Kwan Hung Shing, As Executor of the Estate of Ho Shuk Ming, Deceased v. Fong Kwok Shan, Christine and Others

HCA 265/2012

[2022] HKCFI 1112

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 265 OF 2012

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BETWEEN

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Before:  Hon Wilson Chan J in Chambers

Date of Hearing:  1 December 2021

Date of Decision:  19 April 2022

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D E C I S I O N

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A.  INTRODUCTION

1.This is the 1^st defendant’s application for leave to appeal out of time against the decision of this court delivered on 4 March 2021 (the “Decision”), whereby it was ordered that leave be granted to the Director of Lands (the “Director”)  to be released from the implied undertaking so that use can be made of the documents listed in the Schedule (the “Documents”)  attached to the 21^st defendant’s summons filed on 21 October 2019 (“D21’s Summons”)  in such way and in such manner as may be reasonably necessary, including supplying the said documents or copies thereof to relevant persons, organizations or authorities, for the purposes set out in paragraph 1 of D21’s Summons.

2.The 1^st defendant submits that the Decision is not an interlocutory one and any appeal against the Decision requires no leave from the Court of First Instance or the Court of Appeal.  In any event, it is not in dispute that leave for extension of time is required regardless of whether the Decision was final or interlocutory:

(1)  If the Decision was final, the 1^st defendant should have served her Notice of Appeal within 28 days of the Decision pursuant to Order 59, rule 4(1)(c)  of the Rules of the High Court, Cap 4A (“RHC”), ie on or before 1 April 2021;

(2)  Alternatively, if the Decision was interlocutory, the 1^st defendant should have made her application for leave to appeal within 14 days from the date of the Decision pursuant to Order 59, rule 2B of the RHC, ie on or before 18 March 2021.

Both the above time limits had expired by the time the 1^st defendant filed her summons and supporting affidavit on 13 April 2021.

B.  WHETHER THE DECISION IS FINAL OR INTERLOCUTORY

3.I am of the view that the Decision is an interlocutory order.

4.Practice Note 59/21/4 of the Hong Kong Civil Procedure 2022 provides that where it is required to determine whether a judgment or order is or is not interlocutory in a case where such judgment or order does not fall into one of the classes referred to in Order 59, rule 21, the test to be applied is still the “application test”.

5.Citing Chan PJ’s observation in Shell Hong Kong Ltd v Yeung Wai Man Kiu Yip Co Ltd (2003)  6 HKCFAR 222, at [31]: “A broad common-sense approach should be adopted.  If the issue dealt with and determined by the court is ‘a substantive part of the final trial’ ... or ‘a crucial issue’ in the case or a point ‘that goes to the root of the case’, … or ‘a dominant feature of the case’ …, then the order or judgment, even if it does not finally dispose of the whole action, should nevertheless be regarded as a final judgment.”

6.Practice Note 59/21/4 goes on to state that in Bright Shipping Ltd v Changhong Group (HK)  Ltd [2019] 2 HKLRD 220, the Court of Appeal looked at Shell and B+B Construction, Lam VP (as he then was), giving the reasons for judgment of the Court, held (at [11])  that to be a final decision, the issue in question has to be an issue on the merits as opposed to procedural steps for bringing or preparing a case before it is presented to the court for final determination on the merits.

7.Applying the above principle, clearly the question of whether the Director should be released from the implied undertaking is not an issue on the merits, rather it is one of the procedural steps for preparing a case before it is presented to the court for final determination on the merits.

8.I shall therefore treat this as an application by the 1^st defendant for leave to appeal against an interlocutory order out of time.

9.In this regard, where a delay in applying for leave to appeal is inexcusable although insubstantial, the applicant faces a higher threshold, ie the party must show a real prospect of success on the merits and not simply the test of a reasonable prospect of success: Practice Note 59/2A/10 of the Hong Kong Civil Procedure 2022.

C.  NO “REASONABLE” OR “REAL” PROSPECT OF SUCCESS

10.I am of the view that the proposed grounds of appeal put forward by the 1^st defendant as her Grounds of Appeal are not sufficiently meritorious justifying leave, regardless of whether the test is “reasonable” or “real” prospect of success.

C1.  Ground 1

11.Under this ground, the 1^st defendant submits that the court’s conclusion that the 21^st defendant should be discharged from the implied undertaking is inconsistent with the court’s finding that the remedies sought by the plaintiff against the 21^st defendant were “without legal basis, and in any event wholly unnecessary”.  As I understand it, the 1^st defendant’s contention is that if the 21^st defendant is not a proper party to the action in the first place, she should not be entitled to obtain or use the Documents disclosed by the other parties to the proceedings.

12.I do not consider that the 1^st defendant’s contention is reasonably arguable.

13.The finding that the declarations sought by the plaintiff against the 21^st defendant were unnecessary was only one of the two alternative routes to come to the conclusion that no relief should be granted against the 21^st defendant. The other alternative route was that the relief claimed were “without legal basis” as the Building Licences and Permission Letters involved in this case were only voidable at the instance of the Director and not void ab initio.  In the premises, the 21^st defendant was clearly a proper party in the action.

C2.  Ground 2

14.Under this ground, the 1^st defendant contends that this court was wrong in law in holding that it was in the public interest to release the 21^st defendant from the implied undertaking, given that the criminal liability associated with the development agreements and schemes in the present case was yet to be decided judicially.

15.I do not regard that the 1^st defendant’s contention is reasonably arguable with a reasonable prospect of success.  Whether the activities of the plaintiff and the 1^st to 20^th defendants in this action would give rise to any criminal liability can only be decided after the relevant law enforcement institutions have conducted investigation.  As this court had made the finding that the statutory declarations made or to be made by the dings in this case must all be false (paragraph 23 of the Judgment dated 9 July 2019), it must be correct for this court to find that disclosure of the Documents was in the public interest of ensuring a proper criminal investigation into the conduct in question.

C3.  Ground 3

16.Under this ground, the 1^st defendant contends that this court was wrong in law in holding that the parties’ use of the Documents was connected with the original cause of action, having recognized that the original cause of action was one of resulting trust and trespass only.

17.This ground is again not reasonably arguable.  In paragraph 14 of the Judgment, I explained that it was part of the plaintiff’s case that the defendants “could not rebut the presumption of resulting trust since in doing so they would have to rely on the illegal development scheme concerning the New Territories Small House Policy…”. (Emphasis added)

18.Thus understood, the illegal development scheme involving false statutory declarations had everything to do with the analysis and eventual finding of the resulting trust in favour of the plaintiff.

C4.  Ground 4

19.Under this ground, the 1^st defendant contends that regarding Item 6 and Items 18 to 25 of the Documents, the court was wrong in law in shifting the burden of proof to the 1^st defendant in proving that disclosure of letters between the parties and their respective legal representatives would engage legal professional privilege (“LPP”).

20.This ground is not reasonably arguable.  On a careful reading of the Decision, this court did not shift the burden of proof to the 1^st defendant to establish LPP or generally to resist the 21^st defendant’s application, rather the court was only stating the fact that no LPP was asserted over the Documents (paragraph 13 of the Decision), and as such the Documents were not protected by LPP.

21.This court clearly had in mind that the burden was on the person who had obtained documents to demonstrate cogent and persuasive reasons why the implied undertaking should be released (paragraph 6 of the Decision), and the 21^st defendant had demonstrated such cogent and persuasive reasons as set out at paragraphs 9 to 13 of the Decision.

D.  CONCLUSION

22.For the reasons stated above, the 1^st defendant’s summons dated 13 April 2021 is dismissed.

23.Further, I order that the costs of the application be paid by the 1^st defendant to the 21^st defendant, such costs are to be taxed if not agreed.

24.Lastly, I express my gratitude to counsel on both sides for their helpful assistance in this matter.

Mr K M Chong and Mr Felix HF Tsang, instructed by Messrs K C Ho & Fong, for the 1^st defendant

Mr Ryan Lee (Government Counsel) of Department of Justice, for the 21^st defendant