R Stahl Inc (A Company Incorporated in the United States of America) v. Aj Development Ltd

CACV 163/2020

[2020] HKCA 747

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 163 OF 2020

(ON APPEAL FROM HCA NO 1412 OF 2019)

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BETWEEN

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J U D G M E N T

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

1.The point we are concerned with is whether leave to appeal is required in respect of a particular part of a notice of appeal filed by the defendant. The matter arose in this way.

2.The plaintiff issued a summons against the defendant for final judgment under Order 14 and/or Order 27 rule 3 of the RHC.  The defendant sought leave to file a supplementary affirmation of its director (“Zhong 4^th”) in opposition.  The matter was heard by Deputy High Court Judge Hall-Jones, who considered Zhong 4^th on a de bene esse basis with the agreement of the parties.  He gave judgment on 20 May 2020 dismissing the application for summary judgment on the basis that the claim fell within the “fraud exception” in Order 14 rule 1(2)(b) and Order 14 is inapplicable.  He ordered final judgment to be entered against the defendant for part of the amount claimed on the basis of judgment on admissions.  Having reviewed Zhong 4^th, he refused to give leave to file this affirmation as he did not think it added anything to the matters under discussion in arriving at his judgment.

3.On 10 June 2020, the defendant filed a notice of appeal against the judgment to set aside the judgment on admissions.  It also seeks an order (page 2 para 2) that it be allowed to rely on Zhong 4^th on appeal for the purpose of opposing the plaintiff’s application for final judgment.  It would appear from the grounds of appeal that Zhong 4^th would be relied on in support of the defendant’s averments against a bank which is not a party to these proceedings (particulars to para 1, paras (ii) to (iv)).

4.The Registrar of Civil Appeals took the view that the appeal against that part of the order on page 2 para 2 of the notice of appeal is liable to be struck out as the order refusing leave to file Zhong 4^th is interlocutory and leave to appeal is required.  On 21 July 2020, the Registrar made a direction that the defendant shall, within the stated time, lodge submissions if it is of the view that the notice of appeal may be proceeded with in its entirety without leave to appeal, alternatively it is to take out an application before the Court of First Instance seeking leave to appeal against that part of the order.

5.The defendant filed its submissions contending that no leave to appeal is required as this is not a “stand-alone” interlocutory appeal and there would be duplication of the points to be argued if leave to appeal is required.

6.The plaintiff contended to the contrary, arguing that the cases cited by the defendant are not to the point and, as the judge had remarked, Zhong 4^th is concerned with an unpleaded dispute between the defendant and a non-party, it is difficult to see how it is relevant to the dispute between the plaintiff and the defendant.

7.We do not agree with the Registrar that leave to appeal is required in this instance.  Although the order refusing leave to adduce affidavit evidence is interlocutory in nature, it was made in a judgment in respect of which the defendant has a right of appeal and the defendant has exercised that right by filing the notice of appeal.

8.An analogy may be drawn with the situation where leave to amend pleadings is refused in a trial and an appeal is lodged against the final judgment.  It was held that there is no need for a separate appeal because the refusal of leave to amend pleadings is simply part of the trial and as the whole judgment is appealed from the whole case will be open on the appeal (Laird v Briggs (1881) 16 Ch D 663; Zhang Hong Li & Ors v DBS Bank (Hong Kong) Ltd & Ors [2018] HKCA 435 at §§103 to 106; Hong Kong Civil Procedure 2020 vol 1, §20/8/15).

9.In this instance, the application to adduce Zhong 4^th was made in the course of opposing the plaintiff’s application for final judgment.  The refusal to allow the admission of this affirmation was part of the hearing of the plaintiff’s application.  Once the defendant has lodged an appeal against the judgment on the plaintiff’s application as of right, it opens up the question of the evidence that should have been admitted or excluded in the application.  The defendant is not required to apply for leave separately in this situation regarding the refusal to admit Zhong 4^th.

10.The duplication of the points sought to be argued is irrelevant.  We express no view on the correctness of the decision to exclude Zhong 4^th, as that is also irrelevant to the consideration whether leave to appeal is required in this situation.

11.We make an order nisi that the costs arising in dealing with a point raised by the Registrar be in the cause of the appeal.

Written submissions by Tanner De Witt, solicitors for the Plaintiff (Respondent)

Written submissions by Mr Kelvin Leung, instructed by How & Co, for the Defendant (Appellant)