YU WING CHEONG alias YU JOSEPH WING CHEONG, Executor substituted named in the Will of YAU SIN WAH alias YAU KAM LAN (“Deceased”) AND ANOTHER v. YU WING YIN

CACV 270/2019

[2022] HKCA 1706

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 270 OF 2019

(ON APPEAL FROM HCMP 2089 OF 2017)

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J U D G M E N T

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Hon Au JA (giving the judgment of the court):

A.  INTRODUCTION

1.  This Court handed down our judgment on 19 January 2022 (“the Judgment”) dismissing the defendant’s appeal against a decision of Deputy High Court Judge Le Pichon (“the Judge”) dated 22 May 2019 ([2019] HKCFI 1304)(“the Decision”).

2.  By the Decision, the Judge granted the plaintiffs’ application for summary judgment and ordered the defendant to deliver vacant possession of the property at 1^st Floor, No 24 Green Lane, The Sanitarian Apartments, Nos 20 ‑ 30 Green Lane, Hong Kong (“the Property”) to the plaintiffs, and the Property is to be sold with vacant possession at market price within three months thereafter.

3.  By a Notice of Motion filed on 16 February 2022, the defendant seeks leave to appeal to the Court of Final Appeal against the Judgment.

4.  After reviewing the Notice of Motion and the written submissions lodged by the parties[1], we see no reason to deviate from the usual practice to consider this application on paper pursuant to paragraph 3 of Practice Direction 2.1.

B.  THE NOTICE OF MOTION

5.  The background leading to these proceedings has been summarized at [5] ‑ [12] of the Judgment, which will not be repeated here.

6.  As a recap, the plaintiffs and the defendant are siblings and are, together with their sister, the beneficiaries under their mother’s will.  The plaintiffs are the executors of the will, and the 2^ndplaintiff obtained the grant of probate.  Relevantly, at the time of these proceedings, the only un‑administered / realised estate under the will is the Property, where the defendant has been residing for some 60 years.

7.  The plaintiffs as executors intended to sell the Property (which had an estimated market value of around HK$32 million, subject to making a premium payment to lift the restrictions on alienation under the relevant terms of the Government lease) and to distribute the proceeds to the beneficiaries (who are all in their 70’s).  However, despite the plaintiffs’ requests, the defendant has refused to vacate the Property.  Hence, the present proceedings were brought by the plaintiffs as executors against the defendant, seeking an order for vacant possession, and for sale of the Property at an auction.  The plaintiffs applied for summary judgment before the Judge.

8.  As summarized at [12] of the Judgment, the defendant opposed the summary judgment before the Judge in contending that there were triable issues as to:

(1)  Whether the defendant had an equitable interest in the Property as a tenant in common, such that the Property cannot be sold without his consent;

(2)  Whether the plaintiffs were estopped from demanding the defendant to deliver vacant possession of the Property;

(3)  Whether the statutory power under section 54 of the Probate and Administration Ordinance (Cap 10) (“the PAO”) is exercisable by the 2^nd plaintiff as the executor given:

(a)  The defendant had equitable interest over the Property;

(b)  The court of equity ought to examine other circumstances, ie, the collective sale, prior to the making of an order for sale; and / or

(c)  The plaintiffs are estopped from selling the Property which the defendant was promised by the father and mother to reside as long as he wishes; and

(4)  Whether there was an imminent collective sale for redevelopment of the Sanitarian Apartments, of which the Property is part, pursuant to the Land (Compulsory Sale for Redevelopment) Ordinance (Cap 545) and the Land (Compulsory Sale for Redevelopment) (Specification of Lower Percentage) Notice (Cap 545A).

9.  By way of the Decision, the Judge rejected all these contentions.  The defendant then appealed the Decision to this court.

10.  As we observed at [18] of the Judgment, the defendant’s grounds of appeal as set out in his Notice of Appeal spanned across 31 paragraphs, and were repetitive of the matters that had been stated in his pleadings, affirmations, witness statement and skeleton arguments advanced before the Judge below.  Those grounds can be grouped into the following four general grounds:

(1)  The Judge’s approach of determining the summary judgment application is wrong.

(2)  The Judge erred in finding that there is no triable issue in respect of the defendant’s contentions that he is an equitable tenant in common of the Property.

(3)  The Judge erred in disregarding the fact that the Property is gaining in value and that there is an imminent collective sale for redevelopment.

(4)  The Judge erred in rejecting the two estoppels raised by the defendant.

11.  By way of the Judgment, this court rejected all the above grounds of appeal as plainly without merits for the reasons set out therein.

12.  For the present application for leave to appeal to the CFA, in his Notice of Motion, written submissions and reply submissions, the defendant again adopted a verbose and scattergun approach raising the following proposed grounds of appeal against the Judgment:

(1)  The Judge’s approach in determining the summary judgment application was wrong and that the “burden of proof is on the plaintiffs to prove their case beyond doubt that the defendant has no defence” (“Ground 1”);[2]

(2)  The Judge erred in finding that there is no triable issue in respect of the defendant’s contentions that the siblings are equitable tenants in common and that the plaintiffs have no right to sell under section 52 of the PAO or to evict the defendant from the Property, and that summary judgment is unjustified given the need to look into all the circumstances of the case (“Ground 2”);[3]

(3)  The Property is rapidly gaining in value at a rate 56 times the purported outlay claimed by the plaintiffs and the collective sale would bring the most favourable price for the Property, and there is no need to evict the defendant prior to the sale and that there were instances of mala fides arising from situations (“Ground 3”);[4] and

(4)  The plaintiffs are prevented to sell the Property on the grounds of equitable estoppel and promissory estoppel (“Ground 4”).[5]

13.  It is plain that these proposed grounds of appeal are essentially a repeat of those arguments previously raised before this Court which have all been rejected.

C.  ANALYSIS

14.  The relevant criteria for granting leave to appeal to the Court of Final Appeal are set out in section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance, Cap 484:

“An appeal shall lie to the Court [of Final Appeal] at the discretion of the Court of Appeal or the Court [of Final Appeal], from any judgment of the Court of Appeal in any civil cause or matter, whether final or interlocutory, if, in the opinion of the Court of Appeal or the Court [of Final Appeal], as the case may be, the question involved in the appeal is one which, by reason of its great general or public importance, or otherwise, ought to be submitted to the Court [of Final Appeal] for decision.”

15.  The defendant says this case raises questions of great general public importance concerning the burden of proof in summary judgment procedures and as the Property is under alienation restriction which is similar to a large number of flats in a number of civil servants’ cooperative buildings society schemes.

16.  It is well established that the Court of Appeal will not allow an application of this nature to be deployed as an occasion for re-running the arguments which had already been canvassed at the appeal: Ho Sin Ying v Chan Yui Ling & Another (unreported, CACV 221/2013, 14 November 2014) at [2] and [3].

17.  In the proposed grounds of appeal, the defendant essentially disagrees with the Decision and the Judgment, and repeats the same arguments previously raised before the Judge and this Court, without pointing out with specifics and particulars any errors in the Judgment.  As such, they are plainly not viable grounds of appeal.

18.  In any event, none of his submissions has any merit, as further explained below.

C1.    Ground 1

19.  Under this ground, the defendant again asserts that the burden of proof is on the plaintiffs to prove their case beyond doubt that the defendant has no defence.  He further asserts that even if some elements of his defence are uncertain or perceived to be unclear, or that there is a lack of evidence, these perse do not render those issues not triable, as it was wrong to expect the defendant to present as much evidence in a summary judgment hearing as in a full trial, and that those uncertain or unclear matters can be determined at the subsequent trial where parties could furnish further evidence in support.  In support of these submissions, he has also cited, for the first time, various authorities[6] as to the legal principles on summary judgment applications and contended that the Judge and this Court had erred in assessing his defences.

20.  The defendant’s submissions are wholly untenable.  His contentions in relation to the burden of proof have been considered, addressed and rejected at [21] ‑ [26] of the Judgment.  As we have analysed, the Judge did not wrongly reverse the burden of proof on the defendant as alleged, and her determination of the summary judgment was clearly made in accordance with the well-established legal principles and cannot be faulted.  The defendant has failed to pinpoint any errors in the Judgment and his mere regurgitation of the same arguments does not constitute a proper ground of appeal.

21.  Insofar as those legal authorities cited by the defendant are concerned, they do not depart from those trite principles as we have referred to at [24] of the Judgment.  They therefore do not add anything and do not assist the defendant.  Moreover, it is also well-established that even in a summary judgment application, it is open to the Judge to test the material aspects of the defences to see if they are supported by law and / or against the evidence disclosed in the affidavit including matters such as contemporaneous documents, and the inherent probabilities to see if the relevant defences are capable of belief and thus raise triable issues[7].

22.  Accordingly, this ground is also unarguable.

C2.    Ground 2

23.  Under this ground, the defendant repeats those same submissions previously raised before this Court that the Judge erred in rejecting as not triable his allegations that he and his siblings are equitable tenants in common of the Property.  The defendant also contends that the plaintiffs must first obtain “proper title” before they can sell and that such title obtained “must be in the names of the four siblings” and the siblings must be equitable tenants in common.  He complained that the Judgment had made no mention of “the crucial point that title should reflect equitable interests”.  He further contends that the plaintiffs had instances of acting malafides over the years.  Again, he seeks to rely on Halsbury’s Laws of Hong Kong [230.819] and Bull v Bull [1955] 1 QB 234 that the plaintiffs have no right to sell exercisable under section 52 of the PAO.

24.  These contentions had all been considered and rejected by us at [27] ‑ [37] and [49] of the Judgment.  In his present submissions, the defendant only disagrees with our views and seeks to regurgitate his previous submissions without identifying how we had erred in the Judgment.  This is not a valid ground of appeal.

25.  The defendant’s bare assertion that those reasons and conclusions made by the Court in [34] ‑ [37] of the Judgment are all wrong as the authorities cited therein “do not apply to the present situation at all” is plainly without merit.  The authorities relate to the trite principle that a beneficiary under a will does not have any legal or equitable interest in the assets of the estate before the administration of the estate is completed.  Clearly, that legal principle applies squarely to the present case (given that the administration of the mother’s estate has not been completed), which renders the defendant’s contentions of having an equitable tenants‑in‑common interest of the Property plainly untenable.

26.  For the above reasons, this ground must also fail.

C3.    Ground 3

27.  Under this ground, the defendant contends that the Property is rapidly increasing in value which outweighs the plaintiffs’ reasons for sale.  The defendant again asserts that the collective sale of the Property for development would bring the most favourable price for the Property and is likely to be the only way that the Property could be sold at a reasonable price.  The defendant also repeats the contentions that there had been instances of malafides of the plaintiffs associated with the collective sale and that these factual incidents “showed a bad purpose on the part of the plaintiffs”.

28.  Again, these contentions had all been considered and rejected by this Court for the reasons set out at [38] ‑ [42] of the Judgment, where this Court upheld the Judge’s conclusion that there was no evidence to support even an arguable case that a collective sale of the Sanitarian Apartments was imminent so that the court should not exercise its discretion to grant an order for sale of the Property for the administration of the estate. In this respect, this Court further observed that any allegations of mala fides on the part of the plaintiffs in seeking to sell the Property would not assist the defendant without first establishing a prima facie case that there is an imminent collective sale of the Sanitarian Apartments.

29.  A repeat of the same submissions by the defendant now does not constitute a valid ground of appeal.

30.  In relation to this, the defendant has now attempted to reformulate his case by asserting that whether the collective sale is imminent is not the issue but rather that the collective sale of the Sanitarian Apartments would likely bring the most favourable price for the Property and likely be the only way that the Property could be sold at a reasonable price.

31.  This is neither here nor there.  The material and essential fact remains that the prospect of a collective sale for redevelopment remains unclear and uncertain.  On this basis, we again held in the Judgment at [41] that the Judge was clearly correct in concluding that it would be invidious and unreasonable to refuse an order for sale simply because there is a merepossibility that a collective sale for redevelopment could happen in the future when the court takes into account the other relevant factors, amongst others, that (a) the Property requires significant cost for its maintenance and up‑keeping given its age, (b) the 2^nd plaintiff has to obtain loans to do so, (c) the estate is unable to derive income from the Property given the alienation restrictions under the Government lease, (d) the beneficiaries are all in their 70s, and (e) it is desirable to wind up the mother’s estate which has been in administration for more than 17 years, which factors would all “strongly justify” the plaintiffs’ decision to sell the Property for the proper administration of the mother’s estate.

32.  This ground is without merit.

C4.    Ground 4

33.  This ground relates to the defendant’s purported defence based on the doctrines of equitable estoppel and promissory estoppel.  Under this defence, the defendant contends that the plaintiffs are estopped from selling the Property because (a) they failed to make an assent of the Property to the beneficiaries within two years of obtaining probate pursuant to an alleged “statutory provision”, and / or (b) the father and the mother had promised the defendant that he could reside in the Property for as long as he wished, and he has relied on their promise to his detriment.

34.  We upheld the Judge’s conclusion that no triable issues were raised by this defence as (a) the defendant had failed to show which “statutory provision” or any other legal authority to support the contention that the plaintiffs must make an assent of the Property to the beneficiaries within two years of obtaining probate, and (b) the defendant had failed to provide any particulars and evidence to support the alleged “promises” made by the parents to let him reside in the Property for as long as he wished, and  to show the expenditures that he has allegedly incurred in reliance upon those promises. See [44] and [45] of the Judgment.

35.  Under this ground of appeal, the defendant asserts that his failure to produce legal authority to support his contentions does not equate with the lack of triable issues.  He also says it is unreasonable to expect anyone to keep expenditure records over several decades when there had been no anticipation of litigation.  The defendant again submits that the facts deposed had been testified in his witness statement and this is sufficient evidence to raise a triable issue.

36.  The defendant further seeks to reformulate his case to say that the “two years” time limit he previously contended was not a critical element, but rather that the assent should be done “within a reasonable time”.  He now contends that as 20 years have passed after the 2^nd plaintiff has obtained the probate and has failed to make an assent of the Property, the plaintiffs must now be estopped from selling the Property.

37.  This ground is similarly hopeless:

(1)  The defendant’s reformulated proposition that the plaintiffs as executors must make an assent to the Property to the beneficiaries under the will within a reasonable time even when the administration of the estate is not yet completed is not supported by any authority.  Quite to the contrary, this would be on the face of it contrary to the above-mentioned well-established principle that the beneficiaries do not have any equitable interest in the estate until after the completion of the administration.

(2)  As mentioned above, the court is entitled in a summary judgment application to test the defendant’s case on “the promises” against the evidence (or the lack of it) and the relevant particulars (and the lack of them) of the allegation, but without falling into a “mini-trial” of the case, to reach a conclusion as to whether the defence is worthy of belief to raise a triable issue.  The mere fact that the defendant has set out his assertions in a witness statement in the present case is neither here nor there in this exercise.

D.  DISPOSITION AND COSTS

38.  For all the above reasons, the proposed grounds of appeal are plainly without any merit.  They also in any event raise no arguable question of great general public importance as (a) the principles of burden of proof in a summary judgment application are well established, and (b) the proposed grounds are all facts specific to the particular circumstances of the present case and do not concern the alienation restriction generally applicable to civil servants’ cooperative buildings society schemes as alleged by the defendant.

39.  We also do not see any basis to grant leave on the “otherwise” limb.

40.  We will therefore refuse to grant leave to the defendant to appeal against the Judgment to the Court of Final Appeal and dismiss the Notice of Motion.

41.  As to costs, we see no reason why costs should not follow the event.

42.  In this regard, the plaintiffs have asked for indemnity costs.  We agree this is a right case where indemnity costs should be ordered.  We find it an abuse of process by the defendant in making this application by once again adopting a verbose and scattergun approach to advance hopeless grounds of appeal which are all essentially a repeat of the same submissions and arguments which have been rejected by this Court in the Judgment.  We therefore order that costs of this application be paid by the defendant to the plaintiffs to be assessed summarily on an indemnity basis.

43.  To this end, we further direct that the plaintiffs do lodge and serve a Statement of Costs within 7 days of this Judgment, and the defendant do lodge and serve his written comments (of not more than one page) on the plaintiffs’ Statement of Costs, if any, within 14 days of this judgment.  Thereafter, we will assess the costs summarily on paper.  If the defendant’s written comments exceed one page, this Court will disregard the comments for the assessment.

CACV 270/2019

[2022] HKCA 101

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 270 OF 2019

(ON APPEAL FROM HCMP 2089 OF 2017)

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J U D G M E N T

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Hon Au JA (giving the judgment of the court):

A.  Introduction

1.  On 22 May 2019, Deputy High Court Judge Le Pichon (“the Judge”) granted the Plaintiffs’ application for summary judgment.  The Defendant was ordered to deliver vacant possession of the property at 1^st Floor, No 24 Green Lane, The Sanitarian Apartments, Nos 20 ‑ 30 Green Lane, Hong Kong (“the Property”) to the Plaintiffs, and the Property is to be sold with vacant possession at market price within three months thereafter (“the Decision”).

2.  The Defendant appeals against the Decision by way of a Notice of Appeal (“the NOA”) dated 19 June 2019. Stay of execution of the Decision pending the determination of the appeal was ordered by consent on 9 September 2019.

3.  On 9 March 2020, the Defendant made an application for leave to adduce new evidence on appeal which was rejected by this Court (Lam VP and Barma JA) by its judgment on 6 August 2020 ([2020] HKCA 629) (“the New Evidence Judgment”).

4.  At the end of the hearing of the appeal on 13 April 2021, we reserved our judgment to be handed down.  This is what we do now.

Background

5.  The factual background of this case has been set out in detail at [2] ‑ [11] of the Decision and need not be repeated here.  For the present purpose, we will highlight the following.

6.  The Plaintiffs, the Defendant and Anne Yu are children to Yau Sin Wah alias Yau Kam Lan (“the Mother”) and Yu Hing Wan (“the Father”).  The Mother made a will dated 14 September 1968.  In that will, the Mother named the Father as the executor of her estate but, in the event that the Father predeceased her, the Plaintiffs would substitute as executors.  The Mother in the will bequeathed all her real and personal estate to her four children in equal shares.

7.  The Father predeceased the Mother in 1970, and the Mother passed away on 30 September 2000.  As a result, the Plaintiffs became the executors of the Mother’s estate.  On 5 September 2002, the 2^nd Plaintiff obtained the grant of probate.  To this day, the only unrealized asset in the estate is the Property.  Relevantly, the Defendant has been living in the Property as his home for over 60 years.

8.  The Property was built some 66 years ago.  The original registered owner of the Property was Sanitarian Co-Operative Building Society, Limited (“the Society”).  By way of an assignment dated 1 April 1998, the Property was assigned to the Mother by the Society in liquidation subject to the restrictions on alienation contained in the Government lease and a subsequent modification letter (“the 1998 Assignment”).  On 26 September 2002, the 2^nd Plaintiff registered the grant over the Property in the Land Registry and became the registered owner in the capacity of an executor.

9.  In September 2016, due to the siblings’ old age (all in their 70s then), the condition of the Property and the overburdened maintenance fees[1], the Plaintiffs and Anne Yu reached an agreement to sell the Property and distribute the net proceeds equally among the four siblings.  The estimated market price of the Property was around HK$32 million, subject to making a premium payment to lift the restrictions on alienation under the Government lease.  On 19 September 2016, the Plaintiff wrote to the Lands Department to enquire about the amount of land premium payable[2]. In the meantime, the Plaintiffs also gave notice to the Defendant about the intended sale of Property and asked for vacant possession.  Despite repeated demands, the Defendant has refused to deliver vacant possession of the Property.

10.  On 17 August 2017, the Plaintiffs obtained a Beddoe order to commence the present action and filed the originating summons on 28 September 2017.  On 29 December 2017, Master Lai ordered the proceedings to proceed as if they were begun by writ.

11.  On 13 November 2018, the Plaintiffs issued the present application for summary judgment against the Defendant for vacant possession and for an order that the Property be sold with vacant possession at market price within three months after obtaining vacant possession, such sale to be conducted by the 2^nd Plaintiff.

12.  The Defendant opposed the Plaintiffs’ application, contending that there were triable issues as to:

(1)  Whether the Defendant had an equitable interest in the Property as a tenant in common, such that the Property cannot be sold without his consent.

(2)  Whether the Plaintiffs were estopped from demanding the Defendant to deliver vacant possession of the Property.

(3)  Whether the statutory power under section 54 of the Probate and Administration Ordinance (Cap 10) (“the PAO”) is exercisable by the 2^nd Plaintiff as the executor given:

(a)  The Defendant had equitable interest over the Property;

(b)  The court of equity ought to examine other circumstances, ie, the collective sale, prior to the making of an order for sale; and/or

(c)  The Plaintiffs are estopped from selling the Property which the Defendant was promised by the Father and Mother to reside as long as he wishes.

(4)  Whether there was an imminent collective sale for redevelopment of the Sanitarian Apartments, of which the Property is part, pursuant to the Land (Compulsory Sale for Redevelopment) Ordinance (Cap 545) and the Land (Compulsory Sale for Redevelopment) (Specification of Lower Percentage) Notice (Cap 545A).

The Decision

13.  The Judge found that none of the issues raised by the Defendant was triable and granted summary judgment to the Plaintiffs[3].

14.  First, in respect of the Defendant’s contention that he had acquired an equitable interest in the Property as tenant in common when the Property was granted to the Father under the Civil Servants’ Cooperative Building Society Scheme (“the Scheme”), the Judge found that this was the Defendant’s mere assertion unsupported by even “a shred of evidence”.  Further, and in any event, his case as to how he acquired an equitable interest in the Property was inconsistent, and the alternative basis for asserting an equitable interest in the Property as a residuary beneficiary under the mother’s will was untenable in law in the absence of an assent (see [19] ‑ [27] of the Decision).

15.  Secondly, the Judge rejected the Defendant’s submission that the 2^nd Plaintiff, as the executor of the Mother’s will, could not exercise the statutory power under section 54 of the PAO due to the restrictions on alienation, as those restrictions could be lifted upon payment of the requisite land premium and administrative costs.  She also found no legal basis for the Defendant’s contention that the executor must execute an assent of the Property to the beneficiaries upon the lifting of the restrictions on alienation, and was in breach of an alleged statutory provision requiring an assent to be made within two years of the Mother’s death (see [28] ‑ [32] of the Decision).

16.  Thirdly, the Judge held that the Defendant failed to show or establish a primafacie case of estoppel as he had given no particulars of the alleged promises made by the Father and the Mother that he could live in the Property as long as he wished, and adduced no evidence of the expenditure that he had allegedly incurred in reliance on those promises (see [33] ‑ [35] of the Decision).

17.  Fourthly, the Judge found that there was no evidence of an imminent collective sale for redevelopment of the Sanitarian Apartments, and that the prospects of a collective sale, which might or might not happen in the future, were strongly militated by the reasons in favour of ordering a sale as highlighted in [17] of the Decision (see [36] ‑ [39] of the Decision).

This appeal

18.  The Defendant’s grounds of appeal as set out in the NOA span across 31 paragraphs, and are repetitive of the matters that have been stated in his pleadings, affirmations, witness statement and skeleton arguments advanced in the court below.  For the present purpose, they can be grouped into the following four general grounds:

(1)  The Judge’s approach of determining the summary judgment application is wrong (see [1] ‑ [2] of the NOA).

(2)  The Judge erred in finding that there is no triable issue in respect of the Defendant’s contentions that he is an equitable tenant in common of the Property (see [3] ‑ [12] of the NOA).

(3)  The Judge erred in disregarding the fact that the Property is gaining in value and that there is an imminent collective sale for redevelopment (see [13] ‑ [23] of the NOA).

(4)  The Judge erred in rejecting the two estoppels raised by the Defendant (see [24] ‑ [30] of the NOA).

19.  At the same time, the Plaintiffs have also filed their Respondents’ Notice seeking to affirm the Decision on four other grounds additional to those relied on by the Judge.

20.  We will first consider the merits of the grounds of appeal as summarized above.  However, as pointed out by Kwan VP at the beginning of the hearing, given the scattergun approach of the Defendant’s grounds of appeal and submissions, we must reiterate that it is not the function of a judgment to deal with each and every point raised by a litigant in his evidence and submissions without regard to its significance in the overall exercise.  It is sufficient that adequate reasons are given to explain how the determination has been reached.  See also the similar observations made by Lam VP (as he then was) in LWH v NKWS[2018] HKCA 260 at [9].

Ground 1: The Judge’s approach

21.  Under this ground, the Defendant in substance contends that the Judge committed an error of law in granting the Plaintiffs summary judgment, as she determined the application by wrongly putting the burden of proof on the Defendant.  He argues that the burden of proof in a summary judgment application is on the Plaintiffs to prove their case beyond doubt and also to prove that the Defendant has no defence.

22.  Whilst the Defendant acknowledges that he needs to show triable issues, he argues that the Judge erred in finding that his defences are not triable on the basis that she felt uncertain or that she would like to have more evidence.  He also says it is unreasonable to expect a Defendant to provide substantial amount of evidence at a summary hearing where the burden of proof is not on the Defendant, and the Defendant is only expected to demonstrate triable defences.

23.  The Defendant’s above contentions are wholly unmeritorious.

24.  It is trite that in Order 14 proceedings, if the plaintiff’s application is properly constituted, he is primafacie entitled to judgment, and the burden then shifts to the defendant to satisfy the court as to why judgment should not be given against him by showing a triable or arguable defence: see Hong Kong Civil Procedure 2022 (Vol1) at 14/4/1.

25.  As set out in the Decision, in deciding whether she should accede to the summary judgment application, the Judge first explained that she was satisfied that the Plaintiffs had shown a primafacie case as to the Mother’s title to the Property and the Plaintiffs’ entitlement as executors to administer her estate by seeking to sell the Property under the PAO.  See [13] - [17] of the Decision.  It is only after having found that the Plaintiffs were primafacie entitled to judgment, that the Judge then went on to consider if the Defendant had shown triable issues by discussing each of the defences raised by him under the section “Whether the Defendant has shown triable issues” in the Decision (see [19] ‑ [39] of the Decision).  The Judge eventually concluded that the Defendant had failed to show that there was any triable defence to the Plaintiffs’ claims (see [19] ‑ [40] of the Decision).  Her references to uncertainties in the Defendant’s case were part of her assessment as to whether the Defendant had shown any triable issues.  In the premises, the Judge did not wrongly reverse the burden of proof on the Defendant as contended.

26.  For these reasons, the Judge’s approach in determining the summary judgment application is clearly consistent with the well‑established legal principles and cannot be faulted.  Ground 1 must fail.

Ground 2: Equitable tenants in common

27.  In support of this ground, the Defendant contends that there are two bases upon which to show that he and his siblings are equitable tenants in common of the Property such that neither could evict the other without consent.

28.  The first is based on his assertion that the original grant of the Property was made to the Father “and his family”, such that the Father, the Mother and the four siblings were equitable tenants in common from the outset.  This is so, says the Defendant, as the Property was granted to the Father “for the living and enjoyment of himself and his family”. The Defendant further argues that, as a consequence of having been an alleged equitable tenant in common together with the Father and the Mother from the outset, when the Mother took an assignment of the Property in 1998, she continued to hold it on trust for herself and the siblings (see [20] of the Defendant’s Skeleton Arguments).

29.  This basis is plainly unarguable as the Defendant has failed to advance any triable evidential basis or arguable legal principle to support the contentions.  As rightly held by the Judge at [20] of the Decision, other than the Defendant’s bare assertion, there is no evidence before the court as to the terms of the Scheme and the alleged terms of the original grant to support the allegations that the Property was granted to the Father “for the living and enjoyment of himself and his family”.  More importantly, the Defendant has also singularly failed to advance any arguable basis in law as to how this would in any event create or impose a trust on the Society to hold it on trust for the Father, the Mother and all the siblings when it was the title owner of the Property in the first place, before assigning the same to the Mother by way of the 1998 Assignment.  Quite to the contrary, his case is contradicted by the contemporaneous evidence adduced by the Plaintiffs showing how title to the Property devolved on the Mother and then to the 2^nd Plaintiff as her executor (see [13] ‑ [15] of the Decision).

30.  The Judge is therefore correct in rejecting this argument at [19] - [20] of the Decision.

31.  Second, the Defendant also submits that he is an equitable tenant in common of the Property with his other siblings by virtue of their being the beneficiaries of the estate under the Mother’s will.

32.  This is also plainly unarguable in law and therefore raises no triable issue.

33.  It is again well established that a beneficiary under a will does not have any legal or equitable interest in the assets of the estate before the administration of the estate is completed.  This has been stated succinctly in Chan Chun Wah v Chan Chun Wai Patrick & Anor [1987] 2 HKC 397[4] by Godfrey J (as he then was) at p.398F-I as follows:

“Not until there has been an assent can it be said with certainty whether or not a particular asset will be needed for the payment of debts or other liabilities; and until these have been discharged, it cannot be said what assets there will be in the residuary estate. Accordingly, the general rule is that no beneficiary can assert that he has any legal or equitable interest in any of the assets which are still unadministered; for the whole right of property in them is vested in the personal representatives. The beneficiary has merely a right to require the deceased’s estate to be duly administered. Apart from specific gifts, the rights of beneficiaries are accordingly protected, not by conferring equitable interests upon them, but by the control exercised by the court, whether under a will or an intestacy, to secure the due administration of the assets in the interests of the beneficiaries and of other persons concerned. (For these propositions, see Snell’s Principles of Equity (28^th Ed, 1982), at pp 337, 338.)” (Emphasis added)

See also: the current edition of Snell’s Equity (34^th ed) at 2-012 and Williams, Mortimer & Sunnucks on Executors, Administrators and Probate (2018 edition) at 76-03 (referred to by the Judge at [26] of the Decision).

34.  Given that the administration of the Mother’s estate has not been completed, there is simply no question that the Defendant and the other siblings are equitable tenants in common of the Property.

35.  For the above reasons, as the Defendant has failed to establish even a primafacie case that he has an equitable interest in the Property, we also agree with the Judge that the Defendant’s reliance upon the passage in Halsbury’s Law of Hong Kong at 230.819 and the dictum in Bull v Bull [1955] 1 QB 234 does not assist him.

36.  The Judge is thus also plainly correct in rejecting the Defendant’s contentions on his alleged equitable interest in the Property as raising a triable defence at [21] ‑ [27] of the Decision.

37.  We also dismiss Ground 2.

Ground 3: Imminent collective sale

38.  There was simply no evidence before the Judge to demonstrate that a collective sale was imminent, let alone that the Property was exponentially gaining in value as alleged by the Defendant.  The Judge therefore rightly held that these were bare assertions without any evidential support.  As the burden is on the Defendant to demonstrate triable issues, the Defendant’s repeated contentions made in the appeal that the Judge had wrongly required him to show sufficient evidence to support this[5] is also without merit.

39.  Indeed, the Judge’s view that the Defendant had no proper evidence to support his case of an imminent collective sale of Sanitarian Apartments is further supported by the New Evidence Judgment.  By way of that judgment, this Court rejected his application to adduce new evidence in support of this ground on the basis that it failed to meet the test in Ladd v Marshall [1954] 1 WLR 1489. In this respect, it is also pertinent to note that Lam VP (as he then was) further observed at [22] and [24] that in any event, the new evidence at best only showed that the collective sale “effort” was still at a relatively early stage and thus did not even support a primafacie case of an imminent sale as alleged by the Defendant:

“22. There is nothing to suggest that there has been substantial progress in regard to the collective sale efforts since the hearing before the Judge. Based on what is set out in the Defendant’s affidavit of 9 March 2020[i.e. the evidence which the Defendant sought leave to adduce on appeal], the collective sale effort is still at a relatively early stage. There are outstanding objections from some owners and proceedings may have to be brought in the Lands Tribunal. There is also no suggestion that there is any offer from any interested purchaser which is acceptable to many owners.

…

24.       … even if the affidavit of 9 March 2020 were admissible and the contents were believed, we are not satisfied that it would have an important influence on the outcome.  Even if such evidence on the progress of the collective sale were adduced, it does not show that a collective sale was imminent for reasons set out at [22] above.  There is still great uncertainty as to the fate of such collective sale and it may not materialize in the foreseeable future.  (Emphasis added)”

40.  Under this ground, the Defendant further contends that the Plaintiffs are acting malafide in seeking to sell the Property, and relies on Jones v Challenger [1961] 1 QB 176, In re Buchanan-Wollaston’s Conveyance [1939] Ch 738 and Re Hyde’s Conveyance (1952) 102 LJ 58 to argue that the Court therefore should not enforce a trust for sale in such circumstances.  In support, the Defendant has listed out various matters in [28] ‑ [36] of his written submissions saying that they show malafides on the part of the Plaintiffs in seeking to sell the Property which is in breach of trust.

41.  However, these contentions are premised fundamentally on the Defendant first establishing a case that there is an imminent collective sale of the Sanitarian Apartments.  Since he has not established any triable issue in this respect as explained above, the cases and the matters so relied upon do not assist the Defendant to show that the Plaintiffs’ intended sale of the Property is driven by malafides.  Quite to the contrary, as pointed out by the Judge, the facts (among others) that (a) the Property requires significant cost for its maintenance and up‑keeping given its age, (b) the 2^nd Plaintiff has to obtain loans to do so, (c) the estate is unable to derive income from the Property given the alienation restrictions under the Government lease, (d) the beneficiaries are all in their 70s, and (e) it is desirable to wind up the Mother’s estate which has been in administration for more than 17 years, strongly justify the Plaintiffs’ decision to sell the Property for the proper administration of the Mother’s estate.  See [6], [17] and [39] above.

42.  The Defendant has therefore also failed to demonstrate any triable issues in respect of this ground.

Ground 4: Estoppel

43.  Lastly, the Defendant argues that the Plaintiffs are estopped from selling the Property because (a) they failed to make an assent of the Property to the beneficiaries within two years of obtaining probate, and/or (b) the Father and the Mother had promised the Defendant that he could reside in the Property for as long as he wished, and he has relied on their promise to his detriment.

44.  Under the first basis, the Defendant submits that the 2^nd Plaintiff as executor had to make an assent of the Property to the beneficiaries within two years of the Mother’s death pursuant to an alleged “statutory provision”.  In failing to do so, the Plaintiffs are now estopped from selling the Property.  However, the Defendant has not cited before the Judge or this Court the alleged “statutory provision” or any legal authority or basis to support his contention.  He has plainly failed to show any triable issue under this proposition.

45.  As for the second estoppel, the Defendant has not given any particulars of the promises allegedly made by the Father and the Mother, or adduced any evidence of the expenditures that he has allegedly incurred in reliance upon those promises.  In the circumstances, the Judge is again plainly right to hold that he has failed to show or establish a primafacie case of estoppel.

46.  In fact, the Defendant now confirms that he has not kept, and therefore cannot produce, any evidence of his alleged expenditures for the maintenance and up‑keep of the Property, but seeks to argue that it is a reasonable presumption that he and his family have contributed to the Property (see paragraph 28 of the NOA).

47.  In our view, there is simply no basis to make such a presumption, in particular as to whether these alleged usual and general expenditures incurred for the maintenance and up‑keep of the Property are related to the alleged promises and not attributable to the mere fact that the Defendant has been living in and having the use of the Property himself.  The Defendant therefore has failed to show that there is a triable issue or an arguable defence in respect of this ground.

48.  We also reject Ground 4.

Catch-all complaint

49.  Finally, given that the Defendant has not established any triable issues for all the above contentions advanced under the various grounds of appeal, his catch-all complaint that it is triable as to whether the 2^nd Plaintiff can lawfully and properly exercise his powers as executor under the PAO to sell the Property must also fall away.

Disposition and Costs

50.  For all these reasons, we will dismiss the appeal. In view of the outcome, it is unnecessary to consider the additional grounds raised in the Respondents’ Notice to affirm the Decision.

51.  On the question of costs, the Defendant has submitted that he would seek costs if he succeeds in the appeal, but would ask for no order as to costs if the appeal is dismissed.  He says that he has made reasonable efforts to argue his case efficiently without causing extra burden to anyone, and it is a meritorious attempt regardless of the eventual outcome.

52.  Ms Wong on the other hand submits that the Plaintiffs should be awarded costs if the appeal is dismissed.  She reiterates that there is no reason why costs should not follow the event as the appeal is clearly without merit and it is not reasonable for the Defendant to have brought the appeal.

53.  We agree that the Defendant’s grounds of appeal are plainly without merit.  We therefore can see no reason to depart from the usual costs follow the event principle.  We therefore further order that the Plaintiffs’ costs of the appeal be paid by the Defendant, to be taxed if not agreed.

CACV 270/2019

[2020] HKCA 629

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 270 OF 2019

(ON APPEAL FROM HCMP 2089/2017)

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J U D G M E N T

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Hon Lam VP (giving the Judgment of the Court):

Introduction

1.  On 9 March 2020, the Defendant filed a summons to apply for leave to adduce new evidence in the present appeal.  The appeal is brought in respect of the decision of Deputy High Court Judge Le Pichon (“the Judge”) dated 22 May 2019, [2019] HKCFI 1304. By that decision the Judge granted summary judgment in favour of the Plaintiffs as follows:

(1)  The Defendant do forthwith leave, vacate and deliver vacant possession of the property at 1^st Floor, No 24 Green Lane, The Sanitarian Apartments, Nos 20 – 30 Green Lane, Hong Kong (“the Property”) to the Plaintiffs within 12 weeks from the date of the order.

(2)  The Property be sold with vacant possession at market price.

(3)  The Property be put up for sale by the Plaintiffs within three months after obtaining vacant possession of the Property, such sale to be conducted by the 2^nd Plaintiff.

(4)  There be an order nisi that the Plaintiff’s costs be borne and paid out of the estate of the Deceased on a trustee basis, to be taxed if not agreed, and there be no order as to costs in respect of the Defendant. 

2.  The Defendant issued his Notice of Appeal on 19 June 2019.  The summary judgment of 22 May 2019 was stayed by a consent order dated 9 September 2019 pending the Defendant’s appeal.

Background

3.  The factual background of this case was set out at [2] to [11] of the Judge’s decision of 22 May 2019.

4.  At the court below, the Defendant opposed the Plaintiffs’ application for summary judgment by contending that the following were triable issues, namely whether:

(a)   the Defendant had an equitable interest in the Property as a tenant in common, such that the Property cannot be sold without his consent;

(b)  the statutory power in section 54 of the Probate and Administration Ordinance, Cap 10 is exercisable;

(c)   the plaintiffs were estopped from demanding vacant possession of the Property; and

(d)  there was an imminent collective sale for redevelopment of the Sanitarian Apartments, of which the Property is part of, pursuant to the Land (Compulsory Sale for Redevelopment) Ordinance, Cap 545 and the Land (Compulsory Sale for Redevelopment) (Specification of Lower Percentage) Notice, Cap 545A.

5.  The Judge found that none of the issues raised by the Defendant was triable and granted judgment accordingly.

New evidence sought to be adduced on appeal

6.  The Defendant seeks to adduce on appeal his affidavit sworn on 9 March 2020.  In this affidavit, the Defendant exhibited copies of the land registry search records of all 24 flats at the Sanitarian Apartments as at 28 January 2020, and made the observation that within the past 6 years no sale has been recorded.

7.  In the same affidavit the Defendant deposed as to the content of his conversation on 31 January 2020 with a Mrs Constance Ames (“Ames”), who according to the Defendant is the joint owner of one of the other flats in the Sanitarian Apartments as well as the Chairman of the Incorporated Owners of Sanitarian Apartments and of the Collective Sale Committee.  The conversation was about the progress of efforts toward a collective sale of all the flats in the Sanitarian Apartments.

8.  In addition, the Defendant deposed in that affidavit as to what he characterized as the hypocrisy (involving the 2^nd Plaintiff’s state of knowledge of the status of the proposed collective sale), false accusation (involving an allegation of tire slashing), hostility, and litigiousness of the 2^nd Plaintiff.

9.  The content of the Defendant’s affidavit of 9 March 2020 is not relevant to the first three issues identified by the Defendant as being triable issues before the Judge.  The affidavit is only potentially relevant to the fourth issue raised by the Defendant, i.e. whether there was an imminent collective sale for redevelopment of the Sanitarian Apartments.  The references to other matters in the affidavit as an attack on the character and good faith of the 2^nd Plaintiff are, in our judgment, wholly irrelevant for the purpose of the appeal as the proceedings were brought after Beddoe approval had been obtained.  

Test for adducing new evidence on appeal in respect of a summary judgment

10.  Applications to adduce new evidence on appeal are governed by Order 59, rule 10(2) of the Rules of the High Court, Cap 4A:

“ The Court of Appeal shall have power to receive further evidence on questions of fact, either by oral examination in court, by affidavit, or by deposition taken before an examiner, but no such further evidence (other than evidence as to matters which have occurred after the date of the trial or hearing) shall be admitted except on special grounds.”

11.  As held in Ladd v Marshall, [1954] 1 WLR 1489, further evidence is admissible on appeal only where such evidence:

(i)  could not have been obtained at the trial with reasonable diligence;

(ii)  would or might, if believed, have a very important influence on the result of the case, though it need not be decisive; and

(iii)  is apparently credible though it need not be incontrovertible.

12.  Since the judgment was granted in the context of an application for summary judgment, the following observations of Lord Bridge in Langdale v Danby [1982] 1 WLR 1123 at 1133B to F are relevant,

“ The classic statement of what amounts to ‘special grounds’ within the meaning of Ord. 59, r 10(2) comes from the judgment of Denning L.J. (as he then was) in Ladd v. Marshall [1954] 1 WLR 1489 …

In the situation arising on an appeal to the Court of Appeal from a summary judgment, the application of these conditions and perhaps the conditions themselves will require some modification. It may well be that the standard of diligence required of a defendant preparing his case in opposition to a summons for summary judgment, especially if under pressure of time, will not be so high as that required in preparing for trial. The second and third conditions will no doubt be satisfied if the further evidence tendered is sufficient, according to the ordinary principles applied on applications for summary judgment, to raise a triable issue. But I can see no injustice at all in requiring a defendant to use such diligence as is reasonable in the circumstances to put before the judge on the hearing of the summons, albeit in summary form, all the evidence he relies on in defence, whereas it would be a great injustice to the plaintiff to allow the defendant to introduce for the first time on appeal evidence which was readily available at the hearing of the summons but was not produced.”

13.  This approach is applicable in Hong Kong: Fortis Insurance Co v Lam Hau Wah Inneo CACV 86/2010, 28 October 2010; Johnson Electric International Ltd v Bel Global Resources [2014] 5 HKC 504.

Application of the principles to the present application

14.  In our judgment, the Defendant’s application fails to meet the test in Ladd v Marshall as modified in accordance with Langdale v Danby, supra.

15.  First, even in the context of summary judgment, the Defendant failed to show that the new evidence could not have been obtained for the purpose of the hearing before the Judge.

16.  It should be noted that the summary judgment application was heard by the Judge in May 2019, more than 1.5 years after the present set of proceedings had been commenced.  The Order 14 summons was taken out on 14 November 2018.  If the Defendant were serious about his defence based on the collective sale for redevelopment of the Sanitarian Apartments (assuming for the time being that this could be an arguable defence), he had ample time to prepare his evidence to support this respect of his defence.  There is no question that the Defendant did not have adequate opportunity to marshal his evidence due to pressure of time.

17.  The Defendant submitted that while the evidence as to the land records could have been obtained in November 2018 (before the hearing of the summary judgment application), the import would not be the same as if, as he has in fact done, he produced records of land sales up to 28 January 2020.  He also argued that the land registry record evidence is effective only when corroborated with Ames’ evidence.

18.  Further, the Defendant argues that Ames’ evidence could not be adduced earlier because “it took time to develop the connection” with Ames.

19.  In our judgment, these arguments by the Defendant are without merit.  If, as the Defendant deposed in his affidavit of 9 March 2020, the point of the land registry records is to show that it would take a long time to find a buyer interested in the Property and there is no need for vacant possession to be given, acting with reasonable due diligence the Defendant could have searched and adduced land registry records before or during the summary judgment proceedings to prove the point at that time. 

20.  If the Defendant had acted with reasonable due diligence, he also could have reached out to Ames earlier.  According to the Defendant’s reply submissions, Ames has been an owner at the Sanitarian Apartments since 2004.  Since the Defendant was living at the same building and Ames was the Chairman of the Incorporated Owners, it should not have been difficult for the Defendant to approach her (or the other owners) to discuss the progress of the proposed collective sale. 

21.  The Defendant had raised the issue of potential collective sale at para 26 of his Defence of 9 February 2018.  He could and should have prepared his evidence in that regard since that time.  We do not accept that he could not have obtained similar evidence on the progress of the collective sale for the hearing before the Judge had he exercised reasonable diligence in resistance to the summary judgment application.

22.  There is nothing to suggest that there has been substantial progress in regard to the collective sale efforts since the hearing before the Judge.  Based on what is set out in the Defendant’s affidavit of 9 March 2020, the collective sale effort is still at a relatively early stage.  There are outstanding objections from some owners and proceedings may have to be brought in the Lands Tribunal.  There is also no suggestion that there is any offer from any interested purchaser which is acceptable to many owners. 

23.  Therefore, evidence similar to that included in the affidavit of 9 March 2020 could have been obtained before the hearing of the summary judgment proceedings if the Defendant had acted with reasonable due diligence.  The first condition in Ladd v Marshall (as applied in the context of summary judgment in accordance with Langdale v Danby) is not met.

24.  Second, even if the affidavit of 9 March 2020 were admissible and the contents were believed, we are not satisfied that it would have an important influence on the outcome.  Even if such evidence on the progress of the collective sale were adduced, it does not show that a collective sale was imminent for reasons set out at [22] above.  There is still great uncertainty as to the fate of such collective sale and it may not materialize in the foreseeable future. 

25.  The prospect of the collective sale has to be balanced against the other factors alluded to by the Judge at [17] of the Decision of 22 May 2019.

26.  Hence, the second condition in Ladd v Marshall is also not met.  

27.  For all of the above reasons, we reject the Defendant’s application to adduce new evidence on appeal.  The summons of 9 March 2020 is dismissed.

Costs

28.  We also order the Defendant to pay the Plaintiffs’ costs in the summons.  We have considered the Plaintiffs’ statement of costs.  Counsel, who did most of the drafting of the court documents charged only HK$8,480. We find the time engaged by the solicitor[1] (who was assisted by a trainee solicitor and a litigation clerk, who also billed separately for their time[2] in the statement of costs) involved in the matter to be excessive.  Even taking account of the seniority of the solicitor involved (as compared with that of counsel), we find the total costs charged by the solicitor and his staff to be excessive.  We shall fix the costs of the Plaintiffs summarily at HK$50,000.  We order that the Defendant pay the Plaintiff’s costs accordingly.

Ms Angel H.Y. Wong, instructed by Raymond T.L. Tse & Co, for the plaintiffs

The defendant acting in person