Tang Wai Hung v. Glory Sky Precious Metals Ltd

DCCJ 852/2019

[2023] HKDC 994

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 852 OF 2019

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BETWEEN

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REASONS FOR DECISION

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Introduction

1.By summons dated 17 February 2023 (the “Summons”), the defendant applies for:-

(1) Leave to appeal out of time against my Decision dated 5 September 2022 (the “Main Decision”)[1]; and

(2) Leave to appeal out of time against my Decision dated 20 January 2023 (the “2^nd Decision”)[2].

2.Unless otherwise indicated, I continue to use the same definitions in the Main Decision and the 2^nd Decision.

3.I will begin by sorting out some preliminary matters. First, in §11 of the Main Decision, I acceded to the Stay Application, as a result of which this action is now stayed pending the final determination of the New Action. I however lifted the stay on 23 September 2022 for the limited purpose of allowing the defendant to apply for leave to appeal against the Main Decision.

4.Second, in §4 of the 2^nd Decision, I gave reasons for the dismissal of the EOT Application. In gist, I took the view that the EOT Application was taken out incorrectly as a matter of procedure, but there was no substantive determination of an application for leave to appeal (out of time) against the Main Decision; the EOT Application was only an application to extend time to take out such an application. On this basis, I do not consider that the defendant is now precluded from taking out a proper application for leave to appeal out of time against the Main Decision, based on res judicata or otherwise. The plaintiff has not sought to argue otherwise.

The proposed grounds of appeal

5.The proposed grounds of appeal are set out in the Schedule to the Summons (the “Schedule”). At the hearing, I confirmed with Mr Ching (solicitors for the defendant) that the grounds may be grouped into 4 categories (3 grounds relate to the Main Decision and another ground concerns the 2^nd Decision):-

Proposed appeal against the Main Decision

(1) §§1, 2 & 4 of the Schedule – the learned Master’s summary assessment of costs was so “obviously wrong” that I erred in not so finding. A related argument is that I should have exercised the discretion afresh in place of the Master’s assessment and I erred in not doing so (“Ground 1”);

(2) §3 of the Schedule – the Master’s assessment was clearly wrong in view of the written reasons provided by the Master through a Court letter dated 11 October 2022 (the “Letter”) which was requested by the defendant only after the handing down of the Main Decision (“Ground 2”);

(3) §6 of the Schedule – I erred in failing to adjourn the hearing on 29 August 2022 (which led to the Main Decision) and/or to direct written reasons from the Master to be obtained. It is also said that I failed to observe the duty to exercise case management powers properly (“Ground 3”);

Proposed appeal against the 2^nd Decision

(4) §§5 & 7 of the Schedule – I erred in not awarding costs of the Costs Appeal to the defendant or in acceding to D’s Variation Application in the 2^nd Decision (“Ground 4”).

Legal principles

6.There can be no dispute on the applicable principles. Leave to appeal shall not be granted unless the court is satisfied that the appeal has a reasonable prospect of success or that there is some other reason in the interests of justice why the appeal should be heard: s 63A(2) of the District Court Ordinance (Cap 336). A reasonable prospect of success involves the notion that the prospects of succeeding must be reasonable and therefore more than fanciful, without having to be probable: SMSE v KL [2009] 4 HKLRD 125 at §17.

7.Where the application for leave to appeal is made out of time, the prime considerations are set out in §4 of the 2^nd Decision.

8.I also note that the proposed grounds of appeal only relate to costs. The principles set out in the White Book 2023 §59/0/54 apply as to the limited circumstances under which the Court of Appeal may interfere with an exercise of discretion (which includes decisions on costs).

Ground 1

9.I explained in the Main Decision §§28-35 that I had no material or evidence to consider that the Master was “obviously wrong”. I am unable to see how I might arguably be said to have erred in so finding.

Ground 2

10.The fundamental premise of this proposed ground is that I should now, and the Court of Appeal should in due course, consider the Letter which contains the Master’s reasons.

11.The obvious hurdle is that the defendant has to get over the Ladd v Marshall conditions before new evidence may be adduced. In this connection, the Letter is obviously new evidence since it was not available before me on 29 August 2022 when the Costs Appeal was heard.

12.I am not satisfied that the 1^st Ladd v Marshall condition is met, in that the defendant is unable to show that the Letter could not have been obtained for use at the 29 August 2022 hearing with reasonable diligence. Indeed, the main reason for dismissing the Costs Appeal was precisely that the Master’s reasons were not obtained: Main Decision §§29-31.

13.The defendant submits that the Ladd v Marshall conditions may be relaxed in certain exceptional circumstances, citing A Solicitor v The Law Society of Hong Kong [2021] HKCA 1662 at §§19-22. I do not consider the defendant to have come anywhere near to show exceptional circumstances; it would hardly be “an affront to one’s sense of fairness or justice” (A Solicitor at §§21-24) not to admit the new evidence when it was squarely the defendant’s duty to obtain it in the first place. Further, the Master’s reasons were certainly not “a matter which have occurred” after the Costs Appeal was heard. While it is true that the Letter (i.e. the document itself) was requested for by the defendant and hence came into existence after the hearing, the contents therein (i.e. the Master’s reasons) were certainly not matters which have occurred afterwards. In other words, the 1^st Ladd v Marshall condition is not met simply because the document sought to be adduced comes into existence after the hearing: see e.g. Tsui Yin Fong v Edward Johnson (unreported, HCMP 2878/2012, 5 March 2013) at §16.

14.This proposed ground does not enjoy a reasonable prospect of success.

Ground 3

15.It is extraordinary that this argument is advanced. The defendant did not apply for an adjournment before or at the hearing on 29 August 2022, and it is now effectively trying to shift the blame to the court by saying that the court should adjourn on its own motion.

16.The short point is this. It is incumbent for the defendant (and its lawyers) to properly prepare for the Costs Appeal. Upon basic research, or at the latest by the time the plaintiff’s skeleton was received, it would be clear that the Master’s reasons in her assessment of costs are absolutely essential to the court’s determination of the Costs Appeal. However, the defendant (and its lawyers) chose to do nothing. The natural course was for me to dismiss the Costs Appeal: see Main Decision §§28-31. I do not see how I may be said to have erred in not adjourning the hearing to enable the defendant to obtain the Master’s reasons when the defendant itself has not so applied.

Ground 4

17.I am unable to see how I might be said to have erred by ordering costs of the Costs Appeal to follow the event. In particular I bear in mind the high threshold where the Court of Appeal might interfere with an exercise of discretion. This proposed ground does not enjoy a reasonable prospect of success.

Other considerations

18.Even if I am wrong on the assessment of the merits of the proposed appeal grounds, I would have dismissed the Summons on the basis that there is no good explanation for the delay in applying for leave to appeal:-

(1) In Mr Ching’s 4^th affirmation dated 2 March 2023, he set out the events which, in his view (or in the defendant’s view), justified the delay, essentially that it was reasonable for the defendant to wait for the result of D’s Variation Application before deciding whether to apply for leave to appeal (see Ching 4^th §21);

(2) I do not accept those reasons as good or valid reasons for the delay at all, because the proposed appeal against the Main Decision is not tied with the result of the 2^nd Decision. The Summons was therefore taken out after a very significant period of delay (the deadline to apply for leave to appeal fell on 19 September 2022);

(3) But taking the defendant’s case to the highest, the application for leave to appeal should have been made within 14 days of 20 January 2023 when the 2^nd Decision was handed down, and the application deadline fell on 3 February 2023. In this regard, the Main Decision and the 2^nd Decision were obviously interlocutory decisions or orders, so O 58 r 2(4)(c) of the Rules of the District Court applies. There was no explanation (let alone a good explanation) for the period of delay from this date up to the taking out of the Summons on 17 February 2023.

19.Insofar as is necessary, I would also refuse leave in the interests of proportionality and procedural economy even if I were to find that the proposed appeal has a reasonable prospect of success: Daimler AG v Helge Herbert Leiduck (unreported, HCA 4089/1994, 29 August 2016) at §7 and the cases cited therein. In pursuing the Costs Appeal, the defendant was basically not happy that the Master assessed costs at HK$1,400; the costs statement dated 14 April 2022 lodged by the defendant asked for costs in the sum of HK$111,875. Given the amount at stake, I can still understand the defendant to consider it financially justified to pursue the Costs Appeal. But I am surprised that the defendant thought it was commercially worthwhile to take the matter further to the Court of Appeal upon the dismissal of the Costs Appeal. It is a classic interlocutory skirmish that only serves to escalate costs and should be discouraged: Ho Yuen Ki Winnie v Ho Hung Sun Stanley (unreported, HCMP 1009/2009, 24 August 2009) at §22.

Conclusion

20.For these reasons, none of the proposed grounds has a reasonable prospect of success. I am unable to see any other reason in the interests of justice why the appeal should be heard. I therefore refuse to give leave to appeal and the Summons is dismissed.

Costs of the Summons

21.Costs should follow the event. I order that costs of the Summons be paid by the defendant to the plaintiff.

22.At the hearing, I canvassed with the parties whether execution of such costs order should be stayed pending the determination of the New Action (as I did in §42 of the Main Decision). Upon consideration, I take the view that it is inappropriate to stay such execution. Since I have lifted the stay specifically to enable the defendant to pursue this application for leave to appeal, and now that I have dismissed the Summons, the consequence of facing an adverse costs order arising out of the dismissal should in my view form part and parcel of the lifting of the stay.

23.I therefore order that the defendant shall pay costs forthwith and such costs shall be summarily assessed. For this purpose, the plaintiff shall lodge and serve a statement of costs within 7 days, and the defendant shall lodge and serve its statement of objections within 7 days thereafter. The assessment will then take place on paper.

Mr Kelvin Cheung, of Kelvin Cheung & Co, for the plaintiff

Mr Ching Ming Yu, of Ching & Co, for the defendant