SHUM YUK LUN v. CROWN SURPLUS INTERNATIONAL LTD
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DCCJ 5345/2019
[2024] HKDC 1401
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
CIVIL ACTION NO 5345 OF 2019
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| SHUM YUK LUN（沈玉麟） | Plaintiff | |
| and | ||
| CROWN SURPLUS INTERNATIONAL LIMITED | Defendant | |
| （冠益國際有限公司） |
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| Before: | Deputy District Judge Carol Wong in Chambers (Paper Disposal) |
| Date of Plaintiff’s Written Submissions: | 23 May 2024 and 3 July 2024 |
| Date of Defendant’s Written Submissions: | 19 June 2024 |
| Date of Decision: | 3 October 2024 |
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DECISION
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Introduction
1. This is a property dispute over Flat 10 on 4th Floor, Boundary Building, No 2 Boundary Street, No 196 Tung Chau Street, Kowloon (the “Property”).
2. The Property was acquired in the names of the Plaintiff (the “Father”) and his son, Shum Chow (the “Son”), as joint tenants on 25 July 1991 (the “1991 Property Transfer”). Subsequently, on 23 August 2010, the Father and the Son transferred the Property to the Defendant company, Crown Surplus International Limited (the “Company”), which was wholly owned by the Son at that time (the “2010 Property Transfer”). On 13 February 2018, the Son transferred his only share in the Company to one Ko Wai Kar (the “2018 Share Transfer”).
3. The Father’s case is that the Company was and is holding the Property on trust for him under the 1991 Property Transfer and the 2010 Property Transfer. He sought an order for transfer of the Property by the Company to the Father.
4. Trial took place on 19 and 21 February 2024. By Judgment dated 6 March 2024 (the “Judgment”), I dismissed the Father’s claim.
5. By Summons dated 2 April 2024 (the “Leave Summons”), the Father, acting in person, sought leave to appeal against the Judgment. The Leave Summons contained no proposed grounds of appeal. The affirmation by the Father in support of the Leave Summons is largely a repetition of the Father’s witness statement dated 15 July 2022, which was not admitted as evidence at trial as the Father elected not to give evidence. Neither did that affirmation contain any proposed grounds of appeal.
6. Following the guidelines by the Court of Appeal in Tsang Wing Kwai v Tsang Wing Fai[2018] HKCA 759, paras 24-26, parties were directed to prepare written submissions in respect of the Father’s leave to appeal application which would be disposed of on paper.
7. By Notice to Act dated 21 May 2024, Messrs Justin Chow & de Bedin Solicitors LLP was appointed to act for the Father.
8. Without amending the Leave Summons, Ms Mathilda Kwong, acting on behalf of the Father, by way of written submissions dated 23 May 2024, advanced for the first time various grounds of appeal which had never been raised in the Leave Summons. Mr Ken Lee, acting on behalf of the Company, filed written submissions dated 19 June 2024. Ms Kwong then filed reply submissions dated 3 July 2024. The proposed grounds of appeal were put forward for the first time in Ms Kwong’s two sets of submissions totalling 69 pages.
9. I now deal with the Leave Summons.
Background
1991 Property Transfer
10. On 25 July 1991, the Father and the Son acquired the Property as joint tenants at the consideration of HK$510,000. According to the Son, the only witness for the Father, the Father decided to acquire the Property in their joint names at that time because the Father felt that he was old and the Son’s mother’s health was not good. Since the Son was a student at the time of the 1991 Transfer, the purchase price, including the subsequent mortgage payments, was paid by the Father.
11. In 2000 and 2009, the Father and the Son mortgaged the Property for the purpose of the Son’s business. The Son confirmed that in none of the mortgages did he mention to the bank and the financial institution concerned that he was holding the Property on trust. On the contrary, according to the mortgage documents, both the Father and the Son executed the documents as beneficial owners of the Property.
2010 Property Transfer
12. On 28 April 2010, the Company was incorporated. The Son became the sole director and shareholder on 15 June 2010.
13. Shortly thereafter, by a Provisional Agreement for Sale and Purchase dated 17 July 2010 (the “PSPA”), the Father and the Son as the seller transferred the Property to the Company as the purchaser. The stated consideration was HK$1,500,000. The Father’s case is that there was no actual payment of the consideration.
14. The Son said that the 2010 Transfer was for his convenience to obtain cash flow for his business.
15. Cheung Fung Shan Erica (“Madam Cheung”), the ex-wife of the Son with whom she divorced on 21 February 2019, gave evidence for the Company. She said that in late August 2010, before a dinner which she was personally present, the Father explained that he went to a law firm to sign the PSPA that morning to assign the Property to the Son’s Company at that time, and that the Property now belonged to the Son. The Father said that his share had now been given to the Son because the Property would be the Son’s in the future anyway (“Father’s Stated Intention”).
16. By an Assignment dated 23 August 2010, the 2010 Property Transfer was effected, pursuant to which the Company became the registered owner of the Property.
17. In 2013, 2014, 2015 and 2016, the Company mortgaged the Property. In all the mortgage documents, the Company executed them as the beneficial owner of the Property. The Son said he arranged these mortgages for the purpose of his business.
2018 Share Transfer
18. According to the Son, in 2018, the Son and one Ko Wai Cheung Albert (“Albert Ko”) invested in a project named vBed. Upon advice by Albert Ko, the Son transferred his only share and directorship in the Company to Ko Wai Kar because it was said that it would facilitate fund raising. The Son thus prepared a minutes of the board of the Company dated 13 February 2018 which was signed by the Son, Albert Ko and Ko Wai Kar. The minutes stated that the Son would transfer his share in the Company to Ko Wai Kar at the consideration of HK$1,000,000. However, the Son did not receive any actual payment. Nor did the Son intend to take any action for the HK$1,000,000 because he claimed that his agreement with Albert Ko was that Ko Wai Kar would be holding the one share on trust for the Son. The 2018 Share Transfer was effected accordingly.
19. Albert Ko, who gave evidence on behalf of the Company, gave a wholly different account of events. According to Albert Ko, from 2013 to 2018, he had lent the Son a total of HK$1,000,000 on various occasions. In order to repay the loan, the Son transferred his share in the Company to Ko Wai Kar who held the share on trust for Albert Ko. Albert Ko said that upon the Son’s request, the consideration of the 2018 Share Transfer was stated to be HK$1,000,000 in the board minutes. He further requested Albert Ko to take over the liability of a mortgage loan of HK$2,000,000 in 2016 which the Property was subject to.
The reliefs sought
20. Paragraph 9 of the Statement of Claim states: “When the [Father] requested the said Son for causing the [Company] to transfer the legal title of the [Property] back to him, the said Son told the [Father] that he was unable to do so because he was no longer the director and legal shareholder of the [Company] and Ko Wai Kar was threatening to commence legal proceedings against him for gaining the possession of the [Property] pursuant to the said Tenancy Agreement. Therefore, the [Father] verily believes that the [Company] as trustee will not assign the legal title of the [Property] back to the [Father] unless it is ordered to do so.”
21. Despite pleading and giving evidence about the 2018 Share Transfer, the reliefs sought by the Father in the Statement of Claim did not relate to the share dispute between the Son and Ko Wai Kar and/or Albert Ko. They only concerned the property dispute between the Father and the Company. The reliefs sought are:-
(a) A declaration that the Company is holding the Property on trust for the Father, and the Company is liable to account to the Father for the Property on the ground of its breach of trust; and
(b) An order that the Company shall transfer the legal and beneficial ownership of the Property to the Father.
My ruling in the Judgment
22. After hearing the evidence of the trial, I ruled that:-
(a) After the 1991 Property Transfer, the legal and beneficial ownership were jointly held by the Father and the Son. I rejected the Father’s reliance on resulting trust to allege that the Property belonged wholly to him. I held that presumption of advancement applied and there was no evidence to rebut such presumption.
(b) After the 2010 Property Transfer, the legal and beneficial ownership vested in the Company. I again rejected the Father’s reliance on resulting trust to allege that the Property continued to belong wholly to him. I held that at the time of the 2010 Property Transfer, insofar as the Father’s share was concerned, there was actual intention to gift the Property to the Son who was to hold the Property via a corporate vehicle, namely, the Company. As an alternative, in the absence of contrary evidence, I held that presumption of advancement applied.
(c) I did not make any ruling in relation to the 2018 Share Transfer. Despite parties’ differing evidence concerning the 2018 Share Transfer, whether the Son or Ko Wai Kar or Albert Ko was holding the beneficial interest of the one share in the Company is not an issue to be resolved in the present action. First, neither the Son, Ko Wai Kar nor Albert Ko were parties to the action. Second, none of the reliefs sought relate to the share in the Company. The present case is a property dispute, not a share dispute.
Proposed grounds of appeal
23. The Father’s proposed grounds of appeal are summarised as follows.
(a) Ground 1: The Father alleged that too much emphasis was placed on considering the presumption of advancement without considering the evidence of common intention constructive trust.
(b) Ground 2: The Father alleged that I erred in applying the legal principles concerning common intention constructive trust by failing to consider the timeline of legal charges, mortgages and their relationship with the 1991 Property Transfer and 2010 Property Transfer.
(c) Ground 3: The Father alleged that presumption of advancement did not apply in both the 1991 Property Transfer and 2010 Property Transfer. It was further suggested that I was wrong in “piercing the corporate veil” and treated the Company as the alter ego of the Son in applying the presumption of advancement in the 2010 Property Transfer.
(d) Ground 4: The Father alleged that I was wrong to consider the 2018 Share Transfer to be irrelevant.
(e) Ground 5: The Father alleged that there was miscarriage of justice because I refused to adjourn the trial for the Father to appoint legal representatives and further refused the Son’s application to represent the Father at the trial, when the Father himself was incapable of conducting the trial or conducting cross-examination due to his old age.
Analysis
Legal principles on leave to appeal
24. Section 63A(2) of the District Court Ordinance (Cap. 336) provides that leave to appeal shall not be granted unless the judge is satisfied that (a) the appeal has a reasonable prospect of success; or (b) there is some other reason in the interests of justice why the appeal should be heard.
25. Reasonable prospects of success involves the notion that the prospects of succeeding must be ‘reasonable’ and therefore more than ‘fanciful’, without having to be ‘probable’: SMSE v KL [2009] 4 HKLRD 125, para 17.
26. To meet the “reasonable prospect of success” test, an applicant is required to show more than just an arguable case, but an appeal that has merits and ought to be heard, although he does not have to demonstrate that the appeal will probably succeed: Wynn Resorts (Macau) SA v Mong Henry (also known as Mong Hengli) (unreported, HCA 192/2009, 10 August 2009).
Proposed Grounds 1 and 2: application of common intention constructive trust
27. Grounds 1 and 2 both concern the application of common intention constructive trust. I shall deal with them together.
28. The law on common intention constructive trust has been succinctly summarized by Deputy High Court Judge Alexander Stock SC in Leung Hang Lin v Lam Mei Yung[2019] HKCFI 2819 as follows:-
“(1) The starting point is that equity follows the law. There is a presumption that the beneficial interest follows the legal interest. Where the property is registered in a defendant’s name, the plaintiff bears the burden of showing, on the balance of probabilities, that the defendant held the property on trust for him or her such that the beneficial ownership differs to the legal ownership. See: Liu Wai Keung §44; Mo Ying §5.16; Primecredit §17.
(2) The burden may be discharged by showing that: (i) there was a common intention held by the plaintiff and the property owner at the time of the purchase (or exceptionally, thereafter) that the beneficial ownership was to be different to the legal ownership; (ii) the plaintiff altered his or her position in detrimental reliance upon the common intention; and (iii) it is unconscionable for the property owner to assert ownership in reliance on the legal title. The constructive trust is constituted by the plaintiff’s detrimental reliance on the common intention and the unconscionability of the legal owner departing therefrom. See: Luo Xing Juan §38; Liu Wai Keung §46.
(3) The approach to ascertaining common intention is objective. One looks to the intention of each party which was reasonably understood by the other party to be manifested by the first party’s words and conduct. See: Liu Wai Keung §47; Mo Ying §5.16.
(4) The doctrine is sometimes described as having two limbs. First, where at any time prior to the acquisition (or exceptionally, at a later date), there is an agreement, arrangement or understanding reached between the parties as to how the property is to be held beneficially, based on evidence of express discussions. Second, where there is no evidence to support such a finding but the court relies on the parties’ conduct as a basis from which to infer a common intention. There is some authority that under the second limb, direct contributions to the purchase price by a party who is not a legal owner will readily justify the inference. See: Mo Ying §5.8; Primecredit §§2.3 and 2.4.
(5) However, the modern approach is to assess the parties’ common intention by a holistic approach having regard to the context and the particular facts. The court is not constrained to consider only pure direct monetary contributions to the purchase price. In a Chinese setting, especially for the older generations, where explicit discussions on property rights within the family are not that common, the court has to pay more regard to circumstantial matters. See: Mo Ying §§5.14 and 5.15; Primecredit §1.6.”
29. Ms Kwong alleged that I failed to consider evidence of common intention constructive trust. However, the Father did not rely on common intention constructive trust in his pleaded case.
30. In the Statement of Claim, the only material facts pleaded in relation to the 1991 Property Transfer was:-
“3. Although the [Property] was assigned to the Plaintiff and the said Son as Joint Tenants on 25 July 1991, the purchase price of HK$510,000.00 (“the Purchase Price”) was paid up with the mortgage loan of HK$270,000.00 (“the Mortgage Loan”) from the Bank of East Asia Limited and the Plaintiff’s own money of HK$240,000 being the deposits and balance of the Purchase Price.
4. The said Mortgage Loan was fully paid by the Plaintiff and the said Legal Charge was discharged on 21 February 1998.”
31. Further, the only material facts pleaded in relation to the 2010 Property Transfer was:-
“6. On 23 August 2010, upon the request of the said Son the Plaintiff assigned the [Property] to the Defendant who had never paid any money to the Plaintiff notwithstanding that the purchase price was marked HK$1,500,000.00 in the Assignment registered at the Land Registry by memorial no 10091700610202.
7. In these circumstances, the Defendant had become the trustee holding the [Property] on trust for the Plaintiff.”
32. There are no pleaded facts as to any purported common intention between the Son, the Father and/or the Company, any detrimental reliance or unconscionability to establish common intention constructive trust.
33. In relation to the 1991 Property Transfer, there is also no evidence on any common intention of the Father and the Son save as to the Son’s evidence that the reason for acquiring the Property in the joint names of the Father and the Son was that Father felt that he was old and the Son’s mother’s health was not good. As such, there is no evidence to rebut the presumption of advancement.
34. In relation to the 2010 Property Transfer, there is also no evidence on any common intention of the Father and the Son except that the Property was to be transferred to the Son for him to obtain cash flow in his business. Further, I made a factual finding that there was actual intention of gift by the Father to the Son, particularly in light of the Father’s Stated Intention which was never challenged. Hence, there is no place for resulting trust and/or common intention constructive trust to operate. It is well settled that in respect of findings of fact, the appellate court can only intervene when it is satisfied that the findings by the primary judge is plainly wrong: Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336; China Gold Finance Ltd v CIL Holdings Ltd, CACV 11/2015, 27 November 2015 para 11-22; Yu Pak Kan v Busy Firm Investment Ltd[2023] HKCA 105, para 19. The Father has clearly failed its task.
35. Further, even if the Father is to rely on the second limb of common intention constructive trust mentioned at paragraph 28(4) above, namely, that direct contributions to the purchase price by a party who is not a legal owner will readily justify the inference, he cannot possibly establish common intention constructive trust here based on the Son’s evidence:-
(a) According to the Son’s evidence in court, he confirmed that the reason for transferring the Property to the Company wholly owned by the Son in the 2010 Property Transfer was to enable him to have better cash flow as the Son was doing business. This must have been the case as reflected by the frequent mortgages and legal charges against the Property as discussed at paragraphs 14-15, 29-30, 32-33, 37-38 of the Judgment. I reject Ms Kwong’s submission that I did not consider the mortgages, legal charges and discharges of the respective mortgages and legal charges.
(b) If the very purpose or intention for the Father to transfer the Property to the Son was to enable the Son to borrow money for his business, then there could not have been a common intention between the Father and the Son that the Father was to retain any beneficial interest in the Property. This is because in order to obtain mortgage loans, the Son who held the Property via the Company must represent to the banks or financial institutions concerned that he was both the legal and beneficial owner of the Property, which the Son in fact did in the present case.
(c) To allege any common intention constructive trust between the Father and the Son is tantamount to be a scheme operated by them jointly to avoid legal liability. Under such a scheme, the Father was to secretly hold the beneficial interest in the Property when the Son who held the legal title represented to the lender/mortgagee that the Son owned the Property legally and beneficially. When the Son or his Company could not repay the loan to the lender/mortgagee, then the Father would come in to claim that he was the real beneficial owner of the Property in order to avoid the enforcement of the mortgage. Common intention constructive trust, being an equitable remedy, certainly cannot be utilized in such an inequitable scheme.
(d) The elements to establish common intention constructive trust also did not exist here. First, the common intention was not for the Son and/or his Company to hold the Property on trust for the Father. On the contrary, the common intention was for the Son via the Company to hold the Property legally and beneficially so that the Son could borrow money for his business. Second, there was no detrimental reliance. The Father actively and willingly took the risk to transfer the Property to the Son in order to provide cash flow for the Son to do business. Third, since it was the Father’s active decision to transfer the Property to the Son for his business, there was no unconscionability even if the Son was unfortunately to lose the Property due to his business failures or dealings. The fact that the Son’s parents continued to reside in the Property would not change the above analysis, since it was the Father’s active decision to take the risk of transferring their residential property to the Son in order to support his business.
(e) The present case is different from Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327 where the court held that in the context of a Hong Kong Chinese family, it was not uncommon that parents would acquire a property in the name of their children and yet retain control and beneficial ownership of the property during their lifetimes. In that case, due to restrictions of the Home Ownership Scheme, the mother who funded the acquisition of the property under the scheme was not eligible to make the application, hence the application was made in the names of the father and the son as joint tenants. The son became the sole owner upon the father’s passing. There was evidence from the mother that the property would pass to the son after she and her husband passed away. Such intention of the mother is wholly different from the present case where the Father made an active decision to transfer the Property to the Son so that he could obtain mortgage loan instantly for business and not after his death.
36. Accordingly, Grounds 1 and 2 have no reasonable prospect of success.
Proposed Ground 3: application of presumption of advancement and “piercing the corporate veil”
37. The Father alleged in Ground 3 that presumption of advancement did not apply. I see no reasonable prospect of success on this ground either.
38. Ms Kwong, on behalf of the Father, submitted that presumption of advancement tended to be easily rebutted by slight evidence especially when the child is an independent adult. However, as mentioned above, there is no such evidence of intention at all in relation to the 1991 Property Transfer.
39. As to the 2010 Property Transfer, I found that there was actual intention of gift by the Father to the Son by transferring the Property to the Company wholly owned by the Son. Although I mentioned as an alternative that the presumption of advancement might apply, in light of my factual finding of actual intention of gift which was not challenged in the proposed grounds of appeal, it is not necessary to rely on the presumption of advancement. I therefore need not deal with the question whether presumption of advancement can be applied when a father acquires a property in the name of a corporate vehicle wholly owned by the son, which Ms Kwong described to be “piercing the corporate veil”.
Proposed Ground 4: failure to consider the 2018 Share Transfer
40. Ground 4 has no reasonable prospect of success either. The Father alleged that I was wrong to consider the 2018 Share Transfer to be irrelevant.
41. Ms Kwong submitted that “there was a transfer of ownership of the Defendant by the 2018 Transfer [i.e. 2018 Share Transfer] which clearly suggests there being a positive conduct of the parties which would determine if the beneficial ownership of the Property was subsequently altered by the 2018 Transfer.”
42. She further submitted that I was wrong in not considering whether Ko Wai Kar and Albert Ko were fixed with constructive notice about the Father’s interest in the Property such that they were not bona fide purchaser for value without notice in the 2018 Share Transfer. This point was never raised before and the Father should not be entitled to raise this new point which involves new evidence on appeal.
43. Ms Kwong has also confused the property dispute with the share dispute. The “2018 Transfer” referred to by her is a share transfer, not a property transfer. As mentioned above, the present case only concerns the property dispute, namely, the effect of the 1991 Property Transfer and the 2010 Property Transfer. Once I have decided that the legal and beneficial interest vested wholly in the Company after the 2010 Property Transfer, that is the end of the matter for this case.
44. The court is not in the position in this case to determine the share dispute in relation to the 2018 Share Transfer such as whether Ko Wai Kar and/or Albert Ko are holding the share in the Company on trust for the Son. The share dispute is one between the Son, Ko Wai Kar and/or Albert Ko, all of whom are not parties to the action. There is also no relief sought in relation to the interest of the share in the Company. Hence, I need not and indeed should not make any ruling as to the beneficial interest of the share.
45. I should add that based on my observation of this case, what really happened was this. The Father initially purchased the Property in his joint names with the Son. He later gifted his share to the Son by transferring it to the Company which was wholly owned by the Son at that time to support him to do business. By reason of some business dealings between the Son and Albert Ko and/or Ko Wai Kar, the Son later transferred his only share in the Company to Ko Wai Kar. Thus the Father and the Son no longer owned the Property, whether by themselves or through the Company.
46. The Son wished to get back the Property from the Kos. Hence, as the mastermind of this action, he dragged the Father in hoping to achieve his purpose. During the trial, whenever the Father who attended as the Plaintiff was asked any questions, he did not answer directly most of the times and repeatedly directed to the Son, hoping he would answer for him. The Father also did not give evidence in the witness box.
47. What I see is that the Son is fighting in the wrong battlefield. If the Son considers that he has been wronged by the Kos by reason of their failure to transfer the share in the Company back to him, the proper way is to resolve such dispute in the context of an action for the share dispute with the Kos joined in.
48. To ask this court to make any findings on the share dispute in hope that I would make a ruling ordering the Company now held by the Kos to transfer the Property back to the Father directly seems to me to cut corners by not having to face the real dispute with the Kos. In light of my findings, I do not consider the Son would succeed by taking this approach.
Proposed Ground 5: miscarriage of justice
49. Ground 5 is misplaced. Ms Kwong has incorrectly stated that I refused the Son’s application to act as “McKenzie friend”. She submitted that this was unjust when the Father himself was incapable of conducting the trial or conducting cross-examination due to his old age.
50. Ms Kwong has confused the role of a “McKenzie friend” with a person with the right of audience. A “McKenzie friend” is a person, whether a lawyer or not, who may attend trial as a friend of a party to take note and quietly make suggestions and offer advice, but he has no right of audience.
51. During the trial, I did not refuse any application for the Son to act as a “McKenzie friend”. In fact, the Son sat next to the Father throughout the trial and acted as a “McKenzie friend”. What I refused was the Son’s application to represent the Father at trial, with a right of audience.
52. Section 15 of the District Court Ordinance (Cap. 336) states:-
“Right of audience
(1) In any proceedings in the Court, any of the following persons may address the Court, namely —
(a) any party to the proceedings;
(b) a barrister qualified to practise in the High Court and retained by or on behalf of any party;
(c) a solicitor qualified to practise in the High Court and acting generally in the proceedings for a party thereto, but not a solicitor retained as an advocate by a solicitor so acting;
(d) any other person allowed by leave of the Court to appear instead of a party to the proceedings.”
53. According to section 15(1)(d), while this court can grant leave to allow “any other person” to appear instead of a party to the proceedings, the exercise of this power must be guided with legal principles.
54. I have summarised the legal principles on representation by non-legal representatives in the Judgment in Chinese. I repeat here in English:-
(a) Generally, the court would not permit someone without legal qualifications to represent a party in court to make representations or ask questions. The reason is that qualified barristers and solicitors not only possess professional knowledge but are also accountable to their professional bodies. If they have any inappropriate conducts, they would be sanctioned by the court and their professional bodies. Accordingly, when they act on the right track, the interest of the parties and the court would be protected. If the court permits someone without legal qualifications to make representations and ask questions in court, it is tantamount to the grant of a right of audience to unqualified individuals. Not only would parties and the court lose the aforesaid protection, it would also encourage unqualified individuals to operate unregulated businesses in imitating lawyers. This would clearly have an adverse impact on society. It is by these reasons that the Legislative Council enacted sections 44 and 45 of the Legal Practitioners Ordinance (Cap. 159) which criminalise unqualified persons to practise as a barrister or solicitor: 覃美金 訴 德勤關黃陳方會計師行, CACV 14/2011 (9 March 2012), para 29-30; 洪篤意 訴 香港房屋協會 [2015] 2 HKLRD 730, para 18; Lobo v Kripalani [1998] 2 HKLRD 325, 328.
(b) If a party is incapacitated in managing affairs, there is a “guardian ad litem” procedure in the civil proceedings to afford the party with protection. However, if a party is not so incapacitated, he can only act in person or appoint barristers / solicitors to act as his legal representatives: 覃美金 訴 德勤關黃陳方會計師行, CACV 14/2011 (9 March 2012), para 28; 洪篤意 訴 香港房屋協會 [2015] 2 HKLRD 730, para 18.
(c) A litigant in person is allowed to have sitting with him someone who could give him advice and help him with the presentation of his case (i.e. being a “McKenzie friend”). The leave of the court is not required for assistance of this nature to be utilised. But it is still the litigant in person who has to present that case to the court and a McKenzie friend does not have a right of audience in the court. A judge is entitled to exercise a reasonable degree of flexibility in the manner in which he allows proceedings to be conducted before him. However, it is only in the most exceptional case that a judge should permit a McKenzie friend to in effect represent a litigant: McKenzie v McKenzie [1971] P 33; Lobo v Kripalani [1998] 2 HKLRD 325, 328; Ho Lan Fong v Lam Gook [2004] 3 HKLRD 47, para 39-40; Holiday Resorts (Management) Co Ltd v Chan Yuk Yan, CACV 25/2001 (9 October 2001), para 6; Sobrevilla Rhennie Boy Fernandez v Chua Grace Gonzales, HCLA 7/2015 (7 June 2017), para 30.
(d) The court has inherent jurisdiction and discretion to allow a party to appoint a representative to act as his advocate in proceedings before the court or tribunal in question, which is quite apart from the court’s practice to allow a party to be assisted by a McKenzie friend: Ho Lan Fong v Lam Gook [2004] 3 HKLRD 47, para 43-46; O’Toole v Scott [1965] AC 939; Susan Caroline Berry v William Allan [1997] HKCU 146 (CA).
(e) In exercising such discretion, the court should consider the following principles:- (i) the exercise of discretion could be exercised either on general grounds common to many cases or on specific grounds arising in a particular case; (ii) the exercise of the discretion should not be confined to cases where there is a strict necessity; (iii) it should be regarded as proper when discretion is exercised in order to secure or promote convenience and expedition and efficiency in the administration of justice; (iv) whether the discretion should be exercised must depend on the whole of the circumstances that are pertinent to that case, and to the general nature of the proceedings before the court: Mallorca Joenalyn Domingo v Ng Mei Shuen [2018] 3 HKLRD 694, para 72; O’Toole v Scott [1965] AC 939.
(f) In line with the overriding objective of dealing with cases justly pursuant to the Civil Justice Reform, the court will be more open to exercising its discretion and granting a right of audience in a particular case when it is persuaded it will be of assistance to the case as a whole if a litigant in person were to have someone who is not an authorised advocate to speak for him or her. However, even though the legal world has in many ways moved on, due deference to the will of the Legislative Council and general caution are still required: Andrew James Graham v Eltham Conservative & Unionist Club & Others [2013] EWHC 979 (QB), para 33-34.
(g) When a litigant in person wishes to be heard by way of a lay advocate, he should make an appropriate application to the court at the first inter parte hearing. The application should be made by the litigant in person, and not by the person who he or she wishes to be the advocate, although often, in practice that other person may in fact be heard on the application. The applicant has the burden to prove that it is in the interest of justice for the lay advocate to represent him. The court would generally be assisted by the following information: (i) the relationship between the litigant in person and the proposed advocate, including whether the relationship is a commercial one; (ii) the reasons why the litigant wishes the proposed advocate to speak on his behalf, including any particular difficulties the litigant in person might have in presenting his own case; (iii) the experience, if any, the proposed advocate has had in presenting cases to a court; (iv) any court orders that might be relevant to the appropriateness of the proposed advocate. Given the importance of the role of advocate, there is a duty of frankness on both the litigant in person and the proposed advocate in relation to these issues: Andrew James Graham v Eltham Conservative & Unionist Club & Others [2013] EWHC 979 (QB), para 35-38.
55. As discussed in the Judgment, I refused the Son’s application to represent the Father in light of the above legal principles. In particular, I have considered the following factors:-
(a) The Son admitted in court that he had no legal qualifications, nor had he had any experience speaking in court.
(b) The Father provided no documents or medical reports to support the allegation that he was incapable of speaking in court.
(c) The Father as the Plaintiff had always been legally represented until the Pre-trial Review, and it was only in less than three weeks before trial did he begin to act in person.
(d) Although the Son stated in court that the Father decided to act in person due to financial difficulty, there was no evidence or explanation provided as to the Father’s financial status. The Son also failed to explain why the Father and the Son could not apply for legal aid earlier.
(e) In light of my observations in paragraphs 35(c), 45 to 48 above, the Son has his personal interest in the present action. His interest is also not independent from the Father. For instance, the 1991 Property Transfer and the 2010 Property Transfer both involve the question whether the interest remained with the Father or was passed on to the Son or his then Company. The Son’s special role and interest in the present case make him an inappropriate person to represent his Father as the Plaintiff.
56. Ms Kwong further submitted that the Father “had undertaken to bear costs arisen out of the adjourned trial and asked to be properly represented by legal representatives”. She seemed to be criticizing that I did not adjourn the case for the Father to apply for legal aid or to appoint legal representatives.
57. As I stated in paragraphs 5 and 6 of the Judgment, I refused to adjourn the trial because the adjournment would be contrary to the underlying objectives under Order 1A rule 1 of the Rules of the District Court (Cap. 336H). Trial dates are milestone dates and should not be varied unless there are exceptional circumstances justifying the variation: Order 25 rule 3.
58. Here, the Father had been legally represented from the day when the Writ was issued on 2 October 2019 until the Pre-trial Review on 18 December 2023. Shortly before trial, the Father acted in person. The only explanation for acting in person was a bare assertion of financial difficulty. When trial started, the Father sought to adjourn the case to appoint legal representatives again. According to the listing department, the re-listing of the trial would lead to an adjournment of almost a year. Not only is the substantial delay highly prejudicial to the Defendant Company, it is also contrary to the underlying objectives of the Rules of the District Court (Cap. 336H) to allow a party to manipulate the court procedures in the way which the Father did. There is no way that this kind of conducts in legal proceedings should be allowed.
59. Accordingly, there is no reasonable prospect of success of this ground, nor is there any other reason in the interests of justice why the appeal should be heard.
Orders
60. By reasons aforesaid, the Leave Summons is dismissed. I order that costs of the Leave Summons be paid by the Plaintiff to the Defendant, with certificate for counsel, to be taxed if not agreed.
| ( Carol Wong ) Deputy District Judge |
Ms Mathilda Kwong instructed by Justin Chow & de Bedin Solicitors LLP, for the Plaintiff
Mr Ken Lee instructed by Humphrey & Associates, for the Defendant