China Shanshui Cement Group Ltd and Others v. Zhang Caikui and Another

HCMP 863/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 863OF 2017

(ON AN INTENDED APPEAL FROM HCMP NO 1574 of 2016)

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JUDGMENT

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

1.In this application, the Defendants renewed their application for leave to appeal against the decision of Au-Yeung J of 6 January 2017. By that decision, the learned judge struck out two exhibits to an affirmation of Ho Ka Ko. The two exhibits were actually a draft affirmation of Li Xianguo and a draft report of a PRC lawyer Yao Fuming. Application was made to the judge for leave to appeal. Leave was refused on 29 March 2017.

2.For present purposes, the relevant history of the matter is as follows.  By a statement pursuant to Order 52 Rule 2(2), the Plaintiffs applied for leave to issue contempt proceedings against the Defendants for breach of court orders.  Leave was granted and Originating Summons was issued on 21 June 2016.  On 26 September 2016, an unless order was made by consent, pursuant to which the Defendants must file and serve their affirmation evidence in opposition to the Originating Summons by 4:00 pm on 18 October 2016, failing which the Defendants would be debarred from filing any affirmation evidence. 

3.The affirmation of Ho Ka Ko was filed on 18 October 2016.  The affirmation of Li and the report of Yao (which were exhibited as draft affirmation and draft report to the affirmation of Mr Ho) were not filed until sometime later.  They were subsequently expunged pursuant to the unless order.

4.One of the grounds on which the judge struck out those exhibits was that by virtue of the unless order the Defendants should not be allowed to slip in evidence by way of exhibits in the form of draft affirmation and draft report.  The judge also struck out the exhibits on other grounds.  Another ground which we need to refer to in this judgment was that the draft report of Yao (addressing whether execution of corrective article pursuant to one set of orders which the Defendants allegedly did not comply with should be an issue litigated in the Mainland) is irrelevant to the contempt proceedings.

5.In refusing leave to appeal, the judge considered that it was sufficient to focus on the ground based on the unless order.  We agree.

6.There is no doubt that the Defendants are bound by the unless order.  Thus, affirmation evidence not filed before the deadline should not be permitted to be slipped in by other means.  Further the draft affirmation and draft report are not admissible as affirmation evidence since they did not comply with all the formal requirement for affirmation evidence. When the Defendants (or his lawyers) found that they had insufficient time to put in such affirmation and report, they should either apply for an extension of time (before the time for compliance expired) or alternatively apply for relief against sanction under Order 2 Rule 5.  For reasons that the Defendants did not explain, they did not undertake any of these courses. 

7.In such circumstances, we do not see any reasonably arguable ground for saying that the judge erred in principle or was plainly wrong in insisting that the unless order should be adhered to.  If the Defendants had grounds for seeking relief, we do not understand why they do not apply for relief under Order 2 Rule 5. 

8.Mr Duncan SC submitted that the Court has other less drastic options.  But the ball is in his clients’ court.  If the Defendants wish to seek extension of time or relief, they should make the relevant applications.  The court will then process such applications according to the criteria relevant to such applications.  If the Defendants wish to use the draft affirmation or draft report as witness statements, again they should make the requisite applications.  An unless order provides automatically for the consequence of default.  The judge cannot be criticised for giving full effect to the same and leave the Defendants to make a proper application as they deem fit.

9.This is sufficient to dispose of the present application.

10.In addition, we wish to say that we agree with the judge as to the irrelevance of Yao’s report.  Whilst the court will not debar a litigant in contempt from contesting the validity of the order in question by way of appeal, in the present case we are not aware of any appeal against the order requiring the Defendants to execute amendments to the articles.  In the context of the contempt proceedings itself, there is no basis for the court to entertain any argument that the proper forum for litigating such dispute was in the Mainland.  As the judge said, the time for challenging forum had long gone and we do not see any prospect of success for such application out of time in respect of the same.  After all, a stay of proceedings on the ground of forum non conveniens is discretionary in nature.  Hence, we do not regard Gordon v Gordon [1904] P 163 to be of any assistance to the Defendants.

11.Another point we wish to highlight is that the Yao report is in substance expert evidence which a party should not put in without seeking any expert directions beforehand.  

12.On the topic of admission of hearsay evidence in the context of contempt proceedings, we would refer parties to Numeric City Ltd v Lau Chi Wing [2016] 4 HKLRD 812 which they seemingly have overlooked.  But it is a matter of no moment in the present case in light of what we have said. 

13.We shall dismiss the application for leave to appeal and refuse to grant any stay.  The application is so utterly hopeless that the Defendants should pay the costs of the Plaintiffs on indemnity basis. Having considered the statement of costs of the Plaintiffs, we fix the costs at $150,000.

14.We are also of the view that the application is totally without merit.  Pursuant to Order 59 Rule 2A(8), we make an order that no party may request this determination to be reconsidered at an oral hearing inter partes. 

Mr Barrie Barlow SC, instructed by Wilkinson & Grist, for the 1^st, 2^nd and 3^rd plaintiffs

Mr Peter Duncan SC and Mr Jean-Paul Wou, instructed by Deacons, for the 1^st and 2^nd defendants