Lin Chien Hsiung v. Lin Hsiu Fen

HCCT 24/2021

[2022] HKCFI 340

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 24 OF 2021

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D E C I S I O N

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1.On 31 March 2021, this Court granted leave to the Applicant to enforce an arbitral award dated 18 August 2020 made by the Shanghai Arbitration Commission in an arbitration between the Applicant and the Respondent (“Enforcement Order”). On 24 May 2021, the Respondent applied by summons to set aside the Enforcement Order (“Setting Aside Application”), on the grounds: (1) under section 95 (2) (f) (ii) of the Arbitration Ordinance (“Ordinance”), that the Award had been suspended under the law of the Mainland; (2) under section 95 (2) (c) (ii), that the Respondent was unable to present her case; and (3) that enforcement of the Award would be contrary to public policy under section 95 (3) (b) of the Ordinance. The application was supported by the affirmation of Lam Cheung Shing (“Lam”) filed on 24 May 2021, exhibiting the draft 1^st affirmation of the Respondent (“R1”).

2.On the parties’ consent application made on 19 July 2021, directions were proposed for the filing of evidence on the Setting Aside Application.  These included directions for the Respondent to file her supplemental affirmation within 21 days, the Applicant to file evidence in opposition within 35 days thereafter, the Respondent to file evidence in reply within 28 days thereafter, and no further evidence to be filed without leave of the Court.

3.The proposed directions were not approved by the Court.  It was explained to the parties that under Order 73 rule 10 (6A) RHC, an application made under rule 10 (6) for setting aside an enforcement order must be made by summons, supported by affidavit “which must be filed at the same time as the summons”.  There was no basis established for the Respondent to seek reliance on a supplemental affirmation, as sought in the Consent Summons.  The Order made by the Court on 20 July 2021 was for the Applicant to file his evidence in opposition within 21 days, for the Respondent to file evidence in reply within 14 days, and no further evidence to be filed without the leave of the Court.  The order included a direction for the hearing of the Setting Aside Application to be adjourned to a date to be fixed for argument.

4.On 10 August 2021, the parties applied again, by Consent Summons, for extension of time of 28 days to be granted to the Applicant to file his affirmation in opposition to the Setting Aside Application.  The Court noted that 3 weeks had elapsed since the order of 20 July 2021, but the date for the adjourned hearing of the Setting Aside Application had still not been fixed, and that the Applicant was still seeking an extension of time of 28 days.  The Court sought justification from the Applicant as to the need for an extension of 28 days, and reminded the parties that the action is on the Arbitration List and delay is not tolerated by the Court.  In reply, the Applicant’s solicitors stated that the extension of time was necessary for the Applicant to consult with PRC lawyers in the course of preparing the Applicant’s evidence in opposition.

5.In response, the Court made unless orders for the Applicant to file evidence by 31 August 2021, and for the Respondent to file her evidence in reply by 14 September 2021.  The Court reminded the parties that section 95 (3) (b) of the Ordinance relates to public policy of Hong Kong, and no evidence on PRC law would be relevant or required for that ground, and further, that the ground under section 95 (2) (c) (ii) relates to facts, so again, evidence on PRC law is unnecessary.

6.The hearing of the Setting Aside Application was fixed for 17 February 2022.

7.On 31 August 2021, the Applicant filed his affirmation in opposition to the Setting Aside Application, exhibiting a legal opinion of his expert, Mr Zhang, on PRC law (“Zhang 1”).  The Respondent also filed her evidence in reply on 14 September 2021, which included her expert’s report on PRC law.

8.On 17 January 2022, the Applicant applied by his summons (“Summons”) for leave to adduce further evidence in the form of the 5^th affirmation of the Applicant, whereby he sought to produce a supplemental legal opinion of his expert (“Zhang Supplemental”). This was said to be in answer to the Respondent’s expert evidence on PRC law, which had not been disclosed before the Applicant’s evidence in opposition to the Setting Aside Application was filed.

9.The Respondent opposed the Summons, on the ground that the Court had directed that PRC law evidence was neither relevant nor required, but the Applicant had filed Zhang 1 in disregard of the Court’s direction, that the Summons was issued 4 months after the Respondent’s evidence in reply, and there has been no good explanation for this last minute application, such that it should be dismissed.

10.The Applicant’s reliance on Order 32 rule 11A (4) has no application to this Summons, which is fixed for hearing by a judge on the Construction and Arbitration List. There was never any hearing before nor directions made by any Master.

11.Since the Order of the Court of 20 July 2021 provided expressly for no further evidence to be filed without the leave of the Court, it is incumbent on the Applicant seeking leave to justify his application for leave, and to explain the delay in his application. As the Respondent rightly pointed out, her evidence on PRC law, to which the Applicant seeks to respond, had been filed on 14 September 2021, but the Applicant did not issue his Summons until 4 months later, on 17 January 2022, about 30 days before the hearing on 17 February 2022.  The Respondent claims that it would not be possible for her to file any further evidence in response before the hearing on 17 February 2022, to maintain her Setting Aside Application.

12.The hearing of the Setting Aside Application is obviously a milestone date for the purpose of the proceedings initiated by the Originating Summons filed in this action.  It is the date for the substantive hearing of the Setting Aside Application regarding the Enforcement Order made under the Originating Summons. 13 years after the Civil Justice Reform, parties should need no reminder on the underlying objectives of expeditious dealing with cases, cost-effectiveness, and the emphasis on early preparations for trial. If a late application is made which has impact on a milestone date, under Order 25 rule 1B (3) RHC, the Court shall not grant any application to vary a milestone date, unless there are exceptional circumstances which can justify the variation.

13.The burden lies squarely on the Applicant, as to why the Court should exercise its discretion in his favour and grant him leave to file further evidence, particularly at a late stage of the proceedings. There must be a good and credible explanation by way of affidavit as to why the evidence was not filed earlier, and absent such explanation, the application may be refused on the ground of delay alone, although the Court has to bear in mind and weigh such delay against the primary aim of the Court, which is to secure the just resolution of disputes in accordance with the substantive rights of the parties.

14.In the present case, it is pertinent that despite the fact that the Respondent made her Setting Aside Application on the ground that the Award had been suspended under the law of the Mainland, at the time when the summons for the Setting Aside Application was issued, the only affirmation filed in support was that of Lam exhibiting R1, and R1 did not include any evidence on PRC law, apart from asserting the fact that she had been advised by her legal representatives that the Award had been suspended under PRC law at the time of the application for the Enforcement Order. The Court did not grant leave to the Respondent to file any further supplemental affirmation in support of her Setting Aside Application, by virtue of the express requirements of Order 73 rule 10 (6A).  It was only in her affirmation in reply made on 17 September 2021 (“Respondent 2”) that the Respondent adduced her expert evidence on PRC law in support of her case.

15.The Applicant’s case therefore is that it was only on being served with Respondent 2, that the Applicant was given to understand the basis of the Respondent’s case on PRC law, and her reliance on Article 64 of the Arbitration Law of the PRC. The Applicant contended that he should be given leave to file his expert evidence in response to the Respondent’s case.

16.I accept the Applicant’s submission, that the Respondent should be aware and fully advised on her own case on PRC law as to the alleged suspension of the Award, and should not have to reply to the Applicant’s further evidence.  She had the opportunity to file her expert report.  If the Respondent is deprived of the last say, as now contended by her Counsel, then it is entirely the Respondent’s own fault for not having filed the expert PRC law evidence at the time when the summons for the Setting Aside Application was issued, as required under Order 73 rule 10 (6A).

17.It is true that the Applicant has no good explanation as to why he waited 4 months after receiving the evidence of the Respondent, before issuing the Summons. However, bearing in mind that it is the Respondent’s own case that the Award had been suspended under PRC law, the late filing of the Applicant’s expert evidence in response to the Respondent’s case on PRC law cannot have caused any prejudice to the Respondent. On the other hand, it would not be just to deprive the Applicant of the opportunity to respond to the case sought to be relied upon by the Respondent under PRC law, and any prejudice to the Applicant can be said to have been self-induced by her failure to comply with Order 73 rule 10 (6A).

18.The Respondent’s assertion, that PRC law on the alleged suspension of the Award is not relevant, is rejected. Her reliance on the observations made by the Court on 25 August 2021 is entirely misplaced, as those remarks were made on sections 95 (2) (c) (ii) and 95 (3) (b) of the Ordinance, and not section 95 (2) (f) (ii).

19.It is the Respondent’s case, under section 95 (2) (f) (ii), that the Award had been suspended under PRC law. Section 95 (2) places the onus on the Respondent to prove the grounds invoked, and hence to prove that the effect of any PRC law is that the Award was suspended. Even if the Respondent contends that PRC law is somehow not relevant, the Applicant is entitled to adduce expert evidence on PRC law to refute the Respondent’s assertion, that the Award had been suspended under PRC law.

20.For all the above reasons, I accede to the application for leave to file the further evidence of the Applicant. There must be an end to the exchange of evidence, and I do not consider that there is any further need for evidence from the Respondent.

21.The application made in the Summons is granted, but since it is the Applicant who seeks the indulgence of the Court, he must bear the costs of the Summons, with certificate for Counsel, to be summarily assessed. The Respondent is to file and serve any Statement of Objection to the Applicant’s Statement of Costs, within 7 days.

Mr Ian Chau, instructed by Cheung & Liu, for the applicant

Mr Esmond Wong, instructed by Wan Yeung Hau & Co, for the respondent