Lau Sin v. Wong Mary and Others

HCA 988/2017

[2018] HKCFI 1094

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 988 OF 2017

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Before:  Deputy High Court Judge Paul Lam SC in Chambers

Dates of Hearing: 27 April 2018

Date of Decision:  15 June 2018

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D E C I S I O N

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A. INTRODUCTION

1.The 2^nd defendant applied to strike out the claim against it on the ground that it is the subject matter of a previous action which is pending.  The application was dismissed because its solicitors did not turn up at the hearing.  It then made a second application seeking the same relief.  The plaintiff objected on the ground that, inter alia, the 2^nd defendant could not have a second bite on the cherry.  The Master dismissed the second application with costs.  This is the appeal of the 2^nd defendant against the Master’s decision.  The 2^nd defendant also applies, in the alternative, to restore the hearing of the first application.  This appeal involves the following procedural issues:

(a)  the court’s power to restore a summons for hearing after it has been dismissed due to the absence of the applicant and when the order has already been perfected;

(b)  after an interlocutory application has been dismissed by the court, what the court should do if and when a second application of the same nature is made.

B. THE PLAINTIFF’S CLAIM

2.The plaintiff ie Lau Sin (“Lau”) commenced this action by writ on 25 April 2017.  Wong Mary (“Wong”) is the 1^st defendant, Glory Sky Finance Ltd (“Glory Sky”) is the 2^nd defendant, and Wealth Asia Credits Limited (“Wealth Asia”) is the 3^rd defendant.

3.Lau was and is the sole registered owner of a property known as Flat RA on 15/F, Tower 3, “Le Prestige” at “LOHAS PARK” in Tseung Kwan O (“the Property”).  Wong is the wife of the brother of Lau’s husband, and an insurance agent of AXA General Insurance Hong Kong Ltd.  Glory Sky and Wealth Asia are licensed money lenders.

4.Lau’s case as pleaded in the Statement of Claim is as follows:

(a)  On a day unknown to her, a power of attorney dated 18 June 2014 was purportedly executed by her as donor authorizing Wong to, inter alia, mortgage, charge or pledge the Property on her behalf (“the Purported PA”).  The Purported PA was not executed by her; it was made without her consent, authority or knowledge.

(b)  On other days unknown to her, pursuant to the power given by the Purported PA, Wong signed the following documents and entered into the related transactions purportedly on her behalf without her consent, authority and knowledge:

(i) a loan agreement with Glory Sky dated 30 July 2014 whereby she borrowed a sum of $2.9 million at the interest rate of 2% per month (“the Purported D2 Loan Agreement”);

(ii) a second mortgage of the Property in favour of Glory Sky dated 19 August 2014 (“the Purported 2^nd Mortage”);

(iii) a loan agreement with Wealth Asia (“the Purported D3 Loan Agreement”); and

(iv) a third legal charge of the Property in favour of Wealth Asia dated 26 September 2014 (“the Purported 3^rd Mortgage”).

(c)  On 19 September 2015, Glory Sky commenced proceedings in HCMP 2287/2015 against her to enforce the Purported 2^nd Mortgage; and the originating summons (“the OS”) in that case was registered in the Land Registry on 22 September 2015. 

5.Lau seeks the following remedies:

(a)  As against Wong, a declaration that the Purported PA is void and an order that the Purported PA and all copies thereof be delivered up for cancellation.

(b)  As against Glory Sky, a declaration that the Purported D2 Loan Agreement is void, an order that Purported D2 Loan Agreement and all copies thereof be delivered up forcancellation, an order that all copies of the Purported PA be delivered up for cancellation, a declaration that the Purported 2^nd Mortgage is void, an order that the Purported 2^nd Mortgage and all copies thereof be delivered up for cancellation, an order that the registration of the Purported 2^nd Mortgage in the Land Registry be vacated, and an order that the registration of the OS in the Land Registry be vacated.

(c)  As against Wealth Asia, a declaration that the Purported D3 Loan Agreement is void, an order that the Purported D3 Loan Agreement and all copies thereof be delivered up for cancellation, an order that all copies of the Purported PA be delivered for cancellation, a declaration that the Purported 3^rd Mortgage is void, an order that the Purported 3^rd Mortgage and all copies thereof be delivered up for cancellation, and an order that the registration of the Purported 3^rd Mortgage in the Land Registry be vacated.

C. HCMP 2287/2015

6.In HCMP 2287/2015 commenced on 19 September 2015, Glory Sky is the plaintiff; Lau is the 1^st defendant and Wong is the 2^nd defendant. In the OS, Glory Sky claims the following orders:

(a)  As against Lau, payment of all monies due and payable by Lau under the Purported 2^nd Mortgage, and possession of the Property.

(b)  As against Wong, payment of the “Guaranteed Monies” pursuant to a Deed of Guarantee dated 19 August 2014.

7.The OS was supported by an affirmation made by one Yeung Sau Han Fanny on behalf of Glory Sky dated 11 December 2015.  Wong has not acknowledged service of the OS.  On the other hand, Lau made an affirmation in opposition dated 21 December 2015.  She claimed that the signature on the Purported PA was not signed by her; and it was forged by Wong.  She applied to convert and continue the proceedings as if the same had begun by writ.  In paragraph 10 of the affirmation, she stated that, apart from defending the claim, she would counterclaim against Glory Sky and join in as co-defendant in the counterclaim the mortgagee of the Purported 3^rd Mortgage, for setting aside the Purported D2 Loan Agreement, the Purported 2^nd Mortgage, and the Purported 3^rd Mortgage (including the corresponding purported loan agreement).

8.HCMP 2287/2015 is not before me.  However, I was informed that the last development in that case was an application by Lau for specific discovery, which resulted in an order made by Master Lai on 18 August 2016.  There has been no further action since then. It appears that the court had given directions for the OS (including Lau’s application to continue the OS as if begun by writ) to be heard before a judge for further directions in consultation with counsel’s diaries.  However, neither party has restored the matter before a judge.

D. THE PROCEDURAL HISTORY OF THIS CASE

9.Wong has not acknowledged service of the writ.  Wealth Asia filed a Defence and Counterclaim on 10 August 2017; Lau filed a Reply and Defence to Counterclaim on 27 September 2017.

10.By a summons dated 27 June 2017, Glory Sky applied for, inter alia, an order that this action so far as it relates to Glory Sky, or otherwise, be struck out on the ground that it is scandalous, frivolous or vexatious; or it may prejudice, embarrass or delay the fair trial of the action; or it is otherwise an abuse of the court; in that the issues in this action are all encompassed within the OS issued by Glory Sky under HCMP 2287/2015 (wherein Lau is the 1^st defendant) so that these proceedings are entirely unnecessary and duplicitous (“the 1^st Striking Out Summons”). 

11.On 30 June 2017, Registrar A Ho dismissed the 1^st Striking Out Summons with costs in the sum of $800.00 for want of prosecution as Glory Sky was absent at the hearing (“the Registrar’s Order”).  The Registrar’s Order was perfected on 10 July 2017.

12.By a summons dated 3 July 2017, Glory Sky sought orders which were identical to those sought in the 1^st Striking Out Summons (“the 2^nd Striking Out Summons”).

13.On 18 December 2017, Master Benny Lo dismissed the 2^nd Striking Out Summons upon hearing counsel for Lau and solicitors for Glory Sky.  He also ordered that the costs of the 2^nd Striking Out Summons bepaid by Glory Sky to Lau and be summarily assessed (“the Master’s Order”). 

14.On 2 January 2018, Glory Sky filed a notice of appeal dated 27 December 2017 against the Master’s Order (“the 1^st NA”).

15.On 2 January 2018, Glory Sky applied to restore the hearing of the 1^st Striking Out Summons (“the Restoration Summons”). 

16.On 19 January 2018, Master Benny Lo summarily assessed the costs of the 2^nd Striking Out Summons at $83,700.00 (“the Master’s Assessment on Costs”). 

17.On 22 February 2018, Glory Sky filed a notice of appeal against the Master’s Assessment on Costs (“the 2^nd NA”). 

18.Accordingly, I need to deal with three matters: the Restoration Summons, the 1^st NA and the 2^nd NA.

E. THE RESTORATION SUMMONS

19.Under the Restoration Summons, relying on Order 32, rules 5 and 6 of the Rules of the High Court (“RHC”), Glory Sky applies to restore the hearing of the 1^st Striking Out Summons; and further or alternatively, to set aside the Registrar’s Order.

E1. Order 32, rule 6

20.Order 32, rule 6 provides that:

“ The Court may set aside an order made ex parte.”

Order 32, rule 6 is concerned with orders made pursuant to ex parte applications (see Hong Kong Civil Procedure 2018, vol 1, §32/6/13 at pp 780 – 781).  The 1^st Striking Out Summons was not an ex parte application.  The mere fact that Glory Sky failed to turn up at the hearing did not turn the 1^st Striking Out Summons into an ex parte application, or the Registrar’s Order into an ex parte order.  Order 32, rule 6 is inapplicable.

E2. Order 32, rule 5

21.Order 32, rule 5 provides that:

“ (1) Where any party to a summons fails to attend on the first or any resumed hearing thereof, the Court may proceed in his absence if, having regard to the nature of the application, it thinks it expedient so to do.

(2) Before proceeding in the absence of any party the Court may require to be satisfied that the summons or, as the case may be, notice of the time appointed for the resumed hearing was duly served on that party.

(3) Where the Court hearing a summons proceeded in the absence of a party, then, provided that any order made on the hearing has not been perfected, the Court, if satisfied that it is just to do so, may re-hear the summons.

(4) Where an application made by summons has been dismissed without a hearing by reason of the failure of the party who took out the summons to attend the hearing, the Court, if satisfied that it is just to do so, may allow the summons to be restored to the list.”

22.Glory Sky seeks to invoke Order 32, rule 5(4).  At the hearing, I raised the two following questions with the parties: first, can this rule be invoked when the Registrar’s Order has already been perfected?  Second, can it be said that the 1^st Striking Out Summons has been dismissed “without a hearing” when Registrar Ho dismissed the summons for want of prosecution after hearing Lau’s solicitors?  Mr Ching appearing for Glory Sky submitted that this rule can be invoked notwithstanding that the Registrar’s Order has already been perfected, and that the phrase “without a hearing” should be construed as “without a hearing on the merits”.  In contrast, Mr Fung appearing for Lau submitted that this rule cannot be invoked since the Registrar’s Order has already been perfected, and that the phrase “without a hearing” should be given its literal meaning.  However, neither Mr Ching nor Mr Fung was able to find any judicial authority to support their submissions.

23.After the hearing, I discovered the following passage in The Supreme Court Practice 1997, vol 1, §32/1-6/22, which was the commentary on the then Order 32, rule 5(4) of the Rules of Supreme Court in England (which is identical to Order 32, rule 5(4), RHC):

“ Restoration to list of summons dismissed for non-attendance —Paragraph (4) embodies the present practice, under which a summons or a case is not heard, but is dismissed or merely struck out for non-attendance of the party whose summons it is, the Court may, if satisfied that it is just to do so, allow the summons to be restored to the list and to hear or entertain it, even though the order dismissing it has been draw up. Secus, if there has been a hearing (Rackham v Tabrum (1923) 129 L.T. 24).”

24.In Rackham v Tabrum (1923) 129 LT 24, by the order of a master, the defendant, a solicitor, was ordered to deliver to the plaintiff certain accounts and bills of costs, and the order not having been complied with, the plaintiff issued a summons for attachment.  This summons was originally returnable on 26 January 1923, but owing to delay in effecting service the return day was postponed to 2 February.  Through a mistake in the office the summons was left in the judge’s list for 26 January, but the plaintiff, being unaware of this, did not attend.  The defendant, however, attended, and on his application the summons was dismissed in default of appearance without being heard.  On 2 February, the summons was again in the judge’s list, and both parties attended, and the summons was adjourned.  On 3 February, the defendant drew up the order of 26 January dismissing the summons.  Ultimately the judge ordered a writ of attachment, and the defendant appealed on the ground that from the time when the order of dismissal was drawn up the judge was functus officio.  The English Court of Appeal dismissed the appeal and held that, as the summons had not been heard on the merits, but had merely been struck out, the judge had jurisdictionto entertain it, although the order had been drawn up.  Lord Hewart CJ (with whom Salter J and Branson J agreed) held at p 25 that:

“ The question is whether the learned judge had jurisdiction to entertain this summons after it had been dismissed on the 26^th Jan. In my opinion he had. The principle is that where a summons or case has not been heard, but merely struck out, the court may, if it thinks fit, hear or entertain the summons or case, but if there has been a hearing on the merits, though in the absence of one party, it cannot do so after the order is perfected.”

25.Accordingly, Mr Ching is right in submitting that Order 32, rule 5(4) may be invoked although the Registrar’s Order has already been perfected.  Such conclusion is reinforced by the fact that, unlike Order 32, rule 5(3) which contains an express qualification ie “provided that any order made on the hearing has not been perfected”, Order 32, rule 5(4) does not contain such a qualification.  Mr Ching is also right in submitting that the phrase “without a hearing” in Order 32, rule 5(4) should be construed as “without a hearing on the merits”; and therefore, this rule can be involved because, although Registrar Ho had heard Lau’s solicitors, he dismissed the 1^st Striking Out Summons on the sole ground of want of prosecution.

26.Having said that, even though I agree that an application under Order 32, rule 5(4) may be made in these circumstances, I am not satisfied that it is just to restore the 1^st Striking Out Summons to the list:

(a)  To begin with, a party who has failed to attend the hearing of its application is, generally speaking, expected and required to give a reasonable explanation for its absence.  Glory Sky has not adduced any evidence to explain its absence at the hearing before Registrar Ho.  At this hearing, Mr Ching admitted that it was due to his oversight.  Although the absence was not intentional, I am afraid that oversight of the solicitors cannot constitute a reasonable excuse.

(b)  More importantly, the party concerned should apply to restore the hearing of the application promptly once it becomes aware that an order has been made in its absence, and should not take any inconsistent procedural step in the meantime.  Lau’s solicitors informed Glory Sky’s solicitors by letter dated 30 June 2017 that the 1^st Striking Out Summons had been dismissed by the Registrar that morning as a result of Glory Sky’s absence; and they demanded Glory Sky to pay the costs of $800.00.  On the same day, Glory Sky’s solicitors replied by enclosing a cheque of $800.00 and stating that they would issue a fresh summons for striking out.  Mr Ching explained that $800.00 was a small sum which Glory Sky would be liable to pay in any event.  But the point is, objectively speaking, Glory Sky must be taken to have accepted the Registrar’s Order,and have chosen to make a fresh application instead of pursuing the 1^st Striking Out Summons.

(c)  Furthermore, Glory Sky did not raise any objection when the Registrar’s Order was perfected.  And even after it realized that Lau would object to the 2^nd Striking Out Summons in view of the Registrar’s Orders, Glory Sky decided to pursue the 2^nd Striking Out Summons before Master Benny Lo.  Glory Sky only took out the Restoration Summons after the 2^nd Striking Out Summons had been dismissed.  It was plainly an after- thought in an attempt to salvage its case.  In principle, a party shall not approbate and reprobate at the same time; or put it in layman’s terms, “blow hot and cold”.

27.For the above reasons, I shall dismiss the Restoration Summons. 

F. THE 1^ST NA—WHETHER LAU’S CLAIM AGAINST GLORY SKY SHOULD BE STRUCK OUT

28.At the hearing of the 2^nd Striking Out Summons before the Master, Lau raised the objection that the 2^nd Striking Out Summons was a re-litigation of the 1^st Striking Out Summons which had already been dismissed.  The Master upheld the objection.  Glory Sky complained that Lau only raised such objection for the first time at the hearing before the Master.  I take the view that Lau was entitled to do so.  The real issue is whether the objection is well founded.

29.Mr Fung referred me to the following first instance judgments:

(a)  Re Prudential Enterprises Ltd HCCW 594/1999 (24 October 2003, unreported) where Chu J (as she then was) held in §§12 – 13 of her judgment that:

“ 12. As a matter of general principle, when an interlocutory application was dismissed, whether on procedural ground or merits,it is not permissible to make a fresh application for the same relief and/or on the same ground: Sanyo Electric Trading Co Ltd v Leung Kwok-hing [1993] 1 HKLR 253. There are, however, recognized exceptions, such as in Order 14 or contempt of court proceedings: see Wong Kam Hong v Triangle Motors Ltd [1998] 2 HKLRD 330, or in applications to discharge injunctions: Chu Hing Ching v Chan Kam Ming [2001] 1 HKC 396. The Rules also provide for certain exceptions by enabling applications be made to vary or revoke an earlier order or decision.

13. Another possible exception to the general rule against re-litigating over interlocutory applications will be where there isa significant change of circumstances. In Chanel Ltd v Woolworth& Co [1981] 1 WLR 485, at 492H, Buckley LJ in dismissing an appeal against the dismissal of a motion to discharge undertakings given by consent on an interlocutory injunction application, held that:

‘ The defendants are seeking a rehearing on evidence which, or much of which, so far as one can tell, they could have adduced on the earlier occasion if they had sought an adequate adjournment, which they would probably have obtained.  Even in interlocutory matters a party cannot fight over again a battle which has already been fought unless there has been some significant change of circumstances, or the party has become aware of facts which he could not reasonably have known, or found out, in time for the first encounter.’”

(b)  Wong Kam Hong (t/a Continental Knitting Factory) v Triangle Motors Ltd [1998] 2 HKLRD 330 where Cheung J (as he then was) held at p 336A–F:

“ This is an area in which there should be uniformity in practice. The approach taken by Keith J [in Sanyo Electric Trading Co Ltd v Leung Kwok-hing [1993] 1 HKLR 253] is one that I would adopt. Where a summons is dismissed whether on procedural grounds or on merits, a dissatisfied party should appeal against that decision and not to issue a fresh summons on the same subject matter. There is no provision allowing such a step to be taken. The exceptions recognized in O.14 applications and contempt of court proceedings should not be further extended. Subject to the jurisdiction to rehear before the order is perfected which I will deal with later, once a decision has been made, the challenge is by way of appeal which operates as a re-hearing. I accept Mr Lau’s explanation that in this case the second summons was taken out in an attempt to save cost. However, there is even a less expensive way of challenging the decision which seemed to have been overlooked. The court has jurisdiction to reconsider and rehear the matter before the order is perfected: Re Harrison’s Settlement[1955] 1 Ch 260 and Note 32/1-6/21 of the Supreme Court Practice. In this case, the order of the Master was only sealed and filed on 22 November 1997. Had the plaintiff wished to return to the Master to re-argue the matter, there was really nothing to stop him. The jurisdiction to rehear the summons before an order is perfected, however, should not be extended to a fresh application before another judge or master because this is not something contemplated by this jurisdiction. Mr Lau posed the question of what would happen if the original judge who heard the application had unfortunately passed away. This is a hypothetical question and it only needs to be considered when the situation arises. As the matter now stands, I reluctantly come to the conclusion that the Registrar has no jurisdiction to hear the second summons on 17 November 1997. I will allow the defendant’s appeal against that decision and set aside the order on the amendment.”

30.In Sanyo Electric Trading Co Ltd v Leung Kwok-hing [1993] 1 HKLR 253, Keith J (as he then was) held in pp 256 – 257:

“ The summons dated 25th January 1992 raised the question of whether there should be a stay of execution. Master Yam decided that no stay of execution should be granted. The summons dated 8th April 1992 attempted to re-litigate that very question. That is not permissible. The principle is succinctly stated in Halsbury’s Laws of England, Vol. 26, 4th ed., para. 556:

‘ As a general rule, except by way of appeal, no court, judge or master has power to re-hear, review, alter or vary any judgment or order after it has been entered either in an application in the original action or matter or in a fresh action brought to review the judgment or order. The object of the rule is to bring litigation to finality.’

Indeed, it is axiomatic that unless there is an expression provision to the contrary, and save in certain defined circumstances (such as mistake or misrepresentation, which do not apply to this case), the remedy for challenging an adverse order is by way of appeal to a court of higher jurisdiction rather than by the making of a newapplication to the same court: see, for example, Re St. Nazaire Co. (1879) 12 Ch D 88 and Perston Banking Co. v. William Allsup & Sons [1895] 1 Ch 141.

Mr. Rogers, Q.C. for the defendant, while accepting the general application of this principles, contends that it applies only where the previous order had been made after a consideration of the merits. I see no warrant for limiting the application of the principle in that way. In Yat Tung Investment Co. Ltd. v. Dao Heng Bank Ltd. [1975] AC 581, Lord Kilbrandon said at p.590A:

‘ … it becomes an abuse of process to raise in subsequent proceedings maters which could and therefore should have been litigated in earlier proceedings’ (my emphasis).

This applies to issues which were able to be litigated in earlier interlocutory proceedings: Chan Pak-wai v. Thomas Young (Civil App No. 18 of 1982).  Moreover, even if the principle should be so limited, I cannot believe that the principle ceases to apply when the reason why the previous order was made without a consideration of the merits was the failure of the party seeking the re-hearing to comply with orders relating to the time for filingevidence.  If the principle ceased to apply in situations of that kind, it would always be open to the unscrupulous litigant to abort one hearing (admittedly at his own risk as to costs) in the knowledge that he could have a second bit of the cherry when his evidential tackle was in order.”

31.These first instance judgments should be considered in the light of the Court of Appeal’s judgment in Chu Hung Ching v Chan Kam Ming [2001] 1 HKC 396 where Mayo VP held at pp 401E – 402D:

“ This approach is consistent with the approach adopted by Alberta Court of Appeal in Pocklington Foods Inc v R in right of Alberta (1995) 123 DLR (4th) 141 as can be seen from a passage at 144 of the report:

… Res judicata and issue estoppel do not apply to procedural interlocutory motions. While in the judgment of Clement J.A. in Talbot, there is considerable discussion of the position where a decision is made on the adequacy of the material rather than on the merits of the application, when read as a whole the decision supports the position taken by McDonald J. in this case.

However, the court is not powerless to deal with attempts to re-litigate issues already decided by it. In Talbot, after refusing to apply res judicata to an interlocutory procedural application, Clement J.A. stated at p. 112:

… I am of the opinion that the principle does not apply to an interlocutory application of the nature now before us; rather, the second application is subject to control by the exercise of judicial discretion in determining whether it is frivolous or vexatious in all the circumstances then appearing.

McDonald J went on to consider the reasoning which should apply in controlling abuse of process. He cited from the decision of Lord Maugham L.C. in New Brunswick Ry. Co. v. British & French Trust Corp., Ltd. [1939] A.C. 1 (H.L.) at p. 20 (cited with approval in Talbot) as follows [at p. 282]:

If an issue has been distinctly raised and decided in an action, in which both parties are represented, it is unjust and unreasonable to permit the same issue to be litigated afresh between the same parties or persons claiming under them.

He continued:

Thus the raison d’etre of the principle of res judicata or issue estoppel lies in what is just and reasonable. Applying that notion to an assertion that a ruling on an interlocutory application is res judicata when the same issue is raised in a subsequent interlocutory application in the same action, it will not be unjust or unreasonable to allow the second application to be heard, for what is involved is not relitigation of an identical issue of law or fact:

(a) if the ruling on the first application was not based on the merits of the issue but on a technical objection…

(b) if upon the first application the applicant had failed toprove essential facts from mistake or inadvertence…

(c) if there is new evidence that seriously justifies reconsideration of the issue;

(d) if there is a material change of circumstances of non- evidentiary nature.

It is apparent from this that the rules relating to res judicata in interlocutory matters are less stringent than those generally applicable. …”

32.I have also considered other first instance judgments on this point including M & R Marking Systems Inc v Tse Mee Shuen Wilson & others HCA 1598/2001 (20 December 2001, unreported), §§13 – 24; and Wong Pak Sum v Hong Kong Furniture & Decoration Trade Association Ltd HCMP 2946/2013 (17 October 2014, unreported), §§82 – 85.

33.Having considered all these authorities, in my view, the general principles should be as follows:

(a)  The doctrine of res judicata, properly-so-called, does not apply to interlocutory orders.

(b)  If a party seeks to re-litigate a matter which has been determined in a previous interlocutory decision by taking out a second application, the second application is liable to be dismissed by the court, either of its own motion or on application, pursuant its inherent jurisdiction or Order 18, rule 19, on the ground that it constitutes an abuse of process.

(c)  It will not be an abuse of process if there are express statutory provisions permitting the re-litigation of the matter.  There are many express provisions allowing the respondent to an application to apply to set aside an order made in its absence or as a result of its failure to comply with certain procedural steps (eg Order 13, rule 9; Order 14, rule 11; Order 19, rule 9; Order 24, rule 17; Order 26, rule 8).  Another useful example is that directions on evidence (including expert evidence) may also be revoked and varied by a subsequent direction (Order 38, rule 44).

(d)  In the absence of any such express statutory provision, whether the second application constitutes an abuse of process must depend on the particular circumstances of each case.  Generallyspeaking, the court should consider what is just and reasonable. 

(e)  It is inappropriate and impossible to set out exhaustively what the relevant considerations will be.  Naturally, the court will need to consider the nature of the interlocutory application; whether the applicant had, or could and should have, challenged the first interlocutory decision by other means; and why a second application on the same matter has been made.  Examples of situation where the court may conclude that thereis no abuse of process include: the ruling on the first application was not based on merits but on a technical objection, the applicant failed to prove essential facts from mistake or inadvertence at the first application, there is new evidence that seriously justifies reconsideration of the issue; or there is a material change of circumstances.

(f)  Nevertheless, the court should adopt a holistic, rather than a dogmatic or mechanistic, approach.  At the end of the day, the court shall whether it is in the interests of justice to allow the second application to proceed having regard to all relevant circumstances of the particular case.  And in considering how its discretion should be exercised, Order 1A, rule 2 requires the court to give effect to the underlying objectives of the RHC as set out in Order 1A, rule 1.

34.In this case, the 1^st and 2^nd Striking Out Applications do not concern an ongoing interlocutory matter (as in Chu Hung Ching v Chan Kam Ming where an interlocutory injunction was involved).  Glory Sky does not rely on any new evidence; and there is no suggestion of any material changeof circumstances.  Although the 1^st Striking Out Summons was not dismissed on merits, it was not dismissed on a technical objection.  It was dismissed because Glory Sky’s solicitors did not turn up at the hearing due to their oversight.  As mentioned, it was not a reasonable excuse.   It was incumbent on Glory Sky (and its solicitors) to follow the proper procedure to rectify the mistake.  Glory Sky could have applied to re-hear the 1^st Striking Out Summons before the Registrar’s Order had been perfected.  Even after the Registrar’s Order had been perfected, it could have applied to restore the hearing of the 1^st Striking Out Summons pursuant to Order 32, rule 5(4) (instead of making a fresh striking out application as explained above). Alternatively, it could have lodged an appeal against the Registrar’s Order.  Mr Ching admitted at the hearing that it was again his mistake in failing to follow the proper procedures to rectify the mistake caused by his failure to attend the hearing of the 1^st Striking Out Summons.  In the circumstances, I take the view that the 2^nd Striking Out Summons is a misuse, and prima facie, an abuse, of process.

35.Having said that, it does not follow that I must dismiss the 2^nd Striking Out Summons.  In considering whether I ought to exercise my discretion to do so, I have to consider the following additional matters.  First, it seems that the various mistakes committed by Glory Sky were due to the blunder of its solicitors.  It seems harsh to require Glory Sky to take the blame.  More importantly, Glory Sky’s case is that Lau’s claim against it is, by itself, an abuse of process and should be struck out in order to save time and costs.  If it is plain and obvious that Lau’s claim against Glory Sky shouldbe struck out, it would not make sense to compel the parties to proceed with the claim simply because of the above-mentioned mistakes made by Glory Sky’s solicitors as this would result in a waste of the parties’ time and costs as well as judicial resources.  In such exceptional circumstances, I may be inclined not to dismiss the 2^nd Striking Out Summons even though it is, prima facie, an abuse of process.  Accordingly, I think I ought to consider the substantive merits of the 2^nd Striking Out Summons.

36.I agree that HCMP 2887/2015 and Glory Sky’s claim against Lau in this action involve the same issues.  In particular, the crux of the matter is whether the Purported PA was legally valid.  I also agree that Lau may counterclaim for the same remedies that she seeks against Glory Sky in this action in HCMP 2887/2015 pursuant to Order 28, rule 7, RHC.  In fact, this is what Lau said she intended to do in her affirmation filed in HCMP 2887/2015. To avoid multiplicity of proceedings and to save time and costs, I agree that, generally speaking, if it is possible to make a counterclaim in the same action, a separate action brought by the defendant in the first action should be struck out as an abuse of process.  Far Wealth Ltd and another v Lo Ki Mou and another HCA 1617/2016 (19 October 2017, unreported), cited by Mr Ching, is an example.  DHCJ Gilchrist held in §25 of his judgment:

“ I accept that a party is not obliged to bring a counterclaim, as opposed to issuing separate proceedings. The relevant Rules do give a party an option with respect to bringing a counterclaim. However, in this case there is a clear overlap in the relief sought inboth proceedings, which involve the same parties, the same issues and relate to the same factual matrix. Hence, mindful of the underlying objectives and in exercising the inherent jurisdiction of the court, I consider that it is clearly sensible that only one set of proceedings go forward.”

37.Lau argues that she intends to resolve all disputes involving the use of the Purported PA among all relevant parties in one go, but she cannot join Wealth Asia in HCMP 2287/2015.  However, if she succeeds in her application to convert the OS into an action as if begun by writ, she may make a counterclaim against Wealth Asia pursuant to Order 15, rule 3.

38.It seems to me that Lau’s main concern is that the legal validity of the Purported PA involves serious factual disputes, and should not be resolved by an originating summons.  I tend to agree with Lau in this respect. However, it is unclear to me why she has not restored her application to convert the OS into an action as if begun by writ before a judge in HCMP 2287/2015.  Glory Sky has maintained its opposition to the application up to date.  I am under a strong impression that Lau chose to commence this action because, inter alia, it can save her the trouble of restoring that application in HCMP 2287/2015 for hearing.  I tend to agree with Mr Ching that this was not the appropriate way to deal with the matter.  Having said that, I must say that I have some sympathy for Lau because I take the view that it is unreasonable for Glory Sky to oppose Lau’s application to convert the OS into an action as if begun by writ.

39.Nevertheless, even if it was inappropriate for Lau to commence this action against Glory Sky for reasons stated above, I need to consider what will happen if I strike out the claim.  In such event, this action will still continue as against Wong and Wealth Asia.  As mentioned, Wealth Asia has already filed a Defence and Counterclaim.  The common issue in both actions is whether the Purported PA was legally valid.  However, as Wealth Asia is not a party in HCMP 2887/2015, it will not be bound by the court’s finding on this issue in HCMP 2887/2015 (assuming that it is heard before this action).  In my view, the overriding consideration is that the common issue must be resolved among all parties concerned in one go, and one must avoid the risk of any inconsistent finding on this issue.

40.In the circumstances, irrespective of the outcome of the 2^nd Striking Out Summons, it is most desirable that HCMP 2287/2015 and this action should be heard together by the same judge.  This can be achieved by an application made pursuant to Order 4, rule 9, RHC.  If Glory Sky ceases to be a party in this action, it appears that an application under Order 4, rule 9 will be more complicated.  A formal consolidation of the two actions will reverse the effect of striking out Glory Sky’s claim against Lau in this action, and will entail unnecessary time and costs.  And if there is no formalconsolidation, and the court only orders the two actions to be heard together, it will be tricky to consider how to synchronize the two actions, such as which action should go first, how evidence in the two actions should be given, and how to ensure that the factual finding on the common issue will be binding in both actions.  In addition, the court will still need to deal with Lau’s application to convert the OS into an action as if begun by writ.

41.In contrast, if Lau’s claim against Glory Sky is not struck out, it would be easier and simpler for the court to give appropriate directions under Order 4, rule 9.  For example, the court may simply stay HCMP 2287/2015 subject to the issue of costs.  It will become unnecessary to deal with Lau’s application to convert the OS into an action as if begun by writ.  It may at the same time give directions to ensure that the works already donein HCMP 2287/2015 would not be wasted; for example, it may order that the affirmations filed in HCMP 2287/2015 should stand as witness statements in this action.  Discovery already done in HCMP 2287/2015 may also be taken into account in this action.

42.HCMP 2287/2015 is not before me.  There is no application made pursuant to Order 4, rule 9.  And it is for the parties to decide whether they wish to make an application under that rule.  I have no intention to dictate what the parties should do.  I also have no intention, and indeed no power, to preempt what another judge may wish to do even if there is an application under Order 4, rule 9.  I say all these to explain why I am not satisfied that this is a plain and obvious case that I should strike out Lau’s claim against Glory Sky in this action.  I have taken into account the underlying objectives of the RHC under Order 1A, rule 1 including to increase the cost-effectiveness of any practice and procedure, to ensure that a case is dealt with as expeditiously as is reasonably practicable, and to promote a sense of reasonable proportion and procedural economy in the conduct of proceedings.  Looking forward and adopting a pragmatic approach, I take the view that to strike out Lau’s claim against Glory Sky in this action may actually complicate the matter further, and result in the waste of more time and costs on all parties concerned.

43.For the above reasons, I am not satisfied that this is a plain and obvious case that Lau’s claim against Glory Sky should be struck out.  Taking into account other considerations already mentioned, I am not satisfied that it will be just and reasonable, or in the interests of justice, to allow Glory Sky to make a second application on striking out.  Hence, I shall dismiss the 2^nd Striking Out Summons.

G. THE 2^ND NA—GLORY SKY’S APPEAL AGAINST THE MASTER’S ASSESSMENT OF COSTS

44.The Master’s Assessment on Costs was made on 19 January 2018.  Under Order 58, rule 1(3), unless the court otherwise orders, a notice of appeal against that order must be issued within 14 days ie by 2 February 2018.  However, Glory Sky only filed the 2^nd NA on 22 February 2018.  Glory Sky applies to extend the time to appeal.  It is trite that the court has to consider all relevant factors, particularly, the length of the delay, the reasons for the delay, the merits of the proposed appeal, and the degree of prejudice to the other party (Hong Kong Civil Procedure 2018, vol 1, §58/1/9 at p 1120).

45.In this case, first, the length of the delay ie 20 days is substantial.  Second, Glory Sky had not provided any reason for the delay.  Mr Ching told me that he made a mistake in believing that leave to appeal was necessary, and an application for leave to apply was actually made but withdrawn subsequently. Third, as to the merits of the proposed appeal, in general, a judge in chambers will not allow an appeal from a master’s costs order unless it is unreasonable or the master erred in law (Hong Kong Civil Procedure 2018, vol 1, §58/1/6 at p 1119).  The master’s cost order must be so unreasonable in the sense that no reasonable master would and could have made such an order.  Glory Sky merely argues that the Master’s Assessment on Costs is excessive by repeating the objections that the Master had already considered.  Glory Sky’s intended appeal does not have any reasonable prospect of success.  For these reasons, I refuse to extend the time to appeal.  It follows that the 2^nd NA shall be dismissed.

H. CONCLUSION AND ORDER

46.For the above reasons, I dismiss the Restoration Summons, the 1^st NA and the 2^nd NA.

47.I also order that Glory Sky shall pay Lau the costs of and incidental to the Restoration Summons, the 1^st NA and the 2^nd NA (including all costs reserved and the costs of this hearing) to be summarily assessed.  In Lau’s Statement of Costs for Summary Assessment, she claims a total sum of $95,400.00.  Mr Ching submits that a reasonable sum should not exceed $60,000.00.  I shall assess summarily Lau’s costs at $85,000, which shall be paid by Glory Sky forthwith.

Mr Danny Fung, instructed by Eric Lai, Jason Cheung & Co, for the plaintiff

Mr Ching Ming Yu, of Ching & Co, for the 2^nd defendant