Re Qin Jun

CACV 109/2017

[2018] HKCA 846

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 109 OF 2017

(ON APPEAL FROM HCB NO 3231 OF 2016)

________________________

________________________

Before: Hon Lam VP, Yuen JA and Kwan JA

Dates of Written Submissions: 26 September, 10 and 18 October 2018

Date of Judgment: 16 November 2018

________________________

J U D G M E N T

________________________

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

1.On 15 August 2018, the Court of Appeal dismissed the appeal of the debtor, Qin Jun, against the judgment of Chung J at the conclusion of the hearing. We handed down our reasons for judgment and decision on costs on 24 August 2018 (“the Reasons”). We ordered the debtor to pay costs on an indemnity basis.

2.The only ground of appeal raised before us was a completely new point not raised in the court below and this relates to the contention that the petitioning debt was unenforceable for breach of section 18(1) of the Money Lenders Ordinance, Cap 163 and that the court would not have exercised its discretion under section 18(3) to enforce the loan summarily in this instance without investigation in a full trial.  We declined to exercise our discretion in favour of the debtor to allow him to run the new arguments on appeal, as they are fact-sensitive and would have affected the course of evidence and the conduct of the case below.

3.The debtor filed a notice of motion on 12 September 2018 seeking leave to appeal to the Court of Final Appeal, contending that there are questions of great general or public importance in his intended appeal, or that in all the circumstances of the case leave should be granted under the “or otherwise” limb.

4.These three questions are set out in notice of motion:

“(1) Where a party seeks to raise a fresh point on appeal, what are the factors to be considered in order to decide whether there is reasonable possibility that the state of the evidence would have been more favourable to the other side if the point had been taken at the court below. (Question 1)

(2) What qualities should the factors described in Question 1 possess. (Question 2)

(3) Whether, in making the determinations stated in Questions 1 & 2 above, this Court was correct in law to take into account the likely response of the Creditor in the event that the new point had been argued at the Court below, when this Court refused to exercise its discretion to allow the Debtor to run the new argument on appeal. (Question 3)”

5.It was submitted for the debtor that these questions are of great general or public importance in that the answers will “affect virtually all litigants” and will provide authoritative guidance as to the general conduct, procedures and management of civil appeal cases.  The Court of Final Appeal is not bound by precedents and is at liberty to “elaborate and/or explain and/or retreat from” the principle in Flywin Co Ltd v Strong & Associates Ltd (2002) 5 HKCFAR 356 at §§38 and 39.  It was contended that the Court of Appeal had erred in law in making an “additional gloss” upon the Flywin principle in elevating “mere theoretical possibilities” to the level of “reasonable possibility” under the Flywin principle.  In all the circumstances of this case and in light of the above matters, leave to appeal ought to be granted under the “or otherwise” limb.

6.As pointed out by Mr Toby Brown for the creditor, the Flywin principle has had a long and uncontroversial place in Hong Kong law and has operated seamlessly without the need for any clarification of the type now sought by the debtor.  A question of great general or public importance does not arise simply because a party desires a well‑established principle to be revisited (Kao, Lee & Yip v Donald Koo Hoi Yan & Ors, CACV 32/2006, 26 April 2007, §5).

7.Further, whether there was a reasonable possibility that new evidence would have been adduced is case-sensitive.  And we do not think the intended appeal reasonably arguable, for the reasons given in §§28 to 41 of the Reasons.

8.We are not satisfied the questions raised are of great general or public importance, nor is there any reason that leave should be granted under the “or otherwise” limb.  We decline to exercise our discretion to grant leave to appeal.

9.Mr Brown seeks costs on an indemnity basis and an order that the debtor and his solicitors provide to the court the name and address of the party who funded the appeal and the application for leave to appeal.  Under section 52A(2) of the High Court Ordinance, Cap 4, the court has jurisdiction to order a non‑party to pay costs, if it is satisfied that it is in the interests of justice to do so.  Further, the court has ancillary power, inherent in this jurisdiction, to order a party to proceedings, or the solicitors on record for that party, to disclose to the other party the names of those who have financed the litigation (Re Allied Weli Development Ltd, CACV 58/2016, 18 July 2017, §10.5).

10.A bankruptcy order was made against the debtor on 27 July 2016. Despite the bankruptcy order, the debtor has initiated “an extensive array of litigation both in Hong Kong and overseas”, as we are given to understand in the letter of the creditor’s solicitors to the debtor’s solicitors dated 28 September 2018[1]. It would appear that the appeal and the application for leave to appeal have been funded by a non‑party.

11.We think it appropriate to make a disclosure order in this instance.  We order the debtor and his solicitors to provide the name and address of the party who funded the appeal and is funding the application for leave to appeal for the debtor within seven days of the handing down of this judgment.  Upon such information being provided, the funder will be joined, without further order, as a party to the application for leave to appeal for the purposes of costs only.  We further order the creditor’s solicitors to serve the statement of costs for summary assessment lodged on behalf of the creditor on the funder and the latter be at liberty to lodge written submissions on costs of not more than five pages within seven days of the service of the creditor’s statement of costs.  We will determine the questions of costs (whether costs should be ordered against the funder; whether indemnity costs should be awarded; and the amount on gross sum assessment) on paper.

Written submissions by Mr Toby Brown, instructed by Shum & Co, for the Creditor (Respondent)

Written submissions by Mr Jeremy Cheung, instructed by Chiu & Co, for the Debtor (Appellant)