DCCJ 4215/2023
[2024] HKDC 1999
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
CIVIL ACTION NO 4215 OF 2023
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BETWEEN
| | HILL CONCEPT LIMITED | Plaintiff |
and |
| | YUEN YUN (羽潤) OR FORMERLY KNOWN AS YUEN TIN YUN (源天潤) | Defendant |
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| Before: | Deputy District Judge Norman Hui in Chambers |
| Date of Hearing: | 26 August 2024 |
| Date of Decision: | 26 November 2024 |
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DECISION
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Background
1. The Plaintiff is the developer of a residential building known as “Central 8” located at No.8 Mosque Street in Hong Kong (“the Building”). Within the Building, the Defendant purchased a unit (“the Property”) at a consideration of HK$10,762,500 via a sale and purchase agreement dated 25 March 2022 (“the Sale and Purchase Agreement”). The most significant and outstanding payment instalment of HK$9,686,250 was due on 13 June 2023, namely the balance of the purchase price of the Unit (“the Balance”).
2. From 4 May 2022 to 13 June 2023, the Defendant was granted a licence (as licensee) from the Plaintiff (as licensor) to occupy the Property (“the Licence”) and a material term of that licence was that unless completion were to take place in accordance with the terms of the Sale and Purchase Agreement, namely that the Balance would be paid on or before 13 June 2023 (“the Completion Date”). Failure to comply with the aforesaid terms, the Defendant would vacate or ensure vacation of the Property with delivery up of the same to the Plaintiff as per clause 10 of the Licence, namely:
“10. TERMINATION – Upon the expiration of the Licence (except upon the completion of the sale and purchase of the Property in accordance with the Sale and Purchase Agreement), the Licensee shall forthwith:
(a)vacate and ensure that the Licensee and all occupants of the Property shall vacate the Property;
(b)remove from the Property all furniture and personal properties of the Licensee and the occupants of the Property;
(c)deliver up the Property to the Licensee; and
(d)reinstate the Property to its state and condition at the Commencement Date or, if the Licensor so requires, pay to the Licensor the costs of reinstating the Property to its state and condition at the Commencement Date.
Provided that the termination of the Licence shall be without prejudice to any antecedent rights remedies or causes of action which have accrued to the Licensor prior to the termination of the Licence as well as any remedies of the Licensor in respect of any breach of the Licensee under the Licence.”
3. The Defendant failed to pay the Balance on the Completion Date but continued to occupy the Property contrary to the terms of the Licence despite the Plaintiff giving notice to the Defendant on 3 September 2023. The Plaintiff issued its writ on 27 September 2023 for relief relating to vacant possession of the Property, mesne profits and other loss and damage.
4. These proceedings continued with, inter alia, the Plaintiff issuing a summons for summary judgment for (a) vacant possession of the Property; (b) mesne profit; (c) contractual damages (to be assessed) with the alternative being interim payment to be made to the Plaintiff. A series of orders were made by Madam Registrar M Soong dated 19 January 2024 (“the 1st Order”) and Master Maurice Lam dated 24 January 2024 (“the 2nd Order”) (collectively “the Orders”).
5. Part of the Plaintiff’s summary judgment summons and a striking out summonses were adjourned for substantive argument before Master Vincent Kee on 23 April 2024 (“Master Kee’s Order”) where the learned master (1) entered summary judgment for the Plaintiff for damages to be assessed for breach of the Sale and Purchase Agreement and the Licence; and (2) striking out of the Defendant’s Defence and Counterclaim under Rules of the District Court, Cap.336H (“RDC”) O.18, r.19 for disclosing no reasonable cause of action.
6. The Defendant issued its appeal against Master Kee’s Order on 8 May 2024 under RDC O.58 (“the Defendant’s Appeal”).
7. The Defendant’s Appeal is based on the notice of the same date whereby the relevant parts are as follows:
“… because I am unable to have the Order from the Plaintiff’s solicitor at present, so that I am only express the meaning as which I capture during the hearing… Master Kee judged the Plaintiff’s the Summons dated 18 October 2023 [which led to the 1st Order] and 24 November 2023 [which led to the 2nd Order] to be won and the defendant paid the costs of HKD75,000 for each Summons… I would like to have a fair judgment and have the choice for me to submit the Affirmation according to the Order of Registrar M Soong and counter claim my expenses for the Purchase and Sales Agreement for HKD1,700,000”
8. It will be noted that the Orders were subsequently challenged by the Defendant and a notice of appeal to a judge in chambers was filed on 30 January 2024 resulting in an appeal that went before DDJ Alan Kwong (as he then was) on 26 March 2024 who dismissed the appeal with costs in a very detailed and thoroughly reasoned decision at [2024] HKDC 499 (“1st Decision of DDJ Alan Kwong”). An application for leave to appeal against the 1st Decision of DDJ Alan Kwong was made on 12 April 2024 and dismissed on 9 August 2024 [2024] HKDC 1282 again with a very detailed and thoroughly reasoned decision (“2nd Decision of DDJ Alan Kwong”).
Events leading up to and immediately before the Defendant’s Appeal – legal aid stay
9. The Defendant applied for legal aid on 27 November 2023 which was refused on 3 January 2024 (“the 1st Refused Legal Aid Application”). This was followed by another application for legal aid on 12 January 2024 and the action was stayed under s.15 of the Legal Aid Ordinance, Cap.91 but subsequently refused on 28 March 2024 (“the 2nd Refused Legal Aid Application”).
10. The 1st Order was a call-over hearing for the Plaintiff’s summary judgment summons which took place during the interim processing period of the 2nd Refused Legal Aid Application whereby the legal aid stay was lifted and then judgment was entered for vacant possession of the Property in favour of the Plaintiff the remainder of the summons was adjourned for a substantive hearing. The 1st Order led to an appeal made by the Defendant which the 2nd Refused Legal Aid Application should have had led to a stay but the 1st Decision of DDJ Alan Kwong dismissed the Defendant’s said appeal.
11. Given the 1st Order and subsequently the 1st Decision of DDJ Alan Kwong only gave judgment on a part of the Plaintiff’s summary judgment summons and striking out of the Defendant’s counterclaim was not yet dealt with, the remainder the Plaintiff’s summary judgment summons and striking out of the Defendant’s counterclaim was heard and dealt with in Master Kee’s Order in favour of the Plaintiff.
12. The Defendant just less than 2 weeks before this substantive hearing of the Defendant’s Appeal applied for legal aid (“the 3rd Legal Aid Application”). This court was required to consider whether the statutory legal aid stay should be lifted.
13. The Defendant filed a late skeleton submission in English and submitted that his excuse was that since he did not have a “fax service” and did not have details about the hearing date of the Defendant’s Appeal. The Defendant subsequently received a letter about the Defendant’s Appeal which he claims he then received on 22 August 2024.
14. Given that this is the Defendant’s own appeal, I simply do not accept or agree with the Defendant’s explanation. In any event, given the background to this case, namely the Defendant having appeared in court on multiple occasions on this case as already explained, the Defendant’s explanation (and excuse) is not believed. It was held in 楊嬡v南華金融控股有限公司and Anor., DCCJ 3374/2022, [2024] HKDC 538, that skeleton submissions are to ensure the orderly conduct of proceedings in court, compliance with Practice Direction 5.4 is necessary and non-compliance without reasonable explanation to the court is unacceptable and may be visited with costs.
15. In any event, on the issue of applying for the 3rd Legal Aid Application, the Defendant states that, inter alia, he found “new doubts including audio records about the illegal actions during the processing of the Sale and Purchase Agreement” and that he wanted to “submit the details of the doubts and audio records to Legal Aid Department for further consideration.” The Defendant further submitted that “Since the Plaintiff separated the same case into two hearings originally, so that, the hearing[s] dates is too close for each time, so that, if this time the hearing will be held on 26 September 2024, it is suitable for me to submit the documents on time.”
16. This court fully rejected such submissions given that the Defendant gave no indication about what such evidence may actually be nor that he actually had such evidence of “audio records”.
17. Furthermore, the Plaintiff never “separated” this case “into two hearings” but rather the case simply proceeded in stages, where the Defendant was present at all such stages. Furthermore, it is unknown how or why this “hearing” namely the Defendant’s Appeal, would somehow be heard on 26 September 2024 instead of the fixed date of this substantive hearing as scheduled months in advance.
18. It is trite that the Court has a discretionary power to lift a legal aid stay under s.15(4) of the Legal Aid Ordinance, Cap.91. More pertinently, a legal aid stay may be lifted where there is an abuse of process as in Bank of China (Hong Kong) Ltd v Fu Ming Keung & Anor., HCA 7769 & 3909/2000, unreported, 24 June 2005, where it was held by Recorder Kwok SC that:
“27.The statutory stay is an aid in, not an obstacle to, the administration of justice. It does not mean that a defendant has the right to abort the trial of an action by making a fresh application for legal aid on the eve of every set of dates fixed for the trial of the action.”
19. Given the Defendant has failed to show any change of circumstances, let alone any material change of circumstances between the 1st and 2nd Refusals of Legal Aid, this court lifted the stay at the substantive hearing of the Defendant’s Appeal.
20. It bears noting that the 1st Decision of DDJ Alan Kwong had dealt with a similar situation earlier in these proceedings, namely:
“36.In the present case, there is no evidence showing that there was any material change of circumstances during the 9-day period between 3 January 2024 (ie the day when the Defendant’s first legal aid application was refused) and 12 January 2024 (ie the day when the Defendant made the second application for legal aid). In this connection, I am not impressed by the explanation that the Defendant failed to put forward some documents when the first application was made, and hence the Defendant made the second application after the documents in question were gathered. First of all, in the present proceedings, the Defendant failed to put forward any document that support his case, and as such I am doubtful whether such document existed at all. In any event, had the alleged documents been important, the Defendant would have provided the same to the Director of Legal Aid before the first application was disposed of.
37. All in all, there is an overwhelming impression that the Defendant sought to utilize the second application on 12 January 2024 to cause delay to the present proceedings. This kind of gamesmanship was abusive and would cause prejudice to the opposing party. It must not be allowed.”
Applications by the Defendant for leave to file further evidence at the Defendant’s Appeal
21. By way of correspondence to the court directly on 20 August 2024, the Defendant requested “approval appointing my mother Ms. Wong Kong Heung to be my witness for the hearing on 26 August 2024. It is because she was the key person to handle the processing for the Sale[s] and Purchase Agreement.”
22. It will be noted in the 1st Decision of DDJ Kwong the learned judge therein also dealt with a document that was accompanied with the Defence and Counterclaim, namely a statement of Madam Wong Kong Heung (“Madam Wong”), referred to as “Madame Wong’s Statement” thereof.
23. This court is of coordinate jurisdiction to that of the learned judge in the 1st Decision of DDJ Kwong. Nonetheless, it is found that that description of “Madame Wong’s Statement” in the learned judge’s decision is a fair and accurate one and adopted herein and does not require repetition.
24. Suffice to say, it was unknown exactly what the Defendant was requesting since Madame Wong’s Statement still stands as evidence that is to be considered in this the Defendant’s Appeal hereof. Upon further discussion, the Defendant stated that he sought leave to file an affirmation of Madam Wong which meant there was yet further unseen evidence that the Defendant wanted to adduce at this the Defendant’s Appeal.
25. When further asked, the Defendant gave the impression that such a proposed affirmation of Madam Wong would be prepared in due course. The Defendant also emphasized that a such a proposed affirmation of Madam Wong would be prepared in due course if legal aid were to be granted.
26. At the hearing, this court had first dealt with the issue of legal aid stay which was lifted so the Defendant’s Appeal would and did continue. As such, without any draft affirmation in hand for even this court to consider, the Defendant’s application to file a proposed affirmation of Madam Wong was rejected. The Defendant then immediately suggested that Madam Wong could somehow explain in person to the court what she intended to say as to better the defence in this case but this too was rejected outright given the lateness of such an application and that procedurally this was both unfair to the Plaintiff and irregular, to say the least.
27. The Defendant also applied by verbal submissions again at the hearing of the Defendant’s Appeal that he wanted to file a variety of further documents in the form of CCTV recordings, WhatsApp messages, audio recordings and documents from the Land Registry. Again, when further asked, the Defendant gave the impression that such evidence would somehow show that the estate agents of Centaline Property were deceptive in their behaviour and that the Property was unfit to live in, as such, further emphasizing the matters already found in Madame Wong’s Statement as per the 1st Decision of DDJ Kwong.
28. Also notable to the Defendant’s request for filing of further documents on the day of the substantive hearing of the Defendant’s Appeal, specifically those of CCTV recordings and documents from the Land Registry, the Defendant had in fact already referred to such alleged documents being somehow important to the Defendant’s Appeal that are already found as matters mentioned in the Defendant’s Further Affirmations but even at that stage the Defendant never produced evidence of the same but only their vague and alleged existence.
29. Upon further discussion with the Defendant, he accepted that all of the further alleged evidence he was seeking to adduce was readily available since the commencement of these proceedings.
30. Furthermore, the Defendant was unable to demonstrate, again, that he had such further alleged evidence at hand and/or that such further alleged evidence was in a form which this court could assess. As such, this court refused the Defendant’s request to adduce the further alleged evidence.
The Defendant’s Appeal is out of time
31. It will be noted that the Defendant’s Appeal itself was out of time since pursuant to RDC O.58, r.1(1) and (3), his notice must be issued within 14 days after the judgment, order or decision appealed against. The Defendant’s notice of appeal was issued on 8 May 2024 and thus a day late of Master Kee’s Order.
32. Counsel for the Plaintiff, Mr Justin Ismail made cogent points on why the Defendant’s Appeal should not be entertained with notable and commendable restraint but nonetheless very helpfully dealt with the substance of the Defendant’s Appeal as will be seen hereinbelow.
33. Reference was made to HKCP 2024, §58/1/9 where considerations on whether time to extend time to appeal were stated as being:
(1) The Court has to consider all relevant factors, particularly (1) the length of the delay; (2) reasons for the delay; (3) merits of the proposed appeal and (4) the degree of prejudice to the other party.
(2) In applying to extend time to appeal an adverse order or adjudication, the Court should be slow to accede to the application in the absence of an acceptable reason for the delay.
(3) An application to extend time should be made at the same time as the appeal and the extension asked for in the appeal notice.
34. Mr. Ismail further submitted, as being directly relevant to the Defendant’s Appeal, that this was not the first time that the Defendant failed to adhere to time limits and is habitual in his lateness. This was a matter raised in the 2nd Decision of DDJ Kwong when the learned judge was dealing with appeals from the Orders, namely:
“25.Whilst I accept that the length of the delay was minimal and that the Plaintiff would not suffer prejudice, I do not accept that there is a valid explanation for the delay. In my view, it is important for litigants to abide by the procedural rules of the Court, and the fact that the Defendant is not legally represented is not ipso facto an excuse for non-compliant.”
35. The Defendant’s only explanation as to why the Defendant’s Appeal was brought out of time is because he needed time to obtain certain documents from the Land Registry in support of the appeal, which was a bare assertion. Further and even assuming it were true, it is not an acceptable reason for the delay since the Defendant does not have leave to file additional evidence in support of the appeal in any event as per HKCP 2024, §58/1/3.
36. In the circumstances, I find that the Defendant has been consciously habitual in making tactically late applications to delay proceedings as seen in the history of these proceedings, in particular as pertaining to the Defendant’s Appeal.
37. This court also reminds itself of the particular factual circumstances leading to the lateness of the Defendant’s Appeal and the various tests to be applied for extension of time in relation to appeals pursuant to RDC O.58. As such, this court exercises its discretion and finds that the Defendant’s Appeal is dismissed for being out of time.
38. Nonetheless, given the Defendant’s Appeal was heard and argued in full at the substantive hearing, were this court incorrect in dismissing the Defendant’s Appeal for being out of time, the merits of the Defendant’s Appeal are fully considered and discussed hereinbelow.
Merits of the Defendant’s Appeal
Summary judgment
39. The test relating to summary judgment as per Lau Chun Kam v Lai Tak Shing, unrep, HCA 2126/2007, 9 December 2008 from DHCJ Lisa Wong SC (as she then was) is as follows:
(1) The Order 14 machinery works on the basis that if the plaintiff’s application is properly constituted, it is prima facie entitled to judgment unless the defendant shows cause to the contrary.
(2) The mere assertion in an affidavit of a given situation by the defendant responding to an application for summary judgment does not, ipso facto, ground leave to defend.
(3) The burden is on the defendant to show a real or bona fide defence or some other reason for a trial. The defendant must satisfy the Court that his evidence is capable of being believed and that on the basis of such evidence, there is a fair or reasonable probability of the defendant having a real or bona fide defence.
(4) In deciding whether there is a fair or reasonable probability of the defendant having a real or bona fide defence, the Court does not isolate each factual issue and consider whether it is possible that the defendant’s story on that issue is credible. Rather, the Court must look at the whole situation.
(5) In assessing the credibility of the defendant’s factual case, while the Court will not embark upon a mini-trial on affidavit evidence, the Court is not obliged to suspend its critical faculties and assume that the defendant’s evidence is accurate.
(6) If having regard to inherent plausibility, inconsistency with contemporaneous documents and other compelling evidence, the defence is not credible, the Court must say so.
(7) If the defendant’s evidence is incredible in any material respect, it cannot be said that there is a fair or reasonable probability that the defendant has a real or bona fide defence.
See Hong Kong Civil Procedure 2009, Volume 1, §14/4/1; National Westminster Bank plc v Daniel [1993] 1 WLR 1453, per Glidewell J at 1457; Re Safe Rich Industries Ltd, Civ App 81/1994, unrep., 3 November 1994, per Bokhary JA at p.5; Manciple Ltd v Chan On Man [1995] 2 HKC 459, per Mortimer JA at 466 and Microsoft Corporation v Electro-Wide Ltd [1997] FSR 580, per Laddie J at 593.
40. The Plaintiff’s position is that the Defendant failed to pay the Balance by the Completion Date and the Defendant continued to wrongfully occupy the Property. Nevertheless, the Defendant in its Defence and Counterclaim did not dispute that the underlying transaction did not proceed to completion.
41. The Defendant has pleaded to the effect that the Sale and Purchase Agreement was a “deceitful sale” as to sections 6, 6A, 7, 7A, 13E, 13F and 13G of the Trade Descriptions Ordinance, Cap.362 (“the TDO”) and section 36 of the Estate Agents Ordinance, Cap.511 (“the EAO”) and therefore the Defendant is not liable to pay the Balance to the Plaintiff.
42. Furthermore, the Defendant also pleaded that the Defendant and Madam Wong were subject to fraudulent statements or alleged misrepresentations made towards both of them and therefore the Defendant had no duty to complete under the Sale and Purchase Agreement.
43. The Defendant in its Counterclaim pleaded a total loss of HK$1,696,780.74, being 10% deposit ($1,076,250), “costs on account” (HK$35,000), “management fee deposit and public utilities deposit, special fund and berries removal charges” (HK$14,950), licence fee (HK$215,250), “unknown fee” (HK$3,000) and “the occupation property fee” (HK$352,330.74) that is purportedly subject to section 18A of the TDO.
44. The Defence and Counterclaim was accompanied by (or can roughly be said to be “annexed”) a statement by Madam Wong (as also referred to in the 1st Decision of DDJ Kwong, inter alia, the “Madam Wong Statement”) which was previously mentioned hereinabove, this court has also come to the same finding of their description, namely:
(1) The estate agents of Centaline Property persuaded and induced the Defendant and Madam Wong to purchase the Property, though they were not interested at all and might not have the financial ability to do so. However, after the Defendant paid part of the deposit, the financial companies introduced by the estate agents refused to lend monies to the Defendant and Madam Wong. The Defendant and his family then moved into the Property.
(2) It was a nightmare to live in the Property. For instance, there was bad smell emanating from the renovation materials. The refrigerator did not function properly, and the air-conditioners were noisy. Many neighbours came from Mainland China who were unhygienic and there were cockroaches around. Whilst the management company unilaterally increased management fees, the management service was bad.
(3) Since Madam Wong and her husband could not withstand the conditions, they requested the developer to return the deposit payment, and they would then vacate the Property. However, such request was refused and they refused to vacate.
45. The Defendant has again chosen to run afoul of the procedural rules relating to these proceedings in that the Defendant has never filed an affirmation proper and that the said statement of Madam Wong accompanied to the Defence and Counterclaim, namely the Madame Wong Statement, simply does not qualify as such.
46. The Defendant has provided no reasons why an affirmation could not have been filed at the stage of the 1st Order. Kwan J (as she then was) held in Cheung Tai Hong Holdings (Technology) Ltd v Cheng Yuk Kuen, HCA 3166/2001, unreported, 6 March 2002 at §13:
“13. [A]lthough a defendant may show cause against an application for summary judgment “by affidavit or otherwise” under Order 14 rule 4(1), it is established practice that the defendant is required to file an affidavit before the court can be satisfied he has raised a triable issue, unless it is an unusual situation that he is able to raise a triable issue with reference to the plaintiff's pleading and affirmation alone, without any need to put in evidence to substantiate any of his allegations (see Chinakong Manufactory Ltd. v. Uniden Hong Kong Ltd. [1993] 1 HKLR 28 ; Hong Kong Civil Procedure 2002 , Vol. 1, para. 14/4/3).”
47. The Defendant was not explicit at the substantive hearing of the Defendant’s Appeal on seeking to rely on 2 affirmations which were filed on 8 May 2024 and 16 July 2024 respectively (“the Defendant’s Further Affirmations”).
48. It is noted that the Defendant’s affirmation of 16 July 2024, the latter of the Defendant’s Further Affirmations, was filed after the last affirmation of the Plaintiff, namely after the 3rd Affirmation of Yuen Kai Wing Derek which was dated 6 June 2024. As a matter of procedural fairness and logic, it cannot be right that a respondent be allowed to file evidence after an applicant’s reply evidence has been completed, save and unless the applicant’s reply evidence has raised new points which should have been raised previously in its evidence in support of its application. For the sake of completeness, the 3rd Affirmation of Yuen Kai Wing Derek did not raise any new points that could have been dealt with by the Defendant.
49. When further considering the Defendant’s Further Affirmations, they have raised new allegations of fraud and collusion by the Plaintiff. It is clear from RDC O.58, r.1 (5) that “No further evidence (other than evidence as to matters which have occurred after the date on which the judgment, order or decision was given or made) may be received on the hearing of an appeal under this rule except on special grounds.”
50. The Defendant has not (explicitly) sought leave for the filing of the Defendant’s Further Affirmations which is evidence that has brought forward new allegations and this is contrary to the Ladd v Marshall principle, namely whether the court may accept such further evidence where such further evidence (a) could not have been obtained with reasonable diligence and then adduced at the proceedings in question; (b) most likely will have an important influence on the result of the case, if leave is given; and is apparently credible evidence / presumably to be believed, see also HKCP 2024, §58/1/3.
51. There is no reason why these allegations in the Defendant’s Further Affirmations could not have been raised at the hearing of the Orders, nor is there any suggestion of a change of circumstance which might have occurred after either of those hearings.
52. I indicated to Mr Ismail that for the sake of completeness, this court had already considered the Defendant’s Further Affirmations fully as if they were properly before this court.
53. Mr Ismail had again made cogent points on why the Defendant’s Further Affirmations should not be entertained with notable and commendable restraint but nonetheless very helpfully dealt with the substance of the Defendant’s Further Affirmations.
54. The Defendant cited in his list of authorities dated 20 August 2024 the case of Ju Yan Di Emperory Genesisy v Yau Wai Han, [2015] 1 HKLRD 822 but without any particular reference to that case per se nor the reason for its citation. It can be found in the Defendant’s affirmation of 16 July 2024, the latter of the Defendant’s Further Affirmations, that the said case was cited for the proposition that “This is because the starting point in a summary judgment application is that it should only be invoked when there is no defence to the claim.”
55. Making the best of that citation, and considering Ju Yan Di Emperory Genesisy (ibid) more fully, inter alia, summary judgment was successfully appealed against with an order that unconditional leave to defend by the Court of Appeal was allowed on the basis that where the plaintiff had allegedly committed an offence of fraud, the plaintiff gave a different version of circumstances in his affirmations to that of the statement of claim. The Court of Appeal held that since the plaintiff only gave a general statement stating that he refuted allegations made against him without particulars, such an absence of a proper explanation given by the plaintiff led to a triable issue. The Court of Appeal held that there was “more to the parties’ transactions than meets the eye.”
56. Mr. Ismail submitted that taking on board the Defendant’s case in its entirety, there is no dispute that completion did not take place at all in the sense that the Balance was not paid on the Completion Date and this was contrary to the Sale and Purchase Agreement. In any event, there is also no dispute that the Licence expired on the Completion Date. As an additional factor, by the 1st Order, the Defendant was ordered to vacate the Property and his appeal against that issue, as well his application for leave to appeal via the 1st and 2nd Decisions of DDJ Kwong, were and still stand as being dismissed. The uncontested position as it stands presently is that the Defendant was and still is in clear breach of the Sale and Purchase Agreement and the Plaintiff is prima facie entitled to judgment on its claim.
57. It is trite law that the burden is on the Defendant to show an arguable defence or a triable issue by condescending upon particulars but the Defendant has not discharged that burden.
58. The crux of the Defendant’s defence is that the sale of the Property was a “deceitful sale” contrary to the TDO and EAO but this term has not been defined per se (pleadings or otherwise) nor has the Defendant attempted to explain such a term in the evidence.
59. For the sake of completeness, there is no correlation between the Defendant’s pleas that the Sale and Purchase Agreement was a “deceitful sale” as to sections 6, 6A, 7, 7A, 13E, 13F and 13G of the TDO and section 36 of the EAO.
60. In relation to the TDO, the Defendant’s defence has no correlation as applying to the Property or the Plaintiff as the developer of the Building (and thus applying to the Property) given that “goods” is defined under section 2 of the TDO as “things attached to land” and not landed or real property itself.
61. In relation to the EAO, the Defendant’s defence again has no correlation as applying to estate agents since the Plaintiff is the developer of the Building (and thus applying to the Property).
62. The Defendant’s defence, insofar as relating to the EAO, has no substance since the Defendant has not provided any evidence to corroborate the existence of the alleged fraudulent statements or misrepresentations that were allegedly made. Even if the Defendant could mount a reasonable argument that the alleged fraudulent statements or misrepresentations were said to have been made by estate agents of Centaline Property as alleged, this would only render Centaline Property liable instead of the Plaintiff.
63. Again for the sake of completeness, although a court of coordinate jurisdiction, nonetheless the court came to a similar conclusion to that found in the 1st Decision of DDJ Kwong at §27.
64. In fact, when considering Clause 38 of the Sale and Purchase Agreement (it also being an entire agreement clause), the Plaintiff is relieved of any liability:
“38. This Agreement sets out the full agreement between the parties. Without prejudice to the generality of the foregoing, no warranties or representation express or implied of any kind other than those set out above are or have been made or given by the Vendor or by anybody on their behalf and if such warranties or representations express or implied has been made, the same is withdrawn or deemed to have been withdrawn immediately before the execution of this Agreement.”
65. Dealing with the Defendant’s Further Affirmations, the Defendant alleged that dealings with a certain Lee Bong Credit Service Company Ltd and the allegedly wrongful registration of the loan agreement with the Land Registry lead to some sort of serious fraud on the part of the Emperor Group. This court finds that such allegations are no more than bare and unsubstantiated assertions that do not raise a discernible defence or triable issue.
66. Commentary more than a defence itself, the Defendant alleged that since he was not legally represented and had thus failed to adhere to the relevant procedural rules, he was therefore robbed of “a fair judgment”. This court has found no such allegation to be of any foundation let alone there being any evidence of such conduct. On the contrary, this court has found that it appears at all levels, and in particular to matters related to the Defendant’s Appeal, all steps have been carried out with an acute abundance of caution and care.
Striking out
67. The test relating to striking out under RDC O.18, r.19 are trite and summarizing from HKCP 2024, §18/19/4:
(1) The plaintiff bears the burden to show a plain and obvious case to strike out.
(2) The claim must be obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out.
(3) However, plain is not the same as simple, and obvious is not the same as short. If, on a careful reading of [a counterclaim], however complicated, it can be seen that there is no cause of action or the claim will obviously not succeed, the court can and probably will order it to be struck out.
68. As per the 2nd Order, the Plaintiff struck out the Counterclaim under RDC O.18, r.19 for disclosing no reasonable cause of action. It is trite that RDC O.18, r.19(2) excludes evidence on an application under r.19(1)(a). The court is obliged to look at the indorsement on the pleading without extrinsic evidence and decide whether on the assumption that the facts pleaded are true, the pleading discloses a cause of action in law.
69. The sole basis of the Counterclaim is via his pleaded defence:
“13. Since this Sale and Purchase Agreement is the deceitful sale, and according to the Cap 362 Trade Descriptions Ordinance, Section 18A (Appendix 12), I would like to claim back all the expenses which I have paid.”
70. As already considered earlier in this decision, “deceitful sale” has not been defined as relating to the TDO (and EAO), is not a proper legal basis for a defence to the Plaintiff’s case given that the Plaintiff is not privy to the alleged fraudulent statements and misrepresentations, the TDO has no correlation to the Plaintiff as the developer of the Building and at most may relate to Centaline Property per se. Additionally, the Plaintiff is relieved of any liability given the effect of Clause 38 of the Sale and Purchase Agreement.
71. Accordingly the pleaded basis for the Counterclaim must fail and falls away, a similar situation held in Cantake Ltd v Elite Boxing and Fitness Ltd[2023] HKDC 1862 at §§73-74 where DDJ Anthony Chow held that when none of the defences raised by a defendant is arguable and/or credible and the counterclaim repeats its defence, the counterclaim is bound to fail. The findings as per Cantake Ltd (ibid), and as per the present case where the Defence fails, so to must the Counterclaim which repeats the Defence, this being a natural and logical consequence.
72. For the sake of completeness, the Counterclaim makes specific reference to section 18A of the TDO, namely:
“18A.Power to award compensation
(1) If a person is convicted of an offence under section 4 , 5 , 7 , 7A , 13E , 13F , 13G , 13H or 13I , the court may, in addition to passing any sentence that may otherwise be passed by law, order the person to pay an amount of compensation that it thinks reasonable to any person who has suffered financial loss resulting from that offence.
(2) An amount of compensation ordered to be paid to a person under subsection (1) is recoverable as a civil debt.”
73. Under the TDO, sections 4 and 5 relate to general provisions on marking and advertising goods; sections 7 and 7A relate to criminal offences as per false trade descriptions or representations and forged trade marks which are entirely unrelated to the present case.
74. Under the TDO, sections 13E to 13I relate to unfair trade practices which again are entirely unrelated to the present case. If by some stretch of the imagination the said sections were to somehow apply, namely matters relating to “traders” found to be committing acts such as making misleading omissions, aggressive commercial practices, bait advertising, bait and switching of a product, wrongly accepting payment for a product, the Plaintiff as the developer of the Building (and thus applying to the Property) is in no way liable for such conduct since the Property is not under section 2 of the TDO as being “things attached to land” but rather it is landed or real property itself.
Conclusion
75. In conclusion, given the foregoing analysis and considerations, the Defendant’s Appeal in its entirety is dismissed.
76. Regarding the issue of costs, this court makes reference to Huge Dragon Corp Ltd v Lung Mun Oasis (IO) [2014] 4 HKLRD 286, CACV 6/2013 which cited Town Planning Board v Society for Protection of the Harbour Ltd (No 2) (2004) 7 HKCFAR 114, where the court’s discretion on making orders for indemnity costs is not to be fettered or circumscribed but they must be appropriate on the facts of the case. This is particularly where a party unreasonably and unjustifiably persisted. In Huge Dragon Corp (ibid), the Court of Appeal held that the aforesaid principles also apply to appeals which are devoid of merit.
77. The Defendant has taken every opportunity to advance all possible issues and this court has determined the Defendant has failed entirely on all such issues.
78. Given the background of this case and the matters leading up to the Defendant’s Appeal, this court has come to a firm conclusion that the Defendant has been consciously habitual in making tactically late applications to delay proceedings as seen in the history of these proceedings.
79. I make an order nisi that the Defendant do pay the Plaintiff the costs of the Defendant’s Appeal on an indemnity basis to be taxed if not agreed with certificate for counsel.
80. I thank counsel for his helpful assistance.
| | ( Norman Hui ) |
| | Deputy District Judge |
Mr Justin Ismail, instructed by Woo, Kwan, Lee & Lo, for the plaintiff
The defendant appeared in person.