Unity Profit Ltd v. Lee Ching Lam

HCA 2503/2017

[2020] HKCFI 3146

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2503 OF 2017

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DECISION

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1.On 13 November 2020, I handed down a decision (“the Main Decision”), in which I dismissed D’s application for an injunction to restrain KCHF from acting for P in this action (“the injunction application”). On 27 November 2020, D took out a summons (“the summons”) for (a) a direction pursuant to Order 59 rule 21(3) that the Main Decision is an order determining in a summary way the substantive rights of a party to an action within the meaning of Order 59 rule 21(1)(a), and hence D may lodge an appeal against the Main Decision as of right and without leave; (b) alternatively, leave to appeal from the Main Decision. This decision should be read together with the Main Decision. For ease of reference, the abbreviations used in the Main Decision are adopted herein.

2.I have directed that the summons be determined on paper without an oral hearing.  The parties have provided me their respective written submissions, and I have considered those written submissions.

LEAVE REQUIRED

3.With respect, in my view, it is plain and obvious that the Main Decision is not a judgment or an order determining in a summary way the substantive rights of any party to this action.  In his application for an injunction to restrain KCHF from action for P in this action, D is not asking this court to determine any substantive issues in these proceedings.  D is merely seeking an order to disallow KCHF to continue to be P’s solicitors in these proceedings.  By the Main Decision, none of the substantive issues in these proceedings (ie the issues as defined by the pleadings) has been determined.

4.I am firmly of the view that the Main Decision is not within the scope of Order 59 rule 21(1)(a).  P can only lodge an appeal against the Main Decision with leave from the court.

LEAVE APPLICATION

The principles

5.Both P and D refer me to the principles concerning applications for leave to appeal set out by me in Xu Ying v Xu Weihong[1]. The parties agree that these are the applicable principles in considering the leave application made by D.  In that case, I said[2]:

“3. Leave to appeal would only be granted if the appeal has a reasonable prospect of success (which means that the prospect of success is reasonable and more than fanciful, without having to be probable), or there is some other reason in the interests of justice why the appeal should be heard.

4. In order to overturn a decision made by the court as a result of exercise of a discretion, it has to be shown that the relevant decision exceeded the generous ambit within which reasonable disagreement is possible, and not merely that the appellate court would prefer a solution which the court below had not chosen. The Court of Appeal’s function is not to exercise the discretion afresh, but will only interfere if it is shown that the discretion was wrongly exercised on principle or the court below had taken into account irrelevant consideration or had ignored relevant consideration.

5. Leave to appeal may be granted under the “some other reason in the interests of justice” limb if the applicant does not have a reasonable prospect of success in his or her intended appeal, but the appeal would present the Court of Appeal with an opportunity to provide much needed clarification on an area of the law or to entertain an argument that the law ought to be changed.”

6.Apart from the above, counsel for P has correctly reminded me that even if the threshold test of reasonable prospect is satisfied, the court still retains a discretion whether to grant leave, and may refuse leave in the interests of procedural economy and proportionality[3].

The “reasonable prospect of success” limb

7.Counsel for D submits that D has a reasonable prospect of success in the appeal by relying upon the following grounds:

(1)     This court erred in concluding that there is no real risk that the overriding duty of independence owed by KCHF to the court would be compromised by their continuing to act for P in this action. 

(2)     This court also erred in principle in finding that D ought to have taken out the injunction application before the exchange of the witness statements.  Further, even if there had been delay in taking out the injunction application, this court erred in holding that such delay should lead to the dismissal of the application.

8.With respect, I am of the view that there is no merit in these grounds.

9.As to Ground (1), with respect, it is merely a rerun of the arguments advanced by D in the injunction application.  I have given my reasons in [19] to [21] of the Main Decision as to why I could not accept D’s submissions.  I am not persuaded that D has a reasonable prospect of success in arguing that I erred in my ruling.

10.As to Ground (2), for the reasons given by me in [24] to [26] of the Main Decision, D would not have any reasonable prospect of success in arguing that there has not been any delay on his part in taking out the injunction application.

11.Counsel for D submits that the injunction sought by D is a permanent injunction, and hence the court should not refuse the injunction application by reason of the delay on D’s part.  With respect, there is no merit in this submission.

(1)     In the injunction application, in D’s written submissions dated 29 October 2020, counsel for D accepted that the timing of the injunction application should be a relevant consideration[4].  That is why I said at [23] of the Main Decision that “[t]here is no dispute that delay is a factor which should be taken into account in considering whether an injunction should be granted to restrain a solicitor from acting for a party.”

(2)     In accordance with the undisputed position in the injunction application as recorded in [23] of the Main Decision, and in the light of the authorities set out in the same paragraph, I took the view that delay should be a relevant factor in considering in what way my discretion should be exercised in determining the injunction application.  Based upon the reasons as set out in [24] to [26] of the Main Decision, I decided to exercise my discretion against D. 

(3)     In my view, there is no reasonable prospect of success in arguing that I erred in the exercise of my discretion in these circumstances.  Bearing in mind the high threshold in an appeal against the exercise of discretion mentioned by me in [4] of the Xu Ying case, it is clear that D is miles away from this threshold.

12.For the sake of completeness, I would also say that if I were wrong and D in fact had an appeal with reasonable prospect of success, I would be prepared to exercise my residual discretion to refuse leave on the ground that this action is now at a very advanced stage and is ready to proceed to trial.  For the reasons set out in [24] of the Main Decision, I am of the view that in the interests of procedural economy and proportionality, there should not be a satellite litigation now and the leave application should be refused.

13.I refuse to grant leave to D under the “reasonable prospect of success” limb.  

The “some other reason in the interests of justice” limb

14.Counsel for D submits that leave should be granted under the “some other reason in the interests of justice” limb. Counsel submits that this case raises a novel legal issue, namely, the exercise of the court’s inherent supervisory jurisdiction to restrain its officer from acting for a party in proceedings on the ground that he/she is unable to discharge his/her overriding duty owed to the court to act with independence. Counsel says that this is a question of public importance and ought to be submitted to the Court of Appeal for determination.

15.With respect, the question posed by counsel is based upon an assumption that KCHF would be unable to discharge their duties owed to the court by continuing to act for P in these proceedings.  I have explained in the Main Decision that I could not reach this conclusion.  Without a proper factual basis, I am of the view that it would not be right to allow D to submit the question to the Court of Appeal. 

16.I also refuse to grant leave to D under the “some other reason in the interests of justice” limb.

DISPOSITION

17.For the reasons above, I dismiss the summons.

18.There be a costs order nisi that costs of the summons be paid by D to P forthwith and be summarily assessed.  There be leave to P to file and serve a bill of costs for summary assessment within 7 days after the costs order nisi becoming absolute, and leave to D to file and serve a written reply to the said bill within 7 days thereafter.

19.I thank counsel for the assistance rendered to the court.

Written submissions of Mr Sunny Chan and Mr Sam Kei Chan, instructed by K C Ho & Fong, for the plaintiff

Written submissions of Mr Osmond Lam, Mr Dexter Leung, instructed by Lee Wong & Co, for the defendant