楊佩玲 v. Super Best Investment Ltd

HCA 1465/2022

[2023] HKCFI 3210

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1465 OF 2022

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BETWEEN

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D E C I S I O N

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1.I refer for background to my Decision handed down on 29 September 2023 (the “Decision”)[1]. I use the terms and abbreviations used therein, except that I will call the Summons the “Main Summons” to avoid any confusion.

2.For the reasons set out in the Decision, I (1) granted D leave to file an Acknowledgment of Service out of time (“§1” thereof), and (2) ordered that the Default Judgment be set aside (“§2” thereof), and (3) ordered that these proceedings be stayed in favour of arbitration (“§3” thereof, and the “Order”).

3.This is P’s application by Summons of 13 October 2023 for leave to appeal against the Decision (the “Leave Summons”).

4.Leaving aside section 20 of the Arbitration Ordinance which I will next come to, leave to appeal is required for any appeal against the Decision.  The threshold is reasonable prospect of success.

5.However before any question of leave to appeal is engaged, it is necessary to consider whether the Court of Appeal has any jurisdiction to entertain the intended appeal.

6.Section 14(3)(ea)(ii) of the High Court Ordinance provides that (with emphasis added):

“No appeal shall lie—

(ea) except as provided by the Arbitration Ordinance (Cap. 609), from any judgment or order of the Court of First Instance—

(ii)  under section 20(1) or (2) of that Ordinance refusing to refer the parties to arbitration;”

7.It is important to emphasize the word “refusing”, as I have. That sub-section only applies in the case of the Court of First Instance refusing to refer the parties to arbitration under the specified sections.  The position where the Court of First Instance decide to refer the parties to arbitration is governed by section 20(8) of the Arbitration Ordinance, as follows:

“A decision of the court to refer the parties to arbitration under—

(a) article 8 of the UNCITRAL Model Law, given effect to by subsection (1); or

(b) subsection (2),

is not subject to appeal.

8.§3 is not subject to appeal.

9.P’s intended appeal covers the entire Order, not only §1 and §2.

10.An issue has therefore arisen as to whether the Court of Appeal has any jurisdiction to entertain the intended appeal, even if leave were granted.

11.Mr Chan acknowledged during the hearing that unless P can get over the jurisdictional issue, other grounds are not engaged.

12.In his written submissions, Mr Chan refers to Haller AG v Vestey International Group Ltd [2023] 1 HKLRD 39.  Mr Chan in particular points to §§83 and 84 of the judgment wherein G Lam JA, having refused to express any view on the prima facie threshold stated in PCCW Global (as that would have been obiter), observed that that issue might be left to be dealt with in a case in which it is properly raised.

13.Those observations go at best to the possibility of the prima facie threshold being revisited in the future by the Court of Appeal.  They do not deal with the jurisdictional issue which P is now facing.

14.If anything, the Court of Appeal in Haller in fact confirms its lack of jurisdiction in matters falling within section 20(8) of the Arbitration Ordinance – see §§70 to 77.

15.Mr Chan next relies on Patel v Patel [2000] Q.B. 551 (CA).

16.Patel was not referred to this Court for the hearing of 21 September 2023.  Indeed, the implication of the Main Summons being a combined one (for order to set aside and stay) on the threshold which D had to meet was not analysed in any details in counsel’s submissions.

17.In Patel, the writ and statement of claim were dated 21 January 1998.  On 23 March 1998, the plaintiff was granted judgment in default of defence.  On 28 April 1998, the defendant applied for an order that (1) the default judgment be set aside and leave be given defend and counterclaim, and (2) consequential orders.  On 19 May 1998, the defendant applied for an order that the proceedings be stayed in favour of arbitration.  On 16 October 1998, the judge dismissed the application for stay on the basis that the defendant, by taking out the earlier application, had taken a step in the proceedings.  The issue before the Court of Appeal was whether the judge was correct in that regard.  Whilst Lord Woolf MR did observe that “Unless there was an application to set aside the default judgment, there was nothing to stay”[2], and Otton L.J. did observe that the matters came in stages[3], the test and threshold for a combine application (or indeed even the test and threshold for the application to set aside) was not the issue before the Court of Appeal.  Nor did the Court of Appeal consider the proposition this Court considered at §16 of the Decision.

18.More importantly, the difficulty which P now is facing is that this Court has made §3, and has referred parties to arbitration.  That paragraph is not subject to appeal.

19.Facing that difficulty, Mr Chan submitted that leave to appeal may be granted to §§1 and 2, with an order that §3 be stayed.

20.I do not accept that option.  It is not what P is seeking in the Leave Summons. The only purpose of the suggested stay of §3 is to overcome the jurisdictional issue, but otherwise not supported by any evidence or reasoned basis.  It is, as submitted by Mr Co which I agree, nothing but a backdoor way to appeal against §3.  The future of this stay of a stay is also problematic.  If imposed, and if leave to appeal against §§1 and 2 is then granted, and if the Court of Appeal dismisses the resultant appeal, presumably the stay will be lifted.  But if the Court of Appeal were to allow the appeal, would it mean that the stay of a stay will remain there indefinitely?  In my view, it cannot be.  I reject this suggested unprincipled way of dealing with the application. 

21.For the above reasons, and on the jurisdiction of the Court of Appeal, I refuse the Leave Summons.

22.In any event, I am of the view that the suggested grounds are without merits.  Given my conclusion on the jurisdictional issue, I say simply these:

(a)  Proposed Ground 1 complains that this Court erred in considering the application for stay from a standalone basis.  This Court quite clearly did not.  As observed above, the implication of the Main Summons being a combined one on the threshold which D had to meet was not analysed in counsel’s submissions.  This Court considered the respective positions of an application for set aside and an application for a stay.  This Court then considered the position of the Main Summons being in effect a combined one.  The basic premise of the proposed Ground 1 is not reasonably arguable;

(b)  Proposed Ground 2 goes to the evidence, which this Court has considered and analyzed.  I repeat section D1 of the Decision.  In my view, Proposed Ground 2 is not reasonably arguable;

(c)  Proposed Ground 3 goes to the issue of forum non conveniens.  This Court has not made any order in that regard.  In any event, I repeat section G of the Decision.

23.For the above reasons, I dismiss the Leave Summons.  I make a costs order nisi that P shall bear the costs of and occasioned by the same, to be summarily assessed, with certificate for counsel.  At this stage, I am not inclined to order any enhanced basis.

Mr Kenneth Chan and Mr Hughes Tang, instructed by Chung & Kwan, for the Plaintiff

Mr Dixon Co, instructed by Leung & Lien, for the Defendant