)  Wong then caused the building lots to be assigned to various indigenous villagers as registered owners, again at no consideration; and

(4)  Wong procured 17 small village houses to be constructed on 17 building lots (“17 Houses/Lots”).

9.  Of these 17 Houses/Lots:

(1)  6 houses/lots were allocated and conveyed to Tso on 7 June 2011 (“6 Houses/Lots”) and, since then, have been owned by Tso;

(2)  9 houses are built on the 9 Lots (“9 Houses/Lots”); and

(3)  2 houses are built on the 2 lots in Section B and Section C of Lot No 85, in DD 258 (“2 Houses/Lots”).   

10.  Dispute arose between the defendant and Wong regarding the performance of the Development Agreement.  The defendant alleges that Wong acted in breach of the Development Agreement in that:

(1)  there has been delay in developing and conveying the 6 Houses/Lots to Tso;

(2)  small village houses have not been built on another12 buildinglots originated from Tso [1] and held by 12 indigenous villagers (“Other Villagers”).  Some other lots conveyed by Tso to Wong could not be converted into building lots.  These 12 lots and “unconverted” lots, which are different from the 17 Houses/Lots, are collectively referred to as “Undeveloped Lots”;

(3)  Wong had made misrepresentations to the defendant, which led to the defendant accepting the 6 Houses/Lots instead of insisting on the Selection Mechanism; and

(4)  The defendant contends that the 9 Houses/Lots and the 2 Houses/Lots constitute the so-called “11 Unallocated Houses/Lots”, and Wong has failed to select his share pursuant to the Selection Mechanism.

11.  On 3 November 2011, the defendant commenced HCA 1879/2011 against Wong and the Other Villagers.  On 23 March 2012, the defendant filed an amended writ (ie the 2011 Writ) together with an amended statement of claim (“2011 ASOC”).  In the 2011 ASOC, the defendant claims against Wong for breach of the Development Agreement and seeks the following relief:

(1)  damages for loss of the use of the 6 Houses/Lots as a result of Wong’s delay in completing their construction and the expenses incurred in rectifying the defects in such Houses (prayers (1) – (2));

(2)  damages for misrepresentation in respect of the allocation of the 6 Houses/Lots (prayer (3));

(3)  specific performance of the Development Agreement by Wong to procure the transfer of the Undeveloped Lots to Tso (prayer (4));

(4)  an order that Wong do assign the Undeveloped Lots to Tso, and damages for breach of trust (prayer (5));

(5)  specific performance of the Development Agreement requiring Wong to select 9 houses/lots out of the 11 Unallocated Houses/Lots, and to assign and transfer 40% interest in the 2 remaining houses/lots to the defendant (prayer (6)); and

(6)  a declaration that the defendant is entitled to ²⁄₁₁ shares of the 11 Unallocated Houses/Lots and “an order that there be a charge” in favour of the defendant in respect of such ²⁄₁₁ shares (prayer (7)).

12.  In the 2011 ASOC, the defendant also claims that the Other Villagers hold the Undeveloped Lots on trust for Tso.  No claim hasbeen made against the 11 indigenous villagers who held the 11 Unallocated Houses/Lots.

13.  On 24 May 2013, the 2013 Memorandum was signed by the defendant and the same was lodged by the defendant’s former solicitors for registration against, inter alia, the 9 Lots.  On 6 June 2013, the Land Registrar stopped the registration.

14.  On 22 June 2015, Hong Lee & Co (“HLC”) became the solicitors for the defendant.  On 24 October 2016, HLC lodged the 2011 Writ for registration against, inter alia, the 9 Lots.  On 16 January 2017, the Land Registrar stopped the registration.

15.  By a sale and purchase agreement dated 21 April 2017 (“SPA”), the 9 Lots were “sold” by the 9 indigenous villagers to the plaintiff for HK$117,000,000.  It is common ground that the 9 indigenous villagers never acquired any interest in the 9 Lots, nor did the plaintiff pay the consideration stated in the SPA to the 9 indigenous villagers.

16.  Prior to completion of the SPA, on 26 April 2017, the defendant issued the 2017 Writ together with the statement of claim (“2017 SOC”), and the same was registered against the 9 Lots on 28 April 2017.  In the 2017 Writ, the defendant named the 11 indigenous villagers who held the 11 Unallocated Houses/Lots as the 2^nd to 12^th defendants.

17.  In the 2017 SOC:

(1)  the defendant repeats the same allegations made in 2011 ASOC including the allegation that Wong has not selected 9 houses/lots out of the 11 Unallocated Houses/Lots (at §52(a));

(2)  the defendant alleges, for the first time, that (i) the 11 indigenous villagers held the 11 Unallocated Houses/Lots “as nominee and/or agent” of Wong for the purpose of the Development Agreement (at §60(a)); and (ii) Wong had and still has full control and possession of all of the 11 Unallocated Houses/Lots (at §60(b)).

(3)  For these reasons, the 11 indigenous villagers:

(i) are holding the legal titles of the entire 11 Unallocated Houses/Lots “on resulting and/or constructive trust” for the defendant and Wong (§61(a));

(ii) should assign and transfer 40% interest and benefit of the “2 Remaining Houses/Lots” [2] to the defendant (§61(b));

(iii) should assign and transfer 60% interest and benefit in the “2 Remaining Houses/Lots” to the defendant, and the “9/11 interest and benefit of and in 9 out of all the [11 Unallocated Houses/Lots] to [Wong]” (§61(c)); and

(iv) must not sell, dispose of or create any encumbrances on the 11 Unallocated Houses/Lots (§61(e), (f)).

18.  The defendant further alleges in the 2017 SOC that pending completion of the aforesaid assignments and transfers, the defendant is entitled to:

(1)  “ 40% of the 2/11 shares on all the [11 Unallocated Houses/Lots]” (§61(d)(i));

(2)  “ a charge/lien over all the [11 Unallocated Houses/Lots] for his / the Tso’s proprietary interest of 40% of the 2/11 shares thereof” (§61(d)(ii)); and

(3)  “40% interest and benefit of and in the [2 Remaining Houses/Lots] free from encumbrances; and the [defendant] is entitled to select the same from the [11 Unallocated Houses/Lots]” (§61(g)).   

19.  The declaratory and other relief claimed in the prayers of the 2017 SOC are based on the allegations set out in §§17 – 18 above.

20.  By an assignment dated 6 July 2017, the 9 Lots were assigned by 9 indigenous villagers to the plaintiff (“Assignment”).

21.  By letter dated 18 December 2017, the plaintiff through her former solicitors informed the defendant of the Assignment and demanded the defendant to (1) withdraw the registration of the 2013 Memorandum and the 2011 Writ, (2) vacate the registration of the 2017 Writ against the 9 Lots and (3) disclose all correspondence exchanged between the defendant’s solicitors with the Land Registry in relation to the registration of the 2013 Memorandum.

22.  The defendant did not comply with the demand.  Thereafter, the plaintiff’s solicitors attempted, but was unable, to obtain the correspondence in relation to the registration of the three documents from the Land Registry. 

23.  By letter dated 12 February 2018 (“Selection Letter”), Wong through his solicitors informed the defendant that:

(1)  in response to prayer (6) of the 2011 ASOC, he selected the 9 Houses/Lots as his own;

(2)  he agrees to share with the defendant the interest and benefit of the 2 Houses/Lots in the ratio of 60:40 either by transferring 40% of the ownership in respect of the 2 Houses/Lots to the defendant or putting them for sale and upon completion, sharing the net proceeds between him and the defendant as to 60:40; and

(3)  nothing therein “shall prejudice to Wong’s Amended Defence and Counterclaim filed herein [3] ”.    

24.  The defendant did not respond to the Selection Letter.  On 25 June 2018, the plaintiff commenced the present proceedings.

25.  The plaintiff filed three affirmations in support of her application, namely her affirmation filed on 2 August 2018, her 2^nd affirmation and Wong’s affirmation both filed on 4 October 2018. The defendant filed his affirmation in opposition on 30 August 2018.

26.  At the callover hearing on 8 November 2018, Deputy High Court Judge To adjourned the hearing of the Originating Summons for argument with two days reserved, on the basis that cross-examination of the deponents will not be required.

27.  I should add that the defendant has placed before the court a copy of a writ and statement of claim filed by the defendant on 7 May 2019 in HCA 802/2019 (“2019 Action”) in support of his argument that the plaintiff has no locus standi to commence these proceedings.  This is not permissible, as the 2019 Action does not form part of the evidence in these proceedings.

Discussion

28.  Mr Alan K K Leong SC (leading Mr Alfred C P Cheng), counsel for the plaintiff, submits that the registration of the three documents should be vacated on the following grounds:

(1)  the 2013 Memorandum is not a registrable instrument under the Land Registration Ordinance (Cap 128) (“LRO”), as it does not affect any interest over the 9 Lots;

(2)  the 2011 Writ and 2017 Writ are not lis pendens within section 1A of the LRO because the Development Agreement, if performed, would only confer on Tso a proprietary interest over the 6 Houses/Lots, and 40% of the 2 Houses/Lots; and

(3)  in any event, as Wong has already selected the 9 Houses/Lots as his own, there is no basis for the defendant to maintain any claim over the 9 Lots.

29.  On the other hand, Mr Kenneth C L Chan (appearing with Mr Billy N P Ma), counsel for the defendant, submits that the Originating Summons should be dismissed on the following grounds:

(1)  the plaintiff is not the registered owner of the 9 Lots and has no locus standi to commence these proceedings, as the SPA and the Assignment are “sham” and the defendant has commenced the 2019 Action to set aside the Assignment;

(2)  the 2013 Memorandum is a registrable instrument under the LRO;

(3)  the 2011 Writ is an action “in which claim to land or some interest in land is asserted / there is a claim of right or a claim to charge some specific property”;

(4)  the relief sought by the plaintiff requires the Court to determine the proceedings in the 2011 Writ and the 2017 Writ,which is not permissible; and

(5)  there are “significant factual and legal disputes” and the use of the Originating Summons procedure is inappropriate. 

30.  Accordingly, the issues which require determination of the Court are:

(1)  whether the plaintiff has locus standi to bring the present proceedings;

(2)  whether the 2013 Memorandum is a registrable instrument;

(3)  whether the 2011 Writ is a lis pendens within section 1A of the LRO;

(4)  whether the 2017 Writ is a lis pendens within section 1A of the LRO;

(5)  whether it is appropriate for the Court to determine the issues raised in these proceedings summarily.

Applicable principles

31.  Section 2(1) of the LRO provides as follows:

“ The Land Registry shall be a public office for the registration of deeds, conveyances, and other instruments in writing, and judgments; and all deeds, conveyances, and other instruments in writing, and all judgments, by which deeds, conveyances, and other instruments in writing, and judgments, any parcels of ground, tenements, or premises in Hong Kong may be affected, may be entered and registered in the said office in the prescribed manner.”                (underline added)

32.  The term “instrument in writing” is not defined in the LRO.  In Anstalt Nybro v Hong Kong Resort Co Ltd [1980] HKLR 76 at 81, the Privy Council held that “it is only where the [instrument] may create some interest legal or equitable in the parcel of ground that the instrument can be the subject of registration under the [LRO]”.

33.  As for “judgments”, section 14 provides that the provisions of the LRO relating to judgments shall extend to lites pendentes.  A “lis pendens” is defined in section 1A as “(a) any action or proceeding pendingin a court or tribunal that relates to land or any interest in or charge on land;and (b) a bankruptcy petition”.  However, not all lis pendens are registrable, and the test for registrability was stated by P Chan J (as he then was) in Chow Chiu Tai v Chan Tak Ming [1994] 1 HKLR 274 at 279(10–35) thus:

“ So an action or proceeding which falls within the definition of lis pendens is registrable in the same manner as a judgment. But not every judgment is registrable under the Ordinance; only those by which ‘any parcels of ground, tenements, or premises inHong Kong may be affected may be registered at the Land Office’(see s. 2). It follows that not every lis pendens falling within s. 1A is registrable; only those by which land may be affected are. In other words, not every action or proceeding pending in a court that relates to land or any interest in or charge on land is registrable unless it affects the land or any interest therein.

… A lis pendens, to be registrable, must be one which affects aninterest in land so that if it is not registered or registered in time,the interest affected by it may lose priority to some other interest in the same land if the document relating to that other interest is registered. In other words, the question to be answered is: will the interest which is to be affected by the action or proceeding be adversely affected by or deferred to some other interest in the land if the action or proceeding is not registered or registered in time?”               (underline added)

34.  Under section 19 of the LRO, the court has the power to order the registration of a lis pendens be vacated:

“ The court or judge before whom any property sought to be bound is in litigation, may on the determination of the lis pendens, or during the pendency thereof, where the said court or judge is satisfied that the litigation is not prosecuted bona fide, or for other good cause shown, make an order for the vacating of the registration in the Land Registry of such lis pendens without the consent of the party who registered it, and may direct the party on whose behalf the registration was made to pay all the costs and expenses occasioned by the registration or the vacating thereof, including the costs of the application to vacate, or may make suchother order as to such costs or any of them as to the said court or judge may seem just.”               (underline added)

35.  Moreover, Mr Leong submits (and Mr Chan accepts) that the Court has inherent jurisdiction:

(1)  to grant a declaration on the registrability of any document lodged for registration at the Land Registry whether it is a lis pendens or not (Wong Kum Chi v Lee Tit Ying [2003] 1 HKLRD 594 at §16); and

(2)  to deal with the registrability of documents pending registration at the Land Registry, and order their removal or vacation if they are not registrable (Shineland Corporation Ltdv Gladford Ltd HCMP 1972/2017, 30 November 2017, at §44).  

36.  Further, section 20 provides that an application to vacate a lis pendens under section 19 may be made in a summary way and may be made by “any person interested in the property against which the lis pendenshas been registered, whether such person is a party to the lis pendens or not”. This makes clear that a person having interest in the property in question can seek a summary determination of the registrability of the lis pendenswhich has been registered against that property, whether or not he is a party to the lis.

37.  Although section 20 does not apply to an application concerning the registrability of an “instrument in writing” or a document pending registration, in my view, the Court may take into account the matters listed in section 20 when considering whether a person has locus to make the application and whether the procedure invoked is appropriate.      

38.  I would add that this Court has enquired with counsel as to whether the Development Agreement would be tainted with “illegality”,given the indigenous villagers who applied to the Government for permission to build small village houses were not the beneficial owners ofthe land lots, but acted as conduit or bare trustees for Tso and the defendant (see: Lau Kwai Kiu v Bian Xintian [2012] 2 HKLRD 954 (CACV 263 and 281/2010, 30 March 2012); Chan Yau v Chan Calvin & anor CACV 202/2014, 6 August 2015).  In response, Mr Chan submits that the requirement for indigenous villager to make a statutory declaration to the effect that he is the beneficial owner of the land in question was only introduced in October 1997 and, therefore, has no application to the Development Agreement which was made in December 1994.  This is not disputed by Mr Leong.

39.  I turn to consider the issues identified in §30 above.

Locus standi

40.  In my view, Mr Chan’s submission that the plaintiff has no locus standi to commence these proceedings is misconceived.  The plaintiff is and has since 6 July 2017 been the registered owner of the 9 Lots and, as such, is a person interested in the 9 Lots against which (1) the 2013 Memorandum and 2011 Writ have been pending registration, and (2) the 2017 Writ has been registered.

41.  As to Mr Chan’s submission that the SPA and Assignment are“sham” as they did not represent a genuine sale and purchase of the 9 Lots, but was part of an alleged scheme of “fraudulent transactions” to defraud the defendant, I do not think that the submission is well founded, in light of the defendant’s own case that the 9 indigenous villagers never acquired any interest in the 9 Lots and that Wong had the right to choose his share of 9 houses/lots out of the 11 Unallocated Houses/Lots.  Indeed, until the commencement of the 2019 Action, the defendant has never sought to set aside the SPA or the Assignment.  The mere fact that the defendant belatedly commenced the 2019 Action would not change the fact that the plaintiff is the registered owner of the 9 Lots, such that she has the locus to commence these proceedings.

2013 Memorandum

42.  Mr Leong submits that the 2013 Memorandum is not an “instrument in writing” within the meaning of the LRO, as it did not confer any interest in the 9 Lots on Tso.  At best, it was a self-serving notice to inform the reader that Tso intended to claim against Wong and the 9 indigenous villagers holding the 9 Houses/Lots and the 2 indigenous villagers holding the 2 Houses/Lots for breach of contract.

43.  On the other hand, Mr Chan argues that the 2013 Memorandum is a registrable instrument “as it is dealing with land”.  He relies on the following passage (in particular the words underlined) in Sihombing and Wilkinson, Hong Kong Conveyancing: Law and Practice (2019), Issue 13,Vol 3H, at §XIV[56]:

“ The Ordinance (see vol 2A, XIV [72]) does not provide for mandatory registration of written documents affecting land; however local practice has imbued registration with a mandatory status: Yeung Shu v Alfred Law & Co [1997] 2 HKC 153. This has resulted probably because section 4, in abrogating the doctrine of notice, has meant that registration is really the only means of protection for a prior equitable interest. Consequently, any document dealing with land is capable of supporting a memorialfor registration: see Regulation 6 and see Ngai Kin Lit v To ChaiFook [1997] 3 HKC 749 and see Financial and Investment Services for Asia Ltd v Baik Wha International Trading Co Ltd[1985] HKLR 103 (see vol 2A, XIV [59]). …” (underline added)

44.  The above passage appears in the section discussing the nature of the LRO and explains the genesis of the local practice which gives registration with a mandatory status.  It has nothing to do with the separate question of the principle governing the registrability of an instrument in writing.

45.  Mr Chan has not advanced any reason as to why this Court should not apply the principle set out in Anstalt Nybro (at 81) in determiningthe registrability of the 2013 Memorandum.  Applying that principle, it is clear that the 2013 Memorandum is not an instrument which “may create some interest legal or equitable” in the 9 Lots.  It follows that the 2013 Memorandum is not a registrable instrument under the LRO and its pending registration should be removed or vacated.

2011 Writ

46.  Mr Leong submits that it is clear from the defendant’s pleaded case that his claim is a personal claim against Wong for breach of the Development Agreement, rather than a claim which affects an interest in land. This is reinforced by the fact that:

(1)  he has not joined the 9 indigenous villagers holding the 9 Lots as defendants in the 2011 Writ;

(2)  the primary relief claimed is for specific performance of the Development Agreement requiring Wong to select 9 houses/lots out of the 11 Unallocated Houses/Lots; and

(3)  the defendant did not take any step to register the 2011 Writ against the 9 Lots until 24 October 2016, almost three years after it had been issued.

47.  Mr Leong further submits that as Wong has through the Selection Letter exercised his right to select the 9 Houses/Lots as his own, it is no longer open to the defendant to contend that there are 11 Unallocated Houses/Lots or that he is entitled to ²⁄₁₁ of the so-called 11 Unallocated Houses/Lots.

48.  In response, Mr Chan submits that there is no legal requirement that the registered owner holding the property must be joined as a party to the lis pendens. The argument does not assist the defendant. As explained in Chow Chiu Tai (at 279), the test for registrability is to ask whether if the lis pendens is not registered in time, the interest affected by it may lose priority to some other interest in the same land if the document relating to that other interest is registered.  Since the whole purpose of registration is to preserve priority of a person who claims to have interest in the land in question, if the registered owner of that land is not named as a defendant in the lis pendens, neither the registration nor any judgment to be given in the lis pendens will bind the registered owner.  This is inconsistent with the very purpose of registration of the lis pendens.  

49.  Mr Chan submits that the defendant’s claim in the 2011 Writ for (1) specific performance (prayer (6)) and (2) a declaration that he is entitled to ²⁄₁₁ out of the 11 Unallocated Houses/Lots are clearly a “claim to land or some interest in land is asserted” (prayer (7)) and, therefore, registrable. I disagree.

50.  To be registrable, the 2011 Writ must be a lis pendens which “affects an interest in land” (Chow Chiu Tai, p 279).  A claim for specific performance requiring Wong to select 9 houses/lots out of the 11 Unallocated Houses/Lots is a personal claim against Wong.  It is not a claim which affects an interest in land.

51.  As regards the claim for a declaration that the defendant is entitled to ²⁄₁₁ of the 11 Unallocated Houses/Lots, it is premised on Wong not having made his selection out of the 11 Unallocated Houses/Lots. Mr Chan accepts (rightly) that Wong has the right to choose the 9 Houses/Lots, but contends that he has not made the selection, given that (1) the SPA and the Assignment are “sham”; and (2) Wong has stated in the Letter of Selection that “[f]or the avoidance of doubt, nothing herein contained shall prejudice to Wong’s Amended Defence and Counterclaim filed [in the 2011 Writ].”  As I understand his argument, Mr Chan submitsthat in the Amended Defence and Counterclaim filed by Wong, he disputes the defendant’s claim on, inter alia, the grounds that the Development Agreement is unenforceable by reason of “illegality” and time bar, which is inconsistent with the plaintiff’s case that Wong has selected the 9 Houses/Lots pursuant to the Development Agreement.  Further, in stating that the Selection Letter shall not prejudice his Amended Defence and Counterclaim, Wong has not made his selection unequivocally.

52.  I do not think that the argument is well founded for two reasons.

53.  First, I accept the plaintiff’s contention that by causing the 9 indigenous villagers to enter into the SPA for the purpose of transferring the 9 Lots to the plaintiff, Wong has in effect made selected the9 Houses/Lots as his own.  Once Wong has exercised his right to select the 9 Houses/Lots as his own, the defendant can only maintain a claim for 40% share in the 2 Houses/Lots.  Indeed, this is what the defendant said Wong should do, as pleaded in §61(c) of the 2017 SOC (see §17(3)(iii) above).  

54.  Second, in the evidence filed on behalf of the plaintiff partiesin these proceedings, there is no inconsistency between the plaintiff’s caseand Wong’s case on selection.  In §§41 – 44 of the plaintiff’s 1^st affirmation, she referred to prayer (6) of the 2011 Writ (where the defendant claims specific performance requiring Wong to select 9 houses/lots out of the 11 Unallocated Houses/Lots) and said that Wong had in effect made the selection by (1) causing the 9 indigenous villagers to enter into the Assignment and transfer the 9 Lots to the plaintiff; and (2) sent the Selection Letter to the defendant’s solicitors informing them of his selection of the 9 Houses/Lots, leaving the 2 Houses/Lots to be shared by Wong and the defendant as to 60:40.  In his affirmation filed in these proceedings (at §3) Wong confirmed that the contents of the plaintiff’s affirmations which relate to him are true and correct.  That being the position, Wong has confirmed on oath that he had selected the 9 Houses/Lots as his own.  

55.  Given that the defendant has already received the 6 Houses/Lots, and Wong has also selected the 9 Houses/Lots as his own,the defendant can no longer claim to have any interest in the 9 Lots.  At most, the defendant can only claim his share in 40% of the 2 Houses/Lots,which has nothing to do with the 9 Houses/Lots.

56.  For the above reasons, I hold that since the date of the SPA, the defendant has ceased to have any claim which affects an interest in the 9 Lots and, as such, the 2011 Writ has ceased to be registrable.

2017 Writ

57.  As Mr Leong points out, the 2017 SOC is largely identical to the 2011 ASOC save that the defendant (1) joins the 11 indigenous villagers holding the 11 Unallocated Houses/Lots as the 2^nd to 12^th defendants, and (2) introduces, for the first time, a proprietary claim that the 11 indigenous villagers are holding the 11 Unallocated Houses/Lots “on resulting trust and/or constructive trust for the [defendant] and [Wong]” (at §§56 – 61).

58.  The material facts pleaded in support of the trust claim are the same as what have been pleaded in the 2011 ASOC, namely that the 11 Unallocated Houses/Lots were conveyed by Tso to Wong who, in turn, conveyed them to the 11 indigenous villagers for the specific purpose of theDevelopment Agreement, and neither Wong nor the 11 indigenous villagers have paid any consideration for the lots.

59.  Mr Leong submits that the defendant’s proprietary claim over the 9 Lots is not made bona fide for the following reasons:

(1)  the defendant’s proprietary claim pleaded in §§56 – 61 of the 2017 SOC “tracks almost word for word” of §39 of the 2011 ASOC, where the defendant asserts that the indigenous villagers are holding the Undeveloped Lots on resulting and/or constructive trust for Tso.  It is not understood how thedefendant could “transplant” his proprietary claim against the Undeveloped Lots, without modification, to his case against the 11 Unallocated Houses/Lots;

(2)  the defendant’s claim with respect to the 11 Unallocated Houses/Lots in the 2017 SOC is plainly inconsistent with his own case in the 2011 ASOC, presumably because in the 2011 ASOC, the defendant contends that Wong is entitled to and should select 9 houses/lots out of the 11 Unallocated Houses/Lots as his own, whereas in the 2017 SOC, the defendant asserts a proprietary claim over the entire 11 Unallocated Houses/Lots;

(3)  the 2017 Writ can only be a “desperate attempt to invent a proprietary claim against the [9 Lots]” so as to register it as a lis pendens against the 9 Lots; and

(4)  the 2017 Writ has never been served on Wong.  In this regard, the plaintiff has put forward objective evidence from the Postmaster General to confirm that the purported service of the 2017 Writ by registered post on 28 April 2017 had failed,and the defendant was notified on 20 May 2017 that the 2017 Writ was unclaimed. Thereafter, the defendant has not attempted to effect service of the 2017 Writ on Wong. The irresistible inference must be that the defendant has no intention to prosecute the 2017 Writ.

60.  Mr Chan has not advanced any argument in answer to the first three points.

61.  As to the point about service, Mr Chan submits that the 2017 Writ was served by registered post dated 28 April 2017 (through HLC) to Wong’s address stated in the 2011 Writ, and there was no single letter returned by the Post Office.  Wong did not apply to set aside or strike out the 2017 Writ.  I am unable to accept the submissions: 

(1)  The plaintiff has produced a letter issued by Postmaster General dated 24 September 2018, which confirmed that the delivery of the registered post sent by HLC was unsuccessful.

(2)  As the 2017 Writ has never been served on Wong, it is unnecessary for Wong to make any application to set aside or strike out the 2017 Writ.

62.  Although Mr Chan submits that the defendant will seek directions for “consolidation” of the 2019 Action, the 2017 Writ and these proceedings, there is no evidence in support of such submission.  As a matter of fact, no such application has been made.

63.  I note from the records maintained by the Land Registry that by the time the 2017 Writ was issued (26 April 2017), the defendant wouldhave known from a search at the Land Registry that the plaintiff had alreadyentered into the SPA dated 21 April 2017 in respect of the 9 Lots as the SPA was registered on 25 April 2017. If, upon seeing the SPA, the defendant had any doubt as to whether it constituted a selection of the 9 Lots by Wong, he could easily have written to Wong to seek his confirmation.  This has never been done.  Instead, the defendant chose to issue the 2017 Writ on the next day after the SPA had been registered, and caused it to be registered against the 9 Lots on 28 April 2017.  

64.  In the circumstances, I agree with Mr Leong that the defendant has not prosecuted the 2017 Writ bona fide, and the court should order the registration of the 2017 Writ to be vacated.

65.  Even if I were wrong in my conclusion that the 2017 Writ has not been prosecuted bona fide, for the reasons stated in §§50 – 54 above, by the time the 2017 Writ was issued, Wong had already selected the 9 Houses/Lots as his own, such that the defendant could only make a claim for 40% of the 2 Houses/Lots.

Summary determination

66.  In light of my conclusions on the first four issues, it is obvious that I do not accept Mr Chan’s submissions that the Court should not determine the substantive issues raised in these proceedings summarily. Nothing more needs to be said.

Disposition

67.  In §(9) of the Originating Summons, the plaintiff seeks damages on the basis of slander on title.  In his reply, Mr Leong submits, for the first time, that the Court may order an inquiry as to damages.  I do not think it is appropriate to make such an order, given that the plaintiff has not sought any direction for a split trial and there is no evidence on what damages the plaintiff has suffered.

68.  In light of my conclusion that the 2013 Memorandum and 2011 Writ are not registrable instruments against the 9 Lots, I make an order in terms of §§(1), (2), (4) and (5) of the Originating Summons.

69.  I order the defendant to vacate the registration of the 2017 Writ against the 9 Lots in terms of §(7) of the Originating Summons.

70.  As for costs, I make an order nisi that the defendant do pay to the plaintiff the costs of and occasioned by the Originating Summons, to be taxed if not agreed, with certificate for two counsel.