Wealth Growth (HK) Investment Ltd v. Si Bun Bun Carmen Co Ltd and Another
Read the full judgment text of DCCJ 3633/2014 on BabelCite. This District Court judgment was delivered on 1 November 2021.
1. This is an appeal brought by the 2 nd defendant by virtue of a Notice of Appeal filed on 25 June 2021 against a costs order made by Master Jocelyn Leung on 17 February 2021 pursuant to which the costs of and occasioned by the summons filed by the 2 nd defendant on 24 September 2020 (“ the Inspection Summons” ) were ordered to be paid by the plaintiff to the 2 nd defendant.
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DCCJ 3633/2014 [2021] HKDC 1363 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 3633 OF 2014 -------------------------- BETWEEN
------------------------- Coram: His Honour Judge H. Au-Yeung (Paper Disposal) Dates of Submissions: 20 August 2021, 3 September 2021 and 15 September 2021 Date of Decision: 1 November 2021 -------------------------- DECISION -------------------------- THE APPEAL 1.This is an appeal brought by the 2nd defendant by virtue of a Notice of Appeal filed on 25 June 2021 against a costs order made by Master Jocelyn Leung on 17 February 2021 pursuant to which the costs of and occasioned by the summons filed by the 2nd defendant on 24 September 2020 (“the Inspection Summons”) were ordered to be paid by the plaintiff to the 2nd defendant. 2.The Notice of Appeal was filed out of time for nearly 4 months. THE ACTION 3.According to the Statement of Claim, at all material times, the plaintiff was a licenced money lender. The plaintiff sued the defendants herein to recover a loan allegedly made pursuant to a loan agreement dated 6 October 2008 entered into by the plaintiff as lender, the 1st defendant as borrower and the 2nd defendant as guarantor (“the Loan Agreement”). CHRONOLOGY 4.For the purpose of this appeal, the following events are relevant:
LEGAL PRINCIPLES Appeal on costs 5.While this is an appeal from a decision of Master, this appeal is not dealt with by an actual rehearing of the matter, for it is trite that a judge in chambers will not allow an appeal from a Master’s costs order unless it is unreasonable or the Master had erred in law.[1] Appeal out of time 6.In considering whether to extend time for the plaintiff to appeal against the costs order, the court has to consider the following factors:
THE PLAINTIFF’S NEW AFFIRMATION 7.Before I proceed to consider the plaintiff’s appeal, I should first deal with the 2nd Affirmation of Chan Chung Chak Ben (“the New Affirmation”) which was filed into court by the plaintiff on 20 August 2021 without leave. 8.No summons had been filed by the plaintiff to seek leave for the filing of the New Affirmation. In her written submission dated 20 August 2021, Ms Yeung for the plaintiff did not even mention about this affirmation at all. 9.It is entirely inappropriate to file an affirmation without leave like this. It is also very disrespectful to the court and the procedures for the plaintiff to treat it as if it could file any affirmation at any time it pleased. 10.In her written reply submissions, Ms Yeung even argued that the plaintiff should be allowed to file the New Affirmation without leave because the Ladd v Marshall conditions are satisfied. I am afraid this argument is totally misconceived. 11.Since no proper application for leave to file an affirmation for use in the appeal is made, I will disregard the New Affirmation in this appeal. 12.Even if an application for leave were made, I would have refused to grant leave. 13.Order 58 rule 1(4) of the RDC provides that:
14.As explained by Au-Yeung DHCJ (as her Ladyship then was) in Bank of China (Hong Kong) Limited v Certain Aim Ltd (HCMP 1272/2007, unreported, 4 October 2010):
15.Under this new rule, new evidence would not be admitted unless “special grounds” can be shown. Given the same words “special grounds” are used in Order 58 rule 1(4) of the RDC and Order 59 rule 10(2) of the Rules of the High Court (Cap.4A, Laws of Hong Kong) (“RHC”), it is now well-established that the same test should be applicable to the aforesaid rules. In other words, before new evidence can be admitted in an appeal against Master’s decision, the criteria laid down in Ladd v Marshall [1954] 1 WLR 1489 have to be satisfied. Under those criteria, further evidence is admissible on appeal only when such evidence:
16.In my view, it is obvious that the first criteria cannot be satisfied herein. 17.The purpose of the New Affirmation is to assert that the director of the plaintiff was only informed by the plaintiff’s then solicitors on 9 October 2020 about the Inspection Summons that was filed on 24 September 2020 and the previous requests made by the 2nd defendant for inspection of the Loan Agreement. As Ms Yeung put it in her reply submissions:
18.Apparently, this evidence could have been obtained long time ago. 19.However, Ms Yeung submitted that:
20.Insofar as it is the plaintiff’s argument that it did not realise the relevance of this evidence (explanation as to why there was inaction on the part of the plaintiff before 9 October 2020), this is rejected. Firstly, this is not a relevant matter to be taken into consideration as far as the Ladd v Marshall criteria are concerned. Furthermore, it is clear that the 2nd defendant had, in his affirmation filed on 24 September 2020 in support of the Inspection Summons, complained about the plaintiff’s lack of response despite the 2nd defendant’s issuance of 2 notices requesting for a copy of the Loan Agreement and inspection of the same respectively. When the issue on costs of the Inspection Summons was adjourned for argument, it was obvious that such lack of response might be relied on by the 2nd defendant in justifying the taking out of the Summons. It is simply not open to the plaintiff to say “it did not know the explanation on lack of reply would become relevant”. THE APPEAL OUT OF TIME 21.I will now consider the 4 relevant factors referred to in Postwell Limited. Length of the delay 22.The costs order was made on 17 February 2021. There is no dispute that the time limit for lodging an appeal is 14 days. Hence, the last day for doing so fell on 3 March 2021. As the Notice of Appeal was only filed on 25 June 2021, the plaintiff had been late for nearly 4 months. This is not a short period of time. Reason for the delay 23.The plaintiff did not file any affirmation to explain why the appeal had been made so late. 24.Ms Yeung for the plaintiff explained in her written reply submissions that the delay was caused by change of counsel, and time was “needed to take instructions and give legal advice”[4]. 25.It is trite that counsel should not give evidence from the Bar table. 26.In any event, the reasons given by Ms Yeung are not valid excuses. Firstly, it was the plaintiff’s own decision to engage another counsel. It had to bear the consequence of not giving the new counsel enough time to advise on the matter. Secondly, the plaintiff had all along been legally represented by solicitors. As this appeal against costs order is a simple matter, its solicitors must be competent enough to advise on the appeal. Furthermore, I wonder what instructions had to be taken for the purpose of this appeal. As aforesaid, no further evidence would be admissible unless special grounds could be shown. For the sake of argument, even if the New Affirmation were admissible herein, given the substantive part of such an affirmation only took up half a page, it would not take long to have it drafted and finalised. I find that it is inexcusable that the original time limit was not complied with and there is no reason why the application for extension of time could not have been made earlier. Merits of the appeal 27.As mentioned, since this is an appeal against a costs order made by Master, the appeal is not a rehearing of the matter. This appeal will only be allowed if the learned Master had erred in law or if the costs order made is unreasonable. 28.Unfortunately, the plaintiff’s counsel seemed not to be aware of the above well-established principle, and emphasised time and again in her written submissions that this is a rehearing of the determination of costs. As a result, she did not focus her argument on how it is alleged that the learned Master had erred in law or that the costs order is unreasonable. 29.Be that as it may, I will consider the learned Master’s reasoning and Ms Yeung’s submissions accordingly. 30.As the learned Master’s reasons for making the costs order dated 17 February 2021 were not very long, I would set them out in full below:
31.Ms Yeung’s first argument was that the Inspection Summons was not necessary because a copy of the Loan Agreement had already been filed into court, and the original Loan Agreement had already been inspected by the court back in 2014 when the plaintiff applied for judgment. 32.I agree with the learned Master that getting a copy of the Loan Agreement and having the chance to inspect the original copy of the same are 2 different matters. It is a very bad excuse for the plaintiff to say that given the 2nd defendant had obtained a copy of the Loan Agreement already, there was no need for him to inspect the original thereof. It is even worse for the plaintiff to allege that inspection was not necessary given a court clerk had already checked the original Loan Agreement. 33.In the present case, the plaintiff is suing the 2nd defendant on the basis of the Loan Agreement. Under the discovery process, the Loan Agreement must as a matter of course be included by the plaintiff in its list of documents, and as a result, the 2nd defendant would be entitled to inspect the original copy thereof as of right. I really do not understand how come the plaintiff’s legal advisers would be bold enough to allege that there was no need for the 2nd defendant to inspect such an important document. 34.Ms Yeung then seemed to accuse the 2nd defendant for failing to put forward any reason in his affirmation filed in support of the Inspection Summons. 35.In this regard, the learned Master had taken into account the fact that the Loan Agreement is the basis of the plaintiff’s claim herein. She has also considered the legal principles on the operation of Order 24 rules 10, 11 and 13 as set out by the Court of Appeal in Moulin Global Eyecare Holdings Ltd and Olivia Lee Sin Mei [2013] 3 HKLRD 72. I do not think she had erred in law at all. She had also taken the relevant matters into account. 36.Ms Yeung then argued that the plaintiff’s former solicitors did not inform the plaintiff about the 2nd defendant’s request for inspection of the Loan Agreement made by letter dated 24 August 2020. As there is no admissible evidence filed in support of this factual assertion, I would not consider this point. 37.Ms Yeung’s next argument is that the plaintiff had acted reasonably, in that it had made a reasonable offer on 12 October 2020, which was shortly after it had been informed about the 2nd defendant’s requests for inspection. Again, she is not entitled to make this argument, because there is no admissible evidence showing the time when the plaintiff had knowledge of the said requests. 38.Furthermore, this argument cannot assist the plaintiff anyway because, as the learned Master pointed out, it had a change of stance 2 days later at the call-over hearing on 14 October 2020 in which the plaintiff opposed the Inspection Summons. 39.For reasons of the aforesaid, I am of the view that the plaintiff’s appeal herein has no merits at all. Prejudice to the 2nd defendant 40.The 2nd defendant has not addressed on “prejudice”. Conclusion 41.Having considered the above factors, I refuse to grant leave to the plaintiff to appeal out of time. COSTS 42.I make a costs order nisi that the plaintiff shall bear the costs of the appeal; however, without disrespect, I do not certify the necessity of engaging counsel in the present appeal, which is a simple matter. 43.The above order nisi shall become absolute in the absence of application to vary within 14 days hereof. 44.The 2nd defendant’s costs of the appeal shall be summarily assessed in lieu of taxation. For this purpose, unless any application for variation of the aforesaid costs order nisi is made within time, the 2nd defendant shall lodge and serve his statement of costs within 7 days after the expiry of the said 14-day period, and the plaintiff shall lodge and serve its statement of objection within 7 days thereafter. Summary assessment of the costs of the appeal will then be conducted on paper (no matter whether any statement of objection is lodged by the plaintiff within time) thereafter. The costs assessed shall be payable by the plaintiff within 14 days after assessment.
Ms Natalie S. K. Yeung, instructed by Jal N. Karbhari, for the plaintiff Mr Vincent C.C. Chan, instructed by Chan & Ho, for the 2nd defendant [1] Yuan Chu Chen & Others v Chen Min Chun & Others (HCA 1714/2015, unreported, 6 December 2017), at paragraph 7 [2] Order 58 rule 1(5) of the Rules of the High Court is identical to Order 58 rule 1(4) of the RDC [3] Paragraph 12 of the plaintiff’s written reply submissions [4] Paragraph 16 of the written reply submissions | ||||||||||||||||||||||||||||||||||||||||||||||
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